LPLA SEPARATE ACCOUNT ONE, 497, 1998-05-12

LPLA SEPARATE ACCOUNT ONE
497, 1998-05-12

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[GRAPHIC OMITTED]

INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS

WITH FLEXIBLE CONTRIBUTIONS

ISSUED BY

LPLA SEPARATE ACCOUNT ONE

AND

LONDON PACIFIC LIFE & ANNUITY COMPANY

The Individual Fixed and Variable Deferred Annuity Contracts with Flexible
Contributions (the "Contracts") described in this Prospectus provide for
accumulation of Contract Values on a fixed and variable basis and payment of
annuity payments on a fixed and variable basis. The Contracts are designed for
use by individuals in retirement plans on a Qualified or Non-Qualified basis.
(See "Definitions.")

Contributions for the Contracts will be allocated to a segregated investment
account of London Pacific Life & Annuity Company (the "Company") which account
has been designated LPLA Separate Account One (the "Separate Account") or to the
Company's Fixed Account. Under certain circumstances, however, Contributions may
initially be allocated to the Berkeley Money Market Sub-Account of the Separate
Account. (See "Highlights.") The Separate Account invests in shares of LPT
Variable Insurance Series Trust, Morgan Stanley Universal Funds, Inc. and BT
Insurance Funds Trust. (See "Eligible Funds.") LPT Variable Insurance Series
Trust is a series fund with eight Portfolios currently available: Harris
Associates Value Portfolio; MFS Total Return Portfolio; Berkeley U.S. Quality
Bond Portfolio; Strong International Stock Portfolio; Berkeley Money Market
Portfolio; Robertson Stephens Diversified Growth Portfolio; Lexington Corporate
Leaders Portfolio; and Strong Growth Portfolio. Prior to May 1, 1997, the Harris
Associates Value Portfolio was known as the MAS Value Portfolio and the
Robertson Stephens Diversified Growth Portfolio was known as the Berkeley
Smaller Companies Portfolio. Prior to November 3, 1997, the Berkeley Money
Market Portfolio and the Berkeley U.S. Quality Bond Portfolio were known as the
Salomon Money Market Portfolio and the Salomon U.S. Quality Portfolio,
respectively. Shares of the Strong International Stock Portfolio are no longer
available for investment. Morgan Stanley Universal Funds, Inc. is a series fund
with eighteen portfolios, the following three of which are available in
connection with the Contracts: High Yield Portfolio, International Magnum
Portfolio and Emerging Markets Equity Portfolio. BT Insurance Funds Trust is a
series fund with six series, the following of which is available in connection
with the Contracts: Equity 500 Index Fund.

THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY FINANCIAL INSTITUTION, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
INVESTMENT IN THE CONTRACTS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE
OWNER'S INVESTMENT TO FLUCTUATE, AND WHEN THE CONTRACTS ARE SURRENDERED, THE
VALUE MAY BE HIGHER OR LOWER THAN THE CONTRIBUTIONS.

This Prospectus concisely sets forth the information a prospective investor
should know before investing. Additional information about the Contracts is
contained in the Statement of Additional Information ("SAI") which is available
at no charge. The SAI has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The SEC maintains a Web Site
(http://www.sec.gov) that contains the SAI, material incorporated by reference,
and other information regarding registrants that file electronically with the
SEC. The Table of Contents of the SAI can be found on Page 22 of this
Prospectus. For the Statement of Additional Information, call (800) 852-3152 or
write to the Company's Annuity Service Center at the address listed on the back
page of this Prospectus.

INQUIRIES:

Any inquiries can be made by telephone or in writing to the Annuity Service
Center listed on the back page of this Prospectus.

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

This Prospectus and the Statement of Additional Information are dated May 1,
1998.

This Prospectus should be kept for future reference.

[THIS PAGE INTENTIONALLY LEFT BLANK]

<TABLE>
<CAPTION>
TABLE OF CONTENTS

PAGE

<S> <C>
DEFINITIONS ...............................................................................1

HIGHLIGHTS ................................................................................3

FEE TABLE..................................................................................4

CONDENSED FINANCIAL INFORMATION............................................................7

THE COMPANY................................................................................8

THE SEPARATE ACCOUNT.......................................................................8

ELIGIBLE FUNDS.............................................................................8
LPT Variable Insurance Series Trust...............................................8
Morgan Stanley Universal Funds, Inc...............................................9
BT Insurance Funds Trust..........................................................9
Voting Rights.....................................................................9
Substitution of Securities........................................................9

CHARGES AND DEDUCTIONS.....................................................................9
Deduction for Mortality and Expense Risk Charge...................................9
Deduction for Administrative Charge .............................................10
Deduction for Distribution Charge................................................10
Deduction for Contract Maintenance Charge........................................10
Deduction for Transfer Fee.......................................................10
Deduction for Premium and Other Taxes............................................10
Deduction for Expenses of the Trust..............................................11

THE CONTRACTS.............................................................................11
Owner............................................................................11
Joint Owners ....................................................................11
Annuitant........................................................................11
Assignment ......................................................................11

CONTRIBUTIONS AND CONTRACT VALUE..........................................................11
Contributions ...................................................................11
Allocation of Contributions......................................................11
Dollar Cost Averaging Program ...................................................12
Rebalancing Program..............................................................12
Contract Value...................................................................12
Accumulation Units...............................................................12
Accumulation Unit Value..........................................................12

TRANSFERS.................................................................................13
Transfers During the Accumulation Period.........................................13
Transfers During the Annuity Period..............................................13

WITHDRAWALS...............................................................................14
Systematic Withdrawal Option.....................................................14
Suspension or Deferral of Payments...............................................14

PAGE

PROCEEDS PAYABLE ON DEATH.................................................................15
Death of Owner During the Accumulation Period....................................15
Death Benefit Amount During the Accumulation Period..............................15
Death Benefit Options During the Accumulation Period.............................15
Death of Owner During the Annuity Period.........................................16
Death of Annuitant...............................................................16
Payment of Death Benefit.........................................................16
Beneficiary......................................................................16
Change of Beneficiary............................................................16

ANNUITY PROVISIONS........................................................................16
General..........................................................................16
Annuity Date.....................................................................16
Selection or Change of an Annuity Option.........................................17
Frequency and Amount of Annuity Payments.........................................17
Annuity .........................................................................17
Fixed Annuity ...................................................................17
Variable Annuity ................................................................17
Annuity Options..................................................................17
Option A. Life Annuity..................................................17
Option B. Life Annuity with Period Certain of 120 Months................17
Option C. Joint and Survivor Annuity....................................17
Option D. Period Certain................................................17

DISTRIBUTOR...............................................................................17

PERFORMANCE INFORMATION...................................................................18
Berkeley Money Market Sub-Account................................................18
Other Sub-Accounts...............................................................18

FEDERAL TAX STATUS .......................................................................19
General..........................................................................19
Diversification..................................................................20
Contracts Owned by Other than Natural Persons....................................20
Multiple Contracts...............................................................20
Tax Treatment of Assignments.....................................................20
Income Tax Withholding...........................................................21
Tax Treatment of Withdrawals - Non-Qualified Contracts...........................21
Qualified Plans..................................................................21
Tax Treatment of Withdrawals - Qualified Contracts...............................22

FINANCIAL STATEMENTS......................................................................22

LEGAL PROCEEDINGS.........................................................................22

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION..............................22

APPENDIX ................................................................................A-1
</TABLE>

DEFINITIONS

ACCUMULATION PERIOD: The period prior to the Annuity Date during which
Contributions may be made.

ACCUMULATION UNIT: A unit of measure used to determine the value of the Owner's
interest in a Sub-Account of the Separate Account during the Accumulation
Period.

ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax and
Contract Maintenance Charge, if any. This amount is applied to the applicable
Annuity Tables to determine Annuity Payments.

AGE: The age of any Owner or Annuitant on his/her last birthday.

ANNUITANT: The natural person on whose life Annuity Payments are based. On or
after the Annuity Date, the Annuitant shall also include any Joint Annuitant.

ANNUITY DATE: The date on which Annuity Payments begin.

ANNUITY OPTIONS: Options available for Annuity Payments.

ANNUITY PAYMENTS: The series of payments made to the Owner or any named payee
after the Annuity Date under the Annuity Option selected.

ANNUITY PERIOD: The period of time beginning with the Annuity Date during which
Annuity Payments are made.

ANNUITY SERVICE CENTER: The office indicated on the back page of this Prospectus
to which notices, requests and Contributions must be sent. All sums payable to
the Company under the Contract are payable only at the Annuity Service Center.

ANNUITY UNIT: A unit of measure used to calculate Variable Annuity Payments
during the Annuity Period.

BENEFICIARY: The person(s) or entity(ies) who will receive the death benefit
payable under the Contract.

COMPANY: London Pacific Life & Annuity Company.

CONTRACT ANNIVERSARY: An anniversary of the Issue Date.

CONTRACT VALUE: The dollar value as of any Valuation Period of all amounts
accumulated in the Contract.

CONTRACT WITHDRAWAL VALUE: The Contract Value less any applicable Premium Tax,
less any applicable Contract Maintenance Charge.

CONTRACT YEAR: The first Contract Year is the annual period which begins on the
Issue Date. Subsequent Contract Years begin on each anniversary of the Issue
Date.

CONTRIBUTION: A payment made by or on behalf of an Owner with respect to the
Contract.

EFFECTIVE DATE: The date the Company declares a Guaranteed Interest Rate for a
specified Guarantee Period.

ELIGIBLE FUND: An investment entity into which assets of the Separate Account
will be invested.

FIXED ACCOUNT: An investment option within the General Account where the Company
guarantees the rate(s) of interest for a specified Guarantee Period.

FIXED ANNUITY: A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company.

GENERAL ACCOUNT: The Company's general investment account which contains all the
assets of the Company with the exception of the Separate Account and other
segregated asset accounts.

GUARANTEE PERIOD: A one year period, commencing on the Issue Date, for which the
Guaranteed Interest Rate is credited. Upon each Contract Anniversary, a new one
year Guarantee Period commences.

GUARANTEED INTEREST RATE: The interest rate credited to the Contract Value by
the Company for any given Guarantee Period.

ISSUE DATE: The date on which the Contract became effective.

NON-QUALIFIED CONTRACTS: Contracts issued under non-qualified plans which do not
receive favorable tax treatment under Section 408 of the Internal Revenue Code
of 1986, as amended (the "Code").

OWNER: The person or entity entitled to the ownership rights stated in the
Contract.

PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares.

PREMIUM TAX: Any premium taxes paid to any governmental entity assessed against
Contributions or Contract Value.

