SEPARATE ACCOUNT VA-P OF ALLMERICA FIN LIFE INSUR & ANNU CO, 485BPOS, 1998-12-29

SEPARATE ACCOUNT VA-P OF ALLMERICA FIN LIFE INSUR & ANNU CO
485BPOS, 1998-12-29

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<PAGE>

File No. 33-85916
811-8848

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 11

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 13

SEPARATE ACCOUNT VA-P OF
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
(Exact Name of Registrant)

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
(Name of Depositor)
440 Lincoln Street
Worcester, MA 01653
(Address of Depositor's Principal Executive Offices)
(508) 855-1000
(Depositor's Telephone Number, including Area Code)

Abigail M. Armstrong, Secretary and Counsel
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
(Name and Address of Agent for Service of Process)

It is proposed that this filing will become effective:

X immediately upon filing pursuant to paragraph (b) of Rule 485
------
on (date) pursuant to paragraph (b) of Rule 485
------
60 days after filing pursuant to paragraph (a) (1) of Rule 485
------
on (date) pursuant to paragraph (a) (1) of Rule 485
------
this post-effective amendment designates a new effective
------
date for a previously filed post-effective amendment

VARIABLE ANNUITY POLICIES

Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940 ("1940
Act"), Registrant hereby declares that an indefinite amount of its securities is
being registered under the Securities Act of 1933 ("1933 Act"). The Rule 24f-2
Notice for the issuer's fiscal year ending December 31, 1997 was filed on
March 27, 1998.

<PAGE>

CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF
ITEMS CALLED FOR BY FORM N-4

FORM N-4 ITEM NO. CAPTION IN PROSPECTUS
- ----------------- ---------------------

1 . . . . . . . . . Cover Page

2 . . . . . . . . . Special Terms

3 . . . . . . . . . Summary; Annual and Transaction Expenses

4 . . . . . . . . . Condensed Financial Information; Performance Information

5 . . . . . . . . . Description of the Company, the Variable Account, and
. . . . . . . . . . Pioneer Variable Contracts Trust

6 . . . . . . . . . Charges and Deductions

7 . . . . . . . . . Description of the Contract

8 . . . . . . . . . Electing the Form of Annuity and the Annuity Date;
. . . . . . . . . . Description of Variable Annuity Payout Options; Annuity
. . . . . . . . . . Benefit Payments

9 . . . . . . . . . Death Benefit

10. . . . . . . . . Payments; Computation of Values; Distribution

11. . . . . . . . . Surrender; Withdrawals; Charges for Surrender and
. . . . . . . . . . Withdrawal; Withdrawal Without Surrender Charge; Texas
. . . . . . . . . . Optional Retirement Program

12. . . . . . . . . Federal Tax Considerations

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

14. . . . . . . . . Statement of Additional Information - Table of Contents

FORM N-4 ITEM NO. . CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
- ----------------- ----------------------------------------------
15. . . . . . . . . Cover Page

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

17. . . . . . . . . General Information and History

18. . . . . . . . . Services

19. . . . . . . . . Underwriters

20. . . . . . . . . Underwriters

<PAGE>

21. . . . . . . . . Performance Information

22. . . . . . . . . Annuity Benefit Payments

23. . . . . . . . . Financial Statements

<PAGE>

SEPARATE ACCOUNT VA-P
PIONEER VISION 1 AND 2
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

SUPPLEMENT TO PROSPECTUS DATED May 1, 1998

***
Effective December 29, 1998, an optional Minimum Guaranteed Annuity Payout
Rider will be available under the Contract.* The following information
supplements the corresponding sections of the Prospectus. Please consult the
Prospectus for the full text of each supplemented section.

*Please note, the Minimum Guaranteed Annuity Payout Rider is not available in
all states.

Under "5. Expenses" on page P-2 of the Profile, the following is inserted at the
end of the first paragraph:

In addition, if you elect an optional Minimum Guaranteed Annuity Payout
Rider, we will deduct a charge against the accumulated value of your
contract at an annual rate of 0.25% for a rider with a ten-year waiting
period and at an annual rate of 0.15% for a rider with a fifteen-year
waiting period.

Under "5. Expenses" on page P-2 of the Profile, the following is inserted at the
end of the fourth paragraph:

The following chart does not reflect the optional Minimum Guaranteed
Annuity Payout Rider which, if elected, would increase expenses.

Under "8. Performance" on page P-4 of the Profile, the following is inserted at
the end of the sentence at the top of the page:

The following chart does not reflect the optional Minimum Guaranteed
Annuity Payout Rider which, if elected, would reduce performance.

Under "10. Other Information" on page P-4 of the Profile, the following is
inserted above "Free Look Period:"

OPTIONAL MINIMUM GUARANTEED ANNUITY PAYOUT RIDER: This optional rider
is available for a separate monthly charge. This rider guarantees you a
minimum amount of fixed annuity lifetime income during the annuity
payout phase, subject to certain conditions. On each contract
anniversary a minimum guaranteed annuity payout benefit base is
determined. This minimum guaranteed annuity payout benefit base is the
value that will be annuitized should you exercise the rider.
Annuitization under this rider will occur at the guaranteed annuity
purchase rates listed under the Annuity Option Tables in your Contract.
The minimum guaranteed annuity payout benefit base is equal to the
greatest of:

(a) the accumulated value increased by any positive market value
adjustment, if applicable, (the "accumulated value"); or
(b) accumulated value on the effective date of the rider compounded daily
at an annual rate of 5% plus gross payments made thereafter compounded
daily at an annual rate of 5%, starting on the date each payment is
applied, decreased proportionately to reflect withdrawals; or
(c) the highest accumulated value of all contract anniversaries since the
rider effective date, as determined after the accumulated value of
each contract anniversary is increased for subsequent payments and
decreased proportionately for subsequent withdrawals.

In the Table of Contents on page 3 of the Prospectus, the following is changed:

Under DESCRIPTION OF THE CONTRACT:
"M. Optional Minimum Guaranteed Annuity Payout Rider" is added
"M. NORRIS Decision" is changed to "N. NORRIS Decision"
"N. Computation of Values" is changed to "O. Computation of Values"

<PAGE>

Under CHARGES AND DEDUCTIONS:
"C. Optional Minimum Guaranteed Annuity Payout Rider Charge" is added
"C. Premium Taxes" is changed to "D. Premium Taxes"
"D. Contingent Deferred Sales Charge" is changed to "E. Contingent Deferred
Sales Charge"
"E. Transfer Charge" is changed to "F. Transfer Charge"

In the Summary on page 7 of the Prospectus, the following is added to the end of
the section entitled "What Happens In the Annuity Payout Phase?":

An optional Minimum Guaranteed Annuity Payout Rider is available for a
separate monthly charge. See "M. Optional Minimum Guaranteed Annuity
Payout Rider" under "DESCRIPTION OF THE CONTRACT." If elected, the
rider guarantees the Annuitant a minimum amount of fixed annuity
lifetime income during the annuity payout phase, subject to certain
conditions. On each Contract anniversary a Minimum Guaranteed Annuity
Payout Benefit Base is determined. The Minimum Guaranteed Annuity
Payout Benefit Base is the value that will be annuitized should you
exercise the Rider. Annuitization under this Rider will occur at the
guaranteed annuity purchase rates listed under the Annuity Option Tables
in your Contract. The Minimum Guaranteed Annuity Payout Benefit Base is
equal to the greatest of:

(a) the Accumulated Value increased by any positive Market Value
Adjustment, if applicable, (the "Accumulated Value"); or
(b) Accumulated Value on the effective date of the Rider compounded daily
at an annual rate of 5% plus gross payments made thereafter
compounded daily at an annual rate of 5%, starting on the date each
payment is applied, decreased proportionately to reflect withdrawals;
or
(c) the highest Accumulated Value of all Contract anniversaries since the
Rider effective date, as determined after the Accumulated Value of
each Contract anniversary is increased for subsequent payments and
decreased proportionately for subsequent withdrawals.

For each withdrawal described in (b) and (c) above, the proportionate
reduction is calculated by multiplying the (b) or (c) value determined
immediately prior to the withdrawal by the following fraction:

amount of the withdrawal
------------------------
the Accumulated Value determined immediately prior to the withdrawal.

In the Summary on page 10 of the Prospectus, the following is added to the end
of the section entitled "What Charges Will I Incur Under My Contract?":

Subject to state availability, the Company offers the following Rider that
may be elected by the Owner. A separate monthly charge is made for the
Rider which is deducted from the Accumulated Value at the end of each month
within which the Rider has been in effect. The applicable charge is
assessed by multiplying the Accumulated Value on the last day of each month
and on the date the Rider is terminated by 1/12th of the following annual
percentage rates:

<TABLE>
<S> <C>
Minimum Guaranteed Annuity Payout Rider with a ten-year waiting period.... 0.25%
Minimum Guaranteed Annuity Payout Rider with a fifteen-year waiting
period.................................................................... 0.15%
</TABLE>

For a description of this Rider, see "C. Optional Minimum Guaranteed
Annuity Payout Rider Charge" under "CHARGES AND DEDUCTIONS," and "M.
Optional Minimum Guaranteed Annuity Payout Rider" under "DESCRIPTION OF
THE CONTRACT."

Under "ANNUAL AND TRANSACTION EXPENSES" on page 12 of the Prospectus, after
"Contract Fee," the following is inserted:

OPTIONAL RIDER CHARGES:
(on an annual basis as a percentage of Accumulated Value)
Optional Minimum Guaranteed Annuity Payout Rider with a
ten-year waiting period: 0.25%*

<PAGE>

Optional Minimum Guaranteed Annuity Payout Rider with a
fifteen-year waiting period: 0.15%*

Under "ANNUAL AND TRANSACTION EXPENSES" on page 12 of the Prospectus, below
"Total Asset Charge," the following is inserted:

*if the rider is elected, this annual charge is deducted on a monthly basis
at the end of each month within which the rider was in effect.

Under "ANNUAL AND TRANSACTION EXPENSES" on page 14 of the Prospectus, table (1)
is renamed table (1)(a) and the following table is inserted following table
(1)(a):

(1)(b) If, at the end of the applicable time period, the Contract is
surrendered or annuitized* under a commutable period certain option or a
non-commutable period certain option of less than ten years, you would pay
the following expenses on a $1,000 investment, assuming 5% annual return on
assets and election of a Minimum Guaranteed Annuity Payout Rider(1) with a
ten-year waiting period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Portfolio $ 94 $147 $202 $363
International Growth Portfolio $ 92 $142 $192 $344
Europe Portfolio $ 92 $142 $192 $344
Capital Growth Portfolio $ 86 $122 $159 $278
Growth Shares Portfolio $ 90 $135 $181 $323
Real Estate Growth Portfolio $ 90 $135 $181 $322
Growth and Income Portfolio $ 90 $135 $181 $323
Equity-Income Portfolio $ 86 $122 $158 $276
Balanced Portfolio $ 87 $127 $167 $294
Swiss Franc Bond Portfolio $ 90 $134 $180 $320
America Income Portfolio $ 90 $135 $180 $321
Money Market Portfolio $ 88 $128 $169 $298
</TABLE>
Under "ANNUAL AND TRANSACTION EXPENSES" on page 14 of the Prospectus, table (2)
is renamed table (2)(a) and the following table is inserted following table
(2)(a):

(2)(b) If, at the end of the applicable time period, the Contract is
annuitized* under a life option or a non-commutable period certain option
of ten years or more, or if the Contract is NOT surrendered or annuitized,
you would pay the following expenses on a $1,000 investment, assuming an
annual 5% return on assets and election of a Minimum Guaranteed Annuity
Payout Rider(1) with a ten-year waiting period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Portfolio $34 $103 $174 $363
International Growth Portfolio $32 $ 97 $164 $344
Europe Portfolio $32 $ 97 $164 $344
Capital Growth Portfolio $25 $ 76 $130 $278
Growth Shares Portfolio $29 $ 90 $153 $323
Real Estate Growth Portfolio $29 $ 90 $153 $322
Growth and Income Portfolio $29 $ 90 $153 $323
Equity-Income Portfolio $25 $ 76 $129 $276
Balanced Portfolio $26 $ 81 $138 $294
Swiss Franc Bond Portfolio $29 $ 89 $152 $320
America Income Portfolio $29 $ 89 $152 $321
Money Market Portfolio $27 $ 82 $140 $298
</TABLE>

<PAGE>

(1) If the Minimum Guaranteed Annuity Payout Rider is exercised, you may
only annuitize under a fixed annuity payout option involving a life
contingency at the guaranteed annuity purchase rates listed under the
Annuity Option Tables in your Contract.

Under "PERFORMANCE INFORMATION" on page 17 of the Prospectus, between the second
and third sentences of the paragraph which begins on page 16, the following is
inserted:

The calculation is not adjusted to reflect the deduction of a Minimum
Guaranteed Annuity Payout Rider charge.

Under "PERFORMANCE INFORMATION" on page 17 of the Prospectus, at the end of the
fourth full paragraph, the following is inserted:

In addition, relevant broad-based indices and performance from independent
sources may be used to illustrate the performance of certain Contract
features.

Under "J. Electing the Form of Annuity and the Annuity Date" on page 29 of the
Prospectus, the following is inserted above "K. Description of Variable Annuity
Payout Options:"

If the Owner exercises the Minimum Guaranteed Annuity Payout Rider,
annuity benefit payments must be made under a fixed annuity payout
option involving a life contingency and must occur at the guaranteed
annuity purchase rates listed under the Annuity Option Tables in the
Contract.

Under "L. Annuity Benefit Payments" on page 31 of the Prospectus, the following
is inserted above "M. NORRIS Decision:"

If the Owner elects the Minimum Guaranteed Annuity Payout Rider, at
annuitization the income provided under the Contract by applying the
Accumulated Value to the current annuity factors is compared to the
income provided under the Rider by applying the Minimum Guaranteed
Annuity Payout Benefit Base to the guaranteed annuity factors. If
annuity benefit payments under the Rider are higher, the Owner may
exercise the Rider. If annuity benefit payments under the Rider are
lower, the Owner may choose not to exercise the Rider and instead
annuitize under current annuity factors. See "M. Optional Minimum
Guaranteed Annuity Payout Rider" below.

On page 31 of the Prospectus, "M. NORRIS Decision" is renamed "N. NORRIS
Decision," "N. Computation of Values" is renamed "O. Computation of Values" and
the following is inserted:

M. OPTIONAL MINIMUM GUARANTEED ANNUITY PAYOUT RIDER

An optional Minimum Guaranteed Annuity Payout Rider is available for a
separate monthly charge. The Minimum Guaranteed Annuity Payout Rider
guarantees a minimum amount of fixed annuity lifetime income during the
annuity payout phase, subject to the conditions described below. On
each Contract anniversary a Minimum Guaranteed Annuity Payout Benefit
Base is determined. The Minimum Guaranteed Annuity Payout Benefit Base
is the value that will be annuitized if the Rider is exercised.
Annuitization under this Rider will occur at the guaranteed annuity
purchase rates listed under the Annuity Option Tables in the Contract.
The Minimum Guaranteed Annuity Payout Benefit Base is equal to the
greatest of:

<PAGE>

amount of the withdrawal
------------------------
the Accumulated Value determined immediately prior to the withdrawal

CONDITIONS OF ELECTION OF THE MINIMUM GUARANTEED ANNUITY PAYOUT RIDER.

- The Owner may elect the Minimum Guaranteed Annuity Payout Rider at
Contract issue or at any time thereafter, however, if the Rider is not
elected within thirty days after Contract issue or within thirty days
after a Contract anniversary date, the effective date of the Rider will
be the following Contract anniversary date.

- The Owner may not elect a Rider with a ten-year waiting period if at the
time of election the Annuitant has reached his or her 78th birthday. The
Owner may not elect a Rider with a fifteen-year waiting period if at the
time of election the Annuitant has reached his or her 73rd birthday.

CONDITIONS OF EXERCISE OF THE MINIMUM GUARANTEED ANNUITY PAYOUT RIDER.

- The Owner may only exercise the Minimum Guaranteed Annuity Payout
Rider within thirty days after any Contract anniversary following the
expiration of a ten or fifteen-year waiting period from the effective
date of the Rider.

- The Owner may only annuitize under a fixed annuity payout option
involving a life contingency as provided under "K. Description of
Variable Annuity Payout Options."

- The Owner may only annuitize at the guaranteed annuity purchase rates
listed under the Annuity Option Tables in the Contract.

TERMINATION OF THE MINIMUM GUARANTEED ANNUITY PAYOUT RIDER.

- The Owner may not terminate the Minimum Guaranteed Annuity Payout
Rider prior to the seventh Contract anniversary after the effective date
of the Rider, unless such termination occurs on or within thirty days
after a Contract anniversary and in conjunction with the purchase of a
Minimum Guaranteed Annuity Payout Rider with a waiting period of equal
or greater length at its then current price, if available.

- After the seventh Contract anniversary from the effective date of the
Rider the Owner may terminate the Rider at any time.

- The Owner may repurchase a Rider with a waiting period equal to or
greater than the Rider then in force at the new Rider's then current
price, if available, however, repurchase may only occur on or within
thirty days of a Contract anniversary.

- Other than in the event of a repurchase, once terminated the Rider may
not be purchased again.

- The Rider will terminate upon surrender of the Contract or the date that
a death benefit is payable if the Contract is not continued under "H. The
Spouse of the Owner as Beneficiary" (see "DESCRIPTION OF THE CONTRACT").

From time to time the Company may illustrate minimum guaranteed income
amounts under the Minimum Guaranteed Annuity Payout Rider for
individuals based on a variety of assumptions, including varying rates
of return on the value of the Contract during the accumulation phase,
annuity payout periods, annuity payout options and Minimum Guaranteed
Annuity Payout Rider waiting periods. Any assumed rates of return are
for purposes of illustration only and are not intended as a
representation of past or future investment rates of return.
<PAGE>

For example, the illustration below assumes an initial payment of
$100,000 for an Annuitant age 60 (at issue) and exercise of a Minimum
Guaranteed Annuity Payout Rider with a ten-year waiting period. The
illustration assumes that no subsequent payments or withdrawals are made
and that the annuity payout option is a Life Annuity With Payments
Guaranteed For 10 Years. The values below have been computed based on a
5% net rate of return and are the guaranteed minimums that would be
received under the Minimum Guaranteed Annuity Payout Rider. The minimum
guaranteed benefit base amounts are the values that will be annuitized.
Minimum guaranteed annual income values are based on a fixed
annuity payout.

<TABLE>
<CAPTION>
Minimum
Contract Minimum Guaranteed
Anniversary Guaranteed Annual
at Exercise Benefit Base Income (1)
----------- ------------ ----------
<S> <C> <C>
10 $162,889 $12,153
15 $207,892 $17,695
</TABLE>

(1) Other fixed annuity options involving a life contingency other than
Life Annuity With Payments Guaranteed for 10 Years are available. See
"K. Description of Variable Annuity Payout Options."

The Minimum Guaranteed Annuity Payout Rider does not create Accumulated
Value or guarantee performance of any investment option. Because this
Rider is based on conservative actuarial factors, the level of lifetime
income that it guarantees may often be less than the level that would be
provided by application of Accumulated Value at current annuity factors.
Therefore, the Rider should be regarded as a safety net. As described
above, withdrawals will reduce the Benefit Base.

Under "CHARGES AND DEDUCTIONS" on pages 33 and 34 of the Prospectus, "C. Premium
Taxes" is renamed "D. Premium Taxes," "D. Contingent Deferred Sales Charge" is
renamed "E. Contingent Deferred Sales Charge" and the following is inserted:

C. OPTIONAL MINIMUM GUARANTEED ANNUITY PAYOUT CHARGE

Subject to state availability, the Company offers an optional Minimum
Guaranteed Annuity Payout Rider that may be elected by the Owner. A
separate monthly charge is made for the Rider. On the last day of each
month and on the date the Rider is terminated, a charge equal to 1/12th
of an annual rate (see table below) is made against the Accumulated
Value of the Contract at that time. The charge is made through a
pro-rata reduction of the Accumulated Value of the Sub-Accounts, the
Fixed Account and the Guarantee Period Accounts (based on the relative
value that the Accumulation Units of the Sub-Accounts, the dollar
amounts in the Fixed Account and the dollar amounts in the Guarantee
Period Accounts bear to the total Accumulated Value).

The applicable charge is assessed on the Accumulated Value on the last day
of each month and on the date the Rider is terminated, multiplied by 1/12th
of the following annual percentage rates:

<TABLE>
<S> <C>
Minimum Guaranteed Annuity Payout Rider with ten-year waiting period........ 0.25%
Minimum Guaranteed Annuity Payout Rider with fifteen-year waiting period.... 0.15%
</TABLE>

<PAGE>

For a description of the Rider, see "M. Optional Minimum Guaranteed
Annuity Payout Rider" under "DESCRIPTION OF THE CONTRACT," above.

After the section entitled "LEGAL MATTERS" on page 45 of the Prospectus, the
following is inserted:

YEAR 2000 COMPLIANCE

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the
Company's computer programs that have date-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could
result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business
activities.

Based on a third party assessment, the Company determined that significant
portions of its software required modification or replacement to enable its
computer systems to properly process dates beyond December 31, 1999. The
Company is presently completing the process of modifying or replacing
existing software and believes that this action will resolve the Year 2000
issue. However, if such modifications and conversions are not made, or are
not completed timely, or should there be serious unanticipated
interruptions from unknown sources, the Year 2000 issue could have a
material adverse impact on the operations of the Company. Specifically, the
Company could experience, among other things, an interruption in its
ability to collect and process premiums, process claim payments, safeguard
and manage its invested assets, accurately maintain policyholder
information, accurately maintain accounting records, and perform customer
service. Any of these specific events, depending on duration, could have a
material adverse impact on the results of operations and the financial
position of the Company.

The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company
is vulnerable to those third parties' failure to remediate their own Year
2000 issue. The Company's total Year 2000 project cost and estimates to
complete the project include the estimated costs and time associated with
the impact of a third party's Year 2000 issue, and are based on presently
available information. However, there can be no guarantee that the systems
of other companies on which the Company's systems rely will be timely
converted, or that a failure to convert by another company, or a conversion
that is incompatible with the Company's systems, would not have material
adverse effect on the Company. The Company does not believe that it has
material exposure to contingencies related to the Year 2000 Issue for the
products it has sold. Although the Company does not believe that there is
a material contingency associated with the Year 2000 project, there can be
no assurance that exposure for material contingencies will not arise.

The Company will utilize both internal and external resources to reprogram
or replace, and test both information technology and embedded technology
systems for Year 2000 modifications. The Company plans to complete the
mission critical elements of the Year 2000 by December 31, 1998. The cost
of the Year 2000 project will be expensed as incurred over the next two
years and is being funded primarily through a reallocation of resources
from discretionary projects. Therefore, the Year 2000 project is not
expected to result in any significant incremental technology cost and is
not expected to have a material effect on the results of operations.
Through September 30, 1998, the Company and its subsidiaries and affiliates
have incurred and expensed approximately $47 million related to the
assessment of, and preliminary efforts in connection with, the project and
the development of a remediation plan. The total remaining cost of the
project is estimated at between $30-40 million.

The costs of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of future
events including the continued availability of certain resources, third
party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could
differ materially from those plans. Specific factors that might cause such
material differences include, but are not limited to, the availability and
cost of personnel trained in this area, the ability to locate and correct
all relevant computer codes, and similar uncertainties.

<PAGE>

Under Appendix D on page D-2 of the Prospectus, in all instances "(1)" in number
8 is changed to "(1)(a)," and the following is added after example (1)(a) on
page D-3:

(1)(b) If the Contract is surrendered or annuitized* under a commutable
period certain option or a non-commutable period certain option of less
than ten years at the end of the applicable period, you would pay the
following expenses on a $1,000 investment, assuming 5% annual return on
assets and election of a Minimum Guaranteed Annuity Payout Rider (1) with a
ten-year waiting period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Portfolio $98 $169 $223 $363
International Growth Portfolio $96 $163 $214 $344
Europe Portfolio $96 $163 $214 $344
Capital Growth Portfolio $89 $144 $180 $278
Growth Shares Portfolio $94 $157 $203 $323
Real Estate Growth Portfolio $94 $157 $203 $322
Growth and Income Portfolio $94 $157 $203 $323
Equity-Income Portfolio $89 $144 $179 $276
Balanced Portfolio $91 $149 $188 $294
Swiss Franc Bond Portfolio $93 $156 $202 $320
America Income Portfolio $94 $156 $202 $321
Money Market Portfolio $91 $150 $190 $298
</TABLE>
(1) If the Minimum Guaranteed Annuity Payout Rider is exercised, you may
only annuitize under a fixed annuity payout option involving a life
contingency at the guaranteed annuity purchase rates listed under the
Annuity Option Tables in your policy.

Supplement dated December 29, 1998.

<PAGE>

SEPARATE ACCOUNT VA-P
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1998

***
Effective October 30, 1998, two additional Sub-Accounts will be available under
the Contract. The Sub-Accounts will invest exclusively in shares of the
Emerging Markets Portfolio or the Europe Portfolio of the Pioneer Variable
Contracts Trust. As such, the following information supplements the
corresponding sections of the Prospectus. Please consult the Prospectus for the
full text of each supplemented section.

Under "1. THE PIONEER VISION 2 VARIABLE ANNUITY CONTRACT" on page P-1 of the
Profile, the word "twelve" is substituted for the word "ten" in the second
sentence of the second paragraph.

Under "4. INVESTMENT OPTIONS" on page P-2 of the Profile, the following is added
to the listing of investment options: "Emerging Markets Portfolio" and "Europe
Portfolio."

Under "5. EXPENSES" in the Profile, the following is inserted into the table on
page P-3:

EXAMPLES:
TOTAL ANNUAL
EXPENSES AT
END OF
TOTAL ANNUAL INSURANCE TOTAL ANNUAL TOTAL ANNUAL (1) (2)
PORTFOLIO CHARGES PORTFOLIO EXPENSES CHARGES 1 YEAR 10 YEARS
- -------------------- ---------------------- ------------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Portfolio 1.44% 1.68%* 3.12% $92 $340
Europe Portfolio 1.44% 1.48%* 2.92% $90 $321
</TABLE>

The footnote under "5. EXPENSES" in the Profile, is amended to add the
following:

* Portfolio expenses are estimated for the Emerging Markets and Europe
Portfolios which commenced operations on October 30, 1998. In addition,
Pioneering Management Corporation has agreed voluntarily to waive its management
fee and/or make other arrangements, if necessary, to reduce portfolio expenses.
For more information, see the Fee Table in the Prospectus for the Contract.

"EMERGING MARKETS PORTFOLIO" is added before and "EUROPE PORTFOLIO" is added
after International Growth Portfolio in the listing of Portfolios on page 1 of
the Prospectus and in the listing of "UNDERLYING PORTFOLIOS" under "SPECIAL
TERMS" on page 5 of the Prospectus.

The description of the Variable Account under "WHAT ARE MY INVESTMENT CHOICES?"
on page 8 of the Prospectus is deleted and replaced with the following:

THE VARIABLE ACCOUNT. You have the choice of Sub-Accounts investing
in the twelve Portfolios of the Fund:

Emerging Markets Portfolio Growth and Income Portfolio
International Growth Portfolio Equity-Income Portfolio
Europe Portfolio Balanced Portfolio
Capital Growth Portfolio Swiss Franc Bond Portfolio
Growth Shares Portfolio America Income Portfolio
Real Estate Growth Portfolio Money Market Portfolio

<PAGE>

The following information on the Emerging Markets Portfolio and the Europe
Portfolio is added to the Portfolio Expenses table on page 13 of the Prospectus:

Total Portfolio
Management Fee Other Expenses Expenses (After
(After (After Applicable Waivers/
Voluntary Reimbursements Reimbursements
Portfolio Waivers) and Offsets) and Offsets)
--------- -------------- ----------------- ---------------
<S> <C> <C> <C>
Emerging Markets
Portfolio(1) . . . . . . . . . 1.15% 0.53% 1.68%
Europe Portfolio(1). . . . . . 1.00% 0.48% 1.48%
</TABLE>

Footnote 1 on page 13 of the Prospectus is amended to add the following:

(1) The Emerging Markets and Europe Portfolios commenced operations on October
30, 1998, therefore, expenses are estimated and should not be considered
representative of future expenses. Actual expenses may be greater or less than
those shown.

The paragraph following Footnote 3 on page 13 of the Prospectus is amended in
its entirety as follows:

Pioneering Management Corporation ("Pioneer") is the investment adviser to each
Portfolio. As of the date of this prospectus, Pioneer has agreed voluntarily to
limit its management fee and/or reimburse each Portfolio for expenses to the
extent that total expenses will not exceed 1.75% for the Emerging Markets
Portfolio; 1.50% for the International Growth Portfolio; 1.50% for the Europe
Portfolio; 1.25% for the Growth Shares Portfolio, the Real Estate Portfolio, the
Growth and Income Portfolio, the Swiss Franc Bond Portfolio and the America
Income Portfolio and 1.00% for the Money Market Portfolio. The declaration of a
voluntary limitation and/or reimbursement in any year does not bind the Manager
to declare future expense limitations with respect to these funds. These
limitations/waivers may be terminated at any time with notice.

The following cumulative expense information is added to Examples 1 and 2 on
page 14 of the Prospectus:

(1) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Emerging Markets. . . . . . . . . . . . . $92 $140 $190 $340
Europe. . . . . . . . . . . . . . . . . . $90 $135 $180 $321

(2) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Emerging Markets. . . . . . . . . . . . . $31 $ 95 $162 $340
Europe. . . . . . . . . . . . . . . . . . $29 $ 89 $152 $321
</TABLE>

Under "PIONEER VARIABLE CONTRACTS TRUST" on page 20 of the Prospectus, the word
"twelve" is substituted for the word "ten" and "EMERGING MARKETS PORTFOLIO" is
added before and "EUROPE PORTFOLIO" is added after International Growth
Portfolio in the second sentence of the second paragraph.

The following summary of the investment objectives and policies of the Emerging
Markets Portfolio is inserted as the first Portfolio summary and that of the
Europe Portfolio is inserted as the third summary under "INVESTMENT OBJECTIVES
AND POLICIES" on page 21 of the Prospectus.:

EMERGING MARKETS PORTFOLIO - seeks long-term growth of capital. The
Portfolio invests primarily in securities of issuers in countries with
emerging economies or securities markets and related depositary receipts.

EUROPE PORTFOLIO - seeks long-term growth of capital. The Portfolio
invests in a diversified portfolio consisting primarily of securities of
European companies and in depositary receipts for such securities.

<PAGE>

The following information is added to the fee disclosures under "INVESTMENT
ADVISORY SERVICES" on page 22 of the Prospectus:

MANAGEMENT FEE AS A
% OF PORTFOLIO'S AVERAGE
DAILY NET ASSETS
------------------------
<S> <C>
Emerging Markets Portfolio. . . . . . . . . . . . . . . . . 1.15%
Europe Portfolio. . . . . . . . . . . . . . . . . . . . . . 1.00%
</TABLE>

The following is added to table (1) in paragraph 8 of "APPENDIX D --
DIFFERENCES UNDER THE PIONEER VISION CONTRACT (FORM A3023-95)" on page D-3 of
the Prospectus:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Emerging Markets ....... $95 $162 $211 $340
Europe ................. $94 $156 $202 $321
</TABLE>

Supplement Dated October 30, 1998

<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE
AND ANNUITY COMPANY

PIONEER VISION 2

PROFILE THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT
MAY 1, 1998 POINTS THAT YOU SHOULD KNOW AND CONSIDER BEFORE PURCHASING
THE PIONEER VISION 2 VARIABLE ANNUITY CONTRACT. THE CONTRACT
IS MORE FULLY DESCRIBED LATER IN THIS PROSPECTUS. PLEASE
READ THE PROSPECTUS CAREFULLY.

1. THE PIONEER VISION 2 VARIABLE ANNUITY CONTRACT

The Pioneer Vision 2 variable annuity contract is a contract between you, the
owner, and Allmerica Financial Life Insurance and Annuity Company. It is
designed to help you accumulate assets for your retirement or other important
financial goals on a tax-deferred basis. The Pioneer Vision 2 contract combines
the concept of professional money management with the attributes of an annuity
contract.

Pioneer Vision 2 offers a diverse selection of investment portfolios. You may
allocate your payments among any of ten investment portfolios of the Pioneer
Variable Contracts Trust, the Guarantee Period Accounts and the Fixed Account
(the Guarantee Period Accounts and/or the Fixed Account may not be available in
certain jurisdictions.) This range of investment choices enables you to allocate
your money to meet your particular investment needs.

Like all annuities, the contract has an ACCUMULATION PHASE and an ANNUITY PAYOUT
PHASE. During the ACCUMULATION PHASE you can make payments into the contract on
any frequency. Investment and interest gains accumulate tax deferred. You may
withdraw money from your contract during the ACCUMULATION PHASE. However, as
with other tax-deferred investments, you pay taxes on earnings and any untaxed
payments to the contract when you withdraw them. A federal tax penalty may apply
if you withdraw prior to age 59 1/2.

During the ANNUITY PAYOUT PHASE you will receive regular payments from your
contract, provided you annuitize. Annuitization involves beginning a series of
payments from the capital that has built up in your contract. The amount of your
payments during the annuity payout phase will, in part, be determined by your
contract's growth during the accumulation phase.

2. ANNUITY BENEFIT PAYMENTS

If you choose to annuitize your contract, you may select one of six annuity
options: (1) monthly payments guaranteed for your lifetime; (2) monthly payments
guaranteed for your lifetime, but for not less than 10 years; (3) monthly
payments for your lifetime with the guarantee that, if payments to you are less
than the accumulated value, a refund of the remaining value will be paid; (4)
monthly payments guaranteed for your lifetime and your survivor's lifetime; (5)
monthly payments guaranteed for your lifetime and your survivor's lifetime with
the payment to the survivor being reduced to 2/3; and (6) monthly payments
guaranteed for a specified period of 1 to 30 years.

You also need to decide if you want your annuity payments on a variable basis
(i.e., subject to fluctuation based on investment performance), on a fixed basis
(with benefit payments guaranteed at a fixed amount), or on a combination
variable and fixed basis. Once payments begin, the annuity option cannot be
changed.

3. PURCHASING THIS CONTRACT

You can buy a contract through your financial representative, who can also help
you complete the proper forms. There is no fixed schedule for making payments
into this contract. Payments are not limited as to frequency, but there are
certain limitations as to amount. Currently, the initial payment must be at
least $600

P-1
<PAGE>
and each subsequent investment must be at least $50. Minimum payments are lower
for certain employer-sponsored plans.

4. INVESTMENT OPTIONS

You have full investment control over the contract. You may allocate and
transfer money among the following investment options:

<TABLE>
<S> <C>
International Growth Balanced Portfolio
Portfolio
Capital Growth Portfolio Swiss Franc Bond Portfolio
Growth Shares Portfolio America Income Portfolio
Real Estate Growth Money Market Portfolio
Portfolio
Growth and Income Guarantee Period Accounts
Portfolio
Equity-Income Portfolio Fixed Account
</TABLE>

The Guarantee Period Accounts let you choose from among several different
Guarantee Periods during which principal and interest rates are guaranteed. The
Fixed Account guarantees principal and a minimum rate of interest (never less
than 3% compounded annually).

5. EXPENSES

Each year and upon surrender, a $30 contract fee is deducted from your contract.
The contract fee is waived if the value of the contract is $50,000 or more or if
the contract is issued to and maintained by the Trustees of a 401(k) plan. We
also deduct insurance charges which amount to 1.40% annually of the daily value
of your contract value allocated to the variable investment options. These
insurance charges include a mortality and expense risk charge of 1.25% and an
administrative expense charge of 0.15%. There are also investment management
fees and other portfolio operating expenses that vary by portfolio.

If you decide to surrender your contract, make withdrawals or receive payments
under certain annuity options, we may impose a surrender charge between 1% and
7% of the payment withdrawn, based on when your payments were made. In states
where premium taxes are imposed, a premium tax charge will be deducted either
when withdrawals are made or annuity payments commence.

There is currently no charge for transfers between investment options. We
reserve the right to assess a charge, not to exceed $25, for transfers in excess
of 12 per year.

The following chart is designed to help you understand the charges in your
contract. The column "Total Annual Charges" shows the total of the $30 contract
fee (which is represented as 0.04%), the 1.40% insurance charges and the
investment charges for each portfolio. The next two columns show two examples of
the charges, in dollar amounts, you would pay under a contract. The examples
assume that you invested $1,000 in a portfolio earning 5% annually and that you
withdraw your money: (1) at the end of year 1, and (2) at the end of year 10.
For year 1, the Total Annual Charges are assessed as well as the surrender
charges. For year 10, the example shows the aggregate of all the annual charges
assessed for 10 years, but there is no surrender charge. The premium tax is
assumed to be 0% in both examples.

P-2
<PAGE>

<TABLE>
<CAPTION>
EXAMPLES:
TOTAL ANNUAL
EXPENSES AT
END OF
TOTAL ANNUAL TOTAL ANNUAL -----------------
INSURANCE PORTFOLIO TOTAL ANNUAL (1) (2)
PORTFOLIO CHARGES EXPENSES* CHARGES 1 YEAR 10 YEARS
- --------------------------------------------------------- ------------ ------------ ------------ ------ --------
<S> <C> <C> <C> <C> <C>
International Growth Portfolio 1.44% 1.48% 2.92% $90 $321
Capital Growth Portfolio 1.44% 0.79% 2.23% $83 $253
Growth Shares Portfolio 1.44% 1.25% 2.69% $88 $299
Real Estate Growth Portfolio 1.44% 1.24% 2.68% $88 $298
Growth and Income Portfolio 1.44% 1.25% 2.69% $88 $299
Equity-Income Portfolio 1.44% 0.77% 2.21% $83 $251
Balanced Portfolio 1.44% 0.95% 2.39% $85 $269
Swiss Franc Bond Portfolio 1.44% 1.22% 2.66% $87 $296
America Income Portfolio 1.44% 1.23% 2.67% $88 $297
Money Market Portfolio 1.44% 0.99% 2.43% $85 $273
</TABLE>

The above insurance charges include the $30 annual contract fee (which is
represented as 0.04%).

