NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT III, 485APOS, 1998-12-01

NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT III
485APOS, 1998-12-01

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<PAGE> 1

As filed with the Securities and Exchange Commission on December 1, 1998

Registration No. 33-87382

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Form N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ( )
---

Post-Effective Amendment No. 5 ( X )
---

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 5 ( X )

NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III
(Exact Name of Registrant)

NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
(Name of Depositor)

51 Madison Avenue, New York, New York 10010
(Address of Depositor's Principal Executive Office)

Depositor's Telephone Number: (212) 576-7000

Carol Yee, Esq.
New York Life Insurance and Annuity Corporation
51 Madison Avenue
New York, New York 10010
(Name and Address of Agent for Service)

Copy to:

Peter Panarites, Esq. Michael J. McLaughlin, Esq.
Freedman, Levy, Kroll & Simond Senior Vice President
1050 Connecticut Avenue and General Counsel
Suite 825 New York Life Insurance Company
Washington, D.C. 20036 51 Madison Avenue
New York, New York 10010

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b) of Rule 485.
- ---
on August 1, 1998 pursuant to paragraph (b) of Rule 485.
- ---
60 days after filing pursuant to paragraph (a)(1) of Rule 485.
- ---
X on February 19, 1999 pursuant to paragraph (a)(1) of Rule 485.
- ---

Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has registered an indefinite amount of the securities being offered
pursuant to this Registration Statement. On March 30, 1998, Registrant filed its
Form 24f-2 for Registrant's most recent fiscal year.

<PAGE> 2

CROSS REFERENCE SHEET

INFORMATION REQUIRED IN A PROSPECTUS

<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
- ---------------- ------------------
<S> <C>
1. Cover Page Cover Page

2. Definitions Definitions

3. Synopsis Fee Table

4. Condensed Financial Information Condensed Financial Information

5. General Description of Registrant, New York Life Insurance and Annuity
Depositor and Portfolio Companies Corporation and the Separate
Account; Voting Rights

6. Deductions and Expenses Charges and Deductions; Fee Table; Distributions
Under the Policy; Distributor of the Policies

7. General Description of Variable The Policies; Distributions Under the Policy;
Annuity Contracts Voting Rights; Charges and Deductions; The
Fixed Account; Federal Tax Matters

8. Annuity Period Distributions Under the Policy - Income Payments

9. Death Benefit Distributions Under the Policy

10. Purchases and Contract Value The Policies - Issuing the Policy and Premium
Payments

11. Redemptions Distributions Under the Policy - Surrenders and
Withdrawals; Distributions Under the Policy -
Income Payments; Distributions Under the Policy -
Cancellations

12. Taxes Federal Tax Matters

13. Legal Proceedings Statement of Additional Information - Legal
Proceedings

14. Table of Contents of the Statement of Table of Contents for the Statement of
Additional Information Additional Information
</TABLE>

<PAGE> 3

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

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

16. Table of Contents Table of Contents

17. General Information & History Not Applicable

18. Services Safekeeping of Separate Account Assets

19. Purchase of Securities Being Offered Distributor of the Policies

20. Underwriters Distributor of the Policies

21. Calculation of Performance Data Investment Performance Calculations

22. Annuity Payments The Policies - Valuation of Accumulation Units

23. Financial Statements Financial Statements
</TABLE>

<PAGE> 4

PROSPECTUS DATED , 1999

FOR

MAINSTAY PLUS VARIABLE ANNUITY
FROM
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
(A DELAWARE CORPORATION)
51 MADISON AVENUE, NEW YORK, NEW YORK 10010
INVESTING IN
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III

This Prospectus describes individual flexible premium MainStay Plus
Variable Annuity policies issued by New York Life Insurance and Annuity
Corporation ("NYLIAC"). The policies are primarily designed to assist
individuals with their long-term retirement planning needs. These policies can
be used with retirement plans that do and or do not qualify for special federal
income tax treatment. The policies offer flexible premium payments, access to
your money through partial withdrawals (some withdrawals may be subject to a
surrender charge and/ or tax penalty), a choice of when income payments
commence, and a guaranteed death benefit if the owner or annuitant dies before
income payments have commenced.

Your premium payments accumulate on a tax-deferred basis. This means your
earnings are not taxed until you take the money out of your policy which can be
done in several ways. You can split your premium payments among a guaranteed
interest option, three general account options specifically for the dollar cost
averaging program (in states where approved) and the twenty-six variable
investment divisions listed below.

<TABLE>
<S> <C>
- MainStay VP Capital Appreciation
- MainStay VP Cash Management
- MainStay VP Convertible
- MainStay VP Government
- MainStay VP High Yield Corporate Bond
- MainStay VP International Equity
- MainStay VP Total Return
- MainStay VP Value
- MainStay VP Bond
- MainStay VP Growth Equity
- MainStay VP Indexed Equity
- American Century Income & Growth
- Dreyfus Large Company Value
- Eagle Asset Management Growth Equity
- Lord Abbett Developing Growth
- Alger American Small Capitalization
- Calvert Social Balanced
- Fidelity VIP II Contrafund
- Fidelity VIP Equity-Income
- Janus Aspen Series Balanced
- Janus Aspen Series Worldwide Growth
- MFS Growth With Income Series
- MFS Research Series
- Morgan Stanley Emerging Markets Equity
- T. Rowe Price Equity Income
- Van Eck Worldwide Hard Assets
</TABLE>

We do not guarantee the investment performance of these investment divisions.
Depending on current market conditions, you can make or lose money in any of the
investment divisions.