QUALIFIED CONTRACTS: Contracts issued under qualified plans which receive
favorable tax treatment under Section 408 of the Code.

SEPARATE ACCOUNT: The Company's separate account designated as LPLA Separate
Account One.

SUB-ACCOUNT: Separate Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Fund or a Portfolio
of an Eligible Fund.

VALUATION DATE: Each day on which the Company and the New York Stock Exchange
("NYSE") are open for business.

VALUATION PERIOD: The period of time beginning at the close of business of the
NYSE on each Valuation Date and ending at the close of business for the next
succeeding Valuation Date.

VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-Accounts of the Separate
Account.

WRITTEN REQUEST: A request in writing, in a form satisfactory to the Company,
which is received by the Annuity Service Center.

HIGHLIGHTS

The Contract may be returned to the Company for any reason within ten (10)
calendar days, or for a longer period in states where required, (thirty (30)
calendar days if purchased by individuals in California who are 60 years of age
or older on the Issue Date, or twenty (20) calendar days of the date of receipt
with respect to the circumstances described in (c) below) after its receipt by
the Owner ("Right to Examine Contract"). It may be returned to the Company at
its Annuity Service Center (or the agent through whom it was purchased in the
State of Washington). When the Contract is received by the Company at its
Annuity Service Center, it will be voided as if it had never been in force. Upon
its return, the Company will refund the Contract Value next computed after
receipt of the Contract by the Company at its Annuity Service Center except in
the following circumstances: (a) where the Contract is purchased pursuant to an
Individual Retirement Annuity; (b) in those states which require the Company to
refund Contributions, less withdrawals; or (c) in the case of Contracts which
are deemed by certain states to be replacing an existing annuity or insurance
contract and which require the Company to refund Contributions, less
withdrawals. With respect to the circumstances described in (a), (b) and (c)
above, the Company will refund the greater of Contributions, less any
withdrawals, or the Contract Value (in Idaho, the Company will refund
Contributions, less withdrawals), and will allocate initial Contributions to the
Berkeley Money Market Sub-Account (except for any Contribution to be allocated
to the Fixed Account as elected by the Owner) for 15 days after the Company
first allocates the Owner's first Contribution (this period may be longer in
certain states). Upon the expiration of such period plus five (5) days, the
Sub-Account value of the Berkeley Money Market Sub-Account will be allocated to
the Separate Account in accordance with the election made by the Owner at the
time the Contract is issued.

Each Valuation Period, the Company deducts a Mortality and Expense Risk Charge
from the Separate Account which is equal, on an annual basis, to 1.25% of the
average daily net asset value of each Sub-Account of the Separate Account. This
charge compensates the Company for assuming the mortality and expense risks
under the Contracts. (See "Charges and Deductions - Deduction for Mortality and
Expense Risk Charge.")

Each Valuation Period, the Company deducts a Distribution Charge from the
Separate Account which is equal, on an annual basis, to .10% of the average
daily net asset value of each Sub-Account of the Separate Account. This charge
compensates the Company for the costs associated with the distribution of the
Contracts. (See "Charges and Deductions - Deduction for Distribution Charge.")

Each Valuation Period, the Company deducts an Administrative Charge from the
Separate Account which is equal, on an annual basis, to .15% of the average
daily net asset value of each Sub-Account of the Separate Account. This charge
compensates the Company for costs associated with the administration of the
Contracts and the Separate Account. (See "Charges and Deductions - Deduction for
Administrative Charge.")

On each Contract Anniversary, the Company deducts a Contract Maintenance Charge
of $36 ($30 in North Dakota) from the Contract Value. However, during the
Accumulation Period, if the Contract Value on the Contract Anniversary is at
least $50,000, then no Contract Maintenance Charge is deducted. If a total
withdrawal is made on other than a Contract Anniversary and the Contract Value
for the Valuation Period during which the total withdrawal is made is less than
$50,000, the full Contract Maintenance Charge will be deducted at the time of
the total withdrawal. During the Annuity Period, the Contract Maintenance Charge
will be deducted pro-rata from Annuity Payments regardless of Contract size and
will result in a reduction of each Annuity Payment. (See "Charges and Deductions
- - Deduction for Contract Maintenance Charge.")

Under certain circumstances, a Transfer Fee may be assessed when an Owner
transfers Contract Values between Sub-Accounts or to or from the Fixed Account.
(See "Charges and Deductions - Deduction for Transfer Fee.")

The Company will not deduct Premium Taxes from an Owner's Contributions before
allocating the Contributions to the Fixed Account and/or Sub-Accounts of the
Separate Account unless required to pay such taxes under applicable state law.
The Company's current practice is to pay the Premium Tax due and deduct the tax
upon full or partial withdrawals, payment of a death benefit or purchase of an
annuity under the Contract. The Company reserves the right to discontinue the
deferral of this tax. (See "Charges and Deductions - Deduction for Premium and
Other Taxes.")

There is a ten percent (10%) federal income tax penalty that may be applied to
the income portion of any distribution from the Contracts. However, the penalty
is not imposed under certain circumstances. See "Federal Tax Status - Tax
Treatment of Withdrawals - Non-Qualified Contracts" and "Tax Treatment of
Withdrawals - Qualified Contracts." For a further discussion of the taxation of
the Contracts, see "Federal Tax Status."

See "Federal Tax Status - Diversification" for a discussion of owner control of
the underlying investments in a variable annuity contract.

Because of certain exemptive and exclusionary provisions, interests in the Fixed
Account are not registered under the Securities Act of 1933 and the Fixed
Account is not registered as an investment company under the Investment Company
Act of 1940, as amended. Accordingly, neither the Fixed Account nor any
interests therein are subject to the provisions of these Acts, and the Company
has been advised that the staff of the Securities and Exchange Commission has
not reviewed the disclosures in the Prospectus relating to the Fixed Account.
Disclosures regarding the Fixed Account may, however, be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.

<TABLE>
<CAPTION>
LPLA SEPARATE ACCOUNT ONE

FEE TABLE

CONTRACT OWNER TRANSACTION EXPENSES
<S> <C>
Sales Charge None

Transfer Fee No charge for first 12 transfers in a Contract Year;
thereafter
(see Note 2 on Page 6) the fee is the lesser of $20 or 2% of the amount transferred.
Contract Maintenance Charge $36 per Contract per Contract Year.
(see Note 3 on Page 6)

SEPARATE ACCOUNT ANNUAL EXPENSES Mortality and Expense Risk Charge.................. 1.25%
(as a percentage of average account value) Administrative Charge.............................. .15%
Distribution Charge................................ .10%
------
Total Separate Account Annual Expenses..............1.50%
</TABLE>

<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST'S ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)

Other Expenses
Management (after expense Total Annual
Fees reimbursement)* Expenses*
---- --------------- ---------

<S> <C> <C> <C> <C>
Harris Associates Value Portfolio (1) 1.00% .29% 1.29%
MFS Total Return Portfolio .75% .54% 1.29%
Berkeley U.S. Quality Bond Portfolio .55% .44% .99%
Strong International Stock Portfolio .75% .74% 1.49%
Berkeley Money Market Portfolio .45% .44% .89%
Robertson Stephens Diversified Growth Portfolio (2) .95% .44% 1.39%
Lexington Corporate Leaders Portfolio .65% .64% 1.29%
Strong Growth Portfolio .75% .54% 1.29%
<FN>
(1) Prior to May 1, 1997, the Management Fee was .875% of the average daily
net assets of the Portfolio.

(2)Prior to May 1, 1997, the Management Fee was 1.00% of the average daily
net assets of the Portfolio.

* The Company has voluntarily agreed through December 31, 1998 to reimburse
each Portfolio for certain expenses (excluding brokerage commissions) in excess
of approximately the amounts set forth above under "Total Annual Expenses" for
each Portfolio. Absent this expense reimbursement arrangement, for the year
ending December 31, 1997, the "Total Annual Expenses" (on an annualized basis)
were: 4.22% for the Harris Associates Value Portfolio; 3.88% for the MFS Total
Return Portfolio; 5.09% for the Berkeley U.S. Quality Bond Portfolio; 4.30% for
the Berkeley Money Market Portfolio; 6.81% for the Strong International Stock
Portfolio; 4.44% for the Strong Growth Portfolio; 4.53% for the Robertson
Stephens Diversified Growth Portfolio; and 4.08% for the Lexington Corporate
Leaders Portfolio. The examples following are calculated based upon such expense
reimbursement arrangements.
</FN>
</TABLE>

<TABLE>
<CAPTION>
MORGAN STANLEY UNIVERSAL FUNDS, INC.'S ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)

Other Expenses
Management (after expense Total Annual
Fees reimbursement)* Expenses*
---- --------------- ---------
<S> <C> <C> <C>
Morgan Stanley U.F. High Yield Portfolio 0.0% .80% .80%
Morgan Stanley U.F. International Magnum Portfolio 0.0% 1.15% 1.15%
Morgan Stanley U.F. Emerging Markets Equity Portfolio 0.0% 1.75% 1.75%
<FN>
* The advisers have voluntarily waived receipt of their management fees and
agreed to reimburse the Portfolio, if necessary, if such fees would cause the
total annual operating expenses of the Portfolio to exceed the percentages set
forth above under "Total Annual Portfolio Expenses." Absent this expense
reimbursement, for the year ending December 31, 1997, "Management Fees," "Other
Expenses," and "Total Annual Expenses would have been: 0.50%, 1.18% and 1.68%
for the Morgan Stanley U.F. High Yield Portfolio; 0.80%, 1.98%, and 2.78% for
the Morgan Stanley U.F. International Magnum Portfolio; and 1.25%, 2.87% and
4.12% for the Morgan Stanley U.F. Emerging Markets Portfolio.
</FN>
</TABLE>

<TABLE>
<CAPTION>
BT INSURANCE FUNDS TRUST'S ANNUAL EXPENSES
(as a percentage of the average daily net assets of a Portfolio)

Management Administrative Other Total Annual
Fees Fee Expenses Portfolio Expenses
---- --- -------- ------------------

<S> <C> <C> <C> <C> <C> <C>
BT Equity 500 Index Fund (1) .20% .02% .08% .30%

<FN>
(1) Without expense waivers and reimbursements, the total operating expense
for the BT Equity 500 Index Fund would have been 2.78%.
</FN>
</TABLE>

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

EXAMPLES (SEE NOTE 6 BELOW)

An Owner would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets regardless of whether the Contract is surrendered at the
end of each period or if the Contract is annuitized.