*Portfolio expenses are estimated for the Growth Shares and Growth and Income
Portfolios which commenced operations on October 31, 1997. In addition,
Pioneering Management Corporation has agreed voluntarily to waive its management
fee and/or make other arrangements, if necessary, to reduce portfolio expenses.
For more information, see the Fee Table in the Prospectus for the Contract.

6. TAXES

You will not pay taxes until you withdraw money from your contract. During the
accumulation phase, earnings are withdrawn first and are taxed as ordinary
income. If you make a withdrawal prior to age 59 1/2, you may be subject to a
10% federal tax penalty on the earnings. Payments during the annuity payout
phase are considered partly a return of your investment and partly earnings. You
will be subject to income taxes on the earnings portion of each payment.
However, if your contract is funded with pre-tax or tax deductible dollars (such
as a pension or profit sharing plan contribution), then the entire payment will
be taxable.

7. WITHDRAWALS

You can withdraw money from your contract at any time during the accumulation
phase. Any payment invested for more than seven years can be withdrawn without a
surrender charge. For amounts invested seven years or less, you can withdraw,
without a charge, the GREATEST of: (1) 100% of cumulative earnings; (2) 15% of
the contract value per calendar year; or (3) if you are also the Annuitant, an
amount based on your life expectancy. (Similarly, no surrender charge will apply
if an amount is withdrawn based on the Annuitant's life expectancy if the Owner
is a trust or other non-natural person.) Where permitted by state law, the
surrender charges are also waived if, after the contract is issued, you (1) are
diagnosed with a fatal illness, (2) become disabled (before age 65) or (3) are
confined in a medical care facility until the later of one year from the issue
date or 90 days.

Any withdrawal from a Guarantee Period Account ("GPA") prior to the end of the
guarantee period will be subject to a market value adjustment which may increase
or decrease the value in the account. This adjustment will never impact your
original investment, nor will earnings in the GPA amount to less than an
effective annual rate of 3%.

8. PERFORMANCE

The following chart illustrates past returns for the portfolios since the
inception of each Sub-Account. The performance figures reflect the contract fee,
the insurance charges, the investment charges and all other

P-3
<PAGE>
expenses of the portfolio. They do not reflect the surrender charges which, if
applied, would reduce such performance. Please note that past performance is not
a guarantee of future results.

<TABLE>
<CAPTION>
CALENDAR YEARS
---------------------
PORTFOLIO 1997 1996
- ---------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
International Growth Portfolio 3.38% 6.98%
Capital Growth Portfolio 22.94% 13.38%
Growth Shares Portfolio N/A N/A
Real Estate Growth Portfolio 19.46% 33.80%
Growth and Income Portfolio N/A N/A
Equity-Income Portfolio 33.33% 13.53%
Balanced Portfolio 15.50% 12.62%
Swiss Franc Bond Portfolio -8.25% -12.11%
America Income Portfolio 6.91% -0.17%
Money Market Portfolio 3.16% 3.00%
</TABLE>

9. DEATH BENEFIT

If the annuitant dies during the accumulation phase, we will pay the beneficiary
a death benefit. The death benefit is equal to the GREATEST of: (a) the
accumulated value increased for any positive market value adjustment; (b) gross
payments compounded daily at an annual rate of 5%, decreased proportionately to
reflect any prior withdrawals; or (c) the death benefit that would have been
payable on the most recent contract anniversary, increased for subsequent
payments and decreased proportionately for subsequent withdrawals.

This guaranteed death benefit works in the following way assuming no withdrawals
are made. On the first anniversary, the death benefit will be equal to the
greater of (a) the Accumulated Value (increased by any positive Market Value
Adjustment) or (b) gross payments compounded at the annual rate of 5%. The
higher of (a) or (b) will then be locked in until the second anniversary, at
which time the death benefit will be equal to the greatest of (a) the Contract's
then current Accumulated Value increased by any positive Market Value
Adjustment; (b) gross payments compounded at the annual rate of 5% or (c) the
locked-in value of the death benefit at the first anniversary. The greatest of
(a), (b) or (c) will be locked in until the next Contract anniversary. This
calculation will then be repeated on each anniversary while the Contract remains
in force and prior to the Annuity Date. As noted above, the values of (b) and
(c) will be decreased proportionately if withdrawals are taken.

10. OTHER INFORMATION

FREE-LOOK PERIOD: If you cancel your contract within 10 days after receiving it
(or whatever period is required by your state), you will receive a refund in
accordance with the terms of the contract's "Right to Examine Contract"
provision.

DOLLAR COST AVERAGING: You may elect to automatically transfer money on a
periodic basis from the America Income Portfolio, Money Market Portfolio or
Fixed Account to one or more of the other investment options, except the Fixed
Account and the Guarantee Period Accounts.

AUTOMATIC ACCOUNT REBALANCING: You may elect to automatically have your
contract's accumulated value periodically reallocated ("rebalanced") among your
chosen investment options to maintain your designated percentage allocation mix.

PROBATE FREE: In most cases, the death benefit is payable to the beneficiary
you select without having to go through probate.

P-4
<PAGE>
11. INQUIRIES

If you need more information about Pioneer Vision 2 you may contact us at
1-800-688-9915 or send correspondence to:

Pioneer Vision 2
Allmerica Financial
P.O. Box 8632
Boston, MA 02266-8632

P-5
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
WORCESTER, MASSACHUSETTS
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS
PIONEER VARIABLE CONTRACTS TRUST

This Prospectus describes interests under flexible payment deferred combination
variable and fixed annuity contracts issued either on a group basis or as
individual contracts by Allmerica Financial Life Insurance and Annuity Company
(the "Company") to individuals and businesses in connection with retirement
plans which may or may not qualify for special federal income tax treatment.
(For information about a contract's tax status when used with a particular type
of plan, see "FEDERAL TAX CONSIDERATIONS.") Participation in a group contract
will be accounted for by the issuance of a certificate describing the
individual's interest under the group contract. Participation in an individual
contract will be evidenced by the issuance of an individual contract.
Certificates and individual contracts are referred to herein collectively as the
"Contract(s)." The following is a summary of information about these Contracts.
More detailed information can be found under the referenced captions in this
Prospectus.

Contract values may accumulate on a variable basis in the Contract's Variable
Account, known as Separate Account VA-P. The assets of the Variable Account are
divided into Sub-Accounts, each investing exclusively in shares of one of the
following Portfolios of the Pioneer Variable Contracts Trust ("the Fund"):

INTERNATIONAL GROWTH PORTFOLIO
CAPITAL GROWTH PORTFOLIO
GROWTH SHARES PORTFOLIO
REAL ESTATE GROWTH PORTFOLIO
GROWTH AND INCOME PORTFOLIO
EQUITY-INCOME PORTFOLIO
BALANCED PORTFOLIO
SWISS FRANC BOND PORTFOLIO
AMERICA INCOME PORTFOLIO
MONEY MARKET PORTFOLIO

In most jurisdictions, values also may be allocated on a fixed basis to the
Fixed Account, which is part of the Company's General Account and, during the
accumulation period, to one or more of the Guarantee Period Accounts. Amounts
allocated to the Fixed Account earn interest at a guaranteed rate for one year
from the date allocated. Amounts allocated to a Guarantee Period Account earn a
fixed rate of interest for the duration of the applicable Guarantee Period. The
interest earned is guaranteed if held for the entire Guarantee Period. If
withdrawn or transferred prior to the end of the Guarantee Period, the value may
be increased or decreased by a Market Value Adjustment. Assets supporting
allocations to the Guarantee Period Accounts in the accumulation phase are held
in the Company's Separate Account GPA.

Additional information is contained in a Statement of Additional Information
dated May 1, 1998, filed with the Securities and Exchange Commission ("SEC") and
incorporated herein by reference. The Table of Contents of the Statement of
Additional Information is on page 4 of this Prospectus. The Statement of
Additional Information ("SAI") is available upon request and without charge. To
obtain the SAI, fill out and return the attached request card or contact Annuity
Client Services, telephone 1-800-688-9915.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS OF
PIONEER VARIABLE CONTRACTS TRUST. INVESTORS SHOULD RETAIN A COPY OF THIS
PROSPECTUS FOR FUTURE REFERENCE.

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

DATED MAY 1, 1998
<PAGE>
THE CONTRACTS ARE OBLIGATIONS OF ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY
COMPANY, AND ARE DISTRIBUTED BY ALLMERICA INVESTMENTS, INC. THE CONTRACTS ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR CREDIT
UNION. THE CONTRACTS ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), OR ANY OTHER FEDERAL AGENCY. INVESTMENTS IN THE
CONTRACTS ARE SUBJECT TO VARIOUS RISKS, INCLUDING THE FLUCTUATION OF VALUE AND
POSSIBLE LOSS OF PRINCIPAL.

THE CONTRACTS OFFERED BY THIS PROSPECTUS MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.

2
<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
SPECIAL TERMS......................................................................... 5
SUMMARY............................................................................... 7
ANNUAL AND TRANSACTION EXPENSES....................................................... 12
CONDENSED FINANCIAL INFORMATION....................................................... 15
PERFORMANCE INFORMATION............................................................... 16
DESCRIPTION OF THE COMPANY, THE VARIABLE ACCOUNT, AND PIONEER
VARIABLE CONTRACTS TRUST............................................................. 19
INVESTMENT OBJECTIVES AND POLICIES.................................................... 21
INVESTMENT ADVISORY SERVICES.......................................................... 22
DESCRIPTION OF THE CONTRACT........................................................... 22
A. Payments......................................................................... 22
B. Right to Revoke Individual Retirement Annuity.................................... 23
C. Right to Revoke or Surrender in Some States...................................... 23
D. Transfer Privilege............................................................... 23
Automatic Transfers and Automatic Account Rebalancing Options................... 24
E. Surrender........................................................................ 24
F. Withdrawals...................................................................... 25
Systematic Withdrawals.......................................................... 25
Life Expectancy Distributions................................................... 26
G. Death Benefit.................................................................... 26
Death of the Annuitant Prior to the Annuity Date................................ 26
Death of an Owner Who is Not Also the Annuitant Prior to the Annuity Date....... 27
Payment of the Death Benefit Prior to the Annuity Date.......................... 27
Death of the Annuitant On or After the Annuity Date............................. 27
H. The Spouse of the Owner as Beneficiary........................................... 27
I. Assignment....................................................................... 28
J. Electing the Form of Annuity and the Annuity Date................................ 28
K. Description of Variable Annuity Payout Options................................... 29
L. Annuity Benefit Payments......................................................... 30
The Annuity Unit................................................................ 30
Determination of the First and Subsequent Annuity Benefit Payments.............. 30
M. NORRIS Decision.................................................................. 31
N. Computation of Values............................................................ 31
The Accumulation Unit........................................................... 31
Net Investment Factor........................................................... 31
CHARGES AND DEDUCTIONS................................................................ 32
A. Variable Account Deductions...................................................... 32
Mortality and Expense Risk Charge............................................... 32
Administrative Expense Charge................................................... 32
Other Charges................................................................... 33
B. Contract Fee..................................................................... 33
C. Premium Taxes.................................................................... 33
D. Contingent Deferred Sales Charge................................................. 34
Charges for Surrender and Withdrawal............................................ 34
Reduction or Elimination of Surrender Charge.................................... 34
Withdrawal Without Surrender Charge............................................. 36
Surrenders...................................................................... 36
Charge at the Time Annuity Benefit Payments Begin............................... 36
E. Transfer Charge.................................................................. 37
GUARANTEE PERIOD ACCOUNTS............................................................. 37
</TABLE>

3
<PAGE>
<TABLE>
<S> <C>
FEDERAL TAX CONSIDERATIONS............................................................ 39
A. Qualified and Non-Qualified Contracts............................................ 40
B. Taxation of the Contract in General.............................................. 40
Withdrawals Prior to Annuitization.............................................. 40
Annuity Payouts After Annuitization............................................. 40
Penalty on Distribution......................................................... 40
Assignments or Transfers........................................................ 41
Non-Natural Owners.............................................................. 41
Deferred Compensation Plans of State and Local Government and Tax-Exempt
Organizations.................................................................. 41
C. Tax Withholding.................................................................. 41
D. Provisions Applicable to Qualified Employer Plans................................ 41
Corporate and Self-Employed Pension and Profit Sharing Plans.................... 42
Individual Retirement Annuities................................................. 42
Tax-Sheltered Annuities......................................................... 42
Texas Optional Retirement Program............................................... 42
REPORTS............................................................................... 43
LOANS (QUALIFIED CONTRACTS ONLY)...................................................... 43
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS..................................... 43
CHANGES TO COMPLY WITH LAW AND AMENDMENTS............................................. 44
VOTING RIGHTS......................................................................... 44
DISTRIBUTION.......................................................................... 45
LEGAL MATTERS......................................................................... 45
FURTHER INFORMATION................................................................... 45
APPENDIX A -- MORE INFORMATION ABOUT THE FIXED ACCOUNT................................ A-1
APPENDIX B -- SURRENDER CHARGES AND THE MARKET VALUE ADJUSTMENT....................... B-1
APPENDIX C -- THE DEATH BENEFIT....................................................... C-1
APPENDIX D -- DIFFERENCES UNDER THE PIONEER VISION CONTRACT
(FORM A3023-95)....................................................... D-1
</TABLE>

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<S> <C>
GENERAL INFORMATION AND HISTORY...................................................... 2
TAXATION OF THE CONTRACTS, THE VARIABLE ACCOUNT AND THE COMPANY...................... 3
SERVICES............................................................................. 3
UNDERWRITERS......................................................................... 3
ANNUITY BENEFIT PAYMENTS............................................................. 4
EXCHANGE OFFER....................................................................... 5
PERFORMANCE INFORMATION.............................................................. 7
FINANCIAL STATEMENTS................................................................. F-1
</TABLE>

4
<PAGE>
SPECIAL TERMS

ACCUMULATED VALUE: the sum of the value of all Accumulation Units in the
Sub-Accounts and of the value of all accumulations in the Fixed Account and
Guarantee Period Accounts credited to the Contract on any date before the
Annuity Date.

ACCUMULATION UNIT: a measure of the Owner's interest in a Sub-Account before
annuity benefit payments begin.

ANNUITANT: the person designated in the Contract upon whose life annuity benefit
payments are to be made.

ANNUITY DATE: the date on which annuity benefit payments begin.

ANNUITY UNIT: a measure of the value of the periodic annuity benefit payments
under the Contract.

FIXED ACCOUNT: the part of the Company's General Account that guarantees
principal and a fixed minimum interest rate and to which all or a portion of a
payment or transfer under the Contract may be allocated.

FIXED ANNUITY PAYOUT: an annuity payout option providing for annuity benefit
payments which remain fixed in amount throughout the annuity benefit payment
period selected.

GENERAL ACCOUNT: all the assets of the Company other than those held in a
separate account.

GUARANTEE PERIOD: the number of years that a Guaranteed Interest Rate is
credited.

GUARANTEE PERIOD ACCOUNT: an account which corresponds to a Guaranteed Interest
Rate for a specified Guarantee Period and is supported by assets in a
non-unitized separate account.

GUARANTEED INTEREST RATE: the annual effective rate of interest, after daily
compounding, credited to a Guarantee Period Account.

MARKET VALUE ADJUSTMENT: a positive or negative adjustment assessed if any
portion of a Guarantee Period Account is withdrawn or transferred prior to the
end of its Guarantee Period.

OWNER: the person, persons or entity entitled to exercise the rights and
privileges under the Contract. Joint Owners are permitted if one of the two is
the Annuitant.

SUB-ACCOUNT: a subdivision of the Variable Account. Each Sub-Account available
under the Contract invests exclusively in the shares of a corresponding
Portfolio of the Pioneer Variable Contracts Trust.

SURRENDER VALUE: the Accumulated Value of the Contract on full surrender after
application of any Contract fee, contingent deferred sales charge, and Market
Value Adjustment.

UNDERLYING PORTFOLIOS (OR PORTFOLIOS): the International Growth Portfolio,
Capital Growth Portfolio, Growth Shares Portfolio, Real Estate Growth Portfolio,
Growth and Income Portfolio, Equity-Income Portfolio, Balanced Portfolio, Swiss
Franc Bond Portfolio, America Income Portfolio and Money Market Portfolio of the
Pioneer Variable Contracts Trust.

VALUATION DATE: a day on which the net asset value of the shares of any of the
Underlying Portfolios is determined and unit values of the Sub-Accounts are
determined. Valuation Dates currently occur on each day on which the New York
Stock Exchange is open for trading, and on such other days (other than a day
during which no payment, withdrawal or surrender of a Contract was received)
when there is a sufficient degree of

5
<PAGE>
trading in an Underlying Portfolio's portfolio securities such that the current
net asset value of the Sub-Accounts may be affected materially.

VARIABLE ACCOUNT: Separate Account VA-P, one of the Company's separate accounts,
consisting of assets segregated from other assets of the Company. The investment
performance of the assets of the Variable Account is determined separately from
the other assets of the Company and are not chargeable with liabilities arising
out of any other business which the Company may conduct.

VARIABLE ANNUITY PAYOUT: an annuity payout option providing for payments varying
in amount in accordance with the investment experience of certain of the
Underlying Portfolios.

6
<PAGE>
SUMMARY

WHAT IS THE PIONEER VISION 2 VARIABLE ANNUITY?

The Pioneer Vision 2 variable annuity contract is an insurance contract designed
to help you, the Owner, accumulate assets for your retirement or other important
financial goals on a tax-deferred basis. The Contract combines the concept of
professional money management with the attributes of an annuity contract.
Features available through the Contract include:

- - a customized investment portfolio;

- - experienced professional investment advisers;

- - tax deferral on earnings;

- - guarantees that can protect your family during the accumulation phase;

- - income that can be guaranteed for life;

- - issue age up to your 90th birthday.

The Contract has two phases: an accumulation phase and, if you choose to
annuitize, an annuity payout phase. During the accumulation phase, your initial
payment and any additional payments you choose to make may be allocated among
the Sub-Accounts investing in the Portfolios of the Pioneer Variable Contracts
Trust (the "Fund"), to the Guarantee Period Accounts, and to the Fixed Account.
You select the investment options most appropriate for your investment needs. As
those needs change, you may also change your allocation without incurring any
tax consequences. The Contract's Accumulated Value is based on the investment
performance of the Portfolios and any accumulations in the Guarantee Period and
Fixed Accounts. No income taxes are paid on any earnings under the Contract
unless and until Accumulated Values are withdrawn. In addition, during the
accumulation phase, the beneficiaries receive certain protections and guarantees
in the event of the Annuitant's death. See discussion below: "WHAT HAPPENS UPON
MY DEATH DURING THE ACCUMULATION PHASE?"

WHAT HAPPENS IN THE ANNUITY PAYOUT PHASE?

During the annuity payout phase, the Annuitant can receive income based on
several annuity payout options. You choose the annuity payout option and the
date for annuity benefit payments to begin. You also decide whether you want
variable annuity benefit payments based on the investment performance of certain
Portfolios, fixed annuity benefit payments with payment amounts guaranteed by
the Company, or a combination of fixed and variable annuity benefit payments.
Among the payout options available during the annuity payout phase are:

- - periodic payments for your lifetime (assuming you are the Annuitant);

- - periodic payments for your life and the life of another person selected by
you;

- -periodic payments for your lifetime with guaranteed payments continuing to the
beneficiary for ten years in the event that you die before the end of ten
years;

- -periodic payments over a specified number of years (1 to 30); under this option
you may reserve the right to convert remaining payments to a lump-sum payout by
electing a "commutable" option.

7
<PAGE>
WHO ARE THE KEY PERSONS UNDER THE CONTRACT?

The Contract is between you, (the "Owner"), and Allmerica Financial Life
Insurance and Annuity Company ("Company"). Each Contract has an Owner (or an
Owner and a Joint Owner, in which case one of the two must also be the
Annuitant), an Annuitant and a beneficiary. As Owner, you make payments, choose
investment allocations and select the Annuitant and one or more beneficiaries.
The Annuitant is the individual who receives annuity benefit payments under the
Contract. The beneficiary is the person who receives any payment on the death of
the Owner or Annuitant.

HOW MUCH CAN I INVEST AND HOW OFTEN?

The number and frequency of payments are flexible, subject only to a $600
minimum for the initial payment ($1,000 in Washington) and a $50 minimum for any
additional payments. (A lower initial payment amount is permitted for certain
qualified plans and where monthly payments are being forwarded directly from a
financial institution.) In addition, a minimum of $1,000 is always required to
establish a Guarantee Period Account.

WHAT ARE MY INVESTMENT CHOICES?

The Contract permits net payments to be allocated among the Sub-Accounts, the
Guarantee Period Accounts, and the Fixed Account.

THE VARIABLE ACCOUNT. You have the choice of Sub-Accounts investing in the ten
Underlying Portfolios of the Fund:

<TABLE>
<S> <C>
International Growth Equity-Income Portfolio
Portfolio
Capital Growth Portfolio Balanced Portfolio
Growth Shares Portfolio Swiss Franc Bond Portfolio
Real Estate Growth Portfolio America Income Portfolio
Growth and Income Portfolio Money Market Portfolio
</TABLE>

Each Underlying Portfolio operates pursuant to different investment objectives,
discussed below, and this range of investment options enables you to allocate
your money among the Portfolios to meet your particular investment needs.

GUARANTEE PERIOD ACCOUNTS. Assets supporting the guarantees under the Guarantee
Period Accounts are held in the Company's Separate Account GPA, a non-unitized
insulated separate account. Values and benefits calculated on the basis of
Guarantee Period Account allocations, however, are obligations of the Company's
General Account. Amounts allocated to a Guarantee Period Account earn a
Guaranteed Interest Rate declared by the Company. The level of the Guaranteed
Interest Rate depends on the number of years of the Guarantee Period selected.
The Company may offer up to nine Guarantee Periods ranging from two to ten years
in duration. Once declared, the Guaranteed Interest Rate will not change during
the duration of the Guarantee Period. If amounts allocated to a Guarantee Period
Account are transferred, surrendered or applied to any annuity option at any
time other than the day following the last day of the applicable Guarantee
Period, a Market Value Adjustment will apply that may increase or decrease the
account's value; however, this adjustment will never be applied against your
principal. In addition, earnings in the GPA after application of the Market
Value Adjustment will not be less than an effective annual rate of 3%. For more
information about the Guarantee Period Accounts and the Market Value Adjustment,
see "GUARANTEE PERIOD ACCOUNTS."

THE GUARANTEE PERIOD ACCOUNTS MAY NOT BE AVAILABLE IN ALL STATES.

8
<PAGE>
FIXED ACCOUNT. The Fixed Account is part of the General Account which consists
of all the Company's assets other than those allocated to the Variable Account
and any other separate account. Allocations to the Fixed Account are guaranteed
as to principal and a minimum rate of interest. Additional excess interest may
be declared periodically at the Company's discretion. Furthermore, the initial
rate in effect on the date an amount is allocated to the Fixed Account will be
guaranteed for one year from that date. For more information about the Fixed
Account, see APPENDIX A, "MORE INFORMATION ABOUT THE FIXED ACCOUNT."

WHO IS THE INVESTMENT ADVISER FOR THE PORTFOLIOS?

Pioneering Management Corporation ("Pioneer") is the investment adviser to each
Portfolio. Pioneer also provides investment research and portfolio management
services to a number of other retail mutual funds and certain institutional
clients. As of December 31, 1997, Pioneer advised mutual funds with a total
value of over $19.8 billion, which includes more than 1,000,000 U.S. shareholder
accounts and other institutional accounts. Pioneer is a wholly owned subsidiary
of The Pioneer Group, Inc. ("PGI"). PGI, established in 1928, is one of
America's oldest investment managers and has its principal place of business at
60 State Street, Boston, Massachusetts.

CAN I MAKE TRANSFERS AMONG THE INVESTMENT CHOICES?

Yes. Prior to the Annuity Date, you may transfer among the Sub-Accounts, the
Guarantee Period Accounts, and the Fixed Account. You will incur no current
taxes on transfers while your money remains in the Contract. See "D. Transfer
Privilege." The first 12 transfers in a Contract year are guaranteed to be free
of a transfer charge. For each subsequent transfer in a Contract year, the
Company does not currently charge, but reserves the right to assess a processing
charge guaranteed never to exceed $25.

WHAT IF I NEED MY MONEY BEFORE THE ANNUITY PAYOUT PHASE BEGINS?

You may surrender the Contract or make withdrawals any time before the annuity
payout phase begins. Each year you can take without a surrender charge the
greatest of 100% of cumulative earnings, 15% of the Contract's Accumulated Value
or, if you are both an Owner and the Annuitant, an amount based on your life
expectancy. (Similarly, no surrender charge will apply if an amount is withdrawn
based on the Annuitant's life expectancy if the Owner is a trust or other
non-natural person.) A 10% tax penalty may apply on all amounts deemed to be
income if you are under age 59 1/2. Additional amounts may be withdrawn at any
time but may be subject to the surrender charge for payments that have not been
invested in the Contract for more than seven years. (A Market Value Adjustment,
which may increase or decrease the value of the account, may apply to any
withdrawal made from a Guarantee Period Account prior to the expiration of the
Guarantee Period.)

In addition, except where prohibited by state law, you may withdraw all or a
portion of your money without a surrender charge if, after the Contract is
issued, you are admitted to a medical care facility, become disabled or are
diagnosed with a fatal illness. For details and restrictions, see "Reduction or
Elimination of Surrender Charge."

WHAT HAPPENS UPON MY DEATH DURING THE ACCUMULATION PHASE?

If the Annuitant, Owner or Joint Owner should die before the Annuity Date, a
death benefit will be paid to the beneficiary. Upon the death of the Annuitant
(or an Owner who is also an Annuitant), the death benefit is equal to the
highest of:

- - The Accumulated Value increased by any positive Market Value Adjustment;

- - Gross payments, with interest accumulating daily at an annual rate of 5%
starting on the date each payment is applied, and continuing throughout your
investments' entire accumulation phase, decreased proportionately to reflect
withdrawals; or

- - The death benefit that would have been payable on the most recent contract
anniversary, increased for subsequent payments and decreased proportionately
for subsequent withdrawals.

9
<PAGE>
This guaranteed death benefit works in the following way assuming no withdrawals
are made. On the first anniversary, the death benefit will be equal to the
greater of (a) the Accumulated Value (increased by any positive Market Value
Adjustment) or (b) gross payments compounded at the annual rate of 5%. The
higher of (a) or (b) will then be locked in until the second anniversary, at
which time the death benefit will be equal to the greatest of (a) the Contract's
then current Accumulated Value increased by any positive Market Value
Adjustment; (b) gross payments compounded at the annual rate of 5% or (c) the
locked-in value of the death benefit at the first anniversary. The greatest of
(a), (b) or (c) will be locked in until the next Contract anniversary. This
calculation will then be repeated on each anniversary while the Contract remains
in force and prior to the Annuity Date. As noted above, the values of (b) and
(c) will be decreased proportionately if withdrawals are taken.

At the death of an Owner who is not also the Annuitant, the death benefit will
equal the Accumulated Value of the Contract increased by any positive Market
Value Adjustment.

(If the Annuitant dies after the Annuity Date but before all guaranteed annuity
benefit payments have been made, the remaining payments will be paid to the
beneficiary at least as rapidly as under the annuity option in effect. See "G.
Death Benefit.")

WHAT CHARGES WILL I INCUR UNDER MY CONTRACT?

If the Accumulated Value on a Contract anniversary and upon surrender is less
than $50,000, a $30 Contract fee will be deducted from the Contract. The
Contract fee is waived for Contracts issued to and maintained by a trustee of a
401(k) plan.

Should you decide to surrender the Contract, make withdrawals, or receive
payments under certain annuity payout options, you may be subject to a
contingent deferred sales charge. If applicable, this charge will be between 1%
and 7% of payments withdrawn, based on when the payments were made.

A deduction for state and local premium taxes, if any, may be made as described
under "C. Premium Taxes."

The Company will deduct a daily Mortality and Expense Risk Charge and a daily
Administrative Expense Charge equal to an annual rate of 1.25% and 0.15%,
respectively, of the average daily net assets invested in each Underlying
Portfolio. The Portfolios will incur certain management fees and expenses which
are more fully described in "Other Charges" under "A. Variable Account
Deductions" and in the prospectus for the Fund, which accompanies this
Prospectus.

CAN I EXAMINE THE CONTRACT?

Yes. The Contract will be delivered to you after your purchase. If you return
the Contract to the Company within ten days of receipt, the Contract will be
canceled. (There may be a longer period in certain states; see the "Right to
Examine" provision on the cover of the Contract.) If you cancel the Contract,
you will receive a refund of any amounts allocated to the Fixed and Guarantee
Period Accounts and the Accumulated Value of any amounts allocated to the
Sub-Accounts (plus any fees or charges that may have been deducted.) However, if
state law requires, or if the Contract was issued as an Individual Retirement
Annuity (IRA) you will generally receive a refund of your entire payment. (In
certain states this refund may be the greater of (1) your entire payment or (2)
the amounts allocated to the Fixed and Guarantee Period Accounts plus the
Accumulated Value of amounts in the Sub-Accounts, plus any fees or charges
previously deducted.) See "B. Right to Revoke Individual Retirement Annuity" and
"C. Right to Revoke or Surrender in Some States."

10
<PAGE>
I HAVE THE PIONEER VISION CONTRACT (FORM A3023-95) -- ARE THERE ANY
DIFFERENCES BETWEEN THIS AND PIONEER VISION 2?

Yes. If your contract is issued on Form No. A3023-95, the first version of
Pioneer Vision, it is basically similar to the Contract described in this
Prospectus ("Pioneer Vision 2") except as specifically indicated in APPENDIX D,
"DIFFERENCES UNDER THE PIONEER VISION CONTRACT (FORM A3023-95)." Note that
APPENDIX D also includes the cumulative expense tables and performance figures
applicable to the Pioneer Vision Contract (Form A3023-95). The form number is
located in the bottom left-hand corner of the contract pages, and may include
some numbers or letters in addition to A3023-95 in order to identify state
variations.

11
<PAGE>
ANNUAL AND TRANSACTION EXPENSES

The following tables show charges under the Contract, expenses of the
Sub-Accounts, and expenses of the Underlying Portfolios. In addition to the
charges and expenses described below, premium taxes are applicable in some
states and are deducted as described under "C. Premium Taxes."

<TABLE>
<CAPTION>
YEARS FROM
CONTRACT CHARGES: DATE OF PAYMENT CHARGE
- ------------------------------------------------------------ --------------- ---------
<S> <C> <C>
0-1 7%
CONTINGENT DEFERRED SALES CHARGE: 2 6%
This charge may be assessed upon surrender, withdrawal or 3 5%
annuitization under any commutable period certain option or 4 4%
a noncommutable period certain option of less than ten 5 3%
years. The charge is a percentage of payments applied to the 6 2%
amount surrendered (in excess of any amount that is free of 7 1%
surrender charge) within the indicated time period. Thereafter 0%

TRANSFER CHARGE: None
The Company currently makes no charge for processing
transfers and guarantees that the first 12 transfers in a
Contract year will not be subject to a transfer charge. For
each subsequent transfer, the Company reserves the right to
assess a charge, guaranteed never to exceed $25, to
reimburse the Company for the costs of processing the
transfer.

CONTRACT FEE: $ 30
The fee is deducted annually and upon surrender prior to the
Annuity Date when Accumulated Value is less than $50,000.
The fee is waived for Contracts issued to and maintained by
the trustee of a 401(k) plan.

SUB-ACCOUNT EXPENSES:
(on annual basis as percentage of average daily net assets)
Mortality and Expense Risk Charge: 1.25%
Administrative Expense Charge: 0.15%
---------
Total Asset Charge: 1.40%
</TABLE>

12
<PAGE>
PORTFOLIO EXPENSES: The following table shows the expenses of the Underlying
Portfolios as a percentage of average net assets for the year ended December 31,
1997. For more information concerning fees and expenses, see the prospectus for
the Underlying Portfolios.

<TABLE>
<CAPTION>
Total Portfolio
Other Expenses Expenses
Management Fee (After Applicable (After Waivers/
(After Voluntary Reimbursements and Reimbursements and
Portfolio Waivers) Offsets) Offsets)
- --------------------------------------- ------------------- ------------------- --------------------
<S> <C> <C> <C>
International Growth Portfolio......... 0.78% 0.70% 1.48%(2,3)
Capital Growth Portfolio............... 0.65% 0.14% 0.79%(2)
Growth Shares Portfolio(1)............. 0.00% 1.25% 1.25%(3)
Real Estate Growth Portfolio........... 0.88% 0.36% 1.24%(2,3)
Growth and Income Portfolio(1)......... 0.00% 1.25% 1.25%(3)
Equity-Income Portfolio................ 0.65% 0.12% 0.77%
Balanced Portfolio..................... 0.65% 0.30% 0.95%(2)
Swiss Franc Bond Portfolio............. 0.63% 0.59% 1.22%(2,3)
America Income Portfolio............... 0.38% 0.85% 1.23%(2,3)
Money Market Portfolio................. 0.33% 0.66% 0.99%(2,3)
</TABLE>

(1) These Portfolios commenced operations on October 31, 1997; therefore
expenses shown are estimated and annualized after expense reimbursements and
should not be considered representative of future expenses. Actual expenses may
be greater than shown.

(2) Total expenses are net of amounts paid in connection with certain expense
offset arrangements. Assuming no reduction for expense offset arrangements, (but
including fee waivers noted in footnote 3 below), total operating expenses for
fiscal year ended December 31, 1997, would have been 1.49% for International
Growth Portfolio, 0.80% for Capital Growth Portfolio, 1.25% for Real Estate
Growth Portfolio, 0.96% for Balanced Portfolio, 1.23% for Swiss Franc Portfolio,
1.26% for America Income Portfolio and 1.00% for Money Market Portfolio. No
offset arrangements affected Growth Shares Portfolio, Growth and Income
Portfolio and Equity-Income Portfolio.

(3) No waiver of management fees or reimbursement of other expenses affected
Capital Growth Portfolio, Equity-Income Portfolio and Balanced Portfolio. For
the fiscal year ended December 31, 1997, assuming no waiver of management fees
and no expense offset arrangements, Portfolio expenses as a percentage of the
average daily net assets were 1.71% for International Growth Portfolio, 0.80%
for Capital Growth Portfolio, 6.57% for Growth Shares Portfolio, 1.37% for Real
Estate Growth Portfolio, 5.30% for Growth and Income Portfolio, 0.96% for
Balanced Portfolio, 1.25% for Swiss Franc Bond Portfolio; 1.43% for America
Income Portfolio and 1.17% for Money Market Portfolio.

Pioneering Management Corporation ("Pioneer") is the investment adviser to each
Portfolio. As of the date of this prospectus, Pioneer has agreed voluntarily to
limit its management fee and/or reimburse each Portfolio for expenses to the
extent that total expenses will not exceed 1.50% for the International Growth
Portfolio; 1.25% for the Growth Shares Portfolio, the Real Estate Growth
Portfolio, the Growth and Income Portfolio, the Swiss Franc Bond Portfolio and
the America Income Portfolio and 1.00% for the Money Market Portfolio. The
declaration of a voluntary limitation and/or reimbursement in any year does not
bind the Manager to declare future expense limitations with respect to these
funds. These limitations/waivers may be terminated at any time with notice.

The following examples demonstrate the cumulative expenses which would be paid
by the Owner at 1-year, 3-year, 5-year, and 10-year intervals under certain
contingencies. Each example assumes a $1,000 investment in a Sub-Account and a
5% annual return on assets. Because the expenses of the Underlying Portfolios
differ, separate examples are used to illustrate the expenses incurred by the
Owner on an investment in the various Sub-Accounts.

13
<PAGE>
THE INFORMATION GIVEN UNDER THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESSER THAN THOSE SHOWN.

(1) If, at the end of the applicable time period, the Contract is surrendered or
annuitized* under a commutable period certain option or a non-commutable period
certain option of less than ten years, you would pay the following expenses on a
$1,000 investment, assuming 5% annual return on assets:

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
International Growth......................................................... $90 $135 $180 $321
Capital Growth............................................................... $83 $115 $147 $253
Growth Shares................................................................ $88 $128 $169 $299
Real Estate Growth........................................................... $88 $128 $169 $298
Growth and Income............................................................ $88 $128 $169 $299
Equity-Income................................................................ $83 $114 $146 $251
Balanced..................................................................... $85 $120 $155 $269
Swiss Franc Bond............................................................. $87 $127 $168 $296
America Income............................................................... $88 $128 $168 $297
Money Market................................................................. $85 $121 $157 $273
</TABLE>

(2) If, at the end of the applicable time period, the Contract is annuitized*
under a life option or a non-commutable period certain option of ten years or
more or if the Contract is NOT surrendered or annuitized, you would pay the
following expenses on a $1,000 investment, assuming 5% annual return on assets:

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
International Growth......................................................... $29 $89 $152 $321
Capital Growth............................................................... $22 $69 $118 $253
Growth Shares................................................................ $27 $83 $141 $299
Real Estate Growth........................................................... $27 $82 $140 $298
Growth and Income............................................................ $27 $83 $141 $299
Equity-Income................................................................ $22 $68 $117 $251
Balanced..................................................................... $24 $74 $126 $269
Swiss Franc Bond............................................................. $27 $82 $139 $296
America Income............................................................... $27 $82 $140 $297
Money Market................................................................. $24 $75 $128 $273
</TABLE>

Pursuant to requirements of the SEC, the Contract fee has been reflected in the
examples by a method intended to show the "average" impact of the Contract fee
on an investment in the Variable Account. The total Contract fees collected by
the Company under the Contracts are divided by the total average net assets
attributable to the Contracts. The resulting percentage is 0.04%, and the amount
of the Contract fee is assumed to be $0.40 in the examples. The Contract fee is
deducted only when the accumulated value is less than $50,000. Lower costs apply
to Contracts owned and maintained under a 401(k) plan.