<TABLE>
<CAPTION>
TIME PERIODS

LPT VARIABLE INSURANCE SERIES TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Harris Associates Value Portfolio $ 30.04 $ 94.47 $165.22 $374.10
MFS Total Return Portfolio $ 30.04 $ 94.47 $165.22 $374.10
Berkeley U.S. Quality Bond Portfolio $ 26.96 $ 84.78 $148.23 $335.42
Strong International Stock Portfolio $ 32.09 $100.94 $176.55 $399.88
Berkeley Money Market Portfolio $ 25.94 $ 81.55 $142.56 $322.53
Robertson Stephens Diversified Growth Portfolio $ 31.06 $ 97.70 $170.88 $386.99
Lexington Corporate Leaders Portfolio $ 30.04 $ 94.47 $165.22 $374.10
Strong Growth Portfolio $ 30.04 $ 94.47 $165.22 $374.10

MORGAN STANLEY UNIVERSAL FUNDS, INC.

Morgan Stanley U.F. High Yield Portfolio $25.02 $78.64 $137.47 $310.92
Morgan Stanley U.F. International $28.60 $89.95 $157.29 $356.05
Magnum Portfolio
Morgan Stanley U.F. Emerging $34.75 $109.34 $191.27 $433.40
Markets Equity Portfolio

BT INSURANCE FUNDS TRUST

BT Equity 500 Index Fund $19.89 $62.48 $109.15 $246.46
<FN>
NOTES TO FEE TABLE AND EXAMPLES

1. The purpose of the Fee Table is to assist Owners in understanding the
various costs and expenses that an Owner will incur directly or indirectly.
For additional information, see "Charges and Deductions" in this Prospectus
and the Prospectuses for the Elgible Funds.

2. Transfers made at the end of the Right to Examine Contract period and any
transfers made pursuant to an approved Dollar Cost Averaging Program or
Rebalancing Program will not be counted in determining the application of
the Transfer Fee.

3. During the Accumulation Period, if the Contract Value on the Contract
Anniversary is at least $50,000, then no Contract Maintenance Charge is
deducted. If a total withdrawal is made on other than a Contract
Anniversary and the Contract Value for the Valuation Period during which
the total withdrawal is made is less than $50,000, the full Contract
Maintenance Charge will be deducted at the time of the total withdrawal.
During the Annuity Period, the full charge will be deducted regardless of
Contract size. In the State of North Dakota, the Contract Maintenance
Charge is $30.

4. Premium Taxes are not reflected. Premium Taxes may apply. (See "Charges and
Deductions - Deduction for Premium and Other Taxes.")

5. The Examples assume an estimated $25,000 Contract Value so that the
Contract Maintenance Charge per $1,000 of net asset value in the Separate
Account is $1.44. Such charge would be higher for smaller Contract Values
and lower for higher Contract Values.

6. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
</FN>
</TABLE>

CONDENSED FINANCIAL INFORMATION

The financial statements of the Company and the Separate Account may be found in
the Statement of Additional Information. The table below gives per unit
information about the financial history of each Sub-Account for the periods
indicated. This information should be read in conjunction with the financial
statements and related notes of the Separate Account included in the Statement
of Additional Information.

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED COMMENCEMENT OF
SUB-ACCOUNT 12-31-97 OPERATIONS TO 12-31-96
----------- -------- ----------------------

Harris Associates Value
<S> <C> <C>
Unit value at beginning of period $12.12 $10.00
Unit value at end of period $15.08 $12.12
No. of units outstanding at end of period 225,262 50,583

MFS Total Return

Unit value at beginning of period $11.03 $10.00
Unit value at end of period $13.20 $11.03
No. of units outstanding at end of period 443,010 82,279

Berkeley U.S. Quality Bond*

Unit value at beginning of period $10.15 $10.00
Unit value at end of period $10.99 $10.15
No. of units outstanding at end of period 87,032 78,700

Berkeley Money Market**

Unit value at beginning of period $10.36 $10.00
Unit value at end of period $10.76 $10.36
No. of units outstanding at end of period 127,652 27,763

Strong International Stock

Unit value at beginning of period $10.58 $10.00
Unit value at end of period $9.28 $10.58
No. of units outstanding at end of period 122,491 40,840

Strong Growth

Unit value at beginning of period $12,62 $10.00
Unit value at end of period $15.72 $12.62
No. of units outstanding at end of period 169,389 44,555

Robertson Stephens Diversified Growth

Unit value at beginning of period $10.35 $10.00
Unit value at end of period $12.21 $10.35
No. of units outstanding at end of period 236,983 52,516

Lexington Corporate Leaders

Unit value at beginning of period $11.51 $10.00
Unit value at end of period $14.25 $11.51
No. of units outstanding at end of period 233,629 29,933
<FN>
* Prior to November 3, 1997, the Berkeley U.S. Quality Bond Sub-Account was
known as the Salomon U.S. Quality Bond Sub-Account.

** Prior to November 3, 1997, the Berkeley Money Market Sub-Account was
known as the Salomon Money Market Sub-Account.
</FN>
</TABLE>

THE COMPANY

London Pacific Life & Annuity Company (the "Company") was organized in 1927 in
North Carolina as a stock life insurance company. The Company was acquired from
Liberty Life in 1989 and was formerly named Southern Life Insurance Company.

The Company is authorized to sell life insurance and annuities in forty states
and the District of Columbia. The Company's ultimate parent is London Pacific
Group Limited, an international fund management firm chartered in Jersey,
Channel Islands.

THE SEPARATE ACCOUNT

The Board of Directors of the Company adopted a resolution to establish a
segregated asset account pursuant to North Carolina insurance law on November
21, 1994. This segregated asset account has been designated LPLA Separate
Account One (the "Separate Account"). The Company has caused the Separate
Account to be registered with the Securities and Exchange Commission as a unit
investment trust pursuant to the provisions of the Investment Company Act of
1940.

The assets of the Separate Account are the property of the Company. However, the
assets of the Separate Account, equal to the reserves and other contract
liabilities with respect to the Separate Account, are not chargeable with
liabilities arising out of any other business the Company may conduct. Income,
gains and losses, whether or not realized, are, in accordance with the
Contracts, credited to or charged against the Separate Account without regard to
other income, gains or losses of the Company.

The Company's obligations arising under the Contracts are general obligations.

The Separate Account meets the definition of a "separate account" under federal
securities laws.

The Separate Account is divided into Sub-Accounts. Each Sub-Account invests in
one Portfolio of an Eligible Fund. There is no assurance that the investment
objectives of any of the Portfolios will be met. Owners bear the complete
investment risk for Contributions allocated to a Sub-Account. Contract Values
will fluctuate in accordance with the investment performance of the Sub-Accounts
to which Contributions are allocated, and in accordance with the imposition of
the fees and charges assessed under the Contracts.

ELIGIBLE FUNDS

Purchasers should read the prospectuses for the funds carefully before
investing. Copies of these prospectuses are attached to this prospectus.
Additional prospectuses and the Statements of Additional Information can be
obtained by calling or writing the Company.

Shares of the Portfolios may be offered in connection with certain variable
annuity contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with the Company. Certain
Portfolios may also be sold directly to qualified plans. The funds do not
believe that offering their shares in this manner will be disadvantageous to
Owners.

LPT VARIABLE INSURANCE SERIES TRUST. LPT Variable Insurance Series Trust (the
"Trust") has been established to act as one of the funding vehicles for the
Contracts offered. LPIMC Insurance Marketing Services (the "Adviser"), a
subsidiary of the Company and a registered investment adviser under the
Investment Advisers Act of 1940, serves as investment adviser to the Trust. The
Adviser has entered into sub-advisory agreements with professional managers for
investment of the assets of each Portfolio. The Sub-Adviser for each Portfolio
is listed under each Portfolio below. The Portfolios pay monthly investment
management fees to the Adviser, and the Adviser pays the sub-advisers for their
services to the Portfolios. See "Management of the Trust" in the Prospectuses
for each Portfolio, which accompany this Prospectus, for additional information
concerning the Adviser and the Sub-Advisers, including a description of advisory
and sub-advisory fees.

SHARES OF THE STRONG INTERNATIONAL STOCK PORTFOLIO ARE NO LONGER AVAILABLE FOR
INVESTMENT.

The following Portfolios are available under the Contract:

Harris Associates Value Portfolio. The Sub-Adviser for this Portfolio
is Harris Associates L.P.

MFS Total Return Portfolio. The Sub-Adviser for this Portfolio is
Massachusetts Financial Services Company.

Berkeley U.S. Quality Bond Portfolio. The Sub-Adviser for this
Portfolio is Berkeley Capital Management. Prior to November 3, 1997,
the Portfolio had a different Sub-Adviser.

Strong International Stock Portfolio. The Sub-Adviser for this
Portfolio is Strong Capital Management, Inc.

Berkeley Money Market Portfolio. The Sub-Adviser for this Portfolio is
Berkeley Capital Management. Prior to November 3, 1997, the Portfolio
had a different Sub-Adviser.

Robertson Stephens Diversified Growth Portfolio. The Sub-Adviser for
this Portfolio is Robertson, Stephens & Company Investment Management,
L.P.

Lexington Corporate Leaders Portfolio. The Sub-Adviser for this
Portfolio is Lexington Management Corporation.

Strong Growth Portfolio. The Sub-Adviser for this Portfolio is Strong
Capital Management, Inc.

MORGAN STANLEY UNIVERSAL FUNDS, INC. Morgan Stanley Universal Funds, Inc. is a
mutual fund with eighteen portfolios, three of which are available under the
Contracts. Miller Anderson & Sherrerd, LLP is the investment adviser to the High
Yield Portfolio. Morgan Stanley Asset Management Inc. is the investment adviser
for the International Magnum and Emerging Markets Equity Portfolios. The
following Portfolios are available under the Contract:

High Yield Portfolio.

International Magnum Portfolio.

Emerging Markets Equity Portfolio.

BT INSURANCE FUNDS TRUST. BT Insurance Funds Trust is a series fund with six
series, one of which is available under the Contracts. Bankers Trust Company is
the investment manager of the Fund. The following Portfolio is available under
the Contract:

Equity 500 Index Fund.

VOTING RIGHTS. In accordance with its view of present applicable law, the
Company will vote the shares of the Trust held in the Separate Account at
special meetings of the shareholders in accordance with instructions received
from persons having the voting interest in the Separate Account. The Company
will vote shares for which it has not received instructions, as well as shares
attributable to it, in the same proportion as it votes shares for which it has
received instructions. The Trust does not hold regular meetings of shareholders.

The number of shares which a person has a right to vote will be determined as of
a date to be chosen by the Company not more than sixty (60) days prior to a
shareholder meeting of the Trust. Voting instructions will be solicited by
written communication at least ten (10) days prior to the meeting.