* The Contract fee is not deducted after annuitization. No contingent deferred
sales charge is assessed at the time of annuitization in any Contract year under
an option including a life contingency.

14
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
CONDENSED FINANCIAL INFORMATION
SEPARATE ACCOUNT VA-P

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
SUB-ACCOUNT 1997 1996 1995
-------------------------------------------------- ------ ------ -----
<S> <C> <C> <C>
INTERNATIONAL GROWTH
Unit Value:
Beginning of Period........................... 1.171 1.094 1.000
End of Period................................. 1.211 1.171 1.094
Number of Units Outstanding at End of Period (in
thousands)....................................... 40,248 20,852 2,460
CAPITAL GROWTH
Unit Value:
Beginning of Period........................... 1.314 1.158 1.000
End of Period................................. 1.615 1.314 1,158
Number of Units Outstanding at End of Period (in
thousands)....................................... 61,917 36,746 7,981
GROWTH SHARES
Unit Values
Beginning of Period........................... 0 N/A N/A
End of Period................................. 1.020 N/A N/A
Number of Units Outstanding at End of Period (in
thousands)....................................... 4,454 N/A N/A
REAL ESTATE GROWTH
Unit Value:
Beginning of Period........................... 1.548 1.156 1.000
End of Period................................. 1.849 1.548 1.156
Number of Units Outstanding at End of Period (in
thousands)....................................... 19,820 7,063 342
GROWTH AND INCOME
Unit Value:
Beginning of Period........................... 0 N/A N/A
End of Period................................. 1.053 N/A N/A
Number of Units Outstanding at End of Period (in
thousands)....................................... 4,171 N/A N/A
EQUITY-INCOME
Unit Value:
Beginning of Period........................... 1.388 1.222 1.000
End of Period................................. 1.851 1.388 1.222
Number of Units Outstanding at End of Period (in
thousands)....................................... 66,458 33,466 5,553
BALANCED
Unit Value:
Beginning of Period........................... 1.312 1.185 1.000
End of Period................................. 1.516 1.312 1.185
Number of Units Outstanding at End of Period (in
thousands)....................................... 25,548 12,579 2,171
</TABLE>

15
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
SUB-ACCOUNT 1997 1996 1995
-------------------------------------------------- ------ ------ -----
<S> <C> <C> <C>
SWISS FRANC BOND
Unit Value:
Beginning of Period........................... 0.881 1.001 1.000
End of Period................................. 0.808 0.881 1.001
Number of Units Outstanding at End of Period (in
thousands)....................................... 26,864 14,677 886
AMERICA INCOME
Unit Value:
Beginning of Period........................... 1.042 1.043 1.000
End of Period................................. 1.114 1.042 1.043
Number of Units Outstanding at End of Period (in
thousands)....................................... 12,728 6,317 3,267
MONEY MARKET
Unit Value:
Beginning of Period........................... 1.063 1.031 1.000
End of Period................................. 1.097 1.063 1.031
Number of Units Outstanding at End of Period (in
thousands)....................................... 12,330 10,655 3,210
</TABLE>

PERFORMANCE INFORMATION

The Pioneer Vision 2 Contract was first offered to the public in 1996. The
Company, however, may advertise "total return" and "average annual total return"
performance information based on the periods that the Sub-Accounts have been in
existence and the periods that the Underlying Portfolios have been in existence.
Performance results for all periods shown below will be calculated with all
charges assumed to be those applicable to the Sub-Accounts, the Underlying
Portfolios, and, in Tables 1A and 2A, assuming that the Contract is surrendered
at the end of the applicable period and, alternatively, in Tables 1B and 2B,
assuming that it is not surrendered at the end of the applicable period. Both
the total return and yield figures are based on historical earnings and are not
intended to indicate future performance.

The total return of a Sub-Account refers to the total of the income generated by
an investment in the Sub-Account and of the changes in the value of the
principal (due to realized and unrealized capital gains or losses) for a
specified period, reduced by Variable Account charges, and expressed as a
percentage.

The average annual total return represents the average annual percentage change
in the value of an investment in the Sub-Account over a given period of time. It
represents averaged figures as opposed to the actual performance of a
Sub-Account, which will vary from year to year.

The yield of the Sub-Account investing in the Money Market Portfolio refers to
the income generated by an investment in the Sub-Account over a seven-day period
(which period will be specified in the advertisement). This income is then
"annualized" by assuming that the income generated in the specific week is
generated over a 52-week period. This annualized yield is shown as a percentage
of the investment. The "effective yield" calculation is similar but, when
annualized, the income earned by an investment in the Sub-Account is assumed to
be reinvested. Thus the effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.

The yield of a Sub-Account investing in a Portfolio other than the Money Market
Portfolio refers to the annualized income generated by an investment in the
Sub-Account over a specified 30-day or one-month period. The yield is calculated
by assuming that the income generated by the investment during that 30-day or
one-month period is generated each period over a 12-month period and is shown as
a percentage of the investment.

Quotations of average annual total return as shown in Table 1A are calculated in
the manner prescribed by the SEC and show the percentage rate of return of a
hypothetical initial investment of $1,000 for the most recent

16
<PAGE>
one, five and ten year period or for a period covering the time the Sub-Account
has been in existence, if less than the prescribed periods. The calculation is
adjusted to reflect the deduction of the annual Sub-Account asset charge of
1.40%, the $30 annual Contract fee, Underlying Portfolio charges and the
contingent deferred sales charge which would be assessed if the investment were
completely withdrawn at the end of the specified period. Quotations of
supplemental average total returns, as shown in Table 1B, are calculated in
exactly the same manner and for the same periods of time except that it does not
reflect the contingent deferred sales charge but assumes that the Contract is
not surrendered at the end of the periods shown.

The performance shown in Tables 2A and 2B is calculated in exactly the same
manner as those in Tables 1A and 1B respectively; however, the period of time is
based on the Underlying Portfolios' lifetime, which may predate the
Sub-Account's inception date. These performance calculations are based on the
assumption that the Sub-Account corresponding to the applicable Underlying
Portfolio was actually in existence throughout the stated period and that the
contractual charges and expenses during that period were equal to those
currently assessed under the Contract.

For more detailed information about these performance calculations, including
actual formulas, see the SAI.

PERFORMANCE INFORMATION FOR ANY SUB-ACCOUNT REFLECTS ONLY THE PERFORMANCE OF A
HYPOTHETICAL INVESTMENT IN THE SUB-ACCOUNT DURING THE TIME PERIOD ON WHICH THE
CALCULATIONS ARE BASED. PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF
THE INVESTMENT OBJECTIVES AND POLICIES AND RISK CHARACTERISTICS OF THE
UNDERLYING PORTFOLIO IN WHICH THE SUB-ACCOUNT INVESTS AND THE MARKET CONDITIONS
DURING THE GIVEN TIME PERIOD, AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION
OF WHAT MAY BE ACHIEVED IN THE FUTURE.

Performance information for a Sub-Account may be compared, in reports and
promotional literature, to: (1) the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500"), Dow Jones Industrial Average ("DJIA"), Shearson Lehman
Aggregate Bond Index or other unmanaged indices so that investors may compare
the Sub-Account results with those of a group of unmanaged securities widely
regarded by investors as representative of the securities markets in general;
(2) other groups of variable annuity separate accounts or other investment
products tracked by Lipper Analytical Services, a widely used independent
research firm which ranks mutual funds and other investment products by overall
performance, investment objectives, and assets, or tracked by other services,
companies, publications, or persons, who rank such investment products on
overall performance or other criteria; or (3) the Consumer Price Index (a
measure for inflation) to assess the real rate of return from an investment in
the Sub-Account. Unmanaged indices may assume the reinvestment of dividends but
generally do not reflect deductions for administrative and management costs and
expenses.

At times, the Company may also advertise the ratings and other information
assigned to it by independent rating organizations such as A.M. Best Company
("A.M. Best"), Moody's Investors Service ("Moody's"), Standard & Poor's
Insurance Rating Services ("S&P") and Duff & Phelps. A.M. Best's and Moody's
ratings reflect their current opinion of the Company's relative financial
strength and operating performance in comparison to the norms of the life/health
insurance industry. S&P's and Duff & Phelps' ratings measure the ability of an
insurance company to meet its obligations under insurance policies it issues and
do not measure the ability of such companies to meet other non-policy
obligations. The ratings also do not relate to the performance of the Underlying
Portfolios.

17
<PAGE>
TABLE 1A
AVERAGE ANNUAL TOTAL RETURNS OF SUB-ACCOUNT FOR PERIODS
ENDING DECEMBER 31, 1997
SINCE INCEPTION OF SUB-ACCOUNT
(ASSUMING COMPLETE WITHDRAWAL OF THE INVESTMENT)

<TABLE>
<CAPTION>
FOR YEAR SINCE
ENDED INCEPTION OF
SUB-ACCOUNT INVESTING IN UNDERLYING PORTFOLIO 12/31/97 SUB-ACCOUNT
- --------------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
International Growth................................................................... -2.77% 5.51%
Capital Growth......................................................................... 15.94% 17.09%
Growth Shares.......................................................................... N/A -4.08%
Real Estate Growth..................................................................... 12.46% 23.12%
Growth and Income...................................................................... N/A -1.05%
Equity-Income.......................................................................... 26.33% 23.12%
Balanced............................................................................... 8.62% 15.01%
Swiss Franc Bond....................................................................... -13.71% -11.25%
America Income......................................................................... 0.55% 2.43%
Money Market........................................................................... -2.98% 1.70%
</TABLE>

TABLE 1B
SUPPLEMENTAL AVERAGE ANNUAL TOTAL RETURNS OF SUB-ACCOUNT FOR PERIODS
ENDING DECEMBER 31, 1997
SINCE INCEPTION OF SUB-ACCOUNT
(ASSUMING NO WITHDRAWAL OF THE INVESTMENT)

<TABLE>
<CAPTION>
FOR YEAR SINCE
ENDED INCEPTION OF
SUB-ACCOUNT INVESTING IN UNDERLYING PORTFOLIO 12/31/97 SUB-ACCOUNT
- ---------------------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
International Growth.................................................................... 3.38% 7.14%
Capital Growth.......................................................................... 22.94% 18.40%
Growth Shares........................................................................... N/A 1.99%
Real Estate Growth...................................................................... 19.46% 24.32%
Growth and Income....................................................................... N/A 5.21%
Equity-Income........................................................................... 33.33% 24.32%
Balanced................................................................................ 15.50% 16.43%
Swiss Franc Bond........................................................................ -8.25% -9.45%
America Income.......................................................................... 6.91% 4.12%
Money Market............................................................................ 3.16% 3.28%
</TABLE>

18
<PAGE>
TABLE 2A
AVERAGE ANNUAL TOTAL RETURNS OF SUB-ACCOUNT FOR PERIODS
ENDING DECEMBER 31, 1997
SINCE INCEPTION OF UNDERLYING PORTFOLIO
(ASSUMING COMPLETE WITHDRAWAL OF THE INVESTMENT)

<TABLE>
<CAPTION>
SINCE
FOR YEAR INCEPTION OF
ENDED UNDERLYING
SUB-ACCOUNT INVESTING IN UNDERLYING PORTFOLIO 12/31/97 PORTFOLIO*
- ---------------------------------------------------------------------------------- ----------- ----------------
<S> <C> <C>
International Growth.............................................................. -2.77% 5.28%
Capital Growth.................................................................... 15.94% 17.07%
Growth Shares..................................................................... N/A -4.08%
Real Estate Growth................................................................ 12.46% 22.96%
Growth and Income................................................................. N/A -1.05%
Equity-Income..................................................................... 26.33% 23.02%
Balanced.......................................................................... 8.62% 15.46%
Swiss Franc Bond.................................................................. -13.71% -11.20%
America Income.................................................................... 0.55% 2.39%
Money Market...................................................................... -2.98% 1.69%
</TABLE>

TABLE 2B
SUPPLEMENTAL AVERAGE ANNUAL TOTAL RETURNS OF SUB-ACCOUNT FOR PERIODS
ENDING DECEMBER 31, 1997
SINCE INCEPTION OF UNDERLYING PORTFOLIO
(ASSUMING NO WITHDRAWAL OF THE INVESTMENT)

<TABLE>
<CAPTION>
SINCE
FOR YEAR INCEPTION OF
ENDED UNDERLYING
SUB-ACCOUNT INVESTING IN UNDERLYING PORTFOLIO 12/31/97 PORTFOLIO*
- ----------------------------------------------------------------------------------- ----------- -----------------
<S> <C> <C>
International Growth............................................................... 3.38% 6.86%
Capital Growth..................................................................... 22.94% 18.38%
Growth Shares...................................................................... N/A 1.99%
Real Estate Growth................................................................. 19.46% 24.16%
Growth and Income.................................................................. N/A 5.21%
Equity-Income...................................................................... 33.33% 24.21%
Balanced........................................................................... 15.50% 16.80%
Swiss Franc Bond................................................................... -8.25% -9.40%
America Income..................................................................... 6.91% 3.97%
Money Market....................................................................... 3.16% 3.26%
</TABLE>

* The inception date for Growth Shares and Growth and Income Portfolios
was 10/31/97. The inception date for the Swiss Franc Bond Portfolio was 11/1/95.
All other Portfolios commenced operations on 3/1/95.

DESCRIPTION OF THE COMPANY, THE VARIABLE ACCOUNT,
AND PIONEER VARIABLE CONTRACTS TRUST

THE COMPANY

The Company is a life insurance company organized under the laws of Delaware in
July 1974. Its principal office ("Principal Office") is located at 440 Lincoln
Street, Worcester, MA 01653, telephone 508-855-1000. The Company is subject to
the laws of the state of Delaware governing insurance companies and to
regulation

19
<PAGE>
by the Commissioner of Insurance of Delaware. In addition, the Company is
subject to the insurance laws and regulations of other states and jurisdictions
in which it is licensed to operate. As of December 31, 1997, the Company had
over $9.4 billion in assets and over $26.6 billion of life insurance in force.

Effective October 1, 1995, the Company changed its name from SMA Life Assurance
Company to Allmerica Financial Life Insurance and Annuity Company. The Company
is an indirect wholly owned subsidiary of First Allmerica Financial Life
Insurance Company ("First Allmerica") which, in turn, is a wholly owned
subsidiary of Allmerica Financial Corporation ("AFC"). First Allmerica,
originally organized under the laws of Massachusetts in 1844 as a mutual life
insurance company and known as State Mutual Life Assurance Company of America,
converted to a stock life insurance company and adopted its present name on
October 16, 1995. First Allmerica is the fifth oldest life insurance company in
America. As of December 31, 1997, First Allmerica and its subsidiaries
(including the Company) had over $16.3 billion in combined assets and over $43.8
billion in life insurance in force.

The Company is a charter member of the Insurance Marketplace Standards
Association ("IMSA"). Companies that belong to IMSA subscribe to a rigorous set
of standards that cover the various aspects of sales and service for
individually sold life insurance and annuities. IMSA members have adopted
policies and procedures that demonstrate a commitment to honesty, fairness and
integrity in all customer contacts involving sales and service of individual
life insurance and annuity products.

THE VARIABLE ACCOUNT

The Variable Account is a separate investment account of the Company referred to
as Separate Account VA-P. The assets used to fund the variable portions of the
Contract are set aside in the Sub-Accounts of the Variable Account, and are kept
separate and apart from the general assets of the Company. Each Sub-Account is
administered and accounted for as part of the general business of the Company,
but the income, capital gains or capital losses of each Sub-Account are
allocated to such Sub-Account, without regard to other income, capital gains or
capital losses of the Company. Under Delaware law, the assets of the Variable
Account may not be charged with any liabilities arising out of any other
business of the Company.

The Variable Account was authorized by vote of the Board of Directors of the
Company on October 27, 1994. The Variable Account meets the definition of a
"separate account" under federal securities laws, and is registered with the SEC
as a unit investment trust under the Investment Company Act of 1940 ("1940
Act"). Such registration does not involve the supervision of management or
investment practices or policies of the Variable Account or the Company by the
SEC.

The Company may offer other variable annuity contracts investing in the Variable
Account which are not discussed in this Prospectus. The Variable Account also
may invest in other underlying funds which are not available to the Contracts
described in this Prospectus. The Company reserves the right, subject to
compliance with applicable law, to change the names of the Variable Account and
the Sub-Accounts.

PIONEER VARIABLE CONTRACTS TRUST

Pioneer Variable Contracts Trust (the "Fund") is an open-end, management
investment company registered with the SEC under the 1940 Act. Such registration
does not involve supervision by the SEC of the investments or investment policy
of the Fund or its separate investment Portfolios. Pioneering Management
Corporation ("Pioneer") is the investment adviser to each Portfolio.

The Fund was established to provide a vehicle for the investment of assets of
various separate accounts supporting variable insurance policies. The Fund
currently has ten investment portfolios ("Underlying Portfolios"), each issuing
a separate series of shares: International Growth Portfolio, Capital Growth
Portfolio, Growth Shares Portfolio, Real Estate Growth Portfolio, Growth and
Income Portfolio, Equity-Income Portfolio, Balanced Portfolio, Swiss Franc Bond
Portfolio, America Income Portfolio and Money Market

20
<PAGE>
Portfolio. The assets of each Portfolio are held separately from the assets of
the other Portfolios. Each Portfolio operates as a separate investment vehicle,
and the income or losses of one Portfolio have no effect on the investment
performance of another Portfolio. Shares of the Fund may be sold directly to
separate accounts established and maintained by insurance companies for the
purpose of funding variable contracts and to certain qualified pension and
retirement plans.

INVESTMENT OBJECTIVES AND POLICIES

A summary of investment objectives of each of the Underlying Portfolios is set
forth below. More detailed information regarding the investment objectives,
restrictions and risks, expenses paid by the Underlying Portfolios, and other
relevant information regarding the Underlying Portfolios may be found in the
prospectus for the Fund, which accompanies this Prospectus and should be read
carefully before investing. The Statement of Additional Information for the Fund
("SAI for the Fund") is available upon request.

INTERNATIONAL GROWTH PORTFOLIO -- seeks long-term growth of capital primarily
through investments in non-U.S. equity securities and related depository
receipts.

CAPITAL GROWTH PORTFOLIO -- seeks capital appreciation through a diversified
portfolio of securities consisting primarily of common stocks.

GROWTH SHARES PORTFOLIO -- seeks appreciation of capital through investments in
common stock, together with preferred stocks, bonds, and debentures which are
convertible into common stocks. Current income will be incidental to the
Portfolio's primary objective.

REAL ESTATE GROWTH PORTFOLIO -- seeks long-term growth of capital primarily
through investments in the securities of real estate investment trusts (REITS)
and other real estate industry companies. Current income is the Portfolio's
secondary investment objective.

GROWTH AND INCOME PORTFOLIO -- seeks reasonable income and growth by investing
in a broad list of carefully selected, reasonably priced securities.

EQUITY-INCOME PORTFOLIO -- seeks current income and long-term capital growth by
investing in a portfolio of income-producing equity securities of U.S.
corporations. The Portfolio's goal is to achieve a current dividend yield which
exceeds the published composite yield of the securities comprising the S&P 500.

BALANCED PORTFOLIO -- seeks capital growth and current income by actively
managing investments in a diversified portfolio of equity securities and bonds.

SWISS FRANC BOND PORTFOLIO -- seeks to approximate the performance of the Swiss
franc relative to the U.S. dollar while earning a reasonable level of income.

AMERICA INCOME PORTFOLIO -- seeks as high a level of current income as is
consistent with the preservation of capital. This Portfolio invests exclusively
in United States ("U.S.") Government Securities and in "when issued" commitments
and repurchase agreements with respect to such securities.

MONEY MARKET PORTFOLIO -- seeks current income consistent with preserving
capital and providing liquidity.

If there is a material change in the investment policy of a Sub-Account or the
Underlying Portfolio in which it invests, the Owner will be notified of the
change. If the Owner has values allocated to that Sub-Account, the Company will
transfer it without charge on written request by the Owner to another
Sub-Account or to the Fixed Account. The Company must receive such written
request within 60 days of the later of (1) the effective date of the change in
the investment policy, or (2) the receipt of the notice of the Owner's right to
transfer.

21
<PAGE>
THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF THE PORTFOLIOS WILL BE
MET.

INVESTMENT ADVISORY SERVICES

Each Portfolio pays a management fee to Pioneer for managing its investments and
business affairs. Each Portfolio's management fee is computed daily and paid
monthly at the following annual rate:

<TABLE>
<CAPTION>
MANAGEMENT FEE AS A
% OF PORTFOLIO'S
AVERAGE
DAILY NET ASSETS
-----------------------
<S> <C>
International Growth...................................................................... 1.00%
Capital Growth............................................................................ 0.65%
Growth Shares............................................................................. 0.65%
Real Estate Growth........................................................................ 1.00%
Growth and Income......................................................................... 0.65%
Equity-Income............................................................................. 0.65%
Balanced.................................................................................. 0.65%
Swiss Franc Bond.......................................................................... 0.65%
America Income............................................................................ 0.55%
Money Market.............................................................................. 0.50%
</TABLE>

DESCRIPTION OF THE CONTRACT

A. PAYMENTS

The Company's underwriting requirements, which include receipt of the initial
payment and allocation instructions by the Company at its Principal Office, must
be met before a Contract can be issued. These requirements also may include the
proper completion of an application; however, where permitted, the Company may
issue a Contract without completion of an application and/or signature for
certain classes of Contracts. Payments are to be made payable to the Company. A
net payment is equal to the payment received less the amount of any applicable
premium tax.

The initial net payment will be credited to the Contract and allocated among the
requested accounts as of the date that all issue requirements are properly met.
If all issue requirements are not complied with within five business days of the
Company's receipt of the initial payment, the payment will be returned unless
the Owner specifically consents to the holding of the initial payment until
completion of any outstanding issue requirements. Subsequent payments will be
credited as of the Valuation Date received at the Principal Office.

Payments are not limited as to frequency and number, but there are certain
limitations as to amount. Currently, the initial payment must be at least $600
($1,000 in Washington). Under a salary deduction or monthly automatic payment
plan, the minimum initial payment is $50. In all cases, each subsequent payment
must be at least $50. Where the contribution on behalf of an employee under an
employer-sponsored retirement plan is less than $600 but more than $300
annually, the Company may issue a Contract on the employee if the plan's average
annual contribution per eligible plan participant is at least $600. The minimum
allocation to a Guarantee Period Account is $1,000. If less than $1,000 is
allocated to a Guarantee Period Account, the Company reserves the right to apply
that amount to the Money Market Portfolio.

Generally, unless otherwise requested, all payments will be allocated among the
accounts in the same proportion that the initial net payment is allocated or, if
subsequently changed, according to the most recent allocation instructions. The
Owner may change allocation instructions for new payments pursuant to a written
or telephone request. If telephone requests are elected by the Owner, a properly
completed authorization must be on file before telephone requests will be
honored. The policy of the Company and its agents and affiliates is that they
will not be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. The Company will employ reasonable procedures
to confirm that instructions communicated

22
<PAGE>
by telephone are genuine; otherwise, the Company may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures the Company
follows for transactions initiated by telephone include requirements that
callers on behalf of an Owner identify themselves by name and identify the
Annuitant by name, date of birth and social security number. All transfer
instructions by telephone are tape recorded.

B. RIGHT TO REVOKE INDIVIDUAL RETIREMENT ANNUITY

An individual purchasing a Contract intended to qualify as an IRA may revoke the
Contract at any time within ten days after receipt of the Contract and receive a
refund. In order to revoke the Contract, the Owner must mail or deliver the
Contract to the agent through whom the Contract was purchased, to the Company's
Principal Office at 440 Lincoln Street, Worcester, MA 01653, or to an authorized
representative. Mailing or delivery must occur within ten days after receipt of
the Contract for revocation to be effective.

Within seven days, the Company will provide a refund equal to gross payment(s)
received. In some states, however, the refund may equal the greater of (a) gross
payments or (b) the amounts allocated to the Fixed and Guaranteed Period
Accounts plus the Accumulated Value of amounts in the Sub-Accounts plus any
amounts deducted under the Contract or by the Underlying Portfolios for taxes,
charges or fees. At the time the Contract is issued the "Right to Examine
Contract" provision on the cover page of the Contract will specifically indicate
whether the refund will be equal to gross payments or equal to the greater of
(a) or (b) as set forth above.

The liability of the Variable Account under this provision is limited to the
Owner's Accumulated Value in the Sub-Accounts on the date of cancellation. Any
additional amounts refunded to the Owner will be paid by the Company.

C. RIGHT TO REVOKE OR SURRENDER IN SOME STATES

In Georgia, Idaho, Indiana, Michigan, Missouri, North Carolina, Oklahoma,
Oregon, South Carolina, Texas, Utah, Washington and West Virginia, an Owner may
revoke the Contract at any time within ten days (20 days in Idaho) after receipt
of the Contract, and receive a refund as described under "B. Right to Revoke
Individual Retirement Annuity," above.

In all other states, an Owner may return the Contract at any time within ten
days (or the number of days required by state law if more than ten) after
receipt of the Contract. The Company will pay to the Owner an amount equal to
the sum of (1) the difference between the amount paid, including fees, and any
amount allocated to the Variable Account, and (2) the Accumulated Value of
amounts allocated to the Variable Account as of the date the request is
received. If the Contract was purchased as an IRA, the IRA revocation right
described above may be utilized in lieu of the special surrender right.

D. TRANSFER PRIVILEGE

Prior to the Annuity Date, the Owner may transfer amounts among accounts at any
time upon written or telephone request to the Company. As discussed in "A.
Payments," a properly completed authorization form must be on file before
telephone requests will be honored. Transfer values will be based on the
Accumulated Value next computed after receipt of the transfer request.

Transfers to a Guarantee Period Account must be at least $1,000. If the amount
to be transferred to a Guarantee Period Account is less than $1,000, the Company
may transfer that amount to the Money Market Portfolio.

Currently, the Company makes no charge for transfers. The first twelve transfers
in a Contract year are guaranteed to be free of any transfer charge. For each
subsequent transfer in a Contract year, the Company

23
<PAGE>
does not currently charge but reserves the right to assess a charge, guaranteed
never to exceed $25, to reimburse it for the expense of processing transfers.

The Owner may authorize an independent third party to transact allocations and
transfers in accordance with an asset allocation strategy or other investment
strategy. The Company may provide administrative or other support services to
these independent third parties, however, the Company does not engage any third
parties to offer allocation or other investment services under this Contract,
does not endorse or review any allocation or transfer recommendations and is not
responsible for the investment results of such allocations or transfers
transacted on the Owner's behalf. In addition, the Company reserves the right to
discontinue services or limit the number of Portfolios that it may provide such
services to. The Company does not charge the Owner for providing additional
support services.

AUTOMATIC TRANSFERS (DOLLAR COST AVERAGING) AND AUTOMATIC ACCOUNT REBALANCING
OPTIONS. The Owner may elect automatic transfers of a predetermined dollar
amount, not less than $100, on a periodic basis (monthly, bi-monthly, quarterly,
semi-annually or annually) from the Money Market Portfolio, the America Income
Portfolio or the Fixed Account (the source account) to one or more Portfolios.
Automatic transfers may not be made into the Fixed Account, the Guarantee Period
Accounts or, if applicable, the Portfolio being used as the source account. If
an automatic transfer would reduce the balance in the source account to less
than $100, the entire balance will be transferred proportionately to the chosen
Portfolios. Automatic transfers will continue until the amount in the source
account on a transfer date is zero or the Owner's request to terminate the
option is received by the Company. If additional amounts are allocated to the
source account after its balance has fallen to zero, this option will not
restart automatically, and the Owner must provide a new request to the Company.

To the extent permitted by state law, the Company reserves the right, from time
to time, to credit an enhanced interest rate to certain initial and/or
subsequent payments which are deposited into the Fixed Account and which utilize
the Fixed Account as the source account for the payment from which to process
automatic transfers. For more information see APPENDIX A, "MORE INFORMATION
ABOUT THE FIXED ACCOUNT."

The Owner may request automatic rebalancing of Sub-Account allocations on a
monthly, bi-monthly, quarterly, semi-annual or annual basis in accordance with
specified percentage allocations. As frequently as requested, the Company will
review the percentage allocations in the Portfolios and, if necessary, transfer
amounts to ensure conformity with the designated percentage allocation mix. If
the amount necessary to re-establish the mix on any scheduled date is less than
$100, no transfer will be made. Automatic Account Rebalancing will continue
until the Owner's request to terminate or change the option is received by the
Company. As such, subsequent payments allocated in a manner different from the
percentage allocation mix in effect on the date the payment is received will be
reallocated in accordance with the existing mix on the next scheduled date
unless the Owner's timely request to change the mix or terminate the option is
received by the Company.

The Company reserves the right to limit the number of Portfolios that may be
utilized for automatic transfers and rebalancing, and to discontinue either
option upon advance written notice. Currently, Dollar Cost Averaging and
Automatic Account Rebalancing may not be in effect simultaneously. Either option
may be elected when the Contract is purchased or at a later date.

E. SURRENDER

At any time prior to the Annuity Date, the Owner may surrender the Contract and
receive an amount equal to the Surrender Value. The Owner must return the
Contract and a signed, written request for surrender, satisfactory to the
Company, to the Principal Office. The amount payable to the Owner upon surrender
will be based on the Contract's Accumulated Value as of the Valuation Date on
which the request and the Contract are received at the Principal Office.

24
<PAGE>
Before the Annuity Date, a contingent deferred sales charge may be deducted when
a Contract is surrendered if payments have been credited to the Contract during
the last seven full Contract years. See "CHARGES AND DEDUCTIONS." The Contract
fee will be deducted upon surrender of the Contract.

After the Annuity Date, only a Contract under which a commutable period certain
option has been elected may be surrendered. The Surrender Amount is the commuted
value of any unpaid installments, computed on the basis of the assumed interest
rate incorporated in such annuity benefit payments. No contingent deferred sales
charge is imposed after the Annuity Date.

Any amount surrendered normally is payable within seven days following the
Company's receipt of the surrender request. The Company reserves the right to
defer surrenders and withdrawals of amounts in each Sub-Account in any period
during which (1) trading on the New York Stock Exchange is restricted as
determined by the SEC or such Exchange is closed for other than weekends and
holidays, (2) the SEC has, by order, permitted such suspension, or (3) an
emergency, as determined by the SEC, exists such that disposal of portfolio
securities or valuation of assets of a separate account is not reasonably
practicable.

The right is reserved by the Company to defer surrenders and withdrawals of
amounts allocated to the Company's Fixed Account and Guarantee Period Accounts
for a period not to exceed six months.

The surrender rights of Owners who are participants under Section 403(b) plans
or who are participants in the Texas Optional Retirement Program ("Texas ORP")
are restricted; see "Tax-Sheltered Annuities" and "Texas Optional Retirement
Program."

For important tax consequences which may result from surrender, see "FEDERAL TAX
CONSIDERATIONS."

F. WITHDRAWALS

At any time prior to the Annuity Date, the Owner may withdraw a portion of the
Accumulated Value of his or her Contract, subject to the limits stated below.
The Owner must submit to the Principal Office a signed, written request for
withdrawal, satisfactory to the Company. The written request must indicate the
dollar amount the Owner wishes to receive and the accounts from which such
amount is to be withdrawn. The amount withdrawn equals the amount requested by
the Owner plus any applicable contingent deferred sales charge, as described
under "CHARGES AND DEDUCTIONS." In addition, amounts withdrawn from a Guarantee
Period Account prior to the end of the applicable Guarantee Period will be
subject to a Market Value Adjustment, as described under "GUARANTEE PERIOD
ACCOUNTS."

Where allocations have been made to more than one account, a percentage of the
withdrawal may be allocated to each such account. A withdrawal from a
Sub-Account will result in cancellation of a number of units equivalent in value
to the amount withdrawn, computed as of the Valuation Date that the request is
received at the Principal Office.

Each withdrawal must be in a minimum amount of $100. No withdrawal will be
permitted if the Accumulated Value remaining under the Contract would be reduced
to less than $1,000. Withdrawals will be paid in accordance with the time
limitations described under "E. Surrender."

For important restrictions on withdrawals which are applicable to Owners who are
participants under Section 403(b) plans or under the Texas ORP, see "FEDERAL TAX
CONSIDERATIONS," "Tax-Sheltered Annuities" and "Texas Optional Retirement
Program." For important tax consequences which may result from withdrawals, see
"FEDERAL TAX CONSIDERATIONS."

SYSTEMATIC WITHDRAWALS. The Owner may elect an automatic schedule of
withdrawals (systematic withdrawals) from amounts in the Sub-Accounts and/or the
Fixed Account on a monthly, bi-monthly, quarterly,

25
<PAGE>
semi-annual or annual basis. Systematic withdrawals from Guarantee Period
Accounts are not available. The minimum amount of each automatic withdrawal is
$100, and will be subject to any applicable withdrawal charges. If elected at
the time of purchase, the Owner must designate in writing the specific dollar
amount of each withdrawal and the percentage of this amount which should be
taken from each designated Sub-Account and/or the Fixed Account. Systematic
withdrawals then will begin on the date indicated on the application. If elected
after the issue date, the Owner may elect, by written request, a specific dollar
amount and the percentage of this amount to be taken from each designated
Sub-Account and/or the Fixed Account, or the Owner may elect to withdraw a
specific percentage of the Accumulated Value calculated as of the withdrawal
dates, and may designate the percentage of this amount which should be taken
from each account. The first withdrawal will take place on the date the written
request is received at the Principal Office or, if later, on a date specified by
the Owner.

If a withdrawal would cause the remaining Accumulated Value to be less than
$1,000, systematic withdrawals will be discontinued. Systematic withdrawals will
cease automatically on the Annuity Date. The Owner may change or terminate
systematic withdrawals only by written request to the Principal Office.

LIFE EXPECTANCY DISTRIBUTIONS. Prior to the Annuity Date an Owner who also is
the Annuitant may elect to make a series of systematic withdrawals from the
Contract according to a life expectancy distribution ("LED") option by returning
a properly signed LED request form to the Principal Office. The LED option
permits the Owner to make systematic withdrawals from the Contract over his or
her lifetime. The amount withdrawn from the Contract changes each year, because
life expectancy changes each year that a person lives. For example, actuarial
tables indicate that a person age 70 has a life expectancy of 16 years, but a
person who attains age 86 has a life expectancy of another 6.5 years.

If an Owner elects the LED option, in each calendar year a fraction of the
Accumulated Value is withdrawn based on the Owner's then life expectancy. The
numerator of the fraction is 1 (one), and the denominator of the fraction is the
remaining life expectancy of the Owner, as determined annually by the Company.
The resulting fraction, expressed as a percentage, is applied to the Accumulated
Value at the beginning of the year to determine the amount to be distributed
during the year. The Owner may elect monthly, bi-monthly, quarterly,
semi-annual, or annual distributions, and may terminate the LED option at any
time. The Owner also may elect to receive distributions under an LED option
which is determined on the joint life expectancy of the Owner and a beneficiary.
The Company also may offer other systematic withdrawal options.

Where the Owner is a trust or other non-natural person, the Owner may elect the
LED option based on the Annuitant's life expectancy.

If an Owner makes withdrawals under the LED option prior to age 59 1/2, the
withdrawals may be treated by the Internal Revenue Service ("IRS") as premature
distributions from the Contract. The payments then would be taxed on an "income
first" basis and be subject to a 10% federal tax penalty. For more information,
see "FEDERAL TAX CONSIDERATIONS" and "B. Taxation of the Contracts in General."

G. DEATH BENEFIT

In the event that the Annuitant, Owner or Joint Owner, if applicable, dies while
the Contract is in force, the Company will pay the beneficiary a death benefit,
except where the Contract is continued as provided in "H. The Spouse of the
Owner as Beneficiary." The amount of the death benefit and the time requirements
for receipt of payment may vary depending upon whether the Annuitant or an Owner
dies first, and whether death occurs prior to or after the Annuity Date.

DEATH OF THE ANNUITANT PRIOR TO THE ANNUITY DATE. At the death of the Annuitant
(including an Owner who is also the Annuitant), the benefit is equal to the
greatest of (a) the Accumulated Value under the Contract increased by any
positive Market Value Adjustment; (b) gross payments compounded daily at an
annual rate of 5% starting on the date each payment is applied, decreased
proportionately to reflect withdrawals (for each

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<PAGE>
withdrawal, the proportionate reduction is calculated as the death benefit under
this option immediately prior to the withdrawal multiplied by the withdrawal
amount and divided by the Accumulated Value immediately prior to the
withdrawal); or (c) the death benefit that would have been payable on the most
recent contract anniversary, increased for subsequent payments and decreased
proportionately for subsequent withdrawals.

DEATH OF AN OWNER WHO IS NOT ALSO THE ANNUITANT PRIOR TO THE ANNUITY DATE. If
an Owner who is not also the Annuitant dies before the Annuity Date, the death
benefit will be the Accumulated Value increased by any positive Market Value
Adjustment. The death benefit never will be reduced by a negative Market Value
Adjustment.

PAYMENT OF THE DEATH BENEFIT PRIOR TO THE ANNUITY DATE. The death benefit
generally will be paid to the beneficiary in one sum within seven business days
of the receipt of due proof of death at the Principal Office unless the Owner
has specified a death benefit annuity option. Instead of payment in one sum, the
beneficiary may, by written request, elect to:

(1) defer distribution of the death benefit for a period no more than five years
from the date of death; or

(2) receive a life annuity or an annuity for a period certain not extending
beyond the beneficiary's life expectancy, with annuity benefit payments
beginning one year from the date of death.

If distribution of the death benefit is deferred under (1) or (2), any value in
the Guarantee Period Accounts will be transferred to the Sub-Account investing
in the Money Market Portfolio. The excess, if any, of the death benefit over the
Accumulated Value also will be added to the Money Market Portfolio. The
beneficiary may, by written request, effect transfers and withdrawals during the
deferral period and prior to annuitization under (2), but may not make
additional payments. The death benefit will reflect any earnings or losses
experienced during the deferral period. If there are multiple beneficiaries, the
consent of all is required.

With respect to the death benefit, the Accumulated Value under the Contract will
be based on the unit values next computed after receipt of due proof of death.

DEATH OF THE ANNUITANT ON OR AFTER THE ANNUITY DATE. If the Annuitant's death
occurs on or after the Annuity Date but before completion of all guaranteed
annuity benefit payments, any unpaid amounts or installments will be paid to the
beneficiary. The Company must pay out the remaining payments at least as rapidly
as under the payment option in effect on the date of the Annuitant's death.

H. THE SPOUSE OF THE OWNER AS BENEFICIARY

The Owner's spouse, if named as the sole beneficiary, may by written request
continue the Contract in lieu of receiving the amount payable upon death of the
Owner. Upon such election, the spouse will become the Owner and Annuitant
subject to the following: (1) any value in the Guarantee Period Accounts will be
transferred to the Money Market Portfolio and (2) the excess, if any, of the
death benefit over the Contract's Accumulated Value also will be added to the
Money Market Portfolio. This value never will be subject to a

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<PAGE>
surrender charge when withdrawn. Additional payments may be made; however, a
surrender charge will apply to these amounts if they have not been invested in
the Contract for more than seven years. All other rights and benefits provided
in the Contract will continue, except that any subsequent spouse of such new
Owner will not be entitled to continue the Contract upon such new Owner's death.

I. ASSIGNMENT

The Contract, other than those sold in connection with certain qualified plans,
may be assigned by the Owner at any time prior to the Annuity Date and while the
Annuitant is alive (see "FEDERAL TAX CONSIDERATIONS"). The Company will not be
deemed to have knowledge of an assignment unless it is made in writing and filed
at the Principal Office. The Company will not assume responsibility for
determining the validity of any assignment. If an assignment of the Contract is
in effect on the Annuity Date, the Company reserves the right to pay to the
assignee, in one sum, that portion of the Surrender Value of the Contract to
which the assignee appears to be entitled. The Company will pay the balance, if
any, in one sum to the Owner in full settlement of all liability under the
Contract. The interest of the Owner and of any beneficiary will be subject to
any assignment.

J. ELECTING THE FORM OF ANNUITY AND THE ANNUITY DATE

The Annuity Date is selected by the Owner. To the extent permitted in your
state, the Annuity Date may be the first day of any month (1) before the
Annuitant's 85th birthday, if the Annuitant's age on the issue date of the
Contract is 75 or under, or (2) within ten years from the issue date of the
Contract and before the Annuitant's 90th birthday, if the Annuitant's age on the
issue date is between 76 and 90. The Owner may elect to change the Annuity Date
by sending a request to the Principal Office at least one month before the
Annuity date. The new Annuity Date must be the first day of any month occurring
before the Annuitant's 90th birthday, and must be within the life expectancy of
the Annuitant. The Company shall determine such life expectancy at the time a
change in Annuity Date is requested. The Internal Revenue Code (the "Code") and
the terms of qualified plans impose limitations on the age at which annuity
benefit payments may commence and the type of annuity option selected. See
"FEDERAL TAX CONSIDERATIONS" for further information.

Subject to certain restrictions described below, the Owner has the right (1) to
select the annuity option under which annuity benefit payments are to be made,
and (2) to determine whether payments are to be made on a fixed basis, a
variable basis, or a combination fixed and variable basis. Annuity benefit
payments are determined according to the annuity tables in the Contract, by the
annuity option selected, and by the investment performance of the accounts
selected.

To the extent a fixed annuity payout is selected, Accumulated Value will be
transferred to the Fixed Account of the Company, and the annuity benefit
payments will be fixed in amount. See APPENDIX A, "MORE INFORMATION ABOUT THE
FIXED ACCOUNT."

Under a variable annuity payout, a payment equal to the value of the fixed
number of Annuity Units in the Sub-Accounts is made monthly, quarterly,
semi-annually or annually. Since the value of an Annuity Unit in a Sub-Account
will reflect the investment performance of the Sub-Account, the amount of each
annuity benefit payment will vary.

The annuity option(s) selected must produce an initial payment of at least $50
(a lower amount may be required in some states). The Company reserves the right
to increase this minimum amount. If the annuity option(s) selected do(es) not
produce an initial payment which meets this minimum, a single payment may be
made. Once the Company begins making annuity benefit payments, the Annuitant
cannot make withdrawals or surrender the annuity benefit, except where the
Annuitant has elected a commutable period certain option. Beneficiaries entitled
to receive remaining payments under either a commutable or non-commutable
"period certain" option may elect instead to receive a lump sum settlement. See
"K. Description of Variable Annuity Payout Options."

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<PAGE>
If the Owner does not elect otherwise, a variable life annuity with periodic
payments for ten years guaranteed will be purchased. Changes in either the
Annuity Date or annuity option can be made up to one month prior to the Annuity
Date.

K. DESCRIPTION OF VARIABLE ANNUITY PAYOUT OPTIONS

The Company provides the variable annuity payout options described below.
Currently, variable annuity payout options may be funded through the
Sub-Accounts investing in the Capital Growth Portfolio, the Equity-Income
Portfolio and the America Income Portfolio. The Company also provides these same
options funded through the Fixed Account (fixed annuity payout). Regardless of
how payments were allocated during the accumulation period, any of the variable
payout options or the fixed payout options may be selected, or any of the
variable options may be selected in combination with any of the fixed options.
Other annuity options may be offered by the Company. IRS regulations may not
permit certain of the available annuity payout options when used in connection
with certain qualified Contracts.

VARIABLE LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR TEN YEARS. This variable
annuity is payable periodically during the lifetime of the payee with the
guarantee that if the payee should die before all payments have been made, the
remaining annuity benefit payments will continue to the beneficiary.

VARIABLE LIFE ANNUITY PAYABLE PERIODICALLY DURING LIFETIME OF THE ANNUITANT
ONLY. It would be possible under this option for the Annuitant to receive only
one annuity benefit payment if the Annuitant dies prior to the due date of the
second annuity benefit payment, two annuity benefit payments if the Annuitant
dies before the due date of the third annuity benefit payment, and so on.
Payments will continue, however, during the lifetime of the Annuitant, no matter
how long he or she lives.

UNIT REFUND VARIABLE LIFE ANNUITY. This is an annuity payable periodically
during the lifetime of the payee with the guarantee that if (1) exceeds (2),
then periodic variable annuity benefit payments will continue to the beneficiary
until the number of such payments equals the number determined in (1).

Where: (1) is the dollar amount of the Accumulated Value divided by the
dollar amount of the first payment, and

(2) is the number of payments paid prior to the death of the
payee.

JOINT AND SURVIVOR VARIABLE LIFE ANNUITY. This variable annuity is payable
jointly to two payees during their joint lifetime, and then continues thereafter
during the lifetime of the survivor. The amount of each payment to the survivor
is based on the same number of Annuity Units which applied during the joint
lifetime of the two payees. One of the payees must be either the person
designated as the Annuitant or the beneficiary in the Contract. There is no
minimum number of payments under this option.

JOINT AND TWO-THIRDS SURVIVOR VARIABLE LIFE ANNUITY. This variable annuity is
payable jointly to two payees during their joint lifetime, and then continues
thereafter during the lifetime of the survivor. The amount of each periodic
payment to the survivor, however, is based upon two-thirds of the number of
Annuity Units which applied during the joint lifetime of the two payees. One of
the payees must be the person designated as the Annuitant in the Contract or the
beneficiary. There is no minimum number of payments under this option.

PERIOD CERTAIN VARIABLE ANNUITY. This variable annuity has periodic payments
for a stipulated number of years ranging from one to 30, and may be commutable
or noncommutable. A commutable option provides the Annuitant with the right to
request a lump sum payment of any remaining balance after annuity payments have
commenced. Under a non-commutable period certain option, the Annuitant may not
request a lump sum payment. See "ANNUITY BENEFIT PAYMENTS" in the SAI.

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<PAGE>
It should be noted that the period certain option does not involve a life
contingency. In the computation of the payments under this option, the charge
for annuity rate guarantees, which includes a factor for mortality risks, is
made. Although not contractually required to do so, the Company currently
follows a practice of permitting persons receiving payments under a period
certain option to elect to convert to a variable annuity involving a life
contingency. The Company may discontinue or change this practice at any time,
but not with respect to election of the option made prior to the date of any
change in this practice.

L. ANNUITY BENEFIT PAYMENTS

THE ANNUITY UNIT. On and after the Annuity Date, the Annuity Unit is a measure
of the value of the Annuitant's monthly annuity benefit payments under a
variable annuity payout option. The value of an Annuity Unit in each Sub-Account
initially was set at $1.00. The value of an Annuity Unit under a Sub-Account on
any Valuation Date thereafter is equal to the value of such unit on the
immediately preceding Valuation Date, multiplied by the product of (1) the net
investment factor of the Sub-Account for the current Valuation Period, and (2) a
factor to adjust benefits to neutralize the assumed interest rate. The assumed
interest rate, discussed below, is incorporated in the variable annuity payout
options offered in the Contract.

DETERMINATION OF THE FIRST AND SUBSEQUENT ANNUITY BENEFIT PAYMENTS. The first
periodic annuity benefit payment is based upon the Accumulated Value as of a
date not more than four weeks preceding the date that the first annuity benefit
payment is due. Variable annuity benefit payments are due on the first of a
month, which is the date the payment is to be received by the Annuitant, and
currently are based on unit values as of the 15th day of the preceding month.

The Contract provides annuity rates which determine the dollar amount of the
first periodic payment under each form of annuity for each $1,000 of applied
value. For life contingency options and non-commutable period certain options of
ten or more years, the annuity value is the Accumulated Value less any premium
taxes and adjusted for any Market Value Adjustment. For commutable period
certain options or any period certain option less than ten years, the value is
the Surrender Value less any premium tax. For a death benefit annuity, the
annuity value will be the amount of the death benefit. The annuity rates in the
Contract are based on a modification of the 1983(a) Individual Mortality Table
on rates.

The amount of the first monthly payment depends upon the form of annuity
selected, the sex (however, see "M. NORRIS Decision") and age of the Annuitant
and the value of the amount applied under the annuity option. The variable
annuity payout options offered by the Company are based on a 3.5% assumed
interest rate. Variable payments are affected by the assumed interest rate used
in calculating the annuity option rates. Variable annuity benefit payments will
increase over periods when the actual net investment result of the Sub-Accounts
funding the annuity exceeds the equivalent of the assumed interest rate for the
period. Variable annuity benefit payments will decrease over periods when the
actual net investment result of the respective Sub-Account is less than the
equivalent of the assumed interest rate for the period.

The dollar amount of the first periodic annuity benefit payment under life
annuity options and non-commutable period certain options of ten years or more
is determined by multiplying (1) the Accumulated Value applied under that option
(after application of any Market Value Adjustment and less premium tax, if any)
divided by $1,000, by (2) the applicable amount of the first monthly payment per
$1,000 of value. For commutable period certain options and any period certain
option of less than ten years, the Surrender Value less premium taxes, if any,
is used rather than the Accumulated Value. The dollar amount of the first
variable annuity benefit payment is then divided by the value of an Annuity Unit
of the selected Sub-Accounts to determine the number of Annuity Units
represented by the first payment. This number of Annuity Units remains fixed
under all annuity options except the joint and two-thirds survivor annuity
option. For each subsequent payment, the dollar amount of the variable annuity
benefit payment is determined by multiplying this fixed number of Annuity Units
by the value of an Annuity Unit on the applicable Valuation Date. After the
first benefit payment, the dollar amount of each periodic variable annuity
benefit payment will vary with

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<PAGE>
subsequent variations in the value of the Annuity Unit of the selected
Sub-Accounts. The dollar amount of each fixed amount annuity benefit payment is
fixed and will not change, except under the joint and two-thirds survivor
annuity option.

From time to time, the Company may offer Owners both fixed and variable annuity
rates more favorable than those contained in the Contract. Any such rates will
be applied uniformly to all Owners of the same class.

For an illustration of a variable annuity benefit payment calculation using a
hypothetical example, see "ANNUITY BENEFIT PAYMENTS" in the SAI.

M. NORRIS DECISION

In the case of ARIZONA GOVERNING COMMITTEE V. NORRIS, the United States Supreme
Court ruled that, in connection with retirement benefit options offered under
certain employer-sponsored employee benefit plans, annuity options based on
sex-distinct actuarial tables are not permissible under Title VII of the Civil
Rights Act of 1964. The ruling requires that benefits derived from contributions
paid into a plan after August 1, 1983 be calculated without regard to the sex of
the employee. Annuity benefits attributable to payments received by the Company
under a Contract issued in connection with an employer-sponsored benefit plan
affected by the Norris decision will be based on the greater of (1) the
Company's unisex non-guaranteed current annuity option rates, or (2) the
guaranteed unisex rates described in such Contract, regardless of whether the
Annuitant is male or female.

N. COMPUTATION OF VALUES

THE ACCUMULATION UNIT. Each net payment is allocated to the accounts selected
by the Owner. Allocations to the Sub-Accounts are credited to the Contract in
the form of Accumulation Units. Accumulation Units are credited separately for
each Sub-Account. The number of Accumulation Units of each Sub-Account credited
to the Contract is equal to the portion of the net payment allocated to the
Sub-Account, divided by the dollar value of the applicable Accumulation Unit as
of the Valuation Date the payment is received at the Principal Office. The
number of Accumulation Units resulting from each payment will remain fixed
unless changed by a subsequent split of Accumulation Unit value, a transfer, a
withdrawal or surrender. The dollar value of an Accumulation Unit of each
Sub-Account varies from Valuation Date to Valuation Date based on the investment
experience of that Sub-Account, and will reflect the investment performance,
expenses and charges of its Underlying Portfolios. The value of an Accumulation
Unit was set at $1.00 on the first Valuation Date for each Sub-Account.

Allocations to the Guarantee Period Accounts and the Fixed Account are not
converted into Accumulation Units, but are credited interest at a rate
periodically set by the Company.

The Accumulated Value under the Contract is determined by (1) multiplying the
number of Accumulation Units in each Sub-Account by the value of an Accumulation
Unit of that Sub-Account on the Valuation Date, (2) adding the products, and (3)
adding the amount of the accumulations in the Fixed Account and Guarantee Period
Accounts, if any.

NET INVESTMENT FACTOR. The Net Investment Factor is an index that measures the
investment performance of a Sub-Account from one Valuation Period to the next.
This factor is equal to 1.000000 plus the result from dividing (1) by (2) and
subtracting (3) and (4) where:

(1) is the investment income of a Sub-Account for the Valuation Period,
including realized or unrealized capital gains and losses during the
Valuation Period, adjusted for provisions made for taxes, if any;

(2) is the value of that Sub-Account's assets at the beginning of the Valuation
Period;

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(3) is a charge for mortality and expense risks equal to 1.25% on an annual
basis of the daily value of the Sub-Account's assets; and

(4) is an administrative charge equal to 0.15% on an annual basis of the daily
value of the Sub-Account's assets.

The dollar value of an Accumulation Unit as of a given Valuation Date is
determined by multiplying the dollar value of the corresponding Accumulation
Unit as of the immediately preceding Valuation Date by the appropriate net
investment factor.

For an illustration of an Accumulation Unit calculation using a hypothetical
example see "ANNUITY BENEFIT PAYMENTS" in the SAI.

CHARGES AND DEDUCTIONS

Deductions under the Contract and charges against the assets of the Sub-Accounts
are described below. Other deductions and expenses paid out of the assets of the
Underlying Portfolios are described in the prospectus and SAI for the Fund.

A. VARIABLE ACCOUNT DEDUCTIONS

MORTALITY AND EXPENSE RISK CHARGE. The Company makes a daily charge equal to an
annual rate of 1.25% of the value of each Sub-Account's assets to cover the
mortality and expense risk which the Company assumes in relation to the variable
portion of the Contract. The charge is imposed during both the accumulation
phase and the annuity payout phase. The mortality risk arises from the Company's
guarantee that it will make annuity benefit payments in accordance with annuity
rate provisions established at the time the Contract is issued for the life of
the Annuitant (or in accordance with the annuity option selected), no matter how
long the Annuitant (or other payee) lives and no matter how long all Annuitants
as a class live. Therefore, the mortality charge is deducted during the annuity
payout phase on all Contracts, including those that do not involve a life
contingency, even though the Company does not bear direct mortality risk with
respect to variable annuity settlement options that do not involve life
contingencies. The expense risk arises from the Company's guarantee that the
charges it makes will not exceed the limits described in the Contract and in
this Prospectus.

If the charge for mortality and expense risks is not sufficient to cover actual
mortality experience and expenses, the Company will absorb the losses. If
expenses are less than the amounts provided to the Company by the charge, the
difference will be a profit to the Company. To the extent this charge results in
a profit to the Company, such profit will be available for use by the Company
for, among other things, the payment of distribution, sales and other expenses.
Since mortality and expense risks involve future contingencies which are not
subject to precise determination in advance, it is not feasible to identify
specifically the portion of the charge which is applicable to each. The Company
estimates that a reasonable allocation might be .80% for mortality risk and .45%
for expense risk.

ADMINISTRATIVE EXPENSE CHARGE. The Company assesses each Sub-Account with a
daily charge equal to an annual rate of 0.15% of the average daily net assets of
the Sub-Account. The charge is imposed during both the accumulation phase and
the annuity payout phase. The daily administrative expense charge is assessed to
help defray administrative expenses actually incurred in the administration of
the Sub-Account, without profits. There is no direct relationship, however,
between the amount of administrative expenses imposed on a given Contract and
the amount of expenses actually attributable to that Contract.

Deductions for the Contract fee (see B. CONTRACT FEE below) and for the
administrative expense charge are designed to reimburse the Company for the cost
of administration and related expenses and are not expected to be a source of
profit. The administrative functions and expense assumed by the Company in
connection with the Variable Account and the Contract include, but are not
limited to, clerical, accounting,

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<PAGE>
actuarial and legal services, rent, postage, telephone, office equipment and
supplies, expenses of preparing and printing registration statements, expense of
preparing and typesetting prospectuses and the cost of printing prospectuses not
allocable to sales expense, filing and other fees.

OTHER CHARGES. Because the Sub-Accounts purchase shares of the Underlying
Portfolios, the value of the net assets of the Sub-Accounts will reflect the
investment advisory fee and other expenses incurred by the Underlying
Portfolios. The prospectus and SAI for the Fund contain additional information
concerning expenses of the Underlying Portfolios.

B. CONTRACT FEE

A $30 Contract fee currently is deducted on the Contract anniversary date and
upon full surrender of the Contract if the Accumulated Value on any of these
dates is less than $50,000. The Contract fee is waived for Contracts issued to
and maintained by the trustee of a 401(k) plan. Where Contract value has been
allocated to more than one account, a percentage of the total Contract fee will
be deducted from the value in each account. The portion of the charge deducted
from each account will be equal to the percentage which the value in that
account bears to the Accumulated Value under the Contract. The deduction of the
Contract fee from a Sub-Account will result in cancellation of a number of
Accumulation Units equal in value to the percentage of the charge deducted from
that account.

Where permitted by law, the Contract fee also may be waived for Contracts where,
on the date of issue, either the Owner or the Annuitant is within the following
classes of individuals: employees and registered representatives of any
broker-dealer which has entered into a sales agreement with the Company to sell
the Contract; employees of the Company, its affiliates and subsidiaries;
officers, directors, trustees and employees of any of the Portfolios; investment
managers or sub-advisers; and the spouses of and immediate family members
residing in the same household with such eligible persons. "Immediate family
members" means children, siblings, parents and grandparents.

C. PREMIUM TAXES

Some states and municipalities impose a premium tax on variable annuity
contracts. State premium taxes currently range up to 3.5%.

The Company makes a charge for state and municipal premium taxes, when
applicable, and deducts the amount paid as a premium tax charge. The current
practice of the Company is to deduct the premium tax charge in one of two ways:

1. if the premium tax was paid by the Company when payments were received, the
premium tax charge is deducted on a pro-rata basis when withdrawals are
made, upon surrender of the Contract, or when annuity benefit payments begin
(the Company reserves the right instead to deduct the premium tax charge for
these Contracts at the time the payments are received); or

2. the premium tax charge is deducted when annuity benefit payments begin.

In no event will a deduction be taken before the Company has incurred a tax
liability under applicable state law.

If no amount for premium tax was deducted at the time the payment was received,
but subsequently tax is determined to be due prior to the Annuity Date, the
Company reserves the right to deduct the premium tax from the Contract value at
the time such determination is made.

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D. CONTINGENT DEFERRED SALES CHARGE

No charge for sales expense is deducted from payments at the time the payments
are made. A contingent deferred sales charge, however, is deducted from the
Accumulated Value in the case of surrender and/or a withdrawal or at the time
annuity benefit payments begin, within certain time limits described below.

For purposes of determining the contingent deferred sales charge, the
Accumulated Value is divided into three categories: (1) New Payments - payments
received by the Company during the seven years preceding the date of the
surrender; (2) Old Payments - accumulated payments not defined as New Payments;
and (3) the amount available under the Withdrawal Without Surrender Charge
provision. See "Withdrawal Without Surrender Charge" below. For purposes of
determining the amount of any contingent deferred sales charge, surrenders will
be deemed to be taken first from amounts available as a Withdrawal Without
Surrender Charge, if any; then from Old Payments, and then from New Payments.
Amounts available as a Withdrawal Without Surrender Charge, followed by Old
Payments, may be withdrawn from the Contract at any time without the imposition
of a contingent deferred sales charge. If a withdrawal is attributable all or in
part to New Payments, a contingent deferred sales charge may apply.

CHARGES FOR SURRENDER AND WITHDRAWAL. If the Contract is surrendered, or if New
Payments are withdrawn while the Contract is in force and before the Annuity
Date, a contingent deferred sales charge may be imposed. The amount of the
charge will depend upon the number of years that the New Payments, if any, to
which the withdrawal is attributed have remained credited under the Contract.
For the purpose of calculating surrender charges for New Payments, all amounts
withdrawn are assumed to be deducted first from the earliest New Payment and
then from the next earliest New Payment and so on, until all New Payments have
been exhausted pursuant to the first-in-first-out ("FIFO") method of accounting.
(See "FEDERAL TAX CONSIDERATIONS" for a discussion of how withdrawals are
treated for income tax purposes.)

The contingent deferred sales charges are as follows:

<TABLE>
<CAPTION>
YEARS FROM CHARGE AS PERCENTAGE
DATE OF OF NEW
PAYMENT PAYMENTS WITHDRAWN
- ----------- ---------------------
<S> <C>
Less than 1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
More than 7 0%
</TABLE>

The amount withdrawn equals the amount requested by the Owner plus the
contingent deferred sales charge, if any. The charge is applied as a percentage
of the New Payments withdrawn, but in no event will the total contingent
deferred sales charge exceed a maximum limit of 7% of total gross New Payments.
Such total charge equals the aggregate of all applicable contingent deferred
sales charges for surrender, withdrawals and annuitization.

REDUCTION OR ELIMINATION OF SURRENDER CHARGE. Where permitted by state law, the
Company will waive the contingent deferred sales charge in the event that an
Owner (or the Annuitant, if the Owner is not an individual) is: (1) admitted to
a medical care facility after the issue date of the Contract and remains
confined there until the later of one year after the issue date or 90
consecutive days; (2) first diagnosed by a licensed physician as having a fatal
illness after the issue date of the Contract; or (3) physically disabled after
the issue date of the Contract and before attaining age 65. The Company may
require proof of such disability and continuing disability, including written
confirmation of receipt and approval of any claim for Social Security

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<PAGE>
Disability Benefits and reserves the right to obtain an examination by a
licensed physician of its choice and at its expense.

For purposes of the above provision, "medical care facility" means any
state-licensed facility or, in a state that does not require licensing, a
facility that is operating pursuant to state law, providing medically necessary
inpatient care which is prescribed by a licensed "physician" in writing and
based on physical limitations which prohibit daily living in a non-institutional
setting; "fatal illness" means a condition diagnosed by a licensed physician
which is expected to result in death within two years of the diagnosis; and
"physician" means a person other than the Owner, Annuitant or a member of one of
their families who is state licensed to give medical care or treatment and is
acting within the scope of that license.

Where contingent deferred sales charges have been waived under any one of the
three situations discussed above, no additional payments under the Contract will
be accepted unless required by state law.

In addition, from time to time the Company may allow a reduction in or
elimination of the contingent deferred sales charges, the period during which
the charges apply, or both, and/or credit additional amounts on Contracts, when
Contracts are sold to individuals or groups of individuals in a manner that
reduces sales expenses. The Company will consider factors such as the following:
(1) the size and type of group or class, and the persistency expected from that
group or class; (2) the total amount of payments to be received, and the manner
in which payments are remitted; (3) the purpose for which the Contracts are
being purchased, and whether that purpose makes it likely that costs and
expenses will be reduced; (4) other transactions where sales expenses are likely
to be reduced; or (5) the level of commissions paid to selling broker-dealers or
certain financial institutions with respect to Contracts within the same group
or class (for example, broker-dealers who offer the Contract in connection with
financial planning services offered on a fee-for-service basis). The Company
also may reduce or waive the contingent deferred sales charge, and/or credit
additional amounts on Contracts, where either the Owner or the Annuitant on the
date of issue is within the following classes of individuals ("eligible
persons"): employees and registered representatives of any broker-dealer which
has entered into a sales agreement with the Company to sell the Contract;
employees of the Company, its affiliates and subsidiaries; officers, directors,
trustees and employees of any of the Underlying Portfolios, investment managers
or Sub-Advisers; and the spouses of and immediate family members residing in the
same household with such eligible persons. "Immediate family members" means
children, siblings, parents and grandparents.

Finally, if permitted under state law, contingent deferred sales charges will be
waived under Section 403(b) Contracts where the amount withdrawn is being
contributed to a life insurance policy issued by the Company as part of the
individual's Section 403(b) plan.

Any reduction or elimination in the amount or duration of the contingent
deferred sales charge will not discriminate unfairly among purchasers of the
Contract. The Company will not make any changes to this charge where prohibited
by law.

Pursuant to Section 11 of the 1940 Act and Rule 11a-2 thereunder, the contingent
deferred sales charge is modified to effect certain exchanges of existing
annuity contracts issued by the Company for the Contract. See "EXCHANGE OFFER"
in the SAI.

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<PAGE>
WITHDRAWAL WITHOUT SURRENDER CHARGE. In each calendar year, the Company will
waive the contingent deferred sales charge, if any, on an amount ("Withdrawal
Without Surrender Charge") equal to the greatest of (1), (2) or (3):

<TABLE>
<S> <C>
Where (1) 100% of Cumulative Earnings (calculated as the Accumulated Value as of
is: the Valuation Date the Company receives the withdrawal request, or the
following day, reduced by total gross payments not previously
withdrawn);
Where (2) 15% of the Accumulated Value as of the Valuation Date the Company
is: receives the withdrawal request, or the following day, reduced by the
total amount of any prior withdrawals made in the same calendar year to
which no contingent deferred sales charge was applied; and
Where (3) The amount calculated under the Company's life expectancy distribution
is: option (see "Life Expectancy Distributions") whether or not the
withdrawal was part of such distribution (applies only if Annuitant is
also an Owner).
</TABLE>

For example, an 81-year-old Owner/Annuitant with an Accumulated Value of
$15,000, of which $1,000 is Cumulative Earnings, would have a Free Withdrawal
Amount of $2,250, which is equal to the greatest of:

(1) Cumulative Earnings ($1,000);

(2) 15% of Accumulated Value ($2,250); or

(3) LED of 10.2% of Accumulated Value ($1,530).

The Withdrawal Without Surrender Charge first will be deducted from Cumulative
Earnings. If the Withdrawal Without Surrender Charge exceeds Cumulative
Earnings, the excess amount will be deemed withdrawn from payments not
previously withdrawn on a last-in first-out ("LIFO") basis. If more than one
withdrawal is made during the year, on each subsequent withdrawal the Company
will waive the contingent deferred sales charge, if any, until the entire
Withdrawal Without Surrender Charge has been withdrawn. Amounts withdrawn from a
Guarantee Period Account prior to the end of the applicable Guarantee Period
will be subject to a Market Value Adjustment. See "GUARANTEE PERIOD ACCOUNTS."

SURRENDERS. In the case of a complete surrender, the amount received by the
Owner is equal to the entire Accumulated Value under the Contract, net of the
applicable contingent deferred sales charge on New Payments, the Contract fee
and any applicable tax withholding, and adjusted for any applicable Market Value
Adjustment. Subject to the same rules applicable to withdrawals, the Company
will not assess a contingent deferred sales charge on an amount equal to the
Withdrawal Without Surrender Charge Amount, described above.

Where an Owner who is trustee under a pension plan surrenders, in whole or in
part, a Contract on a terminating employee, the trustee will be permitted to
reallocate all or a part of the Accumulated Value under the Contract to other
contracts issued by the Company and owned by the trustee, with no deduction for
any otherwise applicable contingent deferred sales charge. Any such reallocation
will be at the Accumulation Unit values for the Sub-Accounts as of the Valuation
Date on which a written, signed request is received at the Principal Office.

For further information on surrender and withdrawal, including minimum limits on
amount withdrawn and amount remaining under the Contract in the case of
withdrawal, and important tax considerations, see "E. Surrender" and "F.
Withdrawals" under "DESCRIPTION OF THE CONTRACT," and see "FEDERAL TAX
CONSIDERATIONS."

CHARGE AT THE TIME ANNUITY BENEFIT PAYMENTS BEGIN. If any commutable period
certain option or a non-commutable period certain option for less than ten years
is chosen, a contingent deferred sales charge will be deducted from the
Accumulated Value of the Contract if the Annuity Date occurs at any time when
the surrender charge would still apply had the Contract been surrendered on the
Annuity Date. No contingent

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<PAGE>
deferred sales charge is imposed at the time of annuitization in any Contract
year under an option involving a life contingency or for any non-commutable
period certain option for ten years or more. A Market Value Adjustment, however,
may apply. See "GUARANTEE PERIOD ACCOUNTS." If the Owner of a fixed annuity
contract issued by the Company wishes to elect a variable annuity option, the
Company may permit such Owner to exchange, at the time of annuitization, the
fixed contract for a Contract offered in this Prospectus. The proceeds of the
fixed contract, minus any contingent deferred sales charge applicable under the
fixed contract if a period certain option is chosen, will be applied towards the
variable annuity option desired by the Owner. The number of Annuity Units under
the option will be calculated using the Annuity Unit values as of the 15th of
the month preceding the Annuity Date.

E. TRANSFER CHARGE

The Company currently makes no charge for processing transfers. The Company
guarantees that the first 12 transfers in a Contract year will be free of
transfer charge, but reserves the right to assess a charge, guaranteed never to
exceed $25, for each subsequent transfer in a Contract year. For more
information, see "D. Transfer Privilege."

GUARANTEE PERIOD ACCOUNTS

Due to certain exemptive and exclusionary provisions in the securities laws,
interests in the Guarantee Period Accounts and the Company's Fixed Account are
not registered as an investment company under the provisions of the Securities
Act of 1933 (the "1933 Act") or the 1940 Act. Accordingly, the staff of the SEC
has not reviewed the disclosures in this Prospectus relating to the Guarantee
Period Accounts or the Fixed Account. Nevertheless, disclosures regarding the
Guarantee Period Accounts and the Fixed Account of the Contract or any fixed
benefits offered under these accounts may be subject to the provisions of the
1933 Act relating to the accuracy and completeness of statements made in the
Prospectus.

INVESTMENT OPTIONS. In most jurisdictions, Guarantee Periods ranging from two
through ten years may be available. Each Guarantee Period established for the
Owner is accounted for separately in a non-unitized segregated account. Each
Guarantee Period Account provides for the accumulation of interest at a
Guaranteed Interest Rate. The Guaranteed Interest Rate on amounts allocated or
transferred to a Guarantee Period Account is determined from time to time by the
Company in accordance with market conditions. Once an interest rate is in effect
for a Guarantee Period Account, however, the Company may not change it during
the duration of the Guarantee Period. In no event will the Guaranteed Interest
Rate be less than 3%.

To the extent permitted by law, the Company reserves the right at any time to
offer Guarantee Periods with durations that differ from those which were
available when a Contract initially was issued and to stop accepting new
allocations, transfers or renewals to a particular Guarantee Period.

Owners may allocate net payments or make transfers from any of the Sub-Accounts,
the Fixed Account or an existing Guarantee Period Account to establish a new
Guarantee Period Account at any time prior to the Annuity Date. Transfers from a
Guarantee Period Account on any date other than on the day following the
expiration of that Guarantee Period will be subject to a Market Value
Adjustment. The Company establishes a separate investment account each time the
Owner allocates or transfers amounts to a Guarantee Period except that amounts
allocated to the same Guarantee Period on the same day will be treated as one
Guarantee Period Account. The minimum that may be allocated to establish a
Guarantee Period Account is $1,000. If less than $1,000 is allocated, the
Company reserves the right to apply that amount to the Money Market Portfolio.
The Owner may allocate amounts to any of the Guarantee Periods available.

At least 45 days, but not more than 75 days, prior to the end of a Guarantee
Period, the Company will notify the Owner in writing of the expiration of that
Guarantee Period. At the end of a Guarantee Period the Owner may transfer
amounts to the Sub-Accounts, the Fixed Account or establish a new Guarantee
Period Account of any duration then offered by the Company without a Market
Value Adjustment. If reallocation instructions are

37
<PAGE>
not received at the Principal Office before the end of a Guarantee Period, the
account value automatically will be applied to a new Guarantee Period Account
with the same duration unless (1) less than $1,000 would remain in the Guarantee
Period Account on the expiration date, or (2) the Guarantee Period would extend
beyond the Annuity Date or is no longer available. In such cases, the Guarantee
Period Account value will be transferred to the Money Market Portfolio. Where
amounts have been renewed automatically in a new Guarantee Period, it is the
Company's current practice to give the Owner an additional 30 days to transfer
out of the Guarantee Period Account without application of a Market Value
Adjustment. This practice may be discontinued or changed at the Company's
discretion.

MARKET VALUE ADJUSTMENT. No Market Value Adjustment will be applied to
transfers, withdrawals, or a surrender from a Guarantee Period Account on the
expiration of its Guarantee Period. In addition, no negative Market Value
Adjustment will be applied to a death benefit although a positive Market Value
Adjustment, if any, will be applied to increase the value of the death benefit
when based on the Contract's Accumulated Value. See "G. Death Benefit." All
other transfers, withdrawals, or a surrender prior to the end of a Guarantee
Period will be subject to a Market Value Adjustment, which may increase or
decrease the account value. Amounts applied under an annuity option are treated
as withdrawals when calculating the Market Value Adjustment. The Market Value
Adjustment will be determined by multiplying the amount taken from each
Guarantee Period Account before deduction of any Surrender Charge by the market
value factor. The market value factor for each Guarantee Period Account is equal
to:

[(1+i)/(1+j)]n/365-1

<TABLE>
<S> <C> <C>
where: i is the Guaranteed Interest Rate expressed as a decimal (for example 3% =
0.03) being credited to the current Guarantee Period;
j is the new Guaranteed Interest Rate, expressed as a decimal, for a
Guarantee Period with a duration equal to the number of years remaining in
the current Guarantee Period, rounded to the next higher number of whole
years. If that rate is not available, the Company will use a suitable rate
or index allowed by the Department of Insurance; and
n is the number of days remaining from the Effective Valuation Date to the
end of the current Guarantee Period.
</TABLE>

Based on the application of this formula, the value of a Guarantee Period
Account will increase after the Market Value Adjustment is applied if the then
current market rates are lower than the rate being credited to the Guarantee
Period Account. Similarly, the value of a Guarantee Period Account will decrease
after the Market Value Adjustment is applied if the then current market rates
are higher than the rate being credited to the Guarantee Period Account. The
Market Value Adjustment is limited, however, so that even if the account value
is decreased after application of a Market Value Adjustment, it will equal or
exceed the Owner's principal plus 3% earnings per year less applicable Contract
fees. Conversely, if the then current market rates are lower and the account
value is increased after the Market Value Adjustment is applied, the increase in
value is also affected by the minimum guaranteed rate of 3% such that the amount
that will be added to the Guarantee Period Account is limited to the difference
between the amount earned and the 3% minimum guaranteed earnings. For examples
of how the Market Value Adjustment works, see APPENDIX B.