SUBSTITUTION OF SECURITIES. If the shares of an Eligible Fund (or any Portfolio
within an Eligible Fund or any other Eligible Fund or Portfolio), are no longer
available for investment by the Separate Account or, if in the judgment of the
Company's Board of Directors, further investment in the shares should become
inappropriate in view of the purpose of the Contracts, the Company may limit
further purchase of such shares or may substitute shares of another Eligible
Fund or Portfolio for shares already purchased under the Contracts. No
substitution of securities may take place without prior approval of the
Securities and Exchange Commission and under the requirements it may impose.

CHARGES AND DEDUCTIONS

Various charges and deductions are made from the Contract Value and the Separate
Account. These charges and deductions are:

DEDUCTION FOR MORTALITY AND EXPENSE RISK CHARGE. Each Valuation Period, the
Company deducts a Mortality and Expense Risk Charge from the Separate Account
which is equal, on an annual basis, to 1.25% of the average daily net asset
value of each Sub-Account of the Separate Account. The mortality risks assumed
by the Company arise from its contractual obligation to make Annuity Payments
after the Annuity Date (determined in accordance with the Annuity Option chosen
by the Owner) regardless of how long all Annuitants live. This assures that
neither an Annuitant's own longevity, nor an improvement in life expectancy
greater than that anticipated in the mortality tables, will have any adverse
effect on the Annuity Payments the Annuitant will receive under the Contract.
Further, the Company bears a mortality risk in that it guarantees the annuity
purchase rates for the Annuity Options under the Contract whether for a Fixed
Annuity or a Variable Annuity. Also, the Company bears a mortality risk with
respect to the death benefit. The expense risk assumed by the Company is that
all actual expenses involved in administering the Contracts, including Contract
maintenance costs, administrative costs, mailing costs, data processing costs,
legal fees, accounting fees, filing fees and the costs of other services may
exceed the amount recovered from the Contract Maintenance Charge and the
Administrative Charge.

If the Mortality and Expense Risk Charge is insufficient to cover the actual
costs, the loss will be borne by the Company. Conversely, if the amount deducted
proves more than sufficient, the excess will be a profit to the Company. The
Company expects a profit from this charge.

The Mortality and Expense Risk Charge is guaranteed by the Company and cannot be
increased.

DEDUCTION FOR ADMINISTRATIVE CHARGE. Each Valuation Period, the Company deducts
an Administrative Charge from the Separate Account which is equal, on an annual
basis, to .15% of the average daily net asset value of each Sub-Account of the
Separate Account. This charge, together with the Contract Maintenance Charge
(see below), is to reimburse the Company for the expenses it incurs in the
establishment and maintenance of the Contracts and the Separate Account. These
expenses include, but are not limited to: preparation of the Contracts,
confirmations, annual reports and statements, maintenance of Owner records,
maintenance of Separate Account records, administrative personnel costs, mailing
costs, data processing costs, legal fees, accounting fees, filing fees, the
costs of other services necessary for Owner servicing and all accounting,
valuation, regulatory and reporting requirements. Since this charge is an
asset-based charge, the amount of the charge attributable to a particular
Contract may have no relationship to the administrative costs actually incurred
by that Contract. The Company does not intend to profit from this charge. This
charge will be reduced to the extent that the amount of this charge is in excess
of that necessary to reimburse the Company for its administrative expenses.
Should this charge prove to be insufficient, the Company will not increase this
charge and will incur the loss.

DEDUCTION FOR DISTRIBUTION CHARGE. Each Valuation Period, the Company deducts a
Distribution Charge from the Separate Account which is equal, on an annual
basis, to .10% of the average daily net asset value of each Sub-Account of the
Separate Account. This charge compensates the Company for the costs associated
with the distribution of the Contracts. The Company does not intend to profit
from this charge. This charge will be reduced to the extent that the amount of
this charge is in excess of that necessary to reimburse the Company for its
costs of distribution. Should this charge prove to be insufficient, the Company
will not increase this charge and will incur the loss. The staff of the
Securities and Exchange Commission deems the Distribution Charge to constitute a
deferred sales charge.

DEDUCTION FOR CONTRACT MAINTENANCE CHARGE. On each Contract Anniversary, the
Company deducts a Contract Maintenance Charge from the Contract Value by
subtracting values from the Fixed Account and/or by cancelling Accumulation
Units from each applicable Sub-Account to reimburse it for expenses relating to
maintenance of the Contracts. The Contract Maintenance Charge is $36.00 ($30 in
the State of North Dakota) each Contract Year. However, during the Accumulation
Period, if the Contract Value on the Contract Anniversary is at least $50,000,
then no Contract Maintenance Charge is deducted. If a total withdrawal is made
on other than a Contract Anniversary and the Contract Value for the Valuation
Period during which the total withdrawal is made is less than $50,000, the full
Contract Maintenance Charge will be deducted at the time of the total
withdrawal. During the Annuity Period, the Contract Maintenance Charge will be
deducted from Annuity Payments regardless of Contract size and will result in a
reduction of each Annuity Payment. The Contract Maintenance Charge will be
deducted pro-rata from the Fixed Account and the Sub-Accounts. (In South
Carolina, Texas and Washington during the Accumulation Period and in the event
of a total withdrawal, the Company deducts the Contract Maintenance Charge only
by canceling Accumulation Units from each applicable Sub-Account.) The Company
has set this charge at a level so that, when considered in conjunction with the
Administrative Charge (see above), it will not make a profit from the charges
assessed for administration.

DEDUCTION FOR TRANSFER FEE. An Owner may transfer all or part of the Owner's
interest in a Sub-Account or the Fixed Account (subject to Fixed Account
provisions) without the imposition of any fee or charge if there have been no
more than 12 transfers made in a Contract Year. A transfer made at the end of
the Right to Examine Contract period from the Berkeley Money Market Sub-Account
will not count in determining the application of the Transfer Fee. If more than
twelve transfers have been made in a Contract Year, the Company will deduct a
Transfer Fee which is equal to the lesser of $20 or 2% of the amount
transferred. The Transfer Fee will be deducted from the Contract Value in the
Fixed Account or the Sub-Account from which the transfer is made. However, if
the Owner's entire Contract Value in the Fixed Account or a Sub-Account is being
transferred, the Transfer Fee will be deducted from the amount which is
transferred. If the Contract Value is being transferred from more than one
Sub-Account or a Sub-Account and the Fixed Account, any Transfer Fee will be
allocated to the Fixed Account an to those Sub-Accounts on a pro-rata basis in
proportion to the amount transferred from each. If the Owner is participating in
an approved Dollar Cost Averaging Program or Rebalancing Program, such transfers
currently are not counted toward the number of transfers for the year and are
not taken into account in determining any Transfer Fee.

DEDUCTION FOR PREMIUM AND OTHER TAXES. Any taxes, including any Premium Taxes,
paid to any governmental entity relating to the Contract may be deducted from
the Contributions or Contract Value when incurred. The Company will, in its sole
discretion, determine when taxes have resulted from: the investment experience
of the Separate Account; receipt by the Company of the Contributions; or
commencement of Annuity Payments. The Company may, at its sole discretion, pay
taxes when due and deduct that amount from the Contract Value at a later date.
Payment at an earlier date does not waive any right the Company may have to
deduct amounts at a later date. The Company's current practice is to pay any
Premium Taxes when incurred and deduct the tax upon full or partial withdrawals,
payment of a death benefit or purchase of an annuity under the Contract. The
Company reserves the right to discontinue the deferral of Premium Taxes. Premium
Taxes generally range from 0% to 4%.

While the Company is not currently maintaining a provision for federal income
taxes with respect to the Separate Account, the Company has reserved the right
to establish a provision for income taxes if it determines, in its sole
discretion, that it will incur a tax as a result of the operation of the
Separate Account. The Company will deduct for any income taxes incurred by it as
a result of the operation of the Separate Account whether or not there was a
provision for taxes and whether or not it was sufficient.

The Company will deduct any withholding taxes required by applicable law. See
"Federal ax Status - Income Tax Withholding."

DEDUCTION FOR EXPENSES OF THE TRUST. There are other deductions from and
expenses (including management fees paid to the Adviser and other expenses) paid
out of the assets of the Trust which are described in the Prospectuses for the
Portfolios of the Trust.

THE CONTRACTS

OWNER. The Owner has all interest and rights to amounts held in his or her
Contract. The Owner is the person designated as such on the Issue Date, unless
changed. The Owner may change owners of the Contract at any time prior to the
Annuity Date by Written Request. A change of Owner will automatically revoke any
prior designation of Owner. The change will become effective as of the date the
Written Request is signed. A new designation of Owner will not apply to any
payment made or action taken by the Company prior to the time it was received.

For Non-Qualified Contracts, in accordance with Code Section 72(u), a deferred
annuity contract held by a corporation or other entity that is not a natural
person is not treated as an annuity contract for tax purposes. Income on the
contract is treated as ordinary income received by the owner during the taxable
year. However, for purposes of Code Section 72(u), an annuity contract held by a
trust or other entity as agent for a natural person is considered held by a
natural person and treated as an annuity contract for tax purposes. Tax advice
should be sought prior to purchasing a Contract which is to be owned by a trust
or other non-natural person.

JOINT OWNERS. The Contract can be owned by Joint Owners. If Joint Owners are
named, any Joint Owner must be the spouse of the other Owner. Upon the death of
either Owner, the surviving Joint Owner will be the Primary Beneficiary. Any
other Beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in a Written Request. Unless otherwise specified in the
application for the Contract, if there are Joint Owners both signatures will be
required for all Owner transactions except telephone transfers. If the telephone
transfer option is elected and there are Joint Owners, either Joint Owner can
give telephone instructions.

ANNUITANT. The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by the Owner at the Issue Date, unless
changed prior to the Annuity Date. The Annuitant may not be changed in a
Contract which is owned by a non-natural person. Any change of Annuitant is
subject to the Company's underwriting rules then in effect.

ASSIGNMENT. A Written Request specifying the terms of an assignment of the
Contract must be provided to the Annuity Service Center. Until the Written
Request is received, the Company will not be required to take notice of or be
responsible for any transfer of interest in the Contract by assignment,
agreement, or otherwise.

The Company will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with the Company's consent.

If the Contract is assigned, the Owner's rights may only be exercised with the
consent of the assignee of record.

If the Contract is issued pursuant to a retirement plan which receives favorable
tax treatment under the provisions of Section 408 of the Code, it may not be
assigned, pledged or otherwise transferred except as may be allowed under
applicable law.