BUILD WITH INTEREST AND GROWTH PROGRAM. Under this feature, the Owner elects a
Guarantee Period and one or more Sub-Accounts. The Company will then compute the
proportion of the initial payment that must be allocated to the Guarantee Period
selected, assuming no transfers or withdrawals, in order to ensure that on the
last day of the Guarantee Period it will equal the amount of the entire initial
payment. The required amount then will be allocated to the pre-selected
Guarantee Period Account and the remaining balance to the other investment
options selected by the Owner in accordance with the procedures described in "A.
Payments."

WITHDRAWALS. Prior to the Annuity Date, the Owner may make withdrawals of
amounts held in the Guarantee Period Accounts. Withdrawals from these accounts
will be made in the same manner and be subject to the same rules as set forth
under "E. Surrender" and "F. Withdrawals." In addition, the following

38
<PAGE>
provisions also apply to withdrawals from a Guarantee Period Account: (1) a
Market Value Adjustment will apply to all withdrawals, including Withdrawals
Without Surrender Charge, unless made at the end of the Guarantee Period; and
(2) the Company reserves the right to defer payments of amounts withdrawn from a
Guarantee Period Account for up to six months from the date it receives the
withdrawal request. If deferred for 30 days or more, the Company will pay
interest on the amount deferred at a rate of at least 3%.

In the event that a Market Value Adjustment applies to a withdrawal of a portion
of the value of a Guarantee Period Account, it will be calculated on the amount
requested and deducted or added to the amount remaining in the Guarantee Period
Account. If the entire amount in a Guarantee Period Account is requested, the
adjustment will be made to the amount payable. If a contingent deferred sales
charge applies to the withdrawal, it will be calculated as set forth under "D.
Contingent Deferred Sales Charge" after application of the Market Value
Adjustment.

FEDERAL TAX CONSIDERATIONS

The effect of federal income taxes on the value of the Contract, on withdrawals
or surrenders, on annuity benefit payments, and on the economic benefit to the
Owner, Annuitant, or beneficiary depends upon a variety of factors. The
following discussion is based upon the Company's understanding of current
federal income tax laws as they are interpreted as of the date of this
Prospectus. No representation is made regarding the likelihood of continuation
of current federal income tax laws or of current interpretations by the IRS. In
addition, this discussion does not address state or local tax consequences that
may be associated with the Contract.

IT SHOULD BE RECOGNIZED THAT THE FOLLOWING DISCUSSION OF FEDERAL INCOME TAX
ASPECTS OF AMOUNTS RECEIVED UNDER VARIABLE ANNUITY CONTRACTS IS NOT EXHAUSTIVE,
DOES NOT PURPORT TO COVER ALL SITUATIONS, AND IS NOT INTENDED AS TAX ADVICE. A
QUALIFIED TAX ADVISER ALWAYS SHOULD BE CONSULTED WITH REGARD TO THE APPLICATION
OF LAW TO INDIVIDUAL CIRCUMSTANCES.

The Company intends to make a charge for any effect which the income, assets, or
existence of the Contract, the Variable Account or the Sub-Accounts may have
upon its tax. The Variable Account presently is not subject to tax, but the
Company reserves the right to assess a charge for taxes should the Variable
Account at any time become subject to tax. Any charge for taxes will be assessed
on a fair and equitable basis in order to preserve equity among classes of
Owners and with respect to each separate account as though that separate account
were a separate taxable entity.

The Variable Account is considered a part of and taxed with the operations of
the Company. The Company is taxed as a life insurance company under Subchapter L
of the Code. The Company files a consolidated tax return with its affiliates.

The IRS has issued regulations relating to the diversification requirements for
variable annuity and variable life insurance contracts under Section 817(h) of
the Code. The regulations provide that the investments of a segregated asset
account underlying a variable annuity contract are adequately diversified if no
more than 55% of the value of its assets is represented by any one investment,
no more than 70% by any two investments, no more than 80% by any three
investments, and no more than 90% by any four investments. If the investments
are not adequately diversified, the income on the Contract, for any taxable year
of the Owner, would be treated as ordinary income received or accrued by the
Owner. It is anticipated that the Portfolios of the Fund will comply with the
current diversification requirements. In the event that future IRS regulations
and/or rulings would require Contract modifications in order to remain in
compliance with the diversification standards, the Company will make reasonable
efforts to comply, and it reserves the right to make such changes as it deems
appropriate for that purpose.

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<PAGE>
A. QUALIFIED AND NON-QUALIFIED CONTRACTS

From a federal tax viewpoint there are two types of variable annuity contracts:
"qualified" contracts and "non-qualified" contracts. A qualified contract is one
that is purchased in connection with a retirement plan which meets the
requirements of Sections 401, 403, or 408 of the Code, while a non-qualified
contract is one that is not purchased in connection with one of the indicated
retirement plans. The tax treatment for certain withdrawals or surrenders will
vary, depending on whether they are made from a qualified contract or a non-
qualified contract. For more information on the tax provisions applicable to
qualified contracts, see Section D below.

B. TAXATION OF THE CONTRACT IN GENERAL

The Company believes that the Contract described in this Prospectus will, with
certain exceptions (see "Non-Natural Owners" below), be considered an annuity
contract under Section 72 of the Code. This section governs the taxation of
annuities. The following discussion concerns annuities subject to Section 72.

WITHDRAWALS PRIOR TO ANNUITIZATION. With certain exceptions, any increase in
the Contract's Accumulated Value is not taxable to the Owner until it is
withdrawn from the Contract. If the Contract is surrendered or amounts are
withdrawn prior to the Annuity Date, any withdrawal of investment gain in value
over the cost basis of the Contract will be taxed as ordinary income. Under the
current provisions of the Code, amounts received under an annuity contract prior
to annuitization (including payments made upon the death of the annuitant or
owner), generally are first attributable to any investment gains credited to the
contract over the taxpayer's "investment in the contract." Such amounts will be
treated as gross income subject to federal income taxation. "Investment in the
contract" is the total of all payments to the Contract which were not excluded
from the Owner's gross income less any amounts previously withdrawn which were
not included in income. Section 72(e)(11)(A)(ii) requires that all non-qualified
deferred annuity contracts issued by the same insurance company to the same
owner during a single calendar year be treated as one contract in determining
taxable distributions.

ANNUITY PAYOUTS AFTER ANNUITIZATION. When annuity benefit payments are
commenced under the Contract, generally a portion of each payment may be
excluded from gross income. The excludable portion generally is determined by a
formula that establishes the ratio that the investment in the Contract bears to
the expected return under the Contract. The portion of the payment in excess of
this excludable amount is taxable as ordinary income. Once all the investment in
the Contract is recovered, the entire payment is taxable. If the annuitant dies
before the investment in the Contract is recovered, a deduction for the
difference is allowed on the annuitant's final tax return.

PENALTY ON DISTRIBUTION. A 10% penalty tax may be imposed on the withdrawal of
investment gains if the withdrawal is made prior to age 59 1/2. The penalty tax
will not be imposed on withdrawals taken on or after age 59 1/2 or if the
withdrawal follows the death of the Owner (or, if the Owner is not an
individual, the death of the primary Annuitant, as defined in the Code) or, in
the case of the Owner's "total disability" (as defined in the Code).
Furthermore, under Section 72 of the Code, this penalty tax will not be imposed,
irrespective of age, if the amount received is one of a series of "substantially
equal" periodic payments made at least annually for the life or life expectancy
of the payee. This requirement is met when the Owner elects to have
distributions made over the Owner's life expectancy, or over the joint life
expectancy of the Owner and beneficiary. The requirement that the amount be paid
out as one of a series of "substantially equal" periodic payments is met when
the number of units withdrawn to make each distribution is substantially the
same. Any modification, other than by reason of death or disability, of
distributions which are part of a series of substantially equal periodic
payments that occurs before the Owner's age 59 1/2 or five years, will subject
the Owner to the 10% penalty tax on the prior distributions. In addition to the
exceptions above, the penalty tax will not apply to withdrawals from a qualified
Contract made to an employee who has terminated employment after reaching age
55.

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<PAGE>
In a Private Letter Ruling, the IRS took the position that where distributions
from a variable annuity contract were determined by amortizing the accumulated
value of the contract over the taxpayer's remaining life expectancy (such as
under the Contract's LED option), and the option could be changed or terminated
at any time, the distributions failed to qualify as part of a "series of
substantially equal payments" within the meaning of Section 72 of the Code. The
distributions, therefore, were subject to the 10% federal penalty tax. This
Private Letter Ruling may be applicable to an Owner who receives distributions
under the LED option prior to age 59 1/2. Subsequent Private Letter Rulings,
however, have treated LED-type withdrawal programs as effectively avoiding the
10% penalty tax. The position of the IRS on this issue is unclear.

ASSIGNMENTS OR TRANSFERS. If the Owner transfers (assigns) the Contract to
another individual as a gift prior to the Annuity Date, the Code provides that
the Owner will incur taxable income at the time of the transfer. An exception is
provided for certain transfers between spouses. The amount of taxable income
upon such taxable transfer is equal to any investment gain in value over the
Owner's cost basis at the time of the transfer. The transfer also is subject to
federal gift tax provisions. Where the Owner and Annuitant are different
persons, the change of ownership of the Contract to the Annuitant on the Annuity
Date, as required under the Contract, is a gift and will be taxable to the Owner
as such; however, the Owner will not incur taxable income. Instead, the
Annuitant will incur taxable income upon receipt of annuity benefit payments as
discussed above.

NON-NATURAL OWNERS. As a general rule, deferred annuity contracts owned by
"non-natural persons" (e.g., a corporation) are not treated as annuity contracts
for federal tax purposes, and the investment income attributable to
contributions made after February 28, 1986 is taxed as ordinary income that is
received or accrued by the owner during the taxable year. This rule does not
apply to annuity contracts purchased with a single payment when the annuity date
is no later than a year from the issue date or to deferred annuities owned by
qualified employer plans, estates, employers with respect to a terminated
pension plan, and entities other than employers, such as a trust, holding an
annuity as an agent for a natural person. This exception, however, will not
apply in cases of any employer who is the owner of an annuity contract under a
non-qualified deferred compensation plan.

DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT
ORGANIZATIONS. Under Section 457 of the Code, deferred compensation plans
established by governmental and certain other tax-exempt employers for their
employees may invest in annuity contracts. Contributions and investment earnings
are not taxable to employees until distributed; however, with respect to
payments made after February 28, 1986, a Contract owned by a state or local
government or a tax-exempt organization will not be treated as an annuity under
Section 72 as well. In addition, plan assets are treated as property of the
employer, and are subject to the claims of the employer's general creditors.

C. TAX WITHHOLDING

The Code requires withholding with respect to payments or distributions from
non-qualified contracts and IRAs, unless a taxpayer elects not to have
withholding. A 20% withholding requirement applies to distributions from most
other qualified contracts. In addition, the Code requires reporting to the IRS
of the amount of income received with respect to payment or distributions from
annuities.

The tax treatment of certain withdrawals or surrenders of the non-qualified
Contracts offered by this Prospectus will vary according to whether the amount
withdrawn or surrendered is allocable to an investment in the Contract made
before or after certain dates.

D. PROVISIONS APPLICABLE TO QUALIFIED EMPLOYER PLANS

The tax rules applicable to qualified retirement plans, as defined by the Code,
are complex and vary according to the type of plan. Benefits under a qualified
plan may be subject to that plan's terms and conditions irrespective of the
terms and conditions of any annuity contract used to fund such benefits. As
such, the following is simply a general description of various types of
qualified plans that may use the Contract. Before

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<PAGE>
purchasing any annuity contract for use in funding a qualified plan, more
specific information should be obtained.

Qualified Contracts may include special provisions (endorsements) changing or
restricting rights and benefits otherwise available to Owners of non-qualified
Contracts. Individuals purchasing a qualified Contract should carefully review
any such changes or limitations which may include restrictions to ownership,
transferability, assignability, contributions, and distributions.

CORPORATE AND SELF-EMPLOYED ("H.R. 10" AND "KEOGH") PENSION AND PROFIT SHARING
PLANS. Sections 401(a), 401(k) and 403(a) of the Code permit business employers
and certain associations to establish various types of tax-favored retirement
plans for employees. The Self-Employed Individuals' Tax Retirement Act of 1962,
as amended, permits self-employed individuals to establish similar plans for
themselves and their employees. Employers intending to use qualified Contracts
in connection with such plans should seek competent advice as to the suitability
of the Contracts to their specific needs and as to applicable Code limitations
and tax consequences.

The Company can provide prototype plans for certain pension or profit sharing
plans for review by the plan's legal counsel. For information, ask your
financial representative.

INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity ("IRA"). Note: This term covers all IRAs permitted
under Section 408(b) of the Code, including Roth IRAs. IRAs are subject to
limits on the amounts that may be contributed, the persons who may be eligible,
and on the time when distributions may commence. In addition, certain
distributions from other types of retirement plans may be "rolled over," on a
tax-deferred basis, to an IRA. Purchasers of an IRA Contract will be provided
with supplementary information as may be required by the IRS or other
appropriate agency, and will have the right to revoke the Contract as described
in this Prospectus. See "B. Right to Revoke Individual Retirement Annuity."

Eligible employers that meet specified criteria may establish simplified
employee pension plans (SEP-IRAs) or SIMPLE IRA plans for their employees using
IRAs. Employer contributions that may be made to such plans are larger than the
amounts that may be contributed to regular IRAs and may be deductible to the
employer.

TAX-SHELTERED ANNUITIES ("TSAS"). Under the provisions of Section 403(b) of the
Code, payments made to contracts purchased for employees under annuity plans
adopted by public school systems and certain organizations which are tax-exempt
under Section 501(c)(3) of the Code are excludable from the gross income of such
employees to the extent that total annual payments do not exceed the maximum
contribution permitted under the Code. Purchasers of TSA Contracts should seek
competent advice as to eligibility, limitations on permissible payments and
other tax consequences associated with the contracts.

Withdrawals or other distributions attributable to salary reduction
contributions (including earnings thereon) made to a TSA Contract after December
31, 1988, may not begin before the employee attains age 59 1/2, separates from
service, dies or becomes disabled. In the case of hardship, an Owner may
withdraw amounts contributed by salary reduction, but not the earnings on such
amounts. Even though a distribution may be permitted under these rules (e.g.,
for hardship or after separation from service), it may be subject to a 10%
penalty tax as a premature distribution, in addition to income tax.

TEXAS OPTIONAL RETIREMENT PROGRAM. Distributions under a TSA contract issued to
participants in the Texas Optional Retirement Program may not be received except
in the case of the participant's death, retirement or termination of employment
in the Texas public institutions of higher education. These additional
restrictions are imposed under the Texas Government Code and a prior opinion of
the Texas Attorney General.

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REPORTS

An Owner is sent a report semi-annually which states certain financial
information about the Underlying Portfolios. The Company also will furnish an
annual report to the Owner containing a statement of his or her account,
including Accumulation Unit values and other information as required by
applicable law, rules and regulations.

LOANS (QUALIFIED CONTRACTS ONLY)

Loans are available to owners of TSA contracts (i.e., contracts issued under
Section 403(b) of the Code) and to contracts issued to plans qualified under
Sections 401(a) and 401(k) of the Code. Loans are subject to provisions of the
Code and to applicable qualified retirement plan rules. Tax advisers and plan
fiduciaries should be consulted prior to exercising loan privileges.

Loaned amounts will be withdrawn first from Sub-Account and Fixed Account values
on a pro-rata basis until exhausted. Thereafter, any additional amounts will be
withdrawn from the Guarantee Period Accounts (pro rata by duration and LIFO
within each duration), subject to any applicable Market Value Adjustments. The
maximum loan amount will be determined under the Company's maximum loan formula.
The minimum loan amount is $1,000. Loans will be secured by a security interest
in the Contract and the amount borrowed will be transferred to a loan asset
account within the Company's General Account, where it will accrue interest at a
specified rate below the then-current loan rate. Generally, loans must be repaid
within five years or less, and repayments must be made quarterly and in
substantially equal amounts. Repayments will be allocated pro rata in accordance
with the most recent payment allocation, except that any allocations to a
Guarantee Period Account will be allocated instead to the Money Market
Portfolio.

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS

The Company reserves the right, subject to applicable law, to make additions to,
deletions from, or substitutions for the shares that are held in the
Sub-Accounts or that the Sub-Accounts may purchase. If the shares of any
Underlying Portfolio no longer are available for investment or if, in the
Company's judgment, further investment in any Underlying Portfolio should become
inappropriate in view of the purposes of the Variable Account or the affected
Sub-Account, the Company may withdraw the shares of that Underlying Portfolio
and substitute shares of another registered open-end management company. The
Company will not substitute any shares attributable to the Contract interest in
a Sub-Account without notice to the Owner and prior approval of the SEC and
state insurance authorities, to the extent required by the 1940 Act or other
applicable law. The Variable Account may, to the extent permitted by law,
purchase other securities for other contracts or permit a conversion between
contracts upon request by an Owner.

The Company also reserves the right to establish additional sub-accounts of the
Variable Account, each of which would invest in shares corresponding to a new
Underlying Portfolio or in shares of another investment company having a
specified investment objective. Subject to applicable law and any required SEC
approval, the Company may, in its sole discretion, establish new sub-accounts or
eliminate one or more Sub-Accounts if marketing needs, tax considerations or
investment conditions warrant. Any new Sub-Accounts may be made available to
existing Owners on a basis to be determined by the Company.

Shares of the Underlying Portfolios may be issued to variable accounts of the
Company and its affiliates which issue variable life contracts ("mixed
funding"). Shares of the Portfolios may be also issued to other unaffiliated
insurance companies ("shared funding"). It is conceivable that in the future
such mixed funding or shared funding may be disadvantageous for variable life
owners or variable annuity owners. Although neither the Company nor the Fund
currently foresees any such disadvantages to either variable life owners or
variable annuity owners, the Company and the trustee intend to monitor events in
order to identify any material conflicts between such owners, and to determine
what action, if any, should be taken in response

43
<PAGE>
thereto. If it were concluded that separate funds should be established for
variable life and variable annuity separate accounts, the Company will bear the
attendant expenses.

If any of these substitutions or changes is made, the Company may endorse the
Contract to reflect the substitution or change, and will notify Owners of all
such changes. If the Company deems it to be in the best interest of Owners, and
subject to any approvals that may be required under applicable law, the Variable
Account or any Sub-Accounts may be operated as a management company under the
1940 Act, may be deregistered under the 1940 Act if registration is no longer
required, or may be combined with other Sub-Accounts or other separate accounts
of the Company.

The Company reserves the right, subject to compliance with applicable law, to:
(1) transfer assets from the Variable Account or any of its Sub-Accounts to
another of the Company's separate accounts or sub-accounts having assets of the
same class; (2) to operate the Variable Account or any Sub-Account as a
management investment company under the 1940 Act or in any other form permitted
by law; (3) to deregister the Variable Account under the 1940 Act in accordance
with the requirements of the 1940 Act; (4) to substitute the shares of any other
registered investment company for the Underlying Portfolio shares held by a
Sub-Account, in the event that Underlying Portfolio shares are unavailable for
investment, or if the Company determines that further investment in such
Underlying Fund shares is inappropriate in view of the purpose of the Sub-
Account; (5) to change the methodology for determining the net investment
factor,; and (6) to change the names of the Variable Account or of the
Sub-Accounts. In no event will the changes described above be made without
notice to Owners in accordance with the 1940 Act.

CHANGES TO COMPLY WITH LAW AND AMENDMENTS

The Company reserves the right, without the consent of Owners, to suspend sales
of the Contract as presently offered, and to make any change to provisions of
the Contract to comply with, or give Owners the benefit of, any federal or state
statute, rule or regulation, including but not limited to requirements for
annuity contracts and retirement plans under the Code and pertinent regulations
or any state statute or regulation.

VOTING RIGHTS

The Company will vote Underlying Portfolio shares held by each Sub-Account in
accordance with instructions received from Owners and, after the Annuity Date,
from the Annuitants. Each person having a voting interest in a Sub-Account will
be provided with proxy materials of the Underlying Portfolio, together with a
form with which to give voting instructions to the Company. Shares for which no
timely instructions are received will be voted in proportion to the instructions
which are received. The Company also will vote shares in a Sub-Account that it
owns and which are not attributable to Contracts in the same proportion. If the
1940 Act or any rules thereunder should be amended or if the present
interpretation of the 1940 Act or such rules should change, and as a result the
Company determines that it is permitted to vote shares in its own right, whether
or not such shares are attributable to the Contract, the Company reserves the
right to do so.

The number of votes which an Owner or Annuitant may cast will be determined by
the Company as of the record date established by the Underlying Portfolio.
During the accumulation period, the number of Underlying Portfolio shares
attributable to each Owner will be determined by dividing the dollar value of
the Accumulation Units of the Sub-Account credited to the Contract by the net
asset value of one Underlying Portfolio share. During the annuity period, the
number of Underlying Portfolio shares attributable to each Annuitant will be
determined by dividing the reserve held in each Sub-Account for the Annuitant's
variable annuity by the net asset value of one Underlying Portfolio share.
Ordinarily, the Annuitant's voting interest in the Underlying Portfolio will
decrease as the reserve for the variable annuity is depleted.

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<PAGE>
DISTRIBUTION

The Contracts offered by this Prospectus may be purchased from certain
independent broker-dealers which are registered under the Securities and
Exchange Act of 1934 and members of the National Association of Securities
Dealers, Inc. ("NASD"). The Contracts also are offered through Allmerica
Investments, Inc., which is the principal underwriter and distributor of the
Contracts. Allmerica Investments, Inc., 440 Lincoln Street, Worcester, MA 01653,
is a registered broker-dealer, a member of the NASD and an indirectly wholly
owned subsidiary of First Allmerica.

The Company pays commissions, not to exceed 6.0% of payments, to broker-dealers
which sell the Contract. Alternative commission schedules are available with
lower initial commission amounts based on payments, plus ongoing annual
compensation of up to 1% of Contract value. To the extent permitted by NASD
rules, promotional incentives or payments also may be provided to such
broker-dealers based on sales volumes, the assumption of wholesaling functions
or other sales-related criteria. Additional payments may be made for other
services not directly related to the sale of the Contract, including the
recruitment and training of personnel, production of promotional literature, and
similar services.

The Company intends to recoup commissions and other sales expenses through a
combination of anticipated contingent deferred sales charges and profits from
the Company's General Account. Commissions paid on the Contract, including
additional incentives or payments, do not result in any additional charge to
Owners or to the Variable Account. Any contingent deferred sales charges
assessed on the Contract will be retained by the Company.

Owners may direct any inquiries to their financial representative or to
Allmerica Investments, Inc., 440 Lincoln Street, Worcester, MA 01653, telephone
1-800-688-9915.

LEGAL MATTERS

There are no legal proceedings pending to which the Variable Account is a party.

FURTHER INFORMATION

A Registration Statement under the 1933 Act relating to this offering has been
filed with the SEC. Certain portions of the Registration Statement and
amendments have been omitted in this Prospectus pursuant to the rules and
regulations of the SEC. The omitted information may be obtained from the SEC's
principal office in Washington, D.C., upon payment of the SEC's prescribed fees.

<PAGE>

SEPARATE ACCOUNT VA-P
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1998

***

The third paragraph on page 2 under "GENERAL INFORMATION AND HISTORY" is revised
in its entirety to read as follows:

Twelve Sub-Accounts of the Variable Account are available under the
Pioneer Vision 2 contract ("the Contract") and Pioneer Vision
(3023-95), a predecessor contract no longer being sold. (Pioneer
Vision 2 and Pioneer Vision (3023-95) are referred to collectively as
"the contracts.") Each Sub-Account invests in a corresponding
investment portfolio of Pioneer Variable Contracts Trust (the "Fund"),
an open-end, registered management investment company. The Fund
currently consists of the following twelve investment portfolios:
Emerging Markets Portfolio, International Growth Portfolio, Europe
Portfolio, Capital Growth Portfolio, Growth Shares Portfolio, Real
Estate Growth Portfolio, Growth and Income Portfolio, Equity-Income
Portfolio, Balanced Portfolio, Swiss Franc Bond Portfolio, America
Income Portfolio and the Money Market Portfolio ("Underlying
Portfolios"). Each Underlying Portfolio has its own investment
objectives and certain attendant risks.

Supplement Dated October 30, 1998

<PAGE>

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

STATEMENT OF ADDITIONAL INFORMATION

INDIVIDUAL AND GROUP VARIABLE ANNUITY CONTRACTS FUNDED THROUGH

SUB-ACCOUNTS OF

SEPARATE ACCOUNT VA-P

INVESTING IN SHARES OF PIONEER VARIABLE CONTRACTS TRUST

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF SEPARATE ACCOUNT VA-P DATED MAY 1, 1998
("THE PROSPECTUS"). THE PROSPECTUS MAY BE OBTAINED FROM ANNUITY CLIENT
SERVICES, ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY, 440 LINCOLN
STREET, WORCESTER, MASSACHUSETTS 01653, TELEPHONE 1-800-688-9915.

DATED MAY 1, 1998

<PAGE>

TABLE OF CONTENTS

GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . . . . . . . . 2

TAXATION OF THE CONTRACTS, THE VARIABLE ACCOUNT AND
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ANNUITY BENEFIT PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 4

EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 7

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

GENERAL INFORMATION AND HISTORY

Separate Account VA-P (the "Variable Account") is a separate investment
account of Allmerica Financial Life Insurance and Annuity Company (the
"Company") established by vote of its Board of Directors on October 27, 1994.
The Company is a life insurance company organized under the laws of Delaware
in July 1974. Its principal office (the "Principal Office") is located at 440
Lincoln Street, Worcester, Massachusetts 01653, telephone (508) 855-1000.
The Company is subject to the laws of the State of Delaware governing
insurance companies and to regulation by the Commissioner of Insurance of
Delaware. In addition, the Company is subject to the insurance laws and
regulations of other states and jurisdictions in which it is licensed to
operate. As of December 31, 1997, the Company had over $9.4 billion in assets
and over $26.6 billion of life insurance in force.

Effective October 1, 1995, the Company changed its name from SMA Life
Assurance Company to Allmerica Financial Life Insurance and Annuity Company.
The Company is an indirectly wholly owned subsidiary of First Allmerica
Financial Life Insurance Company ("First Allmerica") which, in turn, is a
wholly owned subsidiary of Allmerica Financial Corporation ("AFC"). First
Allmerica, originally organized under the laws of Massachusetts in 1844 as a
mutual life insurance company, and known as State Mutual Life Assurance
Company of America, converted to a stock life insurance company and adopted
its present name on October 16, 1995. First Allmerica is the fifth oldest
life insurance company in America. As of December 31, 1997, First Allmerica
and its subsidiaries (including the Company) had over $16.3 billion in
combined assets and over $43.8 billion in life insurance in force.

Ten Sub-Accounts of the Variable Account are available under the Pioneer
Vision 2 contract (the "Contract") and Pioneer Vision (3023-95), a
predecessor contract no longer being sold. (Pioneer Vision 2 and Pioneer
Vision - 3023-95 are referred to collectively as "the contracts.") Each
Sub-Account invests in a corresponding investment portfolio of Pioneer
Variable Contracts Trust (the "Fund"), an open-end, registered management
investment company. The Fund currently consists of the following ten
investment portfolios: International Growth Portfolio, Capital Growth
Portfolio, Growth Shares Portfolio, Real Estate Growth Portfolio, Growth and
Income Portfolio, Equity-Income Portfolio, Balanced Portfolio, Swiss Franc
Bond Portfolio, America Income Portfolio and the Money Market Portfolio
("Underlying Portfolios"). Each Underlying Portfolio has its own investment
objectives and certain attendant risks.

2
<PAGE>
TAXATION OF THE CONTRACTS, THE VARIABLE
ACCOUNT AND THE COMPANY

The Company currently imposes no charge for taxes payable in connection with
the contracts, other than for state and local premium taxes and similar
assessments when applicable. The Company reserves the right to impose a
charge for any other taxes that may become payable in the future in
connection with the contracts or the Variable Account.

The Variable Account is considered to be a part of and taxed with the
operations of the Company. The Company is taxed as a life insurance company
under subchapter L of the Internal Revenue Code (the "Code"), and files a
consolidated tax return with its parent and affiliated companies.

The Company reserves the right to make a charge for any effect which the
income, assets or existence of the contracts or the Variable Account may have
upon its tax. Such charge for taxes, if any, will be assessed on a fair and
equitable basis in order to preserve equity among classes of Contract Owners
("Owners"). The Variable Account presently is not subject to tax.

SERVICES

CUSTODIAN OF SECURITIES. The Company serves as custodian of the assets of the
Variable Account. Underlying Portfolio shares owned by the Sub-Accounts are
held on an open account basis. A Sub-Account's ownership of Underlying
Portfolio shares is reflected on the records of the Underlying Portfolio, and
is not represented by any transferable stock certificates.

EXPERTS. The financial statements of the Company as of December 31, 1997 and
1996 and for each of the two years in the period ended December 31, 1997, and
the financial statements of the Separate Account VA-P -- Pioneer Vision of
the Company as of December 31, 1997 and for the periods indicated, included
in this Statement of Additional Information constituting part of this
Registration Statement, have been so included in reliance on the reports of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

The financial statements of the Company included herein should be considered
only as bearing on the ability of the Company to meet its obligations under
the Contract.

UNDERWRITERS

Allmerica Investments, Inc. ("Allmerica Investments"), a registered
broker-dealer under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. ("NASD"), serves as
principal underwriter and general distributor for the Contract pursuant to a
contract with Allmerica Investments, the Company and the Variable Account.
Allmerica Investments distributes the Contract on a best-efforts basis.
Allmerica Investments, Inc., 440 Lincoln Street, Worcester, Massachusetts
01653, was organized in 1969 as a wholly owned subsidiary of First Allmerica,
and presently is indirectly wholly owned by First Allmerica.

The Contract offered by this Prospectus is offered continuously, and may be
purchased from certain independent broker-dealers which are NASD members and
whose representatives are authorized by applicable laws to sell variable
annuity policies.

All persons selling the Contract are required to be licensed by their respective
state insurance authorities for the sale of variable annuity contracts. The
Company pays commissions, not to exceed 6.0% of purchase payments, to entities
which sell the Contract. To the extent permitted by NASD rules, promotional
incentives

3
<PAGE>

or payments also may be provided to such entities based on sales volumes, the
assumption of wholesaling functions or other sales-related criteria.
Additional payments may be made for other services not directly related to
the sale of the Contract, including the recruitment and training of
personnel, production of promotional literature and similar services. A
Promotional Allowance of 1.0% is paid to Pioneer Funds Distributor, Inc. for
administrative and support services with respect to the distribution of the
Contract; however, Pioneer Funds Distributor, Inc. may direct the Company to
pay a portion of said allowance to broker-dealers who provide support
services directly.

The aggregate amounts of commissions paid to Pioneer Funds Distributor, Inc.
and to independent broker-dealers, respectively, for sales of contracts
funded by Separate Account VA-P were $1,991,730.06 and $11,463,585.45 in
1997; $1,263,159.35 and $7,978,798.15 in 1996, and $221,534.90 and
$1,672,592.62 in 1995. Sales of these contracts began in 1995.

Commissions paid by the Company do not result in any charge to Owners or to
the Variable Account, in addition to the charges described under "CHARGES AND
DEDUCTIONS" in the Prospectus. The Company intends to recoup the commission
and other sales expense through a combination of anticipated surrender,
withdrawal and/or annuitization charges, profits from the Company's general
account, including the investment earnings on amounts allocated to accumulate
on a fixed basis in excess of the interest credited on fixed accumulations by
the Company, and the profit, if any, from the mortality and expense risk
charge.

ANNUITY BENEFIT PAYMENTS

The method by which the Accumulated Value under the contracts is determined
is described in detail under "Computation of Values" in the Prospectus.

ILLUSTRATION OF ACCUMULATION UNIT CALCULATION USING HYPOTHETICAL EXAMPLE. The
Accumulation Unit calculation for a daily Valuation Period may be illustrated
by the following hypothetical example: Assume that the assets of a
Sub-Account at the beginning of a one-day Valuation Period were $5,000,000;
that the value of an Accumulation Unit on the previous date was $1.135000;
and that during the Valuation Period, the investment income and net realized
and unrealized capital gains exceed net realized and unrealized capital
losses by $1,675. The Accumulation Unit Value at the end of the current
Valuation Period would be calculated as follows:

(1)Accumulation Unit Value -- Previous Valuation Period . . . . . $ 1.135000

(2)Value of Assets -- Beginning of Valuation Period. . . . . . . . $5,000,000

(3)Excess of Investment Income and Net Gains Over Capital Losses . . . $1,675

(4)Adjusted Gross Investment Rate for the Valuation Period
(3) divided by (2) . . . . . . . . . . . . . . . . . . . . . . . 0.000335

(5)Annual Charge (one-day equivalent of 1.40% per annum) . . . . . . 0.000039

(6)Net Investment Rate (4) - (5) . . . . . . . . . . . . . . . . . . 0.000296

(7)Net Investment Factor 1.000000 + (6). . . . . . . . . . . . . . . 1.000296

(8)Accumulation Unit Value -- Current Period (1) x (7) . . . . . . $1.13533

Conversely, if unrealized capital losses and charges for expenses and taxes
exceeded investment income and net realized capital gains by $1,675, the
Accumulation Unit Value at the end of the Valuation Period would have been
$1.134576.

<PAGE>

The method for determining the amount of annuity benefit payments is
described in detail under "Determination of First and Subsequent Annuity
Benefit Payments" in the Prospectus.

ILLUSTRATION OF VARIABLE ANNUITY BENEFIT PAYMENT CALCULATION USING
HYPOTHETICAL EXAMPLE. The determination of the Annuity Unit Value and the
variable annuity benefit payment may be illustrated by the following
hypothetical example: Assume an Annuitant has 40,000 Accumulation Units in a
Variable Account, and that the value of an Accumulation Unit on the Valuation
Date used to determine the amount of the first variable annuity payment is
$1.120000. Therefore, the Accumulation Value of the Contract is $44,800
(40,000 x $1.120000). Assume also that the Owner elects an option for which
the first monthly payment is $6.57 per $1,000 of Accumulated Value applied.
Assuming no premium tax or contingent deferred sales charge, the first
monthly payment would be 44.800 multiplied by $6.57, or $294.34.

Next, assume that the Annuity Unit value for the assumed rate of 3.5% per
annum for the Valuation Date as of which the first payment was calculated was
1.100000. Annuity Unit values will not be the same as Accumulation Unit
values because the former reflect the 3.5% assumed interest rate used in the
annuity rate calculations. When the Annuity Unit value of $1.100000 is
divided into the first monthly payment the number of Annuity Units
represented by that payment is determined to be 267.5818. The value of this
same number of Annuity Units will be paid in each subsequent month under most
options. Assume further that the net investment factor for the Valuation
Period applicable to the next annuity payment is 1.000190. Multiplying this
factor by .999906 (the one-day adjustment factor for the assumed interest
rate of 3.5% per annum) produces a factor of 1.000096. This then is
multiplied by the Annuity Unit value on the immediately preceding Valuation
Date (assumed here to be $1.105000). The result is an Annuity Unit value of
$1.105106 for the current monthly payment. The current monthly payment then
is determined by multiplying the number of Annuity Units by the current
Annuity Unit value, or 267.5818 times $1.105106, which produces a current
monthly payment of $295.71.

METHOD FOR DETERMINING COMMUTED VALUE ON VARIABLE ANNUITY PERIOD CERTAIN
OPTIONS AND ILLUSTRATION USING HYPOTHETICAL EXAMPLE. The Contract offers both
commutable and non-commutable period certain annuity options. A commutable
option gives the Annuitant the right to exchange any remaining payments for a
lump sum payment based on the commuted value. The Commuted Value is the
present value of remaining payments calculated at 3.5% interest. The
determination of the Commuted Value may be illustrated by the following
hypothetical example.

Assume a commutable period certain option is elected. The number of Annuity
Units on which each payment is based would be calculated using the Surrender
Value less any premium tax rather than the Accumulated Value. Assume this
results in 250.0000 Annuity Units. Assume the Commuted Value is requested
with 60 monthly payments remaining and a current Annuity Unit Value of
$1.200000. Based on these assumptions, the dollar amount of remaining
payments would be $300 a month for 60 months. The present value at 3.5% of
all remaining payments would be $16,560.72.

EXCHANGE OFFER

A. VARIABLE ANNUITY CONTRACT EXCHANGE OFFER

The Company will permit Owners of certain variable annuity contracts,
described below, to exchange their contracts at net asset value for the
variable annuity Contract described in the Prospectus, which is issued on
Form No. A3025-96 or a state variation thereof ("new Contract"). The Company
reserves the right to suspend this exchange offer at any time.

This offer applies to the exchange of the Company's Elective Payment Variable
Annuity contracts issued on Forms A3012-79 and A3013-79 ("Elective Payment
Exchanged Contract," all such contracts having numbers with a "JQ" or "JN"
prefix), and Single Payment Variable Annuity contracts issued on Forms
A3014-79 and

5
<PAGE>

A3015-79 ("Single Payment Exchanged Contract," all such contracts having
numbers with a "KQ" or "KN" prefix). These contracts are referred to
collectively as the "Exchanged Contract." To effect an exchange, the Company
should receive (1) a completed application for the new Contract, (2) the
contract being exchanged, and (3) a signed Letter of Awareness.

CONTINGENT DEFERRED SALES CHARGE COMPUTATION. No surrender charge otherwise
applicable to the Exchanged Contract will be assessed as a result of the
exchange. Instead, the contingent deferred sales charge under the new
Contract will be computed as if the payments that had been made to the
Exchanged Contract were made to the new Contract as of the date of issue of
the Exchanged Contract. Any additional payments to the new Contract after
the exchange will be subject to the contingent deferred sales charge
computation outlined in the new Contract and the Prospectus; i.e., the charge
will be computed based on the number of years that the additional payment (or
portion of that payment) that is being withdrawn has been credited to the new
Contract.

SUMMARY OF DIFFERENCES BETWEEN THE EXCHANGED CONTRACT AND THE NEW CONTRACT.
The new Contract and the Exchanged Contract differ substantially as
summarized below. There may be additional differences important to a person
considering an exchange, and the Prospectuses for the new Contract and the
Exchanged Contract should be reviewed carefully before the exchange request
is submitted to the Company.

CONTINGENT DEFERRED SALES CHARGE. The contingent deferred sales charge under
the new Contract, as described in the Prospectus, imposes higher charge
percentages against the excess amount redeemed than the Single Payment
Exchanged Contract. In addition, if an Elective Payment Exchanged Contract
was issued more than nine years before the date of an exchange under this
offer, additional payments to the Exchanged Contract would not be subject to
a surrender charge. New payments to the new Contract may be subject to a
charge if withdrawn prior to the surrender charge period described in the
Prospectus.

CONTRACT FEE. Under the new Contract, the Company deducts a $30 fee on each
Contract anniversary and at surrender if the Accumulated Value is less than
$50,000. This fee is waived if the new Contract is part of a 401(k) plan.
No Contract fees are charged on the Single Payment Exchanged Contract. A $9
semi-annual fee is charged on the Elective Payment Exchanged Contract if the
Accumulated Value is $10,000 or less.

VARIABLE ACCOUNT ADMINISTRATIVE EXPENSE CHARGE. Under the new Contract, the
Company assesses each Sub-Account a daily administrative expense charge at an
annual rate of 0.15% of the average daily net assets of the Sub-Account. No
administrative expense charge based on a percentage of Sub-Account assets is
imposed under the Exchanged Contract.

TRANSFER CHARGE. No charge for transfers is imposed under the Exchanged
Contract. Currently, no transfer charge is imposed under the new Contract;
however, the Company reserves the right to assess a charge not to exceed $25
for each transfer after the twelfth in any Contract year.

DEATH BENEFIT. The Exchanged Contract offers a death benefit that is
guaranteed to be the greater of a Contract's Accumulated Value or gross
payments made (less withdrawals). At the time an exchange is processed, the
Accumulated Value of the Exchanged Contract becomes the "payment" for the new
Contract. Therefore, prior purchase payments made under the Exchanged
Contract (if higher than the Exchanged Contract's Accumulated Value) no
longer are a basis for determining the death benefit under the new Contract.
Consequently, whether the initial minimum death benefit under the new
Contract is greater than, equal to, or less than, the death benefit of the
Exchanged Contract depends on whether the Accumulated Value transferred to
the new Contract is greater than, equal to, or less than, the gross payments
under the Exchanged Contract. In addition, under the Exchanged Contract, the
amount of any prior withdrawals is subtracted from the value of the death
benefit. Under the new Contract, where there is a reduction in the death
benefit amount due to a prior withdrawal, the value of the death benefit is
reduced in the same proportion that the new Contract's Accumulated Value was
reduced on the date of the withdrawal.

ANNUITY TABLES. The Exchanged Contract contains higher guaranteed annuity
rates.

<PAGE>

INVESTMENTS. Accumulated Values and payments under the new Contract may be
allocated to significantly more investment options than are available under
the Exchanged Contract.

B. FIXED ANNUITY EXCHANGE OFFER

This exchange offer also applies to all fixed annuity contracts issued by the
Company. A fixed annuity contract to which this exchange offer applies may
be exchanged at net asset value for the Contract described in this
Prospectus, subject to the same provisions for effecting the exchange and for
applying the new Contract's contingent deferred sales charge as described
above for variable annuity contracts. This Prospectus should be read
carefully before making such exchange. Unlike a fixed annuity, the new
Contract's value is not guaranteed, and will vary depending on the investment
performance of the Underlying Portfolios to which it is allocated. The new
Contract has a different charge structure than a fixed annuity contract,
which includes not only a contingent deferred sales charge that may vary from
that of the class of contracts to which the exchanged fixed contract belongs,
but also Contract fees, mortality and expense risk charges (for the Company's
assumption of certain mortality and expense risks), administrative expense
charges, transfer charges (for transfers permitted among Sub-Accounts and the
Fixed Account), and expenses incurred by the Underlying Portfolios.
Additionally, the interest rates offered under the Fixed Account of the new
Contract and the Annuity Tables for determining minimum annuity benefit
payments may be different from those offered under the exchanged fixed
contract.

C. EXERCISE OF "FREE-LOOK PROVISION" AFTER ANY EXCHANGE

Persons who, under the terms of this exchange offer, exchange their contract
for the new Contract and subsequently revoke the new Contract within the time
permitted, as described in the sections of this Prospectus captioned "Right
to Revoke Individual Retirement Annuity" and "Right to Revoke All Other
Contracts," will have their exchanged contract automatically reinstated as of
the date of revocation. The refunded amount will be applied as the new
current Accumulated Value under the reinstated contract, which may be more or
less than it would have been had no exchange and reinstatement occurred. The
refunded amount will be allocated initially among the Fixed Account and
Sub-Accounts of the reinstated contract in the same proportion that the value
in the Fixed Account and the value in each Sub-Account bore to the
transferred Accumulated Value on the date of the exchange of the contract for
the new Contract. For purposes of calculating any contingent deferred sales
charge under the reinstated contract, the reinstated contract will be deemed
to have been issued and to have received past purchase payments as if there
had been no exchange.

PERFORMANCE INFORMATION

Performance information for a Sub-Account may be compared, in reports and
promotional literature, to certain indices described in the Prospectus under
"PERFORMANCE INFORMATION." In addition, the Company may provide
advertising, sales literature, periodic publications or other material
information on various topics of interest to Owners and prospective Owners.
These topics may include the relationship between sectors of the economy and
the economy as a whole and its effect on various securities markets,
investment strategies and techniques (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer and account
rebalancing), the advantages and disadvantages of investing in tax-deferred
and taxable investments, customer profiles and hypothetical purchase and
investment scenarios, financial management and tax and retirement planning,
and investment alternatives to certificates of deposit and other financial
instruments, including comparisons between the Contract and the
characteristics of and market for such financial instruments. Total return
data and supplemental total return information may be advertised based on the
period of time that an Underlying Portfolio and an underlying Sub-Account have
been in existence, even if longer than the period of time that the Contract
has been offered. The results for any period prior to a Contract being
offered will be calculated as if the Contract had been offered during that
period of time, with all charges assumed to be those applicable to the
Contract.

<PAGE>

The Contract has been offered since 1996. Total return data, however, may be
advertised based on the period of time that the underlying Sub-Accounts and
the Underlying Portfolios have been in existence. The results for any period
prior to the Contract being offered will be calculated as if the Contract had
been offered during that period of time, with all charges assumed to be those
applicable to the Contract.

TOTAL RETURN

"Total Return" refers to the total of the income generated by an investment
in a Sub-Account and of the changes of value of the principal invested (due
to realized and unrealized capital gains or losses) for a specified period,
reduced by the Sub-Account's asset charge and any applicable contingent
deferred sales charge which would be assessed upon complete withdrawal of the
investment.

Total Return figures are calculated by standardized methods prescribed by
rules of the Securities and Exchange Commission (the "SEC"). The quotations
are computed by finding the average annual compounded rates of return over
the specified periods that would equate the initial amount invested to the
ending redeemable values, according to the following formula:

P(1 + T) (n) = ERV

Where: P = a hypothetical initial payment to the Variable Account
of $1,000

T = average annual total return

n = number of years

ERV = the ending redeemable value of the $1,000 payment at
the end of the specified period

The calculation of Total Return includes the annual charges against the
assets of the Sub-Account. This charge is 1.40% on an annual basis. The
calculation of ending redeemable value assumes (1) the Contract was issued at
the beginning of the period, and (2) a complete surrender of the Contract at
the end of the period. The deduction of the contingent deferred sales charge,
if any, applicable at the end of the period is included in the calculation,
according to the following schedule:

CONTRACT FORM A3023-95 (PIONEER VISION)
(NO GUARANTEE PERIOD ACCOUNT OPTIONS)
-------------------------------------------

YEARS FROM DATE CHARGE AS PERCENTAGE
OF PAYMENT TO DATE OF OF NEW PURCHASE PAYMENTS
WITHDRAWAL WITHDRAWN*
<S> <C>
0-3 7%
4 6%
5 5%
6 4%
7 3%
Thereafter 0%
</TABLE>

8
<PAGE>
<TABLE>
<CAPTION>

CONTRACT FORM A3025-96 (PIONEER VISION II)
(WITH GUARANTEE PERIOD ACCOUNT OPTIONS)
-------------------------------------------

YEARS FROM DATE CHARGE AS PERCENTAGE
OF PAYMENT TO DATE OF OF NEW PURCHASE PAYMENTS
WITHDRAWAL WITHDRAWN*
<S> <C>
0-1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
Thereafter 0%

* Subject to the maximum limit described in the Prospectus.
</TABLE>

No contingent deferred sales charge is deducted upon expiration of the
periods specified above. In all Contract years, a certain amount (withdrawal
without surrender charge amount, as described in the Prospectus) is not
subject to the contingent deferred sales charge.

The calculations of Total Return include the deduction of the $30 annual
Contract fee.

SUPPLEMENTAL TOTAL RETURN INFORMATION

The Supplemental Total Return Information in this section refers to the total
of the income generated by an investment in a Sub-Account and of the changes
of value of the principal invested (due to realized and unrealized capital
gains or losses) for a specified period reduced by the Sub-Account's asset
charges. It is assumed, however, that the investment is NOT withdrawn at the
end of each period.

The quotations of Supplemental Total Return are computed by finding the
average annual compounded rates of return over the specified periods that
would equate the initial amount invested to the ending values, according to
the following formula:

P(1 + T) (n) = EV

Where: P = a hypothetical initial payment to the Variable
Account of $1,000

T = average annual total return

n = number of years

EV = the ending value of the $1,000 payment at the end
of the specified period.

The calculation of Supplemental Total Return reflects the 1.40% annual charge
against the assets of the Sub-Accounts. The ending value assumes that the
Contract is NOT surrendered at the end of the specified period, and therefore
there is no adjustment for the contingent deferred sales charge that would be
applicable if the Contract was surrendered at the end of the period.

The calculations of Supplemental Total Return include the deduction of the
$30 annual Contract fee.

<PAGE>

YIELD AND EFFECTIVE YIELD -- THE MONEY MARKET SUB-ACCOUNT

Set forth below is yield and effective yield information for the Money Market
Sub-Account for the seven- day period ended December 31, 1997:

Yield 3.67%
Effective Yield 3.73%

Yield and effective yield figures are calculated by standardized methods
prescribed by rules of the SEC. Under those methods, the yield quotation is
computed by determining the net change (exclusive of capital changes) in the
value of a hypothetical pre-existing account having a balance of one
accumulation unit of the Sub-Account at the beginning of the period,
subtracting a charge reflecting the annual 1.40% deduction for mortality and
expense risk and the administrative charge, dividing the difference by the
value of the account at the beginning of the same period to obtain the base
period return, and then multiplying the return for a seven-day base period by
(365/7), with the resulting yield carried to the nearest hundredth of one
percent.

The Money Market Sub-Account computes effective yield by compounding the
unannualized base period return by using the formula:

Effective Yield = [(base period return + 1) (365/7)] - 1

The calculations of yield and effective yield reflect the $30 annual Contract
fee.

FINANCIAL STATEMENTS

Financial Statements are included for Allmerica Financial Life Insurance and
Annuity Company and for its Separate Account VA-P.

10
<PAGE>
ALLMERICA FINANCIAL
LIFE INSURANCE AND
ANNUITY COMPANY

FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholder of
Allmerica Financial Life Insurance and Annuity Company

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of shareholder's equity, and of cash flows
present fairly, in all material respects, the financial position of Allmerica
Financial Life Insurance and Annuity Company at December 31, 1997 and 1996, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ Price Waterhouse LLP

Price Waterhouse LLP
Boston, Massachusetts
February 3, 1998
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
----------------------------------------------- --------- ---------
<S> <C> <C>
REVENUES
Premiums..................................... $ 22.8 $ 32.7
Universal life and investment product
policy fees.............................. 212.2 176.2
Net investment income...................... 164.2 171.7
Net realized investment gains (losses)..... 2.9 (3.6)
Other income............................... 1.4 0.9
--------- ---------
Total revenues......................... 403.5 377.9
--------- ---------
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss
adjustment expenses...................... 187.8 192.6
Policy acquisition expenses................ 2.8 49.9
Loss from cession of disability income
business................................. 53.9 --
Other operating expenses................... 101.3 86.6
--------- ---------
Total benefits, losses and expenses.... 345.8 329.1
--------- ---------
Income before federal income taxes............. 57.7 48.8
--------- ---------
FEDERAL INCOME TAX EXPENSE (BENEFIT)
Current.................................... 13.9 26.9
Deferred................................... 7.1 (9.8)
--------- ---------
Total federal income tax expense....... 21.0 17.1
--------- ---------
Net income..................................... $ 36.7 $ 31.7
--------- ---------
--------- ---------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-1
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
-------------------------------------------------------- ---------- ----------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities at fair value (amortized cost of
$1,340.5 and $1,660.2)............................ $1,402.5 $1,698.0
Equity securities at fair value (cost of $34.4 and
$33.0)............................................ 54.0 41.5
Mortgage loans...................................... 228.2 221.6
Real estate......................................... 12.0 26.1
Policy loans........................................ 140.1 131.7
Other long term investments......................... 20.3 7.9
---------- ----------
Total investments............................... 1,857.1 2,126.8
---------- ----------
Cash and cash equivalents............................. 31.1 18.8
Accrued investment income............................. 34.2 37.7
Deferred policy acquisition costs..................... 765.3 632.7
Reinsurance receivables on paid and unpaid losses,
benefits and unearned premiums...................... 251.1 81.5
Other assets.......................................... 10.7 8.2
Separate account assets............................... 7,567.3 4,524.0
---------- ----------
Total assets.................................... $10,516.8 $7,429.7
---------- ----------
---------- ----------
LIABILITIES
Policy liabilities and accruals:
Future policy benefits.............................. $2,097.3 $2,171.3
Outstanding claims, losses and loss adjustment
expenses.......................................... 18.5 16.1
Unearned premiums................................... 1.8 2.7
Contractholder deposit funds and other policy
liabilities....................................... 32.5 32.8
---------- ----------
Total policy liabilities and accruals........... 2,150.1 2,222.9
---------- ----------
Expenses and taxes payable............................ 77.6 77.3
Reinsurance premiums payable.......................... 4.9 --
Deferred federal income taxes......................... 75.9 60.2
Separate account liabilities.......................... 7,567.3 4,523.6
---------- ----------
Total liabilities............................... 9,875.8 6,884.0
---------- ----------
Commitments and contingencies (Note 13)
SHAREHOLDER'S EQUITY
Common stock, $1,000 par value, 10,000 shares
authorized, 2,521 and 2,518 shares issued and
outstanding......................................... 2.5 2.5
Additional paid in capital............................ 386.9 346.3
Unrealized appreciation on investments, net........... 38.5 20.5
Retained earnings..................................... 213.1 176.4
---------- ----------
Total shareholder's equity...................... 641.0 545.7
---------- ----------
Total liabilities and shareholder's equity...... $10,516.8 $7,429.7
---------- ----------
---------- ----------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-2
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
----------------------------------------------- --------- ---------
<S> <C> <C>
COMMON STOCK
Balance at beginning of period............. $ 2.5 $ 2.5
Issued during year......................... -- --
--------- ---------
Balance at end of period................... 2.5 2.5
--------- ---------
ADDITIONAL PAID IN CAPITAL
Balance at beginning of period............. 346.3 324.3
Contribution from Parent................... 40.6 22.0
--------- ---------
Balance at end of period................... 386.9 346.3
--------- ---------
RETAINED EARNINGS
Balance at beginning of period............. 176.4 144.7
Net income................................. 36.7 31.7
--------- ---------
Balance at end of period................... 213.1 176.4
--------- ---------
NET UNREALIZED APPRECIATION ON INVESTMENTS
Balance at beginning of period............. 20.5 23.8
Net appreciation (depreciation) on
available for sale securities............ 27.0 (5.1)
(Provision) benefit for deferred federal
income taxes............................. (9.0) 1.8
--------- ---------
Balance at end of period................... 38.5 20.5
--------- ---------
Total shareholder's equity............. $641.0 $545.7
--------- ---------
--------- ---------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-3
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
-------------------------------------------- ---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.............................. $ 36.7 $ 31.7
Adjustments to reconcile net income to
net cash used in operating activities:
Net realized gains.................. (2.9) 3.6
Net amortization and depreciation... -- 3.5
Loss from cession of disability
income business................... 53.9 --
Deferred federal income taxes....... 7.1 (9.8)
Payment related to cession of
disability income business........ (207.0) --
Change in deferred acquisition
costs............................. (181.3) (66.8)
Change in premiums and notes
receivable, net of reinsurance
payable........................... 3.9 (0.2)
Change in accrued investment
income............................ 3.5 1.2
Change in policy liabilities and
accruals, net..................... (72.4) (39.9)
Change in reinsurance receivable.... 22.1 (1.5)
Change in expenses and taxes
payable........................... 0.2 32.3
Separate account activity, net...... 0.4 10.5
Other, net.......................... (7.5) (0.2)
---------- ----------
Net used in operating
activities.................... (343.3) (35.6)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposals and maturities
of available-for-sale fixed
maturities............................ 909.7 809.4
Proceeds from disposals of equity
securities............................ 2.4 1.5
Proceeds from disposals of other
investments........................... 23.7 17.4
Proceeds from mortgages matured or
collected............................. 62.9 34.0
Purchase of available-for-sale fixed
maturities............................ (579.7) (795.8)
Purchase of equity securities........... (3.2) (13.2)
Purchase of other investments........... (79.4) (36.2)
Other investing activities, net......... -- (2.0)
---------- ----------
Net cash provided by investing
activities........................ 336.4 15.1
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock and
capital paid in....................... 19.2 22.0
---------- ----------
Net cash provided by financing
activities........................ 19.2 22.0
---------- ----------
Net change in cash and cash equivalents..... 12.3 1.5
Cash and cash equivalents, beginning of
period..................................... 18.8 17.3
---------- ----------
Cash and cash equivalents, end of period.... $ 31.1 $ 18.8
---------- ----------
---------- ----------
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid........................... $ -- $ 3.4
Income taxes paid....................... $ 5.4 $ 16.5
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Allmerica Financial Life Insurance and Annuity Company ("AFLIAC" or the
"Company") is organized as a stock life insurance company, and is a wholly-owned
subsidiary of SMA Financial Corporation ("SMAFCO"), which is wholly owned by
First Allmerica Financial Life Insurance Company ("FAFLIC"). FAFLIC is a
wholly-owned subsidiary of Allmerica Financial Corporation ("AFC").

The consolidated financial statements of AFLIAC include the accounts of Somerset
Square, Inc., a wholly-owned non-insurance company and its results of operations
for the month of December, 1997. Somerset Square, Inc. was transferred from
SMAFCO effective November 30, 1997. (See Significant Transactions.)

The Statutory stockholder's equity of the Company is being maintained at a
minimum level of 5% of general account assets by FAFLIC in accordance with a
policy established by vote of FAFLIC's Board of Directors.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Certain reclassifications have been
made to the 1996 financial statements in order to conform to the 1997
presentation.

B. VALUATION OF INVESTMENTS

In accordance with the provisions of Statement of Financial Accounting Standards
No. 115 ("Statement No. 115"), "ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES", the Company is required to classify its investments into one
of three categories: held-to-maturity, available-for-sale or trading. The
Company determines the appropriate classification of debt securities at the time
of purchase and reevaluates such designation as of each balance sheet date.

Mortgage loans on real estate are stated at unpaid principal balances, net of
unamortized discounts and reserves. Reserves on mortgage loans are based on
losses expected by management to be realized on transfers of mortgage loans to
real estate (upon foreclosure), on the disposition or settlement of mortgage
loans and on mortgage loans which management believes may not be collectible in
full. In establishing reserves, management considers, among other things, the
estimated fair value of the underlying collateral.

Fixed maturities and mortgage loans that are delinquent are placed on
non-accrual status, and thereafter interest income is recognized only when cash
payments are received.

Policy loans are carried principally at unpaid principal balances.

During 1997, the Company committed to a plan to dispose of all real estate
assets by the end of 1998. As a result of this decision real estate held by the
Company and real estate joint ventures were written down to the estimated fair
value less cost to sell. Depreciation is not recorded on these assets while they
are held for disposal.

Realized investment gains and losses, other than those related to separate
accounts for which the Company does not bear the investment risk, are reported
as a component of revenues based upon specific identification

F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

of the investment assets sold. When an other-than-temporary impairment of the
value of a specific investment or a group of investments is determined, a
realized investment loss is recorded. Changes in the valuation allowance for
mortgage loans and real estate are included in realized investment gains or
losses.

C. FINANCIAL INSTRUMENTS

In the normal course of business, the Company enters into transactions involving
various types of financial instruments, including debt, investments such as
fixed maturities, mortgage loans and equity securities, and investment and loan
commitments. These instruments involve credit risk and also may be subject to
risk of loss due to interest rate fluctuation. The Company evaluates and
monitors each financial instrument individually and, when appropriate, obtains
collateral or other security to minimize losses.

D. CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.

E. DEFERRED POLICY ACQUISITION COSTS

Acquisition costs consist of commissions, underwriting costs and other costs,
which vary with, and are primarily related to, the production of revenues.
Acquisition costs related to universal life products, variable annuities and
contractholder deposit funds are deferred and amortized in proportion to total
estimated gross profits from investment yields, mortality, surrender charges and
expense margins over the expected life of the contracts. This amortization is
reviewed annually and adjusted retrospectively when the Company revises its
estimate of current or future gross profits to be realized from this group of
products, including realized and unrealized gains and losses from investments.
Acquisition costs related to fixed annuities and other life insurance products
are deferred and amortized, generally in proportion to the ratio of annual
revenue to the estimated total revenues over the contract periods based upon the
same assumptions used in estimating the liability for future policy benefits.

Deferred acquisition costs for each product are reviewed to determine if they
are recoverable from future income, including investment income. If such costs
are determined to be unrecoverable, they are expensed at the time of
determination. Although realization of deferred policy acquisition costs is not
assured, management believes it is more likely than not that all of these costs
will be realized. The amount of deferred policy acquisition costs considered
realizable, however, could be reduced in the near term if the estimates of gross
profits or total revenues discussed above are reduced. The amount of
amortization of deferred policy acquisition costs could be revised in the near
term if any of the estimates discussed above are revised.

F. SEPARATE ACCOUNTS

Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of certain pension, variable annuity
and variable life insurance contractholders. Assets consist principally of
bonds, common stocks, mutual funds, and short-term obligations at market value.
The investment income, gains, and losses of these accounts generally accrue to
the contractholders and, therefore, are not included in the Company's net
income. Appreciation and depreciation of the Company's interest in the separate
accounts, including undistributed net investment income, is reflected in
shareholder's equity or net investment income.

F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

G. POLICY LIABILITIES AND ACCRUALS

Future policy benefits are liabilities for life, health and annuity products.
Such liabilities are established in amounts adequate to meet the estimated
future obligations of policies in force. The liabilities associated with
traditional life insurance products are computed using the net level premium
method for individual life and annuity policies, and are based upon estimates as
to future investment yield, mortality and withdrawals that include provisions
for adverse deviation. Future policy benefits for individual life insurance and
annuity policies are computed using interest rates ranging from 2 1/2% to 6% for
life insurance and 2% to 9 1/2% for annuities. Mortality, morbidity and
withdrawal assumptions for all policies are based on the Company's own
experience and industry standards. Liabilities for universal life include
deposits received from customers and investment earnings on their fund balances,
less administrative charges. Universal life fund balances are also assessed
mortality and surrender charges. Individual health benefit liabilities for
active lives are estimated using the net level premium method, and assumptions
as to future morbidity, withdrawals and interest which provide a margin for
adverse deviation. Benefit liabilities for disabled lives are estimated using
the present value of benefits method and experience assumptions as to claim
terminations, expenses and interest.

Liabilities for outstanding claims, losses and loss adjustment expenses are
estimates of payments to be made for reported claims and estimates of claims
incurred but not reported. These liabilities are determined using case basis
evaluations and statistical analyses and represent estimates of the ultimate
cost of all claims incurred but not paid. These estimates are continually
reviewed and adjusted as necessary; such adjustments are reflected in current
operations.

Premiums for individual accident and health insurance are reported as earned on
a pro-rata basis over the contract period.

The unexpired portion of these premiums is recorded as unearned premiums.

Contractholder deposit funds and other policy liabilities include
investment-related products and consist of deposits received from customers and
investment earnings on their fund balances.

All policy liabilities and accruals are based on the various estimates discussed
above. Although the adequacy of these amounts cannot be assured, management
believes that it is more likely than not that policy liabilities and accruals
will be sufficient to meet future obligations of policies in force. The amount
of liabilities and accruals, however, could be revised in the near term if the
estimates discussed above are revised.

H. PREMIUM AND FEE REVENUE AND RELATED EXPENSES

Premiums for individual life and health insurance and individual annuity
products, excluding universal life and investment-related products, are
considered revenue when due. Individual accident and health insurance premiums
are recognized as revenue over the related contract periods. Benefits, losses
and related expenses are matched with premiums, resulting in their recognition
over the lives of the contracts. This matching is accomplished through the
provision for future benefits, estimated and unpaid losses and amortization of
deferred policy acquisition costs. Revenues for investment-related products
consist of net investment income and contract charges assessed against the fund
values. Related benefit expenses primarily consist of net investment income
credited to the fund values after deduction for investment and risk charges.
Revenues for universal life and group variable universal life products consist
of net investment income, and mortality, administration and surrender charges
assessed against the fund values. Related benefit expenses include universal
life benefits in excess of fund values and net investment income credited to
universal life fund values. Certain policy charges that represent compensation
for services to be provided in future periods are deferred and amortized over
the period benefited using the same assumptions used to amortize capitalized
acquisition costs.

F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

I. FEDERAL INCOME TAXES

AFC, its life insurance subsidiaries, FAFLIC and AFLIAC, and its non-life
insurance domestic subsidiaries file a life-nonlife consolidated United States
Federal income tax return. Entities included within the consolidated group are
segregated into either a life insurance or non-life insurance company subgroup.
The consolidation of these subgroups is subject to certain statutory
restrictions on the percentage of eligible non-life insurance company taxable
operating losses that can be applied to offset life insurance company taxable
income. Allmerica P&C and its subsidiaries will be included in the AFC
consolidated return as part of the non-life insurance company subgroup for the
period July 17, 1997 through December 31, 1997. For the period January 1, 1997
through July 16, 1997, Allmerica P&C and its subsidiaries will file a separate
consolidated United States Federal income tax return.

The Board of Directors has delegated to AFC management, the development and
maintenance of appropriate Federal Income Tax allocation policies and
procedures, which are subject to written agreement between the companies. The
Federal income tax for all subsidiaries in the consolidated return of AFC is
calculated on a separate return basis. Any current tax liability is paid to AFC.
Tax benefits resulting from taxable operating losses or credits of AFC's
subsidiaries are not reimbursed to the subsidiary until such losses or credits
can be utilized by the subsidiary on a separate return basis.

Deferred income taxes are generally recognized when assets and liabilities have
different values for financial statement and tax reporting purposes, and for
other temporary taxable and deductible differences as defined by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No.
109). These differences result primarily from loss reserves, policy acquisition
expenses, and unrealized appreciation/depreciation on investments.

J. NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued Statement No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. This statement establishes standards for
the way that public enterprises report information about operating segments in
annual financial statements and requires that selected information about those
operating segments be reported in interim financial statements. This statement
supersedes Statement No. 14, FINANCIAL REPORTING FOR SEGMENTS OF A BUSINESS
ENTERPRISE. Statement No. 131 requires that all public enterprises report
financial and descriptive information about their reportable operating segments.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. This statement is effective for fiscal years beginning
after December 15, 1997. The Company anticipates no impact from the adoption of
Statement No. 131.

In June 1997, the FASB also issued Statement No. 130, REPORTING COMPREHENSIVE
INCOME, which established standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. All items that are required to be recognized under
accounting standards as components of comprehensive income are to be reported in
a financial statement that is displayed with the same prominence as other
financial statements. This statement stipulates that comprehensive income
reflect the change in equity of an enterprise during a period from transactions
and other events and circumstances from non-owner sources. This statement is
effective for fiscal years beginning after December 15, 1997. The Company
anticipates that the adoption of Statement No. 130 will result primarily in
reporting the changes in unrealized gains and losses on investments in debt and
equity securities in comprehensive income.

F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT TRANSACTIONS

On April 14, 1997, the Company entered into an agreement in principle to
transfer the Company's individual disability income under a 100% coinsurance
agreement to Metropolitan Life Insurance Company. The coinsurance agreement
became effective October 1, 1997. The transaction has resulted in the
recognition of a $53.9 million pre-tax loss in the first quarter of 1997.

During the 4th quarter of 1997, SMAFCO contributed $40.6 million of additional
paid in capital to the Company. The nature of the contribution was $19.2 million
in cash and $21.4 million in other assets including Somerset Square, Inc.

Effective January 1, 1998, the Company entered into an agreement with
Reinsurance Group of America, Inc. to reinsure the mortality risk on the
universal life and variable universal life blocks of business. Management
believes that this agreement will not have a material effect on the results of
operations or financial position of the Company.

3. INVESTMENTS

A. SUMMARY OF INVESTMENTS

The Company accounts for its investments, all of which are classified as
available-for-sale, in accordance with the provisions of SFAS No. 115.

The amortized cost and fair value of available-for-sale fixed maturities and
equity securities were as follows:

<TABLE>
<CAPTION>
1997
--------------------------------------------
GROSS GROSS
DECEMBER 31, AMORTIZED UNREALIZED UNREALIZED FAIR
(IN MILLIONS) COST (1) GAINS LOSSES VALUE
- ---------------------------------------- ---------- -------- --------- --------
<S> <C> <C> <C> <C>
U.S. Treasury securities and U.S.
government and agency securities....... $ 6.3 $ .5 $-- $ 6.8
States and political subdivisions....... 2.8 .2 -- 3.0
Foreign governments..................... 50.1 2.0 -- 52.1
Corporate fixed maturities.............. 1,147.5 58.7 3.3 1,202.9
Mortgage-backed securities.............. 133.8 5.2 1.3 137.7
---------- -------- --------- --------
Total fixed maturities
available-for-sale..................... $1,340.5 $66.6 $ 4.6 $1,402.5
---------- -------- --------- --------
Equity securities....................... $ 34.4 $19.9 $ 0.3 $ 54.0
---------- -------- --------- --------
---------- -------- --------- --------

1996
--------------------------------------------
U.S. Treasury securities and U.S.
government and agency securities....... $ 15.7 $ 0.5 $ 0.2 $ 16.0
States and political subdivisions....... 8.9 1.6 -- 10.5
Foreign governments..................... 53.2 2.9 -- 56.1
Corporate fixed maturities.............. 1,437.2 38.6 6.1 1,469.7
Mortgage-backed securities.............. 145.2 2.2 1.7 145.7
---------- -------- --------- --------
Total fixed maturities
available-for-sale..................... $1,660.2 $45.8 $ 8.0 $1,698.0
---------- -------- --------- --------
Equity securities....................... $ 33.0 $10.2 $ 1.7 $ 41.5
---------- -------- --------- --------
---------- -------- --------- --------
</TABLE>

(1) Amortized cost for fixed maturities and cost for equity securities.

F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

In connection with AFLIAC's voluntary withdrawal of its license in New York,
AFLIAC agreed with the New York Department of Insurance to maintain, through a
custodial account in New York, a security deposit, the market value of which
will at all times equal 102% of all outstanding liabilities of AFLIAC for New
York policyholders, claimants and creditors. At December 31, 1997, the amortized
cost and market value of these assets on deposit were $276.8 million and $291.7
million, respectively. At December 31, 1996, the amortized cost and market value
of these assets on deposit were $284.9 million and $292.2 million, respectively.
In addition, fixed maturities, excluding those securities on deposit in New
York, with an amortized cost of $4.2 million were on deposit with various state
and governmental authorities at December 31, 1997 and 1996.

There were no contractual fixed maturity investment commitments at December 31,
1997 and 1996, respectively.

The amortized cost and fair value by maturity periods for fixed maturities are
shown below. Actual maturities may differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties, or the Company may have the right to put or sell the
obligations back to the issuers. Mortgage backed securities are included in the
category representing their ultimate maturity.

<TABLE>
<CAPTION>
1997
--------------------
DECEMBER 31, AMORTIZED FAIR
(IN MILLIONS) COST VALUE
- ------------------------------------------------------------ --------- ---------
<S> <C> <C>
Due in one year or less..................................... $ 63.0 $ 63.5
Due after one year through five years....................... 328.8 343.9
Due after five years through ten years...................... 649.5 679.9
Due after ten years......................................... 299.2 315.2
--------- ---------
Total....................................................... $1,340.5 $1,402.5
--------- ---------
--------- ---------
</TABLE>

The proceeds from voluntary sales of available-for-sale securities and the gross
realized gains and gross realized losses on those sales were as follows:

<TABLE>
<CAPTION>
PROCEEDS
FROM
FOR THE YEARS ENDED DECEMBER 31, VOLUNTARY GROSS GROSS
(IN MILLIONS) SALES GAINS LOSSES
- ------------------------------------------------------------ ---------- ------ ------
<S> <C> <C> <C>
1997
Fixed maturities............................................ $702.9 $ 11.4 $ 5.0
Equity securities........................................... $ 1.3 $ 0.5 $ --

1996
Fixed maturities............................................ $496.6 $ 4.3 $ 8.3
Equity securities........................................... $ 1.5 $ 0.4 $ 0.1
</TABLE>

F-10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Unrealized gains and losses on available-for-sale and other securities, are
summarized as follows:

<TABLE>
<CAPTION>
EQUITY
FOR THE YEAR ENDED DECEMBER 31, FIXED SECURITIES
(IN MILLIONS) MATURITIES AND OTHER (1) TOTAL
- ------------------------------------------------------------ ---------- ------------- ------
<S> <C> <C> <C>
1997
Net appreciation, beginning of year......................... $ 12.7 $ 7.8 $ 20.5
Net appreciation on available-for-sale securities........... 24.3 12.5 36.8
Net depreciation from the effect on deferred policy
acquisition costs and on policy liabilities................ (9.8) -- (9.8)
Provision for deferred federal income taxes................. (5.1) (3.9) (9.0)
---------- ----- ------
9.4 8.6 18.0
---------- ----- ------
Net appreciation, end of year............................... $ 22.1 $ 16.4 $ 38.5
---------- ----- ------
---------- ----- ------
</TABLE>

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

F-11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996 FIXED SECURITIES
(IN MILLIONS) MATURITIES AND OTHER (1) TOTAL
- ------------------------------------------------------------ ---------- ------------- ------
<S> <C> <C> <C>
Net appreciation, beginning of year......................... $ 20.4 $ 3.4 $ 23.8
Net (depreciation) appreciation on available-for-sale
securities................................................. (20.8) 6.7 (14.1)
Net appreciation from the effect on deferred policy
acquisition costs and on policy liabilities................ 9.0 -- 9.0
Benefit (provision) for deferred federal income taxes....... 4.1 (2.3) 1.8
---------- ----- ------
(7.7) 4.4 (3.3)
---------- ----- ------
Net appreciation, end of year............................... $ 12.7 $ 7.8 $ 20.5
---------- ----- ------
---------- ----- ------
</TABLE>

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

B. MORTGAGE LOANS AND REAL ESTATE

AFLIAC's mortgage loans and real estate are diversified by property type and
location. Real estate investments have been obtained primarily through
foreclosure. Mortgage loans are collateralized by the related properties and
generally are no more than 75% of the property's value at the time the original
loan is made.

The carrying values of mortgage loans and real estate investments net of
applicable reserves were as follows:

<TABLE>
<CAPTION>
DECEMBER 31
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Mortgage loans.............................................. $228.2 $221.6
Real estate:
Held for sale............................................. 12.0 26.1
Held for production of income............................. -- --
---------- ------
Total real estate....................................... $ 12.0 $ 26.1
---------- ------
Total mortgage loans and real estate........................ $240.2 $247.7
---------- ------
---------- ------
</TABLE>

Reserves for mortgage loans were $9.4 million and $9.5 million at December 31,
1997 and 1996, respectively.

During 1997, the Company committed to a plan to dispose of all real estate
assets by the end of 1998. As a result, real estate assets with a carrying
amount of $15.7 million were written down to the estimated fair value less cost
to sell of $12.0 million, and a net realized investment loss of $3.7 million was
recognized. Depreciation is not recorded on these assets while they are held for
disposal.

There were no non-cash investing activities, including real estate acquired
through foreclosure of mortgage loans, in 1997. During 1996, non-cash investing
activities included real estate acquired through foreclosure of mortgage loans,
which had a fair value of $0.9 million.

At December 31, 1997, contractual commitments to extend credit under commercial
mortgage loan agreements amounted to approximately $18.7 million. These
commitments generally expire within one year.