CONTRIBUTIONS AND CONTRACT VALUE

CONTRIBUTIONS. The initial Contribution is due on the Issue Date. The minimum
initial Contribution is $5,000 (except for Individual Retirement Annuities, the
minimum initial Contribution is $1,000). The minimum subsequent Contribution is
$1,000, or if the periodic investment plan option is elected $100. The maximum
total Contributions the Company will accept without Company approval are
$1,000,000, except for issue Ages greater than 75 years old for which the
maximum total Contributions are $500,000.

The Company reserves the right to reject any Contribution or Contract.

ALLOCATION OF CONTRIBUTIONS. Contributions are allocated to the Fixed Account
and/or to one or more Sub-Accounts of the Separate Account in accordance with
the selections made by the Owner. The allocation of the initial Contribution is
made in accordance with the selection made by the Owner at the Issue Date.
Unless otherwise changed by the Owner, subsequent Contributions are allocated in
the same manner as the initial Contribution. Allocation of the Contribution is
subject to the terms and conditions imposed by the Company. There are currently
no limitations on the number of Sub-Accounts that can be selected by an Owner.
Allocations must be in whole percentages with a minimum allocation of 10% of
each Contribution or transfer, unless the Contribution is being made pursuant to
an approved Dollar Cost Averaging Program. Under certain circumstances, the
Company will allocate initial Contributions to the Berkeley Money Market
Sub-Account until the expiration of the Right to Examine Contract period (see
"Highlights").

For initial Contributions, if the forms required to issue a Contract are in good
order, the Company will apply the Contribution to the Separate Account and
credit the Contract with Accumulation Units and/or to the Fixed Account and
credit the Contract with dollars within two business days of receipt.

In addition to the underwriting requirements of the Company, good order means
that the Company has received federal funds (monies credited to a bank's account
with its regional Federal Reserve Bank). If the forms required to issue a
Contract are not in good order, the Company will attempt to get them in good
order or the Company will return the forms and the Contribution within five
business days. The Company will not retain the Contribution for more than five
business days while processing incomplete forms unless it has been so authorized
by the purchaser. For subsequent Contributions, the Company will apply
Contributions to the Separate Account and credit the Contract with Accumulation
Units and/or to the Fixed Account and credit the Contract with dollars as of the
end of the Valuation Period during which the Contribution was received in good
order.

DOLLAR COST AVERAGING PROGRAM. Dollar Cost Averaging is a program which, if
elected, permits an Owner to systematically transfer amounts on a monthly,
quarterly, semi-annual or annual basis from the Berkeley Money Market
Sub-Account, the Berkeley U.S. Quality Bond Sub-Account or the Fixed Account to
one or more Sub-Accounts. Dollar Cost Averaging may be elected if the Owner's
Contract Value is at least $20,000 as of the Valuation Date Dollar Cost
Averaging is elected. By allocating amounts on a regularly scheduled basis as
opposed to allocating the total amount at one particular time, an Owner may be
less susceptible to the impact of market fluctuations. Transfers to the Fixed
Account are not permitted. The Company reserves the right, at any time and
without prior notice to any party, to terminate, suspend or modify its Dollar
Cost Averaging Program.

If selected, Dollar Cost Averaging must be for at least 12 months. There is no
current charge for Dollar Cost Averaging. However, the Company reserves the
right to charge for Dollar Cost Averaging in the future. The standard date of
the month for transfers is the date the Owner's request for enrollment in the
program is received and processed by the Company and subsequent monthly,
quarterly, semi-annual or annual anniversaries of that date. The Owner may
specify a different future date. Transfers made pursuant to the Dollar Cost
Averaging Program are not taken into account in determining any Transfer Fee.

REBALANCING PROGRAM. Certain Owners may utilize an asset allocation model known
as the Asset Equalizer to help them establish their initial investment
allocations in the Contracts. These Owners may rebalance their investments
monthly to maintain the allocation in the Asset Equalizer model. Rebalancing
provides for periodic pre-authorized automatic transfers among the Sub-Accounts.
Any amounts in the Fixed Account will not be transferred pursuant to this
program. If the Owner is participating in the Rebalancing Program, such
transfers currently are not counted toward the number of transfers for the year
and are not taken into account in determining any Transfer Fee.

CONTRACT VALUE. The Contract Value for any Valuation Period is the sum of the
Contract Value in each of the Sub-Accounts of the Separate Account and the
Contract Value in the Fixed Account.

The Contract Value in a Sub-Account of the Separate Account is determined by
multiplying the number of Accumulation Units allocated to the Sub-Account by the
Accumulation Unit value.

ACCUMULATION UNITS. Accumulation Units will be used to account for all amounts
allocated to or withdrawn from the Sub-Accounts of the Separate Account as a
result of Contributions, withdrawals, transfers, or fees and charges. The
Company will determine the number of Accumulation Units of a Sub-Account
purchased or cancelled. This will be done by dividing the amount allocated to
(or the amount withdrawn from) the Sub-Account by the dollar value of one
Accumulation Unit of the Sub-Account as of the end of the Valuation Period
during which the request for the transaction is received at the Annuity Service
Center.

ACCUMULATION UNIT VALUE. The Accumulation Unit value for each Sub-Account was
arbitrarily set initially at $10. The Accumulation Unit value for each
Sub-Account for any later Valuation Period is determined by subtracting (2) from
(1) and dividing the result by (3) where:

1. is the result of:

a. the assets of the Sub-Account attributable to Accumulation Units;
plus or minus

b. the cumulative charge or credit for taxes reserved which is
determined by the Company to have resulted from the operation of
the Sub-Account.

2. is the cumulative unpaid charge for the Mortality and Expense Risk
Charge, for the Administrative Charge and for the Distribution
Charge.

3. is the number of Accumulation Units outstanding at the end of the
Valuation Period.

The Accumulation Unit value may increase or decrease from Valuation
Period to Valuation Period.

TRANSFERS

TRANSFERS DURING THE ACCUMULATION PERIOD. Subject to any limitation imposed by
the Company on the number of transfers (currently, unlimited) that can be made
during the Accumulation Period, the Owner may transfer all or part of the
Contract Value in a Sub-Account or the Fixed Account without the imposition of
any fee or charge if there have been no more than the number of free transfers
(currently, twelve) made. All transfers are subject to the following:

1. If more than the number of free transfers have been made in a Contract
Year, the Company will deduct a Transfer Fee for each subsequent
transfer permitted.

2. The minimum amount which can be transferred is $500 (from (i) one or
multiple Sub-Accounts, or (ii) the Fixed Account) or the Owner's
entire interest in the Sub-Account or the Fixed Account, if less. The
minimum amount which must remain in a Sub-Account after a transfer is
$500 per Sub-Account, or $0 if the entire amount in the Sub-Account is
transferred. Transfers made pursuant to an approved Dollar Cost
Averaging Program and Rebalancing Program will not be subject to this
limitation. The minimum amount which must remain in the Fixed Account
after a transfer is $500, or $0 if the entire amount in any Guarantee
Period is transferred. Transfers made from any Guarantee Period
pursuant to an approved Dollar Cost Averaging Program will not be
subject to these limits.

3. The Company reserves the right, at any time and without prior notice
to any party, to terminate, suspend or modify the transfer privilege
described above.

Neither the Separate Account nor the Trust is designed for professional market
timing organizations or other entities using programmed and frequent transfers.
A pattern of exchanges that coincides with a "market timing" strategy may be
disruptive to a Portfolio. The Company reserves the right to restrict the
transfer privilege or reject any specific Contribution allocation request for
any person whose transactions seem to follow a timing pattern.

TRANSFERS DURING THE ANNUITY PERIOD. During the Annuity Period, the Owner may
make transfers, by Written Request, as follows:

1. The Owner may make transfers of Contract Values between Sub-Accounts,
subject to any limitations imposed by the Company on the number of
transfers that can be made during the Annuity Period (currently,
unlimited). If more than the number of free transfers have been made
in a Contract Year, the Company will deduct a Transfer Fee for each
subsequent transfer permitted. The Transfer Fee will be deducted from
the amount which is transferred.

2. The Owner may once each Contract Year make a transfer from one or
more Sub-Accounts to the Fixed Account. The Owner may not make a
transfer from the Fixed Account to the Separate Account.

3. Transfers between Sub-Accounts will be made by converting the number
of Annuity Units being transferred to the number of Annuity Units of
the Sub-Account to which the transfer is made, so that the next
Annuity Payment if it were made at that time would be the same amount
that it would have been without the transfer. Thereafter, Annuity
Payments will reflect changes in the value of the new Annuity Units.

4. The minimum amount which can be transferred is $500 (from one or
multiple Sub-Accounts) or the Owner's entire interest in the
Sub-Account, if less. The minimum amount which must remain in a
Sub-Account after a transfer is $500 per Sub-Account, or $0 if the
entire amount in the Sub-Account is transferred.

5. The Company reserves the right, at any time and without prior notice
to any party, to terminate, suspend or modify the transfer privilege
described above.

Owners can elect to make transfers by telephone. To do so Owners must complete a
Written Request. The Company will use reasonable procedures to confirm that
instructions communicated by telephone are genuine. If it does not, the Company
may be liable for any losses due to unauthorized or fraudulent instructions. The
Company may tape record all telephone instructions. The Company will not be
liable for any loss, liability, cost or expense incurred by the Owner for acting
in accordance with such telephone instructions believed to be genuine. The
telephone transfer privilege may be discontinued at any time by the Company. If
there are Joint Owners, unless the Company is informed to the contrary,
telephone instructions will be accepted from either of the Joint Owners.

WITHDRAWALS

During the Accumulation Period, the Owner may, upon a Written Request, make a
total or partial withdrawal of the Contract Withdrawal Value. (In the State of
Washington, the Owner may make a withdrawal on the Annuity Date.)

Unless the Owner instructs the Company otherwise, a partial withdrawal will be
made from the Separate Account. A partial withdrawal will result in the
cancellation of Accumulation Units from each applicable Sub-Account in the ratio
that the Owner's interest in the Sub-Account bears to the total Contract Value
allocated to the Separate Account. The Owner must specify by Written Request in
advance which Sub-Account Accumulation Units are to be cancelled if other than
the above method is desired.

A partial withdrawal from the Fixed Account is made for a Contract with multiple
Contributions during the Guarantee Period by a withdrawal from the Contribution
with the most recent Effective Date.

The Company will pay the amount of any withdrawal from the Separate Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments provision is in effect.

Each partial withdrawal must be for at least $500 (this requirement may be
waived to meet minimum distribution requirements for Qualified Contracts). The
minimum Contract Value which must remain in the Contract after a partial
withdrawal is $2,000 (this requirement may be waived to meet minimum
distribution requirements for Qualified Contracts). The minimum Contract Value
which must remain in a Sub-Account or the Fixed Account after a partial
withdrawal is $500.