F-12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Mortgage loans and real estate investments comprised the following property
types and geographic regions:

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Property type:
Office building........................................... $101.7 $ 86.1
Residential............................................... 19.3 39.0
Retail.................................................... 42.2 55.9
Industrial/warehouse...................................... 61.9 52.6
Other..................................................... 24.5 25.3
Valuation allowances...................................... (9.4) (11.2)
---------- ------
Total....................................................... $240.2 $247.7
---------- ------
---------- ------
Geographic region:
South Atlantic............................................ $ 68.7 $ 72.9
Pacific................................................... 56.6 37.0
East North Central........................................ 61.4 58.3
Middle Atlantic........................................... 29.8 35.0
West South Central........................................ 6.9 5.7
New England............................................... 12.4 21.9
Other..................................................... 13.8 28.1
Valuation allowances...................................... (9.4) (11.2)
---------- ------
Total....................................................... $240.2 $247.7
---------- ------
---------- ------
</TABLE>

At December 31, 1997, scheduled mortgage loan maturities were as follows: 1998
- -- $52.0 million; 1999 -- $17.1 million; 2000 -- $46.3 million; 2001 -- $7.0
million; 2002 -- $11.7 million; and $94.1 million thereafter. Actual maturities
could differ from contractual maturities because borrowers may have the right to
prepay obligations with or without prepayment penalties and loans may be
refinanced. During 1997, the Company did not refinance any mortgage loans based
on terms which differed from those granted to new borrowers.

C. INVESTMENT VALUATION ALLOWANCES

Investment valuation allowances which have been deducted in arriving at
investment carrying values as presented in the balance sheet and changes thereto
are shown below.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, BALANCE AT BALANCE AT
(IN MILLIONS) JANUARY 1 ADDITIONS DEDUCTIONS DECEMBER 31
- ------------------------------------------------------------ ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
1997
Mortgage loans.............................................. $ 9.5 $ 1.1 $ 1.2 $ 9.4
Real estate................................................. 1.7 3.7 5.4 --
----- --- --- -----
Total................................................... $ 11.2 $ 4.8 $ 6.6 $ 9.4
----- --- --- -----
----- --- --- -----

1996
Mortgage loans.............................................. $ 12.5 $ 4.5 $ 7.5 $ 9.5
Real estate................................................. 2.1 -- 0.4 1.7
----- --- --- -----
Total................................................... $ 14.6 $ 4.5 $ 7.9 $ 11.2
----- --- --- -----
----- --- --- -----
</TABLE>

F-13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Deductions of $5.4 million to the investment valuation allowance related to real
estate in 1997 primarily reflect writedowns to the estimated fair value less
cost to sell pursuant to the aforementioned 1997 plan of disposal.

The carrying value of impaired loans was $20.6 million and $21.5 million, with
related reserves of $7.1 million and $7.3 million as of December 31, 1997 and
1996, respectively. All impaired loans were reserved as of December 31, 1997 and
1996.

The average carrying value of impaired loans was $19.8 million and $26.3
million, with related interest income while such loans were impaired of $2.2
million and $3.4 million as of December 31, 1997 and 1996, respectively.

D. OTHER

At December 31, 1997, AFLIAC had no concentration of investments in a single
investee exceeding 10% of shareholder's equity.

4. INVESTMENT INCOME AND GAINS AND LOSSES

A. NET INVESTMENT INCOME

The components of net investment income were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Fixed maturities............................................ $130.0 $137.2
Mortgage loans.............................................. 20.4 22.0
Equity securities........................................... 1.3 0.7
Policy loans................................................ 10.8 10.2
Real estate................................................. 3.9 6.2
Other long-term investments................................. 1.0 0.8
Short-term investments...................................... 1.4 1.4
---------- ------
Gross investment income..................................... 168.8 178.5
Less investment expenses.................................... (4.6) (6.8)
---------- ------
Net investment income....................................... $164.2 $171.7
---------- ------
---------- ------
</TABLE>

At December 31, 1997, mortgage loans on non-accrual status were $2.8 million,
which were all restructured loans. There were no fixed maturities on non-accrual
status at December 31, 1997. The effect of non-accruals, compared with amounts
that would have been recognized in accordance with the original terms of the
investment, had no impact in 1997, and reduced net income by $0.1 million in
1996.

The payment terms of mortgage loans may from time to time be restructured or
modified. The investment in restructured mortgage loans, based on amortized
cost, amounted to $21.1 million and $25.4 million at December 31, 1997 and 1996,
respectively. Interest income on restructured mortgage loans that would have
been recorded in accordance with the original terms of such loans amounted to
$1.9 million and $3.6 million in 1997 and 1996, respectively. Actual interest
income on these loans included in net investment income aggregated $2.1 million
and $2.2 million in 1997 and 1996, respectively.

F-14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

There were no fixed maturities or mortgage loans which were non-income producing
for the twelve months ended December 31, 1997.

B. REALIZED INVESTMENT GAINS AND LOSSES

Realized gains (losses) on investments were as follows:

5. FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments", requires
disclosure of fair value information about certain financial instruments
(insurance contracts, real estate, goodwill and taxes are excluded) for which it
is practicable to estimate such values, whether or not these instruments are
included in the balance sheet. The fair values presented for certain financial
instruments are estimates which, in many cases, may differ significantly from
the amounts which could be realized upon immediate liquidation. In cases where
market prices are not available, estimates of fair value are based on discounted
cash flow analyses which utilize current interest rates for similar financial
instruments which have comparable terms and credit quality.

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

CASH AND CASH EQUIVALENTS

For these short-term investments, the carrying amount approximates fair value.

FIXED MATURITIES

Fair values are based on quoted market prices, if available. If a quoted market
price is not available, fair values are estimated using independent pricing
sources or internally developed pricing models using discounted cash flow
analyses.

EQUITY SECURITIES

MORTGAGE LOANS

Fair values are estimated by discounting the future contractual cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings. The fair value of below investment grade mortgage loans are
limited to the lesser of the present value of the cash flows or book value.

F-15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

REINSURANCE RECEIVABLES

The carrying amount of the reinsurance receivable for outstanding claims, losses
and loss adjustment expenses reported in the balance sheet approximates fair
value.

POLICY LOANS

The carrying amount reported in the balance sheet approximates fair value since
policy loans have no defined maturity dates and are inseparable from the
insurance contracts.

INVESTMENT CONTRACTS (WITHOUT MORTALITY FEATURES)

Fair values for the Company's liabilities under investment type contracts are
estimated based on current surrender values.

The estimated fair values of the financial instruments were as follows:

<TABLE>
<CAPTION>
1997 1996
--------------------- ---------------------
DECEMBER 31, CARRYING FAIR CARRYING FAIR
(IN MILLIONS) VALUE VALUE VALUE VALUE
- ------------------------------------------------------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS
Cash and cash equivalents................................. $ 31.1 $ 31.1 $ 18.8 $ 18.8
Fixed maturities.......................................... 1,402.5 1,402.5 1,698.0 1,698.0
Equity securities......................................... 54.0 54.0 41.5 41.5
Mortgage loans............................................ 228.2 239.8 221.6 229.3
Policy loans.............................................. 140.1 140.1 131.7 131.7
Reinsurance receivables................................... 251.1 251.1 72.5 72.5
--------- --------- --------- ---------
$2,107.0 $2,118.6 $2,184.1 $2,191.8
--------- --------- --------- ---------
--------- --------- --------- ---------
FINANCIAL LIABILITIES
Individual annuity contracts.............................. 876.0 850.6 910.2 885.9
Supplemental contracts without life contingencies......... 15.3 15.3 15.9 15.9
Other individual contract deposit funds................... 0.3 0.3 0.3 0.3
--------- --------- --------- ---------
$ 891.6 $ 866.2 $ 926.4 $ 902.1
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

6. DEBT

In 1997 the Company incurred no debt. During 1996, the Company utilized
repurchase agreements to finance certain investments.

Interest expense was $3.4 million in 1996, relating to the repurchase
agreements, and is recorded in other operating expenses.

F-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. FEDERAL INCOME TAXES

Provisions for federal income taxes have been calculated in accordance with the
provisions of SFAS No. 109. A summary of the federal income tax expense
(benefit) in the statement of income is shown below:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- ------
<S> <C> <C>
Federal income tax expense (benefit)
Current................................................... $ 13.9 $ 26.9
Deferred.................................................. 7.1 (9.8)
----- -----
Total....................................................... $ 21.0 $ 17.1
----- -----
----- -----
</TABLE>

The provision for federal income taxes does not materially differ from the
amount of federal income tax determined by applying the appropriate U.S.
statutory income tax rate to income before federal income taxes. The deferred
tax (assets) liabilities are comprised of the following at December 31, 1997:

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Deferred tax (assets) liabilitie
Loss reserves............................................. $(175.8) $(137.0)
Deferred acquisition costs................................ 226.4 186.9
Investments, net.......................................... 27.0 14.2
Bad debt reserve.......................................... (2.0) (1.1)
Other, net................................................ 0.3 (2.8)
---------- -------------
Deferred tax liability, net............................... $ 75.9 $ 60.2
---------- -------------
---------- -------------
</TABLE>

Gross deferred income tax liabilities totaled $253.7 million and $201.1 million
at December 31, 1997 and 1996. Gross deferred income tax assets totaled $177.8
million and $140.9 at December 31, 1997 and 1996.

Management believes, based on the Company's recent earnings history and its
future expectations, that the Company's taxable income in future years will be
sufficient to realize all deferred tax assets. In determining the adequacy of
future income, management considered the future reversal of its existing
temporary differences and available tax planning strategies that could be
implemented, if necessary.

The Company's federal income tax returns are routinely audited by the IRS, and
provisions are routinely made in the financial statements in anticipation of the
results of these audits. The IRS has examined the life-nonlife consolidated
group's federal income tax returns through 1991. The Company is currently
considering its response to certain adjustments proposed by the IRS with respect
to the life-nonlife consolidated group's federal income tax returns for 1989,
1990, and 1991. In management's opinion, adequate tax liabilities have been
established for all years. However, the amount of these tax liabilities could be
revised in the near term if estimates of the Company's ultimate liability are
revised.

8. RELATED PARTY TRANSACTIONS

The Company has no employees of its own, but has agreements under which FAFLIC
provides management, space and other services, including accounting, electronic
data processing, human resources, legal and other staff functions. Charges for
these services are based on full cost including all direct and indirect overhead
costs, and amounted to $124.1 million and $112.4 million in 1997 and 1996. The
net amounts payable to FAFLIC and affiliates for accrued expenses and various
other liabilities and receivables were $15.0 million and $13.3 million at
December 31, 1997 and 1996.

F-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. DIVIDEND RESTRICTIONS

Delaware has enacted laws governing the payment of dividends to stockholders by
insurers. These laws affect the dividend paying ability of the Company.

Pursuant to Delaware's statute, the maximum amount of dividends and other
distributions that an insurer may pay in any twelve month period, without the
prior approval of the Delaware Commissioner of Insurance, is limited to the
greater of (i) 10% of its policyholders' surplus as of the preceding December 31
or (ii) the individual company's statutory net gain from operations for the
preceding calendar year (if such insurer is a life company) or its net income
(not including realized capital gains) for the preceding calendar year (if such
insurer is not a life company). Any dividends to be paid by an insurer, whether
or not in excess of the aforementioned threshold, from a source other than
statutory earned surplus would also require the prior approval of the Delaware
Commissioner of Insurance.

At January 1, 1998, AFLIAC could pay dividends of $33.9 million to FAFLIC
without prior approval.

10. REINSURANCE

In the normal course of business, the Company seeks to reduce the loss that may
arise from events that cause unfavorable underwriting results by reinsuring
certain levels of risk in various areas of exposure with other insurance
enterprises or reinsurers. Reinsurance transactions are accounted for in
accordance with the provisions of SFAS No. 113.

Amounts recoverable from reinsurers are estimated in a manner consistent with
the claim liability associated with the reinsured policy. Reinsurance contracts
do not relieve the Company from its obligations to policyholders. Failure of
reinsurers to honor their obligations could result in losses to the Company;
consequently, allowances are established for amounts deemed uncollectible. The
Company determines the appropriate amount of reinsurance based on evaluation of
the risks accepted and analyses prepared by consultants and reinsurers and on
market conditions (including the availability and pricing of reinsurance). The
Company also believes that the terms of its reinsurance contracts are consistent
with industry practice in that they contain standard terms with respect to lines
of business covered, limit and retention, arbitration and occurrence. Based on
its review of its reinsurers' financial statements and reputations in the
reinsurance marketplace, the Company believes that its reinsurers are
financially sound.

The effects of reinsurance were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Insurance premiums:
Direct.................................................... $ 48.8 $ 53.3
Assumed................................................... 2.6 3.1
Ceded..................................................... (28.6) (23.7)
---------- ------
Net premiums................................................ $ 22.8 $ 32.7
---------- ------
---------- ------
Insurance and other individual policy benefits, claims,
losses and loss adjustment expenses:
Direct.................................................... $226.0 $206.4
Assumed................................................... 4.2 4.5
Ceded..................................................... (42.4) (18.3)
---------- ------
Net policy benefits, claims, losses and loss adjustment
expenses................................................... $187.8 $192.6
---------- ------
---------- ------
</TABLE>

F-18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. DEFERRED POLICY ACQUISITION EXPENSES

The following reflects the changes to the deferred policy acquisition asset:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Balance at beginning of year................................ $632.7 $555.7
Acquisition expenses deferred............................. 184.1 116.6
Amortized to expense during the year...................... (53.0) (49.9)
Adjustment to equity during the year...................... (10.2) 10.3
Adjustment for cession of disability income insurance..... (38.6) --
Adjustment for revision of universal life and variable
universal life insurance mortality assumptions.......... 50.3 --
---------- ------
Balance at end of year...................................... $765.3 $632.7
---------- ------
---------- ------
</TABLE>

On October 1, 1997, the Company revised the mortality assumptions for universal
life and variable universal life product lines. These revisions resulted in a
$50.3 million recapitalization of deferred policy acquisition costs.

12. LIABILITIES FOR INDIVIDUAL ACCIDENT AND HEALTH BENEFITS

The Company regularly updates its estimates of liabilities for future policy
benefits and outstanding claims, losses and loss adjustment expenses as new
information becomes available and further events occur which may impact the
resolution of unsettled claims. Changes in prior estimates are reflected in
results of operations in the year such changes are determined to be needed and
recorded.

The liability for future policy benefits and outstanding claims, losses and loss
adjustment expenses related to the Company's accident and health business was
$219.9 million and $226.2 million at December 31, 1997 and 1996. Accident and
health claim liabilities have been re-estimated for all prior years and were
increased by $-0- million in 1997 and $3.2 million in 1996. Due to the
reinsurance agreement whereby the Company has ceded substantially all of its
accident and health business to the Metropolitan, management believes that no
material adverse development of losses will occur. However, the amount of the
liabilities could be revised in the near term if the estimates are revised.

13. CONTINGENCIES

REGULATORY AND INDUSTRY DEVELOPMENTS

Unfavorable economic conditions may contribute to an increase in the number of
insurance companies that are under regulatory supervision. This may result in an
increase in mandatory assessments by state guaranty funds, or voluntary payments
by solvent insurance companies to cover losses to policyholders of insolvent or
rehabilitated companies. Mandatory assessments, which are subject to statutory
limits, can be partially recovered through a reduction in future premium taxes
in some states. The Company is not able to reasonably estimate the potential
effect on it of any such future assessments or voluntary payments.

LITIGATION

In July 1997, a lawsuit was instituted in Louisiana against Allmerica Financial
Corp. and certain of its subsidiaries by individual plaintiffs alleging fraud,
unfair or deceptive acts, breach of contract, misrepresentation and related
claims in the sale of life insurance policies. In October 1997, plaintiffs
voluntarily dismissed

F-19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

the Louisiana suit and refiled the action in Federal District Court in
Worcester, Massachusetts. The plaintiffs seek to be certified as a class. The
case is in the early stages of discovery and the Company is evaluating the
claims. Although the Company believes it has meritorious defenses to plaintiffs'
claims, there can be no assurance that the claims will be resolved on a basis
which is satisfactory to the Company.

The Company has been named a defendant in various legal proceedings arising in
the normal course of business. In the opinion of management, based on the advice
of legal counsel, the ultimate resolution of these proceedings will not have a
material effect on the Company's financial statements. However, liabilities
related to these proceedings could be established in the near term if estimates
of the ultimate resolution of these proceedings are revised.

YEAR 2000

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities. Although the Company does not
believe that there is a material contingency associated with the Year 2000
project, there can be no assurance that exposure for material contingencies will
not arise.

14. STATUTORY FINANCIAL INFORMATION

The Company is required to file annual statements with state regulatory
authorities prepared on an accounting basis prescribed or permitted by such
authorities (statutory basis). Statutory surplus differs from shareholder's
equity reported in accordance with generally accepted accounting principles for
stock life insurance companies primarily because policy acquisition costs are
expensed when incurred, investment reserves are based on different assumptions,
life insurance reserves are based on different assumptions and income tax
expense reflects only taxes paid or currently payable. Statutory net income and
surplus are as follows:

<TABLE>
<CAPTION>
(IN MILLIONS) 1997 1996
- ------------------------------------------------------------ ---------- -------------
<S> <C> <C>
Statutory net income........................................ $ 31.5 $ 5.4
Statutory Surplus........................................... $307.1 $234.0
---------- ------
---------- ------
</TABLE>

15. EVENT SUBSEQUENT TO DATE OF INDEPENDENT ACCOUNTANT'S REPORT (UNAUDITED)

In July 1997, a lawsuit on behalf of a punitive class was instituted in
Louisiana against AFC and certain of its subsidiaries by individual
plaintiffs alleging fraud, unfair or deceptive acts, breach of contract,
misrepresentation and related claims in the sale of life insurance policies.
In October 1997, plaintiffs voluntarily dismissed the Louisiana suit and
refiled the action in Federal District Court in Worcester, Massachusetts. The
Company and the plaintiffs have entered into a settlement agreement. The
Court granted preliminary approval of the settlement on December 4, 1998, and
has scheduled the hearing to consider final approval for March 1999. Although
the Company believes it has meritorious defenses to plaintiffs' claims, it
concluded that this settlement was best for the Company. Accordingly, AFC
recognized a $31.0 million pre-tax expense during the third quarter of 1998
related to this litigation, of which $21.0 million was apportioned to AFLIAC.
Although the Company believes it has established an appropriate reserve, this
reserve may be revised based on changes in the Company's estimate of the
ultimate cost of the settlement.

F-20
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Allmerica Financial Life Insurance and Annuity
Company and Policyowners of Separate Account VA-P -- Pioneer Vision of
Allmerica Financial Life Insurance and Annuity Company

In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of each of the Sub-Accounts
(International Growth, Capital Growth, Real Estate Growth, Equity-Income,
Balanced, America Income, Money Market, Swiss Franc Bond, Growth Shares, and
Growth and Income) constituting the Separate Account VA-P -- Pioneer Vision
of Allmerica Financial Life Insurance and Annuity Company at December
31,1997, the results of each of their operations and the changes in each of
their net assets for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Allmerica Financial Life Insurance and Annuity Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
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, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of investments at December 31, 1997 by
correspondence with the Fund, provide a reasonable basis for the opinion
expressed above.

/s/ PRICE WATERHOUSE LLP

PRICE WATERHOUSE LLP
Boston, Massachusetts

March 25, 1998

<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL CAPITAL REAL ESTATE
GROWTH GROWTH GROWTH EQUITY-INCOME BALANCED
------------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS (NOTES 3 AND 7):
Investments in shares of Pioneer Variable Contracts
Trust................................................ $48,733,527 $100,015,791 $36,654,932 $123,038,690 $43,281,685
Receivable from Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............................ 6,067 13,562 -- -- --
------------- ------------ ----------- ------------- -----------
Total assets......................................... 48,739,594 100,029,353 36,654,932 123,038,690 43,281,685

LIABILITIES:
Payable to Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............................ -- -- 3,008 10,789 --
------------- ------------ ----------- ------------- -----------
Net assets........................................... $48,739,594 $100,029,353 $36,651,924 $123,027,901 $43,281,685
------------- ------------ ----------- ------------- -----------
------------- ------------ ----------- ------------- -----------

Net asset distribution by category:
Qualified variable annuity policies.................. $12,064,006 $ 27,919,286 $11,112,637 $ 32,707,416 $12,060,729
Non-qualified variable annuity policies.............. 36,675,588 72,110,067 25,539,287 90,320,485 31,220,956
------------- ------------ ----------- ------------- -----------
$48,739,594 $100,029,353 $36,651,924 $123,027,901 $43,281,685
------------- ------------ ----------- ------------- -----------
------------- ------------ ----------- ------------- -----------

Qualified units outstanding, December 31, 1997......... 9,963,320 17,284,016 6,008,721 17,666,468 7,955,185
Net asset value per qualified unit, December 31,
1997................................................. $ 1.210842 $ 1.615324 $ 1.849418 $ 1.851384 $ 1.516084
Non-qualified units outstanding, December 31, 1997..... 30,289,326 44,641,240 13,809,365 48,785,387 20,593,157
Net asset value per non-qualified unit, December 31,
1997................................................. $ 1.210842 $ 1.615324 $ 1.849418 $ 1.851384 $ 1.516084

<CAPTION>
AMERICA MONEY SWISS FRANC GROWTH GROWTH
INCOME MARKET BOND SHARES AND INCOME
----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS (NOTES 3 AND 7):
Investments in shares of Pioneer Variable Contracts
Trust................................................ $14,181,165 $13,520,726 $21,713,070 $4,544,533 $4,390,517
Receivable from Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............................ 280 2 7 -- --
----------- ----------- ----------- ---------- -----------
Total assets......................................... 14,181,445 13,520,728 21,713,077 4,544,533 4,390,517
LIABILITIES:
Payable to Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............................ -- -- -- -- --
----------- ----------- ----------- ---------- -----------
Net assets........................................... $14,181,445 $13,520,728 $21,713,077 $4,544,533 $4,390,517
----------- ----------- ----------- ---------- -----------
----------- ----------- ----------- ---------- -----------
Net asset distribution by category:
Qualified variable annuity policies.................. $ 2,785,498 $ 1,963,057 $10,186,590 $1,503,776 $1,026,813
Non-qualified variable annuity policies.............. 11,395,947 11,557,671 11,526,487 3,040,757 3,363,704
----------- ----------- ----------- ---------- -----------
$14,181,445 $13,520,728 $21,713,077 $4,544,533 $4,390,517
----------- ----------- ----------- ---------- -----------
----------- ----------- ----------- ---------- -----------
Qualified units outstanding, December 31, 1997......... 2,500,146 1,790,171 12,602,892 1,473,861 975,578
Net asset value per qualified unit, December 31,
1997................................................. $ 1.114134 $ 1.096575 $ 0.808274 $ 1.020297 $ 1.052518
Non-qualified units outstanding, December 31, 1997..... 10,228,525 10,539,791 14,260,620 2,980,267 3,195,863
Net asset value per non-qualified unit, December 31,
1997................................................. $ 1.114134 $ 1.096575 $ 0.808274 $ 1.020297 $ 1.052518
</TABLE>

The accompanying notes are an integral part of these financial statements.

SA-1
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL REAL ESTATE
GROWTH CAPITAL GROWTH GROWTH EQUITY-INCOME BALANCED
------------ -------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 90,381 $ -- $ 899,720 $ 1,956,565 $ 757,171
------------ -------------- ------------ ------------- ------------
EXPENSES (NOTE 4):
Mortality and expense risk fees................. 488,086 925,315 292,763 1,013,070 351,807
Administrative expense fees..................... 60,326 114,365 36,184 125,211 43,482
------------ -------------- ------------ ------------- ------------
Total expenses................................ 548,412 1,039,680 328,947 1,138,281 395,289
------------ -------------- ------------ ------------- ------------
Net investment income (loss).................... (458,031) (1,039,680) 570,773 818,284 361,882
------------ -------------- ------------ ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain distributions from portfolio
sponsor....................................... 473,914 549,333 41,137 59,861 258,539
Net realized gain (loss) from sales of
investments................................... 123,161 674,650 252,219 1,346,024 175,512
------------ -------------- ------------ ------------- ------------
Net realized gain (loss)...................... 597,075 1,223,983 293,356 1,405,885 434,051
Net unrealized gain (loss)...................... (833,701) 13,286,504 3,758,359 20,957,678 2,741,339
------------ -------------- ------------ ------------- ------------
Net realized and unrealized gain (loss)....... (236,626) 14,510,487 4,051,715 22,363,563 3,175,390
------------ -------------- ------------ ------------- ------------
Net increase (decrease) in net assets from
operations.................................. $ (694,657) $ 13,470,807 $4,622,488 $23,181,847 $3,537,272
------------ -------------- ------------ ------------- ------------
------------ -------------- ------------ ------------- ------------

<CAPTION>
AMERICA MONEY SWISS FRANC GROWTH GROWTH
INCOME MARKET BOND SHARES* AND INCOME*
------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 481,164 $ 555,165 $ -- $ -- $ 2,775
------------ ------------ ------------ ------------- -------------
EXPENSES (NOTE 4):
Mortality and expense risk fees................. 108,597 150,787 214,128 3,766 3,365
Administrative expense fees..................... 13,422 18,637 26,466 465 416
------------ ------------ ------------ ------------- -------------
Total expenses................................ 122,019 169,424 240,594 4,231 3,781
------------ ------------ ------------ ------------- -------------
Net investment income (loss).................... 359,145 385,741 (240,594) (4,231) (1,006)
------------ ------------ ------------ ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain distributions from portfolio
sponsor....................................... -- -- -- -- --
Net realized gain (loss) from sales of
investments................................... (16,827) -- (167,069) 1,156 (2)
------------ ------------ ------------ ------------- -------------
Net realized gain (loss)...................... (16,827) -- (167,069) 1,156 (2)
Net unrealized gain (loss)...................... 299,832 -- (803,923) 19,377 67,826
------------ ------------ ------------ ------------- -------------
Net realized and unrealized gain (loss)....... 283,005 -- (970,992) 20,533 67,824
------------ ------------ ------------ ------------- -------------
Net increase (decrease) in net assets from
operations.................................. $ 642,150 $ 385,741 $(1,211,586) $ 16,302 $ 66,818
------------ ------------ ------------ ------------- -------------
------------ ------------ ------------ ------------- -------------

</TABLE>

* For the period 10/31/97 (date of initial investment) to 12/31/97

The accompanying notes are an integral part of these financial statements.

SA-2
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL REAL ESTATE
GROWTH CAPITAL GROWTH GROWTH EQUITY-INCOME BALANCED
------------ -------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 90,381 $ -- $ 899,720 $ 1,956,565 $ 757,171
------------ -------------- ------------ ------------- ------------
EXPENSES (NOTE 4):
Mortality and expense risk fees................. 488,086 925,315 292,763 1,013,070 351,807
Administrative expense fees..................... 60,326 114,365 36,184 125,211 43,482
------------ -------------- ------------ ------------- ------------
Total expenses................................ 548,412 1,039,680 328,947 1,138,281 395,289
------------ -------------- ------------ ------------- ------------
Net investment income (loss).................... (458,031) (1,039,680) 570,773 818,284 361,882
------------ -------------- ------------ ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain distributions from portfolio
sponsor....................................... 473,914 549,333 41,137 59,861 258,539
Net realized gain (loss) from sales of
investments................................... 123,161 674,650 252,219 1,346,024 175,512
------------ -------------- ------------ ------------- ------------
Net realized gain (loss)...................... 597,075 1,223,983 293,356 1,405,885 434,051
Net unrealized gain (loss)...................... (833,701) 13,286,504 3,758,359 20,957,678 2,741,339
------------ -------------- ------------ ------------- ------------
Net realized and unrealized gain (loss)....... (236,626) 14,510,487 4,051,715 22,363,563 3,175,390
------------ -------------- ------------ ------------- ------------
Net increase (decrease) in net assets from
operations.................................. $ (694,657) $ 13,470,807 $4,622,488 $23,181,847 $3,537,272
------------ -------------- ------------ ------------- ------------
------------ -------------- ------------ ------------- ------------

</TABLE>

* For the period 10/31/97 (date of initial investment) to 12/31/97

The accompanying notes are an integral part of these financial statements.

SA-2
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH CAPITAL GROWTH REAL ESTATE GROWTH
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------ ------------------------- ------------------------
1997 1996 1997 1996 1997 1996
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............. $ (458,031) $ (146,170) $ (1,039,680) $ (144,561) $ 570,773 $ 93,007
Net realized gain (loss)................. 597,075 11,904 1,223,983 628,933 293,356 88,724
Net unrealized gain (loss)............... (833,701) 913,644 13,286,504 1,850,086 3,758,359 1,395,785
----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from operations........................ (694,657) 779,378 13,470,807 2,334,458 4,622,488 1,577,516
----------- ----------- ------------ ----------- ----------- -----------

FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments.................... 22,741,571 14,985,371 34,562,466 23,951,458 16,808,158 5,171,249
Withdrawals.............................. (1,864,858) (531,373) (3,065,144) (1,094,307) (998,730) (178,259)
Annuity benefits......................... (815,896) (35,524) (1,497,249) (404,622) (279,646) (21,214)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor).............................. 4,961,076 6,523,125 8,291,056 14,237,620 5,569,102 3,985,797
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. -- -- -- -- -- --
----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from capital transactions.............. 25,021,893 20,941,599 38,291,129 36,690,149 21,098,884 8,957,573
----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net assets.... 24,327,236 21,720,977 51,761,936 39,024,607 25,721,372 10,535,089

NET ASSETS:
Beginning of period........................ 24,412,358 2,691,381 48,267,417 9,242,810 10,930,552 395,463
----------- ----------- ------------ ----------- ----------- -----------
End of period.............................. $48,739,594 $24,412,358 $100,029,353 $48,267,417 $36,651,924 $10,930,552
----------- ----------- ------------ ----------- ----------- -----------
----------- ----------- ------------ ----------- ----------- -----------

<CAPTION>
EQUITY-INCOME BALANCED
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------- ------------------------
1997 1996 1997 1996
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............. $ 818,284 $ 233,135 $ 361,882 $ 114,720
Net realized gain (loss)................. 1,405,885 106,639 434,051 114,381
Net unrealized gain (loss)............... 20,957,678 3,553,882 2,741,339 930,084
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from operations........................ 23,181,847 3,893,656 3,537,272 1,159,185
------------ ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments.................... 46,057,375 24,174,481 20,877,883 8,374,265
Withdrawals.............................. (3,392,147) (1,355,793) (1,589,954) (533,231)
Annuity benefits......................... (1,782,924) (225,541) (891,283) (2,577)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor).............................. 12,733,934 12,956,495 4,841,886 4,979,408
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. -- -- -- --
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from capital transactions.............. 53,616,238 35,549,642 23,238,532 12,817,865
------------ ----------- ----------- -----------
Net increase (decrease) in net assets.... 76,798,085 39,443,298 26,775,804 13,977,050
NET ASSETS:
Beginning of period........................ 46,229,816 6,786,518 16,505,881 2,528,831
------------ ----------- ----------- -----------
End of period.............................. $123,027,901 $46,229,816 $43,281,685 $16,505,881
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

SA-3
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
AMERICA INCOME MONEY MARKET SWISS FRANC BOND
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------- -------------------------- ------------------------
1997 1996 1997 1996 1997 1996
----------- ---------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............. $ 359,145 $ 160,053 $ 385,741 $ 247,249 $ (240,594) $ (71,334)
Net realized gain (loss)................. (16,827) (89,497) -- -- (167,069) (12,348)
Net unrealized gain (loss)............... 299,832 (85,087) -- -- (803,923) (567,385)
----------- ---------- ------------ ------------ ----------- -----------
Net increase (decrease) in net assets
from
operations............................. 642,150 (14,531) 385,741 247,249 (1,211,586) (651,067)
----------- ---------- ------------ ------------ ----------- -----------

FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments.................... 6,844,021 4,028,488 43,113,597 57,939,153 8,144,276 5,962,270
Withdrawals.............................. (474,352) (208,917) (1,366,472) (1,310,771) (604,411) (86,141)
Annuity benefits......................... (121,607) (66,963) (88,688) (70,325) (77,999) --
Other transfers from (to) the General
Account of
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. 711,089 (566,632) (39,844,835) (48,794,697) 2,538,464 7,610,472
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. -- -- -- -- -- (177)
----------- ---------- ------------ ------------ ----------- -----------
Net increase (decrease) in net assets
from capital
transactions........................... 6,959,151 3,185,976 1,813,602 7,763,360 10,000,330 13,486,424
----------- ---------- ------------ ------------ ----------- -----------
Net increase (decrease) in net assets.... 7,601,301 3,171,445 2,199,343 8,010,609 8,788,744 12,835,357

NET ASSETS:
Beginning of period........................ 6,580,144 3,408,699 11,321,385 3,310,776 12,924,333 88,976
----------- ---------- ------------ ------------ ----------- -----------
End of period.............................. $14,181,445 $6,580,144 $ 13,520,728 $ 11,321,385 $21,713,077 $12,924,333
----------- ---------- ------------ ------------ ----------- -----------
----------- ---------- ------------ ------------ ----------- -----------

GROWTH SHARES GROWTH AND INCOME
PERIOD FROM PERIOD FROM
10/31/97* TO 12/31/97 10/31/97* TO 12/31/97
--------------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............. $ (4,231) $ (1,006)
Net realized gain (loss)................. 1,156 (2)
Net unrealized gain (loss)............... 19,377 67,826
----------- -----------
Net increase (decrease) in net assets
from
operations............................. 16,302 66,818
----------- -----------
FROM CAPITAL TRANSACTIONS (NOTE 5):
Net purchase payments.................... 1,737,338 2,355,264
Withdrawals.............................. (8,166) (9,391)
Annuity benefits......................... -- --
Other transfers from (to) the General
Account of
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. 2,799,059 1,977,826
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor).............. -- --
----------- -----------
Net increase (decrease) in net assets
from capital
transactions........................... 4,528,231 4,323,699
----------- -----------
Net increase (decrease) in net assets.... 4,544,533 4,390,517
NET ASSETS:
Beginning of period........................ -- --
----------- -----------
End of period.............................. $4,544,533 $4,390,517
----------- -----------
----------- -----------
</TABLE>

* Date of initial investment

The accompanying notes are an integral part of these financial statements.

SA-4
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION

Separate Account VA-P -- Pioneer Vision (Separate Account VA-P) is a
separate investment account of Allmerica Financial Life Insurance and Annuity
Company (the Company), established on October 27, 1994 for the purpose of
separating from the general assets of the Company those assets used to fund
certain variable annuity contracts issued by the Company. The Company is a
wholly-owned subsidiary of First Allmerica Financial Life Insurance Company
(First Allmerica). First Allmerica is a wholly-owned subsidiary of Allmerica
Financial Corporation (AFC). Under applicable insurance law, the assets and
liabilities of Separate Account VA-P are clearly identified and distinguished
from the other assets and liabilities of the Company. Separate Account VA-P
cannot be charged with liabilities arising out of any other business of the
Company.

Separate Account VA-P is registered as a unit investment trust under the
Investment Company Act of 1940, as amended (the 1940 Act). Separate Account VA-P
currently offers ten Sub-Accounts under the contracts. Each Sub-Account invests
exclusively in a corresponding investment portfolio of the Pioneer Variable
Contracts Trust (the Fund). Each portfolio is managed by Pioneering Management
Corporation (Pioneer). The Fund is an open-end management investment company
registered under the 1940 Act.

Separate Account VA-P funds two types of variable annuity contracts, "qualified"
contracts and "non-qualified" contracts. A qualified contract is one that is
purchased in connection with a retirement plan which meets the requirements of
Section 401, 403, or 408 of the Internal Revenue Code, while a non-qualified
contract is one that is not purchased in connection with one of the indicated
retirement plans. The tax treatment for certain withdrawals or surrenders will
vary according to whether they are made from a qualified contract or a
non-qualified contract.

Certain prior year balances have been reclassified to conform with current year
presentation.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

INVESTMENTS -- Security transactions are recorded on the trade date. Investments
in shares of the Fund are stated at the net asset value per share of the
respective investment portfolio of the Fund. Net realized gains and losses on
securities sold are determined using the average cost method. Dividends and
capital gain distributions are recorded on the ex-dividend date and are
reinvested in additional shares of the respective investment portfolio of the
Fund at net asset value.

FEDERAL INCOME TAXES -- The Company is taxed as a "life insurance company" under
Subchapter L of the Internal Revenue Code and files a consolidated federal
income tax return with First Allmerica. The Company anticipates no tax liability
resulting from the operations of Separate Account VA-P. Therefore, no provision
for income taxes has been charged against Separate Account VA-P.

SA-5
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 3 -- INVESTMENTS

The number of shares owned, aggregate cost, and net asset value per share of
each Sub-Account's investment in the Fund at December 31, 1997 were as follows:

<TABLE>
<CAPTION>
PORTFOLIO INFORMATION
-------------------------------------
NET ASSET
NUMBER OF AGGREGATE VALUE
INVESTMENT PORTFOLIO SHARES COST PER SHARE
- ---------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
International Growth.................... 3,984,753 $48,612,006 $ 12.230
Capital Growth.......................... 6,192,928 84,785,584 16.150
Real Estate Growth...................... 2,168,931 31,486,001 16.900
Equity-Income........................... 6,782,728 98,198,953 18.140
Balanced................................ 2,898,974 39,520,884 14.930
America Income.......................... 1,412,467 13,919,047 10.040
Money Market............................ 13,520,726 13,520,726 1.000
Swiss Franc Bond........................ 1,737,046 23,084,396 12.500
Growth Shares........................... 296,254 4,525,156 15.340
Growth and Income....................... 277,705 4,322,691 15.810
</TABLE>

NOTE 4 -- RELATED PARTY TRANSACTIONS

The Company makes a charge of 1.25% per annum based on the average daily net
assets of each Sub-Account at each valuation date for mortality and expense
risks. The Company also charges each Sub-Account .15% per annum based on the
average daily net assets of each Sub-Account for administrative expenses. These
charges are deducted from the daily value of each Sub-Account and are paid to
the Company on a daily basis.