INCOME TAXES AND TAX PENALTIES MAY APPLY TO ANY WITHDRAWAL FROM THE CONTRACT.
See "Federal Tax Status - Tax Treatment of Withdrawals - Qualified Contracts"
and "Tax Treatment of Withdrawals - Non-Qualified Contracts."

SYSTEMATIC WITHDRAWAL OPTION. The Company offers a Systematic Withdrawal Option
which enables an Owner to pre-authorize a periodic exercise of the contractual
withdrawal rights described above. The Systematic Withdrawal Option is available
if the Owner's Contract Value is at least $20,000 as of the Valuation Date this
option is requested. The Owner or the Company may terminate systematic
withdrawals upon 30 days' prior written notice. There is currently no
transaction charge for systematic withdrawals. However, the Company reserves the
right to exercise the transaction charge for systematic withdrawals in the
future. The total permitted systematic withdrawal in a Contract Year is limited
to not more than 10% of the unliquidated Contributions as of the immediately
preceding Contract Anniversary or, if during the first Contract Year, as of the
Issue Date. The Systematic Withdrawal Option can be exercised at any time,
including during the first Contract Year.

Systematic withdrawals are available for Qualified and Non-Qualified Contracts.
Certain tax penalties and restrictions may apply to systematic withdrawals from
the Contracts. (See "Federal Tax Status - Tax Treatment of Withdrawals -
Qualified Contracts" and "Tax Treatment of Withdrawals - Non-Qualified
Contracts.") Owners entering into such a program instruct the Company to
withdraw an amount specified as a percentage of the Contribution, or a
percentage of Contract Value, or in dollars on a monthly, quarterly or
semi-annual basis. The minimum withdrawal amount is $100 per payment. The
standard date of the month for withdrawals is the date the Owner's request for
enrollment in the program is received and processed by the Company, and
subsequent monthly (or the payment schedule selected) anniversaries of that
date. The Owner may specify a different future date.

SUSPENSION OR DEFERRAL OF PAYMENTS. The Company reserves the right to suspend or
postpone payments from the Separate Account for a withdrawal or transfer for any
period when:

1. The New York Stock Exchange is closed (other than customary weekend
and holiday closings);

2. Trading on the New York Stock Exchange is restricted;

3. An emergency exists as a result of which disposal of securities held
in the Separate Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate
Account's net assets; or

4. During any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners; provided that
applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2)
and (3) exist.

The Company further reserves the right to postpone payment for a withdrawal or
transfer from the Fixed Account for a period of up to six months.

PROCEEDS PAYABLE ON DEATH

DEATH OF OWNER DURING THE ACCUMULATION PERIOD. Upon the death of the Owner or
any Joint Owner prior to the Annuity Date, the death benefit will be paid to the
Beneficiary(ies) designated by the Owner. Upon the death of a Joint Owner, the
surviving Joint Owner, if any, will be treated as the primary Beneficiary. Any
other Beneficiary designation on record at the time of death will be treated as
a contingent Beneficiary.

A Beneficiary may request that the death benefit be paid under one of the Death
Benefit Options described below. If the Beneficiary is the spouse of the Owner
he or she may elect to continue the Contract at the then current Contract Value
in his or her own name and exercise all the Owner's rights under the Contract.

DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD. Prior to the Owner, or the
oldest Joint Owner, attaining Age 80, the death benefit during the Accumulation
Period will be the greater of:

1. The Adjusted Contributions; or

2. The Contract Value determined as of the end of the Valuation Period
during which the Company receives at its Annuity Service Center both
due proof of death and an election of the payment method; or

3. The Contract Value on the most recent seventh year Contract
Anniversary or the Adjusted Contributions as of the most recent
seventh year Contract Anniversary, whichever is greater. This amount
is increased for subsequent Contributions and reduced for subsequent
partial withdrawals in the same proportion that the Contract Value
was reduced on the date of the withdrawal.

After the Owner, or the oldest Joint Owner, attains Age 80, the death benefit
during the Accumulation Period will be the Contract Value determined as of the
end of the Valuation Period during which the Company receives both due proof of
death an election for the payment method.

Adjusted Contributions are equal to the initial Contribution increased for
subsequent Contributions and reduced for subsequent partial withdrawals in the
same proportion that the Contract Value was reduced on the date of the
withdrawal.

In certain states, the death benefit during the Accumulation Period will be the
Contract Value determined as of the end of the Valuation Period during which the
Company receives both due proof of death and an election for the payment method.

Owners should refer to their Contract for the applicable death benefit
provision.

See the "Appendix" for examples of how the death benefit is calculated.

DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD. A non-spousal Beneficiary
must elect the death benefit to be paid under one of the following options in
the event of the death of the Owner during the Accumulation Period:

Option 1 - lump sum payment of the death benefit; or

Option 2 - payment of the entire death benefit within 5 years of the date
of the death of the Owner; or

Option 3 - payment of the death benefit under an Annuity Option over the
lifetime of the Beneficiary or over a period not extending beyond the life
expectancy of the Beneficiary with distribution beginning within one year
of the date of death of the Owner or any Joint Owner.

Any portion of the death benefit not applied under Option 3 within one year of
the date of the Owner's death, must be distributed within five years of the date
of death.

A spousal Beneficiary may elect to continue the Contract in his or her own name
at the then current Contract Value, elect a lump sum payment of the death
benefit or apply the death benefit to an Annuity Option.

If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments provision is in effect. Payment to the Beneficiary, other
than in a lump sum, may only be elected during the sixty-day period beginning
with the date of receipt of proof of death.

DEATH OF OWNER DURING THE ANNUITY PERIOD. If the Owner or a Joint Owner, who is
not the Annuitant, dies during the Annuity Period, any remaining payments under
the Annuity Option elected will continue at least as rapidly as under the method
of distribution in effect at such Owner's death. Upon the death of the Owner
during the Annuity Period, the Beneficiary becomes the Owner.

DEATH OF ANNUITANT. Upon the death of the Annuitant, who is not the Owner,
during the Accumulation Period, the Owner may designate a new Annuitant, subject
to the Company's underwriting rules then in effect. If no designation is made
within 30 days of the death of the Annuitant, the Owner will become the
Annuitant. If the Owner is a non-natural person, the death of the Annuitant will
be treated as the death of the Owner and a new Annuitant may not be designated.

Upon the death of the Annuitant during the Annuity Period, the death benefit, if
any, will be as specified in the Annuity Option elected. Death benefits will be
paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.

PAYMENT OF DEATH BENEFIT. The Company will require due proof of death before any
death benefit is paid. Due proof of death will be:

1. a certified death certificate;

2. a certified decree of a court of competent jurisdiction as to the
finding of death; or

3. any other proof satisfactory to the Company.

All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.

BENEFICIARY. The Beneficiary designation in effect on the Issue Date will remain
in effect until changed. The Beneficiary is entitled to receive the benefits to
be paid at the death of the Owner. Unless the Owner provides otherwise, the
death benefit will be paid in equal shares to the survivor(s) as follows:

1. to the Primary Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none

2. to the Contingent Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none

3. to the estate of the Owner.

CHANGE OF BENEFICIARY. Subject to the rights of any irrevocable
Beneficiary(ies), the Owner may change the Primary Beneficiary(ies) or
Contingent Beneficiary(ies). Any change must be made by Written Request. The
change will take effect as of the date the Written Request is signed. The
Company will not be liable for any payment made or action taken before it
records the change.

ANNUITY PROVISIONS

GENERAL. On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity Option selected by the Owner. Annuity Payments may be made on a
fixed or variable basis or both.

ANNUITY DATE. The Annuity Date is selected by the Owner on the Issue Date. The
Annuity Date must be the first day of a calendar month and must be at least one
month after the Issue Date. The Annuity Date may not be later than when the
Annuitant reaches Age 85 or 10 years after the Issue Date for issue ages after
Age 75.

Prior to the Annuity Date, the Owner, subject to the above, may change the
Annuity Date by Written Request. Any change must be requested at least seven (7)
days prior to the new Annuity Date.

SELECTION OR CHANGE OF AN ANNUITY OPTION. An Annuity Option is selected by the
Owner at the time the Contract is issued. Prior to the Annuity Date, the Owner
can change the Annuity Option selected by Written Request. Any change must be
requested at least seven (7) days prior to the Annuity Date.

FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS. Annuity Payments are paid in monthly
installments. The Adjusted Contract Value is applied to the Annuity Table for
the Annuity Option selected. If the Adjusted Contract Value to be applied under
an Annuity Option is less than $2,000, the Company reserves the right to make a
lump sum payment in lieu of Annuity Payments. If the Annuity Payment would be or
become less than $200 where only a Fixed Annuity or a Variable Annuity is
selected, or if the Annuity Payment would be or become less than $100 on each
basis when a combination of a Fixed and Variable Annuity is selected, the
Company will reduce the frequency of payments to an interval which will result
in each payment being at least $200, or $100 on each basis if a combination of a
Fixed and Variable Annuity is selected.

ANNUITY. If the Owner selects a Fixed Annuity, the Adjusted Contract Value is
allocated to the Fixed Account and the Annuity is paid as a Fixed Annuity. If
the Owner selects a Variable Annuity, the Adjusted Contract Value will be
allocated to the Sub-Account(s) of the Separate Account in accordance with the
selection made by the Owner, and the Annuity will be paid as a Variable Annuity.
The Owner can also select a combination of a Fixed and Variable Annuity and the
Adjusted Contract Value will be allocated accordingly. Unless the Owner
specifies otherwise, the payee of the Annuity Payments shall be the Owner.

The Adjusted Contract Value will be applied to the applicable Annuity Table
contained in the Contract based upon the Annuity Option selected by the Owner.

FIXED ANNUITY. The Owner may elect to have the Adjusted Contract Value applied
to provide a Fixed Annuity. The dollar amount of each Fixed Annuity Payment will
be determined in accordance with Annuity Tables contained in the Contract which
are based on the minimum guaranteed interest rate of 3% per year. The dollar
amount of each Fixed Annuity Payment will be reduced by the applicable portion
of the Contract Maintenance Charge. After the initial Fixed Annuity Payment, the
payments will not change regardless of investment, mortality or expense
experience.

VARIABLE ANNUITY. Variable Annuity Payments reflect the investment performance
of the Separate Account in accordance with the allocation of the Adjusted
Contract Value to the Sub-Accounts during the Annuity Period. Variable Annuity
payments are not guaranteed as to dollar amount.

ANNUITY OPTIONS. The following Annuity Options or any other Annuity Option
acceptable to the Company may be selected:

OPTION A. LIFE ANNUITY: Monthly Annuity Payments during the life of the
Annuitant.

OPTION B. LIFE ANNUITY WITH PERIOD CERTAIN OF 120 MONTHS: Monthly Annuity
Payments during the lifetime of the Annuitant and in any event for one
hundred twenty (120) months. If the Beneficiary does not desire payments to
continue for the remainder of the period certain, he or she may elect to
have the present value of the guaranteed annuity payments remaining
commuted and paid in a lump sum.

OPTION C. JOINT AND SURVIVOR ANNUITY: Monthly Annuity Payments payable
during the joint lifetime of the Annuitant and a Joint Annuitant and then
during the lifetime of the survivor at 66 2/3%.

OPTION D. PERIOD CERTAIN: Monthly payments will be made for a specified
period. The specified period must be at least ten (10) years and cannot be
more than thirty (30) years. If the Owner does not desire payments to
continue for the remainder of the selected period, he or she may elect to
have the present value of the remaining payments to be made from the
Separate Account commuted and paid in a lump sum or as an Annuity Option
purchased at the date of such election.

Annuity Options A, B, C and D are available on a Fixed Annuity basis, a Variable
Annuity basis or a combination of both. Election of a Fixed Annuity or a
Variable Annuity must be made no later than fifteen (15) days prior to the
Annuity Date. If no election is made as between a Fixed Annuity and a Variable
Annuity, the Variable Annuity will be the default option.

DISTRIBUTOR

London Pacific Financial and Insurance Services is the distributor of the
Contracts. London Pacific Financial and Insurance Services is registered as a
broker-dealer with the Securities and Exchange Commission and is a member of the
National Association of Securities Dealers, Inc. London Pacific Financial and
Insurance Services is an affiliate of the Company.

Commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers will be paid an ongoing quarterly commission currently equal to
.275% of the Contract Value (pro-rated for the first Contract quarter based upon
the length of time the Contract has been in force) for promotional or
distribution expenses associated with the marketing of the Contracts.

PERFORMANCE INFORMATION

BERKELEY MONEY MARKET SUB-ACCOUNT. From time to time, the Berkeley Money Market
Sub-Account of the Separate Account may advertise its "current yield" and
"effective yield." Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "current yield" of the Berkeley
Money Market Sub-Account refers to the income generated by Contract Values in
the Berkeley Money Market Sub-Account over a seven-day period ending on the date
of calculation (which period will be stated in the advertisement). This income
is "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the Contract Value in the Berkeley Money Market
Sub-Account. The "effective yield" is calculated similarly. However, when
annualized, the income earned by Contract Value is assumed to be reinvested.
This results in the "effective yield" being slightly higher than the "current
yield" because of the compounding effect of the assumed reinvestment. The yield
figure will reflect the deduction of all recurring charges and deductions
against the Sub-Account's income, including the deduction of the Mortality and
Expense Risk Charge, the Administrative Charge, the Distribution Charge and a
pro-rata portion of the Contract Maintenance Charge. The Company does not impose
a sales load upon redemptions in connection with the Contracts.

OTHER SUB-ACCOUNTS. From time to time, the Company may advertise performance
data for the various other Sub-Accounts under the Contract. Such data will show
the percentage change in the value of an Accumulation Unit based on the
performance of a Portfolio over a period of time, usually a calendar year,
determined by dividing the increase (decrease) in value for that Unit by the
Accumulation Unit value at the beginning of the period. This percentage figure
will reflect the deduction of any asset-based charges and any applicable
Contract Maintenance Charges under the Contracts. The Company may also advertise
performance information computed on a different basis which may not include
certain charges. If such charges were deducted, the performance would be lower.

Any advertisement will also include standardized average annual total return
figures calculated as described in the Statement of Additional Information. The
total return figures reflect the fees and expenses of the Portfolio and all
recurring charges and deductions against the Sub-Account's income, including the
deduction of the Mortality and Expense Risk Charge, the Administrative Charge,
the Distribution Charge and a pro-rata portion of the Contract Maintenance
Charge for the applicable periods shown.

The Company may make available yield information with respect to some of the
Sub-Accounts. Such yield information will be calculated as described in the
Statement of Additional Information. The yield information will reflect the
deduction of all recurring charges and deductions against the Sub-Account's
income, including the deduction of the Mortality and Expense Risk Charge, the
Administrative Charge, the Distribution Charge and a pro-rata portion of the
Contract Maintenance Charge. The Company does not impose a sales load upon
redemptions in connection with the Contracts.

The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.

Owners should note that the investment results of each Sub-Account will
fluctuate over time, and any presentation of the Sub-Account's current yield or
total return for any prior period should not be considered a representation of
what an investment may earn or what an Owner's yield or total return may be in
any future period.

In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the Sub-Accounts
against established market indices such as the Standard & Poor's 500 Composite
Stock Price Index, the Dow Jones Industrial Average or other management
investment companies which have investment objectives similar to the underlying
Portfolio being compared. The Standard & Poor's 500 Composite Stock Price Index
is an unmanaged, unweighted average of 500 stocks, the majority of which are
listed on the New York Stock Exchange. The Dow Jones Industrial Average is an
unmanaged, weighted average of thirty blue chip industrial corporations listed
on the New York Stock Exchange. Both the Standard & Poor's 500 Composite Stock
Price Index and the Dow Jones Industrial Average assume quarterly reinvestment
of dividends.

In addition, the Company may, as appropriate, compare each Sub-Account's
performance to that of other types of investments such as certificates of
deposit, savings accounts and U.S. Treasuries, or to certain interest rate and
inflation indices, such as the Consumer Price Index, which is published by the
U.S. Department of Labor and measures the average change in prices over time of
a fixed "market basket" of certain specified goods and services. Similar
comparisons of Sub-Account performance may also be made with appropriate indices
measuring the performance of a defined group of securities widely recognized by
investors as representing a particular segment of the securities markets. For
example, Sub-Account performance may be compared with Donoghue Money Market
Institutional Averages (money market rates), Lehman Brothers Corporate Bond
Index (corporate bond interest rates) or Lehman Brothers Government Bond Index
(long-term U.S. Government obligation interest rates).

The Company may also distribute sales literature which compares the performance
of the Accumulation Unit values of the Contracts issued through the Separate
Account with the unit values of variable annuities issued through the separate
accounts of other insurance companies. Such information will be derived from the
Lipper Variable Insurance Products Performance Analysis Service, the VARDS
Report or from Morningstar.

The Lipper Variable Insurance Products Performance Analysis Service is published
by Lipper Analytical Services, Inc., a publisher of statistical data which
currently tracks the performance of almost 4,000 investment companies. The
rankings compiled by Lipper may or may not reflect the deduction of asset-based
insurance charges. The Company's sales literature utilizing these rankings will
indicate whether or not such charges have been deducted. Where the charges have
not been deducted, the sales literature will indicate that if the charges had
been deducted, the ranking might have been lower.

The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Georgia and published by Financial
Planning Resources, Inc. The VARDS rankings may or may not reflect the deduction
of asset-based insurance charges. Where the charges have not been deducted, the
sales literature will indicate that if the charges had been deducted, the
rankings might have been lower.

Morningstar rates a variable annuity Sub-Account against its peers with similar
investment objectives. Morningstar does not rate any Sub-Account that has less
than three years of performance data. The Morningstar rankings may or may not
reflect the deduction of charges. Where charges have not been deducted, the
sales literature will indicate that if the charges had been deducted, the
rankings might have been lower. \

FEDERAL TAX STATUS

NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE COMPANY
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE MADE.
PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE POSSIBILITY
OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED IN THIS PROSPECTUS MAY BE APPLICABLE IN CERTAIN SITUATIONS.
MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX
LAWS.

GENERAL. Section 72 of the Code governs taxation of annuities in general. An
owner is not taxed on increases in the value of a Contract until distribution
occurs, either in the form of a lump sum payment or as annuity payments under
the Annuity Option selected. For a lump sum payment received as a total
withdrawal (total surrender), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the Contract. For Non-Qualified
Contracts, this cost basis is generally the contributions, while for Qualified
Contracts there may be no cost basis. The taxable portion of the lump sum
payment is taxed at ordinary income tax rates.

For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
Fixed Annuity Option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period certain or refund
feature) bears to the expected return under the Contract. The exclusion amount
for payments based on a Variable Annuity Option is determined by dividing the
cost basis of the Contract (adjusted for any period certain or refund feature)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the Contract has been recovered (i.e. when the
total of the excludible amounts equal the investment in the Contract) are fully
taxable. The taxable portion is taxed at ordinary income tax rates. For certain
types of Qualified Plans there may be no cost basis in the Contract within the
meaning of Section 72 of the Code. Owners, Annuitants and Beneficiaries under
the Contracts should seek competent financial advice about the tax consequences
of any distributions.

The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from the
Company and its operations form a part of the Company.

DIVERSIFICATION. Section 817(h) of the Code imposes certain diversification
standards on the underlying assets of variable annuity contracts. The Code
provides that a variable annuity contract will not be treated as an annuity
contract for any period (and any subsequent period) for which the investments
are not, in accordance with regulations prescribed by the United States Treasury
Department ("Treasury Department"), adequately diversified. Disqualification of
the Contract as an annuity contract would result in imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contracts meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.

On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contracts. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.

The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."

The Company intends that all Portfolios will be managed in such a manner as to
comply with these diversification requirements.

The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.

The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Separate
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.

In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owner being
retroactively determined to be the owner of the assets of the Separate Account.

Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.

CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS. Under Section 72(u) of the Code,
the investment earnings on Contributions for the Contracts will be taxed
currently to the Owner if the Owner is a non-natural person, e.g., a
corporation, or certain other entities. Such Contracts generally will not be
treated as annuities for federal income tax purposes. However, this treatment is
not applied to Contracts held by a trust or other entity as agent for a natural
person nor to Contracts held by Qualified Plans. Purchasers should consult their
own tax adviser before purchasing a Contract to be owned by a non-natural
person.

MULTIPLE CONTRACTS. The Code provides that multiple non-qualified annuity
contracts which are issued within a calendar year to the same contract owner by
one company or its affiliates are treated as one annuity contract for purposes
of determining the tax consequences of any distribution. Such treatment may
result in adverse tax consequences including more rapid taxation of the
distributed amounts from such combination of contracts. Owners should consult a
tax adviser prior to purchasing more than one non-qualified annuity contract in
any calendar year.

TAX TREATMENT OF ASSIGNMENTS. An assignment or pledge of a Contract may be a
taxable event. Owners should therefore consult competent tax advisers should
they wish to assign or pledge their Contracts.