A $30 contract fee is currently deducted on the contract anniversary date and
upon full surrender when the accumulated value is less than $50,000 on contracts
issued on Form A3025-96 (Pioneer Vision II) and $50,000 or less on contracts
issued on Form A3023-95 (Pioneer Vision I). The fee is currently waived for all
contracts issued to the trustee of a 401(k) plan. For the year ended December
31, 1997, contract fees deducted from accumulated value in Separate Account VA-P
amounted to $71,966. These amounts are included on the statements of changes in
net assets with Other transfers to the General Account.

Allmerica Investments, Inc. (Allmerica Investments), a wholly-owned subsidiary
of First Allmerica, is principal underwriter and general distributor of Separate
Account VA-P, and does not receive any compensation for sales of the contracts.
Commissions are paid by the Company to registered representatives of broker-
dealers who are registered under the Securities Exchange Act of 1934 and are
members of the National Association of Securities Dealers. As the current series
of contracts have a contingent deferred sales charge, no deduction is made for
sales charges at the time of the sale. For the year ended December 31, 1997, the
Company received $182,152 for contingent deferred sales charges applicable to
Separate Account VA-P.

SA-6
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 -- CONTRACTOWNERS AND SPONSOR TRANSACTIONS

Transactions from contractowners and sponsor were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996
----------------------------- -----------------------------
UNITS AMOUNT UNITS AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
International Growth
Issuance of Units........... 27,421,873 $ 35,312,945 20,211,464 $ 23,383,021
Redemption of Units......... (8,021,017) (10,291,052) (1,819,897) (2,441,422)
------------- -------------- ------------- --------------
Net increase.............. 19,400,856 $ 25,021,893 18,391,567 $ 20,941,599
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Capital Growth
Issuance of Units........... 34,980,357 $ 52,814,487 36,627,516 $ 47,339,569
Redemption of Units......... (9,801,579) (14,523,358) (7,862,188) (10,649,420)
------------- -------------- ------------- --------------
Net increase.............. 25,178,778 $ 38,291,129 28,765,328 $ 36,690,149
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Real Estate Growth
Issuance of Units........... 17,299,530 $ 28,116,775 7,087,383 $ 9,543,697
Redemption of Units......... (4,544,021) (7,017,891) (366,808) (586,124)
------------- -------------- ------------- --------------
Net increase.............. 12,755,509 $ 21,098,884 6,720,575 $ 8,957,573
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Equity-Income
Issuance of Units........... 48,076,797 $ 78,041,834 31,805,402 $ 41,659,999
Redemption of Units......... (14,928,631) (24,425,596) (4,054,352) (6,110,357)
------------- -------------- ------------- --------------
Net increase.............. 33,148,166 $ 53,616,238 27,751,050 $ 35,549,642
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Balanced
Issuance of Units........... 20,321,783 $ 28,876,353 11,488,390 $ 14,519,443
Redemption of Units......... (4,352,053) (5,637,821) (1,080,821) (1,701,578)
------------- -------------- ------------- --------------
Net increase.............. 15,969,730 $ 23,238,532 10,407,569 $ 12,817,865
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

America Income
Issuance of Units........... 10,705,484 $ 11,334,874 7,667,493 $ 8,085,046
Redemption of Units......... (4,293,398) (4,375,723) (4,618,822) (4,899,070)
------------- -------------- ------------- --------------
Net increase.............. 6,412,086 $ 6,959,151 3,048,671 $ 3,185,976
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Money Market
Issuance of Units........... 67,768,795 $ 70,815,473 67,955,469 $ 72,128,999
Redemption of Units......... (66,093,041) (69,001,871) (60,511,733) (64,365,639)
------------- -------------- ------------- --------------
Net increase.............. 1,675,754 $ 1,813,602 7,443,736 $ 7,763,360
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
</TABLE>

SA-7
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 -- CONTRACTOWNERS AND SPONSOR TRANSACTIONS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996
----------------------------- -----------------------------
UNITS AMOUNT UNITS AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Swiss Franc Bond
Issuance of Units........... 17,505,832 $ 14,050,313 15,076,598 $ 13,957,588
Redemption of Units......... (5,319,088) (4,049,983) (488,674) (471,164)
------------- -------------- ------------- --------------
Net increase.............. 12,186,744 $ 10,000,330 14,587,924 $ 13,486,424
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Growth Shares
Issuance of Units........... 4,755,609 $ 4,827,869 -- $ --
Redemption of Units......... (301,481) (299,638) -- --
------------- -------------- ------------- --------------
Net increase.............. 4,454,128 $ 4,528,231 -- $ --
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------

Growth and Income
Issuance of Units........... 4,214,742 $ 4,366,278 -- $ --
Redemption of Units......... (43,301) (42,579) -- --
------------- -------------- ------------- --------------
Net increase.............. 4,171,441 $ 4,323,699 -- $ --
------------- -------------- ------------- --------------
------------- -------------- ------------- --------------
</TABLE>

NOTE 6 -- DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Internal Revenue Code, a
variable annuity contract, other than a contract issued in connection with
certain types of employee benefit plans, will not be treated as an annuity
contract for federal income tax purposes for any period for which the
investments of the segregated asset account on which the contract is based are
not adequately diversified. The Code provides that the "adequately diversified"
requirement may be met if the underlying investments satisfy either a statutory
safe harbor test or diversification requirements set forth in regulations issued
by the Secretary of The Treasury.

The Internal Revenue Service has issued regulations under Section 817(h) of the
Code. The Company believes that Separate Account VA-P satisfies the current
requirements of the regulations, and it intends that Separate Account VA-P will
continue to meet such requirements.

SA-8
<PAGE>
SEPARATE ACCOUNT VA-P -- PIONEER VISION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 7 -- PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of the Fund shares by Separate
Account VA-P during the year ended December 31, 1997 were as follows:

<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO PURCHASES SALES
- -------------------------------------------------- ------------ -----------
<S> <C> <C>
International Growth.............................. $ 28,153,120 $ 3,121,412
Capital Growth.................................... 42,007,835 4,220,564
Real Estate Growth................................ 23,891,493 2,177,691
Equity-Income..................................... 63,169,779 8,890,305
Balanced.......................................... 25,590,095 1,731,142
America Income.................................... 9,756,316 2,438,252
Money Market...................................... 38,983,077 36,783,735
Swiss Franc Bond.................................. 12,047,912 2,288,183
Growth Shares..................................... 4,620,514 96,514
Growth and Income................................. 4,323,145 452
------------ -----------
Totals............................................ $252,543,286 $61,748,250
------------ -----------
------------ -----------
</TABLE>

SA-9
<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS

Financial Statements Included in Part A
None

Financial Statements Included in Part B
Financial Statements for Allmerica Financial Life Insurance and
Annuity Company and
Financial Statements for Separate Account VA-P of Allmerica Financial
Life Insurance and Annuity Company

Financial Statements Included in Part C
None

(B) EXHIBITS

EXHIBIT 1 Vote of Board of Directors Authorizing Establishment of
Registrant dated October 27, 1994 was previously filed on
April 24, 1998 in Post-Effective Amendment No. 9 and is
incorporated by reference herein.

EXHIBIT 2 Not Applicable. Pursuant to Rule 26a-2, the Insurance Company
may hold the assets of the Registrant NOT pursuant to a trust
indenture or other such instrument.

EXHIBIT 3 (a) Underwriting and Administrative Services Agreement was
previously filed on April 24, 1998 in Post-Effective
Amendment No. 9 and is incorporated by reference
herein.

(b) Wholesaling Agreement and Amendment were previously
filed on April 24, 1998 in Post-Effective Amendment No.
9 and are incorporated by reference herein.

(c) Sales Agreements with Commission Schedule were
previously filed on April 24, 1998 in Post-Effective
Amendment No. 9 and are incorporated by reference
herein.

(d) General Agent's Agreement was previously filed on April
24, 1998 in Post-Effective Amendment No. 9 and is
incorporated by reference herein.

(e) Career Agent Agreement was previously filed on April
24, 1998 in Post-Effective Amendment No. 9 and is
incorporated by reference herein.

(f) Registered Representative's Agreement was previously
filed on April 24, 1998 in Post-Effective Amendment No.
9 and is incorporated by reference herein.

EXHIBIT 4 Minimum Guaranteed Annuity Payout Rider is filed herewith.
Contract Form A was previously filed on April 24, 1998 in
Post-Effective Amendment No. 9 and is incorporated by
reference herein. Contract Form B was previously filed in
Post-Effective Amendment No. 4 on May 1, 1996 and is
incorporated by reference herein.

<PAGE>

EXHIBIT 5 Application Form A was previously filed on April 24, 1998 in
Post-Effective Amendment No. 9 and is incorporated by
reference herein. Application Form B was previously filed in
Post-Effective Amendment No. 4 on May 1, 1996 and is
incorporated by reference herein.

EXHIBIT 6 The Depositor's Articles of Incorporation and Bylaws were
previously filed in Registrant's initial Registration
Statement on November 3, 1994 and are incorporated by
reference herein. An Amendment to the Articles of
Incorporation and Bylaws were previously filed on October 1,
1996, and are incorporated by reference herein.

EXHIBIT 7 Not Applicable.

EXHIBIT 8 BFDS Agreements were previously filed on April 24, 1998 in
Post-Effective Amendment No. 9 and are incorporated by
reference herein.

EXHIBIT 9 Opinion of Counsel is filed herewith.

EXHIBIT 10 Consent of Independent Accountants is filed herewith.

EXHIBIT 11 None.

EXHIBIT 12 None.

EXHIBIT 13 Not Applicable.

EXHIBIT 14 Not Applicable.

EXHIBIT 15 Participation Agreement with Pioneer was previously filed on
April 24, 1998 in Post-Effective Amendment No. 9 and is
incorporated by reference herein.

ITEM 25. DIRECTORS AND EXECUTIVE OFFICERS OF THE DEPOSITOR

The principal business address of all the following Directors and
Officers is:
440 Lincoln Street
Worcester, Massachusetts 01653

DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY

NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING
WITH COMPANY PAST FIVE YEARS
------------ ---------------
Bruce C. Anderson Director of First Allmerica since
Director 1996; Vice President, First Allmerica
since 1984

Abigail M. Armstrong Secretary of First Allmerica since
Secretary and Counsel 1996; Counsel, First Allmerica
since 1991

Warren E. Barnes Vice President and Corporate
Vice President and Corporate Controller of First Allmerica since
Controller 1998; Vice President and Co-
Controller, First Allmerica 1997; Vice
President and Assistant Controller,
First Allmerica 1996 to 1997;
Assistant Vice President and Assistant
Controller, First Allmerica 1995 to
1996; Assistant Vice

<PAGE>

President Corporate Accounting and
Reporting, First Allmerica 1993 to 1995

Robert E. Bruce Director and Chief Information Officer
Director and Chief Information of First Allmerica since 1997; Vice
Officer President of First Allmerica since
1995; Corporate Manager, Digital
Equipment Corporation 1979 to 1995

John P. Kavanaugh Director and Chief Investment Officer
Director, Vice President and of First Allmerica since 1996; Vice
Chief Investment Officer President, First Allmerica since 1991

John F. Kelly Director of First Allmerica since
Director, Vice President and 1996; Senior Vice President, First
General Counsel Allmerica since 1986; General Counsel,
First Allmerica since 1981; Assistant
Secretary, First Allmerica since 1991

J. Barry May Director of First Allmerica since
Director 1996; Director and President, The
Hanover Insurance Company since
1996; Vice President, The Hanover
Insurance Company, 1993 to 1996;
General Manager, The Hanover
Insurance Company 1989 to 1993

James R. McAuliffe Director of First Allmerica since
Director 1996; Director of Citizens Insurance
Company of America since 1992,
President since 1994, and CEO since
1996; Vice President, First Allmerica
1982 to 1994; Chief Investment
Officer, First Allmerica 1986 to 1994

John F. O'Brien Director, Chairman of the Board,
Director, Chairman of the Board, President and Chief Executive
President and Chief Executive Officer, First Allmerica since 1989
Officer

Edward J. Parry, III Director and Chief Financial Officer
Director, Vice President, of First Allmerica since 1996; Vice
Chief Financial Officer and President and Treasurer, First
Treasurer Allmerica since 1993; Assistant
Vice President 1992 to 1993

Richard M. Reilly Director of First Allmerica since
Director and Vice President 1996; Vice President, First Allmerica
since 1990; Director, Allmerica
Investments, Inc. since 1990; Director
and President, Allmerica Financial
Investment Management Services, Inc.
since 1990

Robert P. Restrepo, Jr. Chief Executive Officer of Travelers
Director Property & Casualty Company 1996-1998;
Senior Vice President of Aetna Life &
Casualty Company 1993-1996

Eric A. Simonsen Director of First Allmerica since
Director and Vice President 1996; Vice President, First
Allmerica since 1990; Chief
Financial Officer, First Allmerica
1990 to 1996

Phillip E. Soule Director of First Allmerica since
Director and Vice President 1996; Vice President, First
Allmerica since 1987

<PAGE>

ITEM 26. PERSONS UNDER COMMON CONTROL WITH REGISTRANT

See attached organization chart.

<TABLE>
<CAPTION>
<S><C>
Allmerica Financial Corporation

Delaware
| | | | | | |
______________________________________________________________________________________________________________
Financial 100% 100% 100% 100% 100% 100%
Profiles, Inc. Allmerica, Inc. Allmerica First Allmerica AFC Capital Allmerica First Sterling
Funding Corp. Financial Life Trust I Services Limited
Insurance Corporation
Company

California Massachusetts Massachusetts Massachusetts Delaware Massachusetts Bermuda
| |
30% _________________ _____________
| |
100% 100%
SMA First Sterling
Financial Corp. Reinsurance
Company
Limited

Massachusetts Bermuda
|
______________________________________________________________________________________________________________________
| | | | | |
70% 100% 99.2% 100% 100% 100%
Allmerica Sterling Risk Allmerica Allmerica Allmerica Allmerica
Property Management Trust Investments, Financial Financial Life
& Casualty Services, Inc. Company, N.A. Inc. Investment Insurance and
Companies, Inc. Management Annuity Company
Services, Inc.

Federally
Delaware Delaware Chartered Massachusetts Massachusetts Delaware
|
___________________________________________________________________________ ______|_______
| | | | |
100% 100% 100% 100% 100%
APC The Hanover Allmerica Citizens Somerset
Funding Corp. Insurance Financial Insurance Square, Inc.
Company Insurance Company of
Brokers, Inc. Illinois

Massachusetts New Hampshire Massachusetts Illinois Massachusetts
|
______________________________________________________________________________________________________________________
| | | | |
100% 100% 100% 100% 82.5% 100%
Allmerica Allmerica The Hanover Hanover Texas Citizens Massachusetts
Financial Plus American Insurance Corporation Bay Insurance
Benefit Insurance Insurance Management Company
Insurance Agency, Inc. Company Company, Inc.
Company

Pennsylvania Massachusetts New Hampshire Texas Delaware New Hampshire
|
________________________________________________________
| | |
100% 100% 100%
Citizens Citizens Insurance Citizens
Insurance Company of Insurance
Company of Ohio America Company of the
Midwest

Ohio Michigan Indiana
|
_______________
100%
Citizens
Management Inc.

Michigan
</TABLE>

<TABLE>
<CAPTION>
<S><C>
Allmerica Financial Corporation

Delaware
| | | | | | |
_______________________________________________________________________________________________________________________
Financial 100% 100% 100% 100% 100% 100%
Profiles, Inc. Allmerica, Inc. Allmerica First Allmerica AFC Capital Allmerica First Sterling
Funding Corp. Financial Life Trust I Services Limited
Insurance Corporation
Company

California Massachusetts Massachusetts Massachusetts Delaware Massachusetts Bermuda
| |

_____________________________________________________________________________________________________________________
| | | | |
100% 100% 100% 100% 100%
Allmerica Allmerica Allmerica Allmerica Allmerica
Investment Asset Financial Services Asset Benefits
Management Management, Insurance Management, Inc.
Company, Inc. Inc. Agency, Inc. Limited

Massachusetts Massachusetts Massachusetts Bermuda Florida

________________ _________________________________
Allmerica Equity Greendale AAM
Index Pool Special Equity Fund
Placements
Fund

Massachusetts Massachusetts Massachusetts
_____________________________________
| | -------------- Grantor Trusts established for the benefit of First
100% 100% Allmerica, Allmerica Financial Life, Hanover and
Allmerica AMGRO, Inc. Citizens
Financial Allmerica Allmerica
Alliance Investment Trust Securities
Insurance Trust
Company
Massachusetts Massachusetts
New Hampshire Massachusetts
|
_______________
|
100% -------------- Affiliated Management Investment Companies
Lloyds
Credit Hanover Lloyd's
Corporation Insurance
Company

Massachusetts Texas

-------------- Affiliated Lloyd's plan company, controlled by
Underwriters for the benefit of The Hanover
Insurance Company

AAM AAM
Growth & High
Income Fund Yield Fund,
L.P. L.L.C.

Delaware Massachusetts

-------------- L.P. or L.L.C. established for the benefit of
First Allmerica, Allmerica
Financial Life, Hanover and
Citizens

</TABLE>

<PAGE>

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

NAME ADDRESS TYPE OF BUSINESS
---- ------- ----------------
AAM Equity Fund 440 Lincoln Street Massachusetts Grantor
Worcester MA 01653 Trust

AAM Growth & Income Fund, 440 Lincoln Street Limited Partnership
L.P. Worcester MA 01653

AFC Capital Trust I 440 Lincoln Street Statutory Business Trust
Worcester MA 01653

Allmerica Asset Management 440 Lincoln Street Investment advisory
Limited Worcester MA 01653 services

Allmerica Asset Management, 440 Lincoln Street Investment advisory
Inc. Worcester MA 01653 services

Allmerica Benefits, Inc. 440 Lincoln Street Non-insurance medical
Worcester MA 01653 services

Allmerica Equity Index Pool 440 Lincoln Street Massachusetts Grantor
Worcester MA 01653 Trust

Allmerica Financial Alliance 100 North Parkway Multi-line property and
Insurance Company Worcester MA 01605 casualty insurance

Allmerica Financial Benefit 100 North Parkway Multi-line property and
Insurance Company Worcester MA 01605 casualty insurance

Allmerica Financial 440 Lincoln Street Holding Company
Corporation Worcester MA 01653

Allmerica Financial Insurance 440 Lincoln Street Insurance Broker
Brokers, Inc. Worcester MA 01653

Allmerica Financial Life 440 Lincoln Street Life insurance, accident
Insurance and Annuity Company Worcester MA 01653 and health insurance,
(formerly known as SMA Life annuities, variable
Assurance Company) annuities and variable
life insurance

Allmerica Financial Services 440 Lincoln Street Insurance Agency
Insurance Agency, Inc. Worcester MA 01653

Allmerica Funding Corp. 440 Lincoln Street Special purpose funding
Worcester MA 01653 vehicle for commercial
paper

Allmerica, Inc. 440 Lincoln Street Common employer for
Worcester MA 01653 Allmerica Financial
Corporation entities

Allmerica Financial 440 Lincoln Street Investment advisory
Investment Management Worcester MA 01653 services
Services, Inc.
(formerly known as Allmerica
Institutional Services, Inc.
and 440 Financial Group of
Worcester, Inc.)

<PAGE>

Allmerica Investment 440 Lincoln Street Investment advisory
Management Company, Inc. Worcester MA 01653 services
Allmerica Investments, Inc. 440 Lincoln Street Securities, retail
Worcester MA 01653 broker-dealer

Allmerica Investment Trust 440 Lincoln Street Investment Company
Worcester MA 01653

Allmerica Plus Insurance 440 Lincoln Street Insurance Agency
Agency, Inc. Worcester MA 01653

Allmerica Property & Casualty 440 Lincoln Street Holding Company
Companies, Inc. Worcester MA 01653

Allmerica Securities Trust 440 Lincoln Street Investment Company
Worcester MA 01653

Allmerica Services 440 Lincoln Street Internal administrative
Corporation Worcester MA 01653 services provider to
Allmerica Financial
Corporation entities

Allmerica Trust Company, N.A. 440 Lincoln Street Limited purpose national
Worcester MA 01653 trust company

AMGRO, Inc. 100 North Parkway Premium financing
Worcester MA 01605

Citizens Corporation 440 Lincoln Street Holding Company
Worcester MA 01653

Citizens Insurance Company of 645 West Grand River Multi-line property and
America Howell MI 48843 casualty insurance

Citizens Insurance Company of 333 Pierce Road Multi-line property and
Illinois Itasca IL 60143 casualty insurance

Citizens Insurance Company of 3950 Priority Way Multi-line property and
the Midwest South Drive, Suite casualty insurance
200 Indianapolis IN
46280

Citizens Insurance Company of 8101 N. High Street Multi-line property and
Ohio P.O. Box 342250 casualty insurance
Columbus OH 43234

Citizens Management, Inc. 645 West Grand River Services management
Howell MI 48843 company

Financial Profiles 5421 Avenida Encinas Computer software company
Carlsbad, CA 92008

First Allmerica Financial 440 Lincoln Street Life, pension, annuity,
Life Insurance Company Worcester MA 01653 accident and health
(formerly State Mutual Life insurance company

<PAGE>

Assurance Company of America)

First Sterling Limited 440 Lincoln Street Holding Company
Worcester MA 01653

First Sterling Reinsurance 440 Lincoln Street Reinsurance Company
Company Limited Worcester MA 01653

Greendale Special Placements 440 Lincoln Street Massachusetts Grantor
Fund Worcester MA 01653 Trust

The Hanover American 100 North Parkway Multi-line property and
Insurance Company Worcester MA 01605 casualty insurance

The Hanover Insurance Company 100 North Parkway Multi-line property and
Worcester MA 01605 casualty insurance

Hanover Texas Insurance 801 East Campbell Attorney-in-fact for
Management Company, Inc. Road Hanover Lloyd's Insurance
Richardson TX 75081 Company

Hanover Lloyd's Insurance 801 East Campbell Multi-line property and
Company Road casualty insurance
Richardson TX 75081

Lloyds Credit Corporation 440 Lincoln Street Premium financing service
Worcester MA 01653 franchises

Massachusetts Bay Insurance 100 North Parkway Multi-line property and
Company Worcester MA 01605 casualty insurance

SMA Financial Corp. 440 Lincoln Street Holding Company
Worcester MA 01653

Somerset Square, Inc. 440 Lincoln Street Real estate holding
Worcester MA 01653 company

Sterling Risk Management 440 Lincoln Street Risk management services
Services, Inc. Worcester MA 01653

ITEM 27. NUMBER OF CONTRACT OWNERS

As of October 30, 1998, the Variable Account had 3,415 Qualified Contract
Owners and 8,313 Non-Qualified Contract Owners.

ITEM 28. INDEMNIFICATION

Article VIII of the Bylaws of Allmerica Financial Life Insurance and
Annuity Company (the Depositor) states: Each Director and each Officer of
the Corporation, whether or not in office, (and his executors and
administrators), shall be indemnified or reimbursed by the Corporation
against all expenses actually and necessarily incurred by him in the
defense or reasonable settlement of any action, suit or proceeding in which
he is made a party by reason of his being or having been a Director or
Officer of the Corporation, including any sums paid in settlement or to
discharge judgment, except in relation to matters as to which he shall be
finally adjudged in such action, suit or proceeding to be liable for
negligence or misconduct in the performance of his duties as such Director
or Officer; and the foregoing right of indemnification or reimbursement
shall not affect any other rights to which he may be entitled under the
Articles of

<PAGE>

Incorporation, any statute, bylaw, agreement, vote of stockholders, or
otherwise.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Allmerica Investments, Inc. also acts as principal underwriter for the
following:

- VEL Account, VEL II Account, VEL Account III, Select Account
III, Inheiritage Account, Separate Accounts VA-A, VA-B, VA-C,
VA-G, VA-H, VA-K, VA-P, Allmerica Select Separate Account II,
Group VEL Account, Separate Account KG, Separate Account KGC,
Fulcrum Separate Account, Fulcrum Variable Life Separate
Account, and Allmerica Select Separate Account of Allmerica
Financial Life Insurance and Annuity Company

- Inheiritage Account, VEL II Account, Separate Account I,
Separate Account VA-K, Separate Account VA-P, Allmerica
Select Separate Account II, Group VEL Account, Separate
Account KG, Separate Account KGC, Fulcrum Separate Account,
and Allmerica Select Separate Account of First Allmerica
Financial Life Insurance Company.

- Allmerica Investment Trust

(b) The Principal Business Address of each of the following Directors and
Officers of Allmerica Investments, Inc. is:
440 Lincoln Street
Worcester, Massachusetts 01653

NAME POSITION OR OFFICE WITH UNDERWRITER
---- -----------------------------------

Abigail M. Armstrong Secretary and Counsel

Emil J. Aberizk, Jr. Vice President

Edward T. Berger Vice President and Chief Compliance Officer

Richard F. Betzler, Jr. Vice President

Thomas P. Cunningham Vice President , Chief Financial Officer and
Controller

Philip L. Heffernan Vice President

John F. Kelly Director

Daniel Mastrototaro Vice President

William F. Monroe, Jr. Vice President

David J. Mueller Vice President

John F. O'Brien Director

Stephen Parker President, Director and Chief Executive
Officer

<PAGE>

Edward J. Parry, III Treasurer

Richard M. Reilly Director

Eric A. Simonsen Director

Mark G. Steinberg Senior Vice President

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

Each account, book or other document required to be maintained by Section
31(a) of the 1940 Act and Rules 31a-1 to 31a-3 thereunder are maintained by
the Company at 440 Lincoln Street, Worcester, Massachusetts.

ITEM 31. MANAGEMENT SERVICES

The Company provides daily unit value calculations and related services for
the Company's separate accounts.

ITEM 32. UNDERTAKINGS

(a) Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to
file with the Securities and Exchange Commission ("SEC") such
supplementary and periodic information, documents, and reports as may
be prescribed by any rule or regulation of the SEC heretofore or
hereafter duly adopted pursuant to authority conferred in that
section.

(b) The Registrant hereby undertakes to include in the prospectus a
postcard that the applicant can remove to send for a Statement of
Additional Information.

(c) The Registrant hereby undertakes to deliver a Statement of Additional
Information promptly upon written or oral request, according to the
requirements of Form N-4.

(d) Insofar as indemnification for liability arising under the 1933 Act
may be permitted to Directors, Officers and Controlling Persons of
Registrant under any registration statement, underwriting agreement or
otherwise, Registrant has been advised that, in the opinion of the
SEC, such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a Director, Officer or
Controlling Person of Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Director, Officer or
Controlling Person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.

(e) The Company hereby represents that the aggregate fees and charges
under the Policies are reasonable in relation to the services
rendered, expenses expected to be incurred, and risks assumed by the
Company.

ITEM 33. REPRESENTATIONS CONCERNING WITHDRAWAL RESTRICTIONS ON SECTION 403(b)
PLANS AND UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

<PAGE>

Registrant, a separate account of Allmerica Financial Life Insurance and
Annuity Company ("Company"), states that it is (a) relying on Rule 6c-7
under the 1940 Act with respect to withdrawal restrictions under the Texas
Optional Retirement Program ("Program") and (b) relying on the "no-action"
letter (Ref. No. IP-6-88) issued on November 28, 1988 to the American
Council of Life Insurance, in applying the withdrawal restrictions of
Internal Revenue Code Section 403(b)(11). Registrant has taken the
following steps in reliance on the letter:

1. Appropriate disclosures regarding the redemption/withdrawal
restrictions imposed by the Program and by Section 403(b)(11) have
been included in the prospectus of each registration statement used in
connection with the offer of the Company's variable contracts.

2. Appropriate disclosures regarding the redemption/withdrawal
restrictions imposed by the Program and by Section 403(b)(11) have
been included in sales literature used in connection with the offer of
the Company's variable contracts.

3. Sales Representatives who solicit participants to purchase the
variable contracts have been instructed to specifically bring the
redemption/withdrawal restrictions imposed by the Program and by
Section 403(b)(11) to the attention of potential participants.

4. A signed statement acknowledging the participant's understanding of
(I) the restrictions on redemption/withdrawal imposed by the Program
and by Section 403(b)(11) and (ii) the investment alternatives
available under the employer's arrangement will be obtained from each
participant who purchases a variable annuity contract prior to or at
the time of purchase.

Registrant hereby represents that it will not act to deny or limit a
transfer request except to the extent that a Service-Ruling or written
opinion of counsel, specifically addressing the fact pattern involved and
taking into account the terms of the applicable employer plan, determines
that denial or limitation is necessary for the variable annuity contracts
to meet the requirements of the Program or of Section 403(b). Any transfer
request not so denied or limited will be effected as expeditiously as
possible.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Worcester, and Commonwealth of Massachusetts on the
1st day of December, 1998.

SEPARATE ACCOUNT VA-P OF
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

By: /s/ Abigail M. Armstrong
-------------------------------
Abigail M. Armstrong, Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

Signatures Title Date
---------- ----- ----

/s/ John F. O'Brien Director and Chairman of December 1, 1998
--------------------------- the Board
John F. O'Brien

/s/ Bruce C. Anderson Director
---------------------------
Bruce C. Anderson

/s/ Warren E. Barnes Vice President and Corporate
- ---------------------------- Controller
Warren E. Barnes

/s/ Robert E. Bruce Director and Chief Information
--------------------------- Officer
Robert E. Bruce

/s/ John P. Kavanaugh Director, Vice President and
--------------------------- Chief Investment Officer
John P. Kavanaugh

/s/ John F. Kelly Director, Vice President and
--------------------------- General Counsel
John F. Kelly

/s/ J. Barry May Director
---------------------------
J. Barry May

/s/ James R. McAuliffe Director
---------------------------
James R. McAuliffe

/s/ Edward J. Parry III Director, Vice President, Chief
--------------------------- Financial Officer and Treasurer
Edward J. Parry III

/s/ Richard M. Reilly Director, President and
--------------------------- Chief Executive Officer
Richard M. Reilly
/s/ Robert P. Restrepo, Jr. Director
---------------------------
Robert P. Restrepo, Jr.

/s/ Eric A. Simonsen Director and Vice President
---------------------------
Eric A. Simonsen

/s/ Phillip E. Soule Director
---------------------------
Phillip E. Soule

<PAGE>

EXHIBIT TABLE

Exhibit 4 Minimum Guaranteed Annuity Payout Rider

Exhibit 9 Opinion of Counsel

Exhibit 10 Consent of Independent Accountants

<PAGE>

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

MINIMUM GUARANTEED ANNUITY PAYOUT ("M-GAP") RIDER

OVERVIEW:

The M-GAP Rider ("Rider") is an optional rider you have selected. It
guarantees a minimum level of income at the time of annuitization provided
you annuitize in accordance with the provisions of the Rider.

DEFINITIONS:

"M-GAP Effective Date" - the date on which the Rider is effective. If the
Rider is selected at issue or within the 30-day period immediately
thereafter, the "M-GAP Effective Date" is the contract (1) issue date. If
the Rider is selected on a contract anniversary or within the 30-day period
immediately thereafter, the "M-GAP Effective Date" is that contract
anniversary. If the Rider is selected at any other time, the "M-GAP
Effective Date" is the next contract anniversary following the date of
selection of the Rider.

"M-GAP Effective Annual Yield" - [5%]

"M-GAP Initial Payment Amount" - the Accumulated Value on the "M-GAP
Effective Date".

"M-GAP Waiting Period" - the [ 10 ]-year period which begins on the "M-GAP
Effective Date". The Rider can only be exercised after the expiration of the
"M-GAP Waiting Period" and during a "M-GAP Benefit Window".

"[10]-Year M-GAP Rider Annual Percentage Rate" - [.25%]

"M-GAP Benefit Window" - the 30-day period during which the Rider can be
exercised. The "M-GAP Benefit Window" always begins on a contract
anniversary. The first "M-GAP Benefit Window" begins on the contract
anniversary immediately following the "M-GAP Waiting Period".

APPLICABILITY:

This Rider is part of the contract to which it is attached and is effective
on the "M-GAP Effective Date". The Rider can be exercised only when the
Owner elects to annuitize under each of the following conditions:

(a) during an "M-GAP Benefit Window";
(b) under a fixed annuity option involving a life contingency; and
(c) at the guaranteed annuity purchase rates specified under the Annuity
Option Tables in your contract.

- -------------------------------------
(1) "Contract", as used in this Rider, includes any "policy" to which the
Rider is attached.

1
<PAGE>

BENEFIT:

When the Rider is exercised, the M-GAP Benefit Base, less any applicable
premium tax, is the value annuitized. On each contract anniversary,
commencing with the "M-GAP Effective Date", the M-GAP Benefit Base is
determined. The M-GAP Benefit Base is equal to the greatest of the following:

(a) the Accumulated Value increased by any positive Market Value
Adjustment (MVA), if applicable;
(b) the sum of:
1) the "M-GAP Initial Payment Amount" accumulated daily at the
"M-GAP Effective Annual Yield" starting on the "M-GAP Effective
Date" and
2) gross payments(2) accumulated daily at the "M-GAP Effective
Annual Yield" starting on the Effective Valuation Date(3) of
each gross payment reduced proportionately to reflect
withdrawals; and
(c) the highest Accumulated Value on any contract anniversary since the
"M-GAP Effective Date" as determined after positive adjustments have
been made for subsequent payments and any positive MVA, if
applicable, and negative adjustments have been made for subsequent
withdrawals.

For each withdrawal described in (b) and (c) above, the proportionate
reduction is calculated by multiplying the (b) or (c) value, whichever
applicable, determined immediately prior to the withdrawal by the following
fraction:

Amount of the Withdrawal
------------------------
Accumulated Value determined immediately prior to the withdrawal

The M-GAP Benefit Base does not create an Accumulated Value. It is used
solely for annuitization purposes to determine the value of the income stream
when the Rider is exercised.

CHARGE FOR BENEFITS:

From the "M-GAP Effective Date" until the date the Rider is terminated, the
Company will assess a monthly rider charge which will be deducted Pro Rata
(4) on the last day of each month and on the date the Rider terminates. The
charge will be equal to the Accumulated Value on such date multiplied by
1/12th of the "[10]-Year M-GAP Rider Annual Percentage Rate".

TERMINATION:

This Rider will terminate on the earliest of the following dates:

(a) the date the Owner elects to annuitize;

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

(2) "Gross payments", if not defined in your contract, includes any "gross
Elective Payments".
(3) "Effective Valuation Date", if not defined in your contract, means the
Valuation Date coincident with or next following the date of the
Company's receipt of the payment.
(4) "Pro Rata", if not defined in your contract, means that the withdrawal
is deducted from the Accumulated Value of each account in the same
proportion as such value bears to the total policy/contract value.

2
<PAGE>

(b) when a death benefit is payable and the contract is not continued
under a spousal takeover;
(c) surrender of the contract; or
(d) receipt of the Owner's Written Request to terminate the Rider. The
Owner may terminate the Rider anytime after the end of the 7-year
period beginning on the "M-GAP Effective Date". The rider may be
terminated prior to the end of such 7-year period only if such
termination occurs on a contract anniversary or within the 30-day
period immediately thereafter and in conjunction with the Owner's
exercise of the "Repurchase Option", described below.

REPURCHASE OPTION:

If an Owner terminates the Rider on a contract anniversary or within the
30-day period immediately thereafter, the Owner may purchase another M-GAP
Rider, at its then current price, only if on the date of termination:

1) an M-GAP Rider is still being offered by the Company and
2) the Owner purchases an M-GAP Rider, with an "M-GAP Waiting Period"
equal to or longer than the "M-GAP Waiting Period" for this Rider.

For purposes of determining the "M-GAP Effective Date" of the new Rider, the
date of termination of this Rider will be considered to be the date of selection
of the new Rider.

Signed for the Company at Dover, Delaware.

President Secretary

End3259.98

9-98-29

<PAGE>

December 22, 1998

Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester MA 01653

RE: SEPARATE ACCOUNT VA-P (PIONEER VISION) OF ALLMERICA
FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
FILE #'S: 33-85916 AND 811-8848

Gentlemen:

In my capacity as Attorney of Allmerica Financial Life Insurance and Annuity
Company (the "Company"), I have participated in the preparation of the
Post-Effective Amendment to the Registration Statement for Separate Account VA-P
on Form N-4 under the Securities Act of 1933 and the Investment Company Act of
1940, with respect to the Company's qualified and non-qualified variable annuity
contracts.

I am of the following opinion:

1. Separate Account VA-P is a separate account of the Company validly existing
pursuant to the Delaware Insurance Code and the regulations issued
thereunder.

2. The assets held in Separate Account VA-P are not chargeable with
liabilities arising out of any other business the Company may conduct.

3. The variable annuity contracts, when issued in accordance with the
Prospectus contained in the Registration Statement and upon compliance with
applicable local law, will be legal and binding obligations of the Company
in accordance with their terms and when sold will be legally issued, fully
paid and non-assessable.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment to the Registration Statement for Separate Account VA-P
on Form N-4 under the Securities Act of 1933.

Very truly yours,

/s/ Lynn Gelinas

Lynn Gelinas
Attorney

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 11 to the Registration
Statement of Separate Account VA-P of Allmerica Financial Life Insurance and
Annuity Company on Form N-4 of our report dated February 3, 1998, relating to
the financial statements of Allmerica Financial Life Insurance and Annuity
Company, and our report dated March 25, 1998, relating to the financial
statements of Separate Account VA-P -- Pioneer Vision of Allmerica Financial
Life Insurance and Annuity Company, both of which appear in such Statement of
Additional Information. We also consent to the reference to us under the
heading "Experts" in such Statement of Additional Information.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Boston, Massachusetts
December 22, 1998