INCOME TAX WITHHOLDING. All distributions or the portion thereof which is
includible in the gross income of the Owner are subject to federal income tax
withholding. Generally, amounts are withheld from periodic payments at the same
rate as wages and at the rate of 10% from non-periodic payments. However, the
Owner, in most cases, may elect not to have taxes withheld or to have
withholding done at a different rate. Effective January 1, 1993, certain
distributions from retirement plans qualified under Section 401 or Section
403(b) of the Code, which are not directly rolled over to another eligible
retirement plan or individual retirement account or individual retirement
annuity, are subject to a mandatory 20% withholding for federal income tax. The
20% withholding requirement generally does not apply to: a) a series of
substantially equal payments made at least annually for the life or life
expectancy of the participant or joint and last survivor expectancy of the
participant and a designated beneficiary, or distributions for a specified
period of 10 years or more; or b) distributions which are required minimum
distributions; or c) the portion of the distributions not includible in gross
income (i.e. returns of after-tax contributions). Participants under such plans
should consult their own tax counsel or other tax adviser regarding withholding
requirements.

TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS. Section 72 of the Code
governs the treatment of distributions from annuity contracts. It provides that
if the contract value exceeds the aggregate contributions made, any amount
withdrawn will be treated as coming first from the earnings and then, only after
the income portion is exhausted, as coming from the principal. Withdrawn
earnings are includible in gross income. It further provides that a ten percent
(10%) penalty will apply to the income portion of any distribution. However, the
penalty is not imposed on amounts received: (a) after the taxpayer reaches age
59 1/2; (b) after the death of the Owner; (c) if the taxpayer is totally
disabled (for this purpose disability is as defined in Section 72(m)(7) of the
Code); (d) in a series of substantially equal periodic payments made not less
frequently than annually for the life (or life expectancy) of the taxpayer or
for the joint lives (or joint life expectancies) of the taxpayer and his or her
Beneficiary; (e) under an immediate annuity; or (f) which are allocable to
purchase payments made prior to August 14, 1982.

The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts," below.)

QUALIFIED PLANS. The Contracts offered by this Prospectus may also be used as
Qualified Contracts. The following discussion of Qualified Contracts is not
exhaustive and is for general informational purposes only. The tax rules
regarding Qualified Contracts are very complex and will have differing
applications depending on individual facts and circumstances. Each purchaser
should obtain competent tax advice prior to purchasing Qualified Contracts.

Qualified Contracts include special provisions restricting Contract provisions
that may otherwise be available as described in this Prospectus. Generally,
Qualified Contracts are not transferable except upon surrender or annuitization.

On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. Qualified Contracts will utilize annuity tables
which do not differentiate on the basis of sex. Such annuity tables will also be
available for use in connection with certain non-qualified deferred compensation
plans.

Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which will be deductible from the individual's gross income. These IRAs are
subject to limitations on eligibility, contributions, transferability and
distributions. (See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
Under certain conditions, distributions from other IRAs and other Qualified
Plans may be rolled over or transferred on a tax-deferred basis into an IRA.
Sales of Contracts for use with IRAs are subject to special requirements imposed
by the Code, including the requirement that certain informational disclosure be
given to persons desiring to establish an IRA. Purchasers of Contracts to be
qualified as Individual Retirement Annuities should obtain competent tax advice
as to the tax treatment and suitability of such an investment.

Beginning in 1998, individuals may purchase a new type of non-deductible IRA,
known as a Roth IRA. Contributions for a Roth IRA are limited to a maximum of
$2,000 per year. Lower maximum limitations apply to individuals with adjusted
gross income between $95,000 and $110,000 in the case of single taxpayers,
between $150,000 and $160,000 in the case of married taxpayers filing joint
returns, and between $0 and $10,000 in the case of married taxpayers filing
separately. An overall $2,000 annual limitation continues to apply to all of a
taxpayer's IRA contributions, including Roth IRA and non-Roth IRAs.

Qualified distributions from Roth IRAs are entirely tax free. A qualified
distribution requires that an individual has held the Roth IRA for at least five
years and, in addition, that the distribution is made either after the
individual reaches age 59-1/2, on the individual's death or disability, or as a
qualified first-time home purchase, subject to a $10,000 lifetime maximum, for
the individual, a spouse, child, grandchild, or ancestor. Any distribution which
is not a qualified distribution is taxable to the extent of earnings in the
distribution. Distributions are treated as made from contributions first and
therefore no distributions are taxable until distributions exceed the amount of
contributions to the Roth IRA. The 10% penalty tax and the regular IRA
exceptions to the 10% penalty tax apply to taxable distributions from a Roth
IRA. Amounts may be rolled over from one Roth IRA to another Roth IRA.
Furthermore, an individual may make a rollover contribution from a non-Roth IRA
to a Roth IRA, unless the individual has adjusted gross income over $100,000 or
the individual is a married taxpayer filing a separate return. The individual
must pay tax on any portion of the IRA that represents income or a previously
deductible IRA contribution. However, for rollovers in 1998, the individual may
pay that tax ratably over the four taxable year period beginning with tax year
1998.

Purchasers of Contracts to be qualified as a Roth IRA should obtain competent
tax advice as to the tax treatment and suitability of such an investment.

TAX TREATMENT OF WITHDRAWALS - QUALIFIED CONTRACTS. In the case of a withdrawal
under a Qualified Contract, a ratable portion of the amount received is taxable,
generally based on the ratio of the individual's cost basis to the individual's
total accrued benefit under the retirement plan. Special tax rules may be
available for certain distributions from a Qualified Contract. Section 72(t) of
the Code imposes a 10% penalty tax on the taxable portion of any distribution
from qualified retirement plans, including Contracts issued and qualified under
Code Section 408(b) (Individual Retirement Annuities). To the extent amounts are
not includible in gross income because they have been rolled over to an IRA or
to another eligible qualified plan, no tax penalty will be imposed. The tax
penalty will not apply to the following distributions: (a) if distribution is
made on or after the date on which the Owner or Annuitant (as applicable)
reaches age 59 1/2; (b) distributions following the death or disability of the
Owner or Annuitant (as applicable) (for this purpose disability is as defined in
Section 72(m)(7) of the Code); (c) distributions that are part of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the Owner or Annuitant (as applicable) or the joint lives
(or joint life expectancies) of such Owner or Annuitant (as applicable) and his
or her designated Beneficiary; (d) distributions made to the Owner or Annuitant
(as applicable) to the extent such distributions do not exceed the amount
allowable as a deduction under Code Section 213 to the Owner or Annuitant (as
applicable) for amounts paid during the taxable year for medical care; (e)
distributions from an Individual Retirement Annuity for the purchase of medical
insurance (as described in Section 213 (d) (1) (D) of the Code) for the Owner or
Annuitant (as applicable) and his or her spouse and dependents if the Owner or
Annuitant (as applicable) has received unemployment compensation for at least 12
weeks (this exception will no longer apply after the Owner or Annuitant (as
applicable) has been re-employed for at least 60 days); (f) distributions from
an Individual Retirement Annuity made to the Owner or Annuitant (as applicable)
to the extent such distributions do not exceed the qualified higher education
expenses (as defined in Section 72(t)(7) of the Code) of the Owner or Annuitant
(as applicable) for the taxable year; and (g) distributions from an individual
Retirement Annuity made to the Owner or Annuitant (as applicable) which are
qualified first-time home buyer distributions (as defined in Section 72(t)(8) of
the Code).

Generally, distributions from a qualified plan must commence no later than April
1 of the calendar year, following the year in which the employee attains age 70
1/2. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.

FINANCIAL STATEMENTS

Financial statements of the Company and the Separate Account have been included
in the Statement of Additional Information.

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Separate Account,
the Distributor or the Company is a party.

TABLE OF CONTENTS OF THE

STATEMENT OF ADDITIONAL INFORMATION

ITEM PAGE
Company....................................................... 3

Experts....................................................... 3

Legal Opinions................................................ 3

Distributor................................................... 3

Yield Calculation for the Berkeley Money Market Sub-Account... 3

Performance Information....................................... 4

Annuity Provisions............................................ 6

Financial Statements.......................................... 7

APPENDIX

The purpose of the Examples below is to demonstrate how the death benefit is
calculated.

DEATH BENEFIT

EXAMPLE A - OWNER AGE 65 AT DEATH; DIES DURING CONTRACT YEAR TWO

Example A assumes the following:

(1) A Contribution of $10,000 was made for the Contract.

(2) Owner dies at Age 65 during the second Contract Year.

(3) The Contract Value at death was $12,000.

(4) No withdrawals have been made.

The following applies to this Example:

(a) Adjusted Contributions equal $10,000, since there were no withdrawals.

(b) No seventh year stepped-up death benefit is available because death
occurred prior to the seventh year Contract Anniversary.

(d) The death benefit is $12,000.

EXAMPLE B - OWNER AGE 65 AT DEATH; DIES DURING CONTRACT YEAR TWO

This Example is based on the same assumptions as Example A except that in this
Example the Contract Value at death is $9,500.

The following applies to this Example:

(a) The Adjusted Contributions are greater than the Contract Value.
(b) The death benefit is $10,000.

EXAMPLE C - OWNER AGE 65 AT DEATH; DIES DURING CONTRACT YEAR TEN

Example C assumes the following:

(1) A single Contribution of $10,000 was made to the Contract.

(2) Owner dies at Age 65 during the tenth Contract Year.

(3) The Contract Value on the seventh Contract Anniversary was $18,000.

(4) The Contract Value at death was $17,000.

(5) A gross withdrawal of $1,500 was made in the sixth Contract Year at
which time the Contract Value was $15,000 before the withdrawal was
made.

The following applies to this Example:

(a) Adjusted Contributions are equal to $9,000. (At the time of the
withdrawal the Contract Value was reduced by 10% ($1,500/$15,000 =
.10) therefore, Adjusted Contributions are reduced by 10% ($10,000 -
($10,000 x .10) = $9,000).

(b) Contract Value on the seventh Contract Anniversary ($18,000) was
greater than that on the death of Owner ($17,000) and greater than
Adjusted Contributions ($9,000).

EXAMPLE D - OWNER AGE 87 AT DEATH; DIES DURING CONTRACT YEAR TWO

This Example is based on the same assumptions as Example A except in this
Example the Owner is Age 87 at death.

The following applies to this Example:

(a) Since the Owner was beyond Age 80, the death benefit will be limited
to the Contract Value.

(b) The death benefit is $12,000.

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1009 5/98

Distributed by:

London Pacific Financial & Insurance Services
1755 Creekside Oaks Drive
Sacramento, CA 95833

Issued by:
[GRAPHIC OMITTED]

Home Office:
3109 Poplarwood Court
Raleigh, North Carolina 27604
(919) 790-2243

Annuity Service Center:
P.O. Box 29564
Raleigh, North Carolina 27626
(800) 852-3152