Please read this Prospectus carefully before investing and keep it for
future reference. This Prospectus is not valid unless attached to current
prospectuses for the MainStay VP Series Fund, Inc., the Alger American Fund, the
Calvert Variable Series, Inc., the Fidelity Variable Insurance Products Fund II,
the Fidelity Variable Insurance Products Fund, the Janus Aspen Series, the MFS
Variable Insurance Trust, the Morgan Stanley Universal Funds, Inc., the T. Rowe
Price Equity Series, Inc. and the Van Eck Worldwide Insurance Trust (the
"Funds", each individually a "Fund").

To learn more about the policy, you can obtain a copy of the Statement of
Additional Information ("SAI") dated , 1999. The SAI has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this Prospectus. The table of contents for the SAI appears at the
end of this Prospectus. For a free copy of the SAI, call us at (888) 695-6246 or
write to us at the address above.

THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

THE POLICIES INVOLVE RISKS, INCLUDING POTENTIAL LOSS OF PRINCIPAL INVESTED.
THE POLICIES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.

<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS............................
FEE TABLE..............................
QUESTIONS AND ANSWERS ABOUT MAINSTAY
PLUS VARIABLE ANNUITY................
FINANCIAL STATEMENTS...................
CONDENSED FINANCIAL INFORMATION........
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION AND THE SEPARATE
ACCOUNT..............................
New York Life Insurance and Annuity
Corporation.......................
The Separate Account.................
The Portfolios.......................
Additions, Deletions or Substitutions
of Investments....................
Reinvestment.........................
THE POLICIES...........................
Purpose of Policies..................
Types of Policies....................
Issuing the Policy and Premium
Payments..........................
Issue Ages...........................
Transfers............................
Procedures for Telephone
Transactions......................
Dollar Cost Averaging (DCA)..........
(a) Traditional Dollar Cost
Averaging....................
(b) The DCA Program...............
Automatic Asset Reallocation.........
Interest Sweep.......................
Accumulation Period..................
(a) Crediting of Premium
Payments.....................
(b) Valuation of Accumulation
Units........................
Third Party Investment Advisory
Arrangements......................
Owner Inquiries......................
CHARGES AND DEDUCTIONS.................
Surrender Charges....................
Amount of Surrender Charge...........
Exceptions to Surrender Charges......
Other Charges........................
(a) Mortality and Expense Risk
Charges......................
(b) Administration Fee............
(c) Policy Service Charge.........
(d) Fund Charges..................
Group and Sponsored Arrangements.....
Taxes................................
DISTRIBUTIONS UNDER THE POLICY.........
Surrenders and Withdrawals...........
(a) Surrenders....................
(b) Partial Withdrawals...........
(c) Periodic Partial
Withdrawals..................
(d) Hardship Withdrawals..........
Required Minimum Distribution
Option...........................
Cancellations........................
Annuity Commencement Date............
Death Before Annuity Commencement....
Income Payments......................
(a) Election of Income Payment
Options......................
(b) Other Methods of Payment......
(c) Proof of Survivorship.........
Delay of Payments....................
Designation of Beneficiary...........
Restrictions Under Internal Revenue
Code Section 403(b)(11)...........
Loans................................
Riders...............................
(a) Living Needs Benefit Rider....
(b) Unemployment Benefit Rider...
THE FIXED ACCOUNT......................
(a) Interest Crediting............
(b) Transfers to Investment
Divisions....................
(c) Fixed Account Initial Premium
Guarantee.....................
THE DCA ACCOUNT........................
FEDERAL TAX MATTERS....................
Introduction.........................
Taxation of Annuities in General.....
Qualified Plans......................
(a) Section 403(b) Plans..........
(b) Individual Retirement
Annuities....................
(c) Roth Individual Retirement
Annuities.....................
(d) Deferred Compensation Plans...
DISTRIBUTOR OF THE POLICIES............
VOTING RIGHTS..........................
TABLE OF CONTENTS FOR THE STATEMENT OF
ADDITIONAL INFORMATION...............
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANY
INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS OR ANY ATTACHED SUPPLEMENT
OR IN ANY SUPPLEMENTAL SALES MATERIAL WE AUTHORIZE.

2
<PAGE> 6

DEFINITIONS

ACCUMULATION UNIT--An accounting unit used to calculate the Variable
Accumulation Value prior to the Annuity Commencement Date. Each Investment
Division of the Separate Account has a distinct variable Accumulation Unit
value.

ACCUMULATION VALUE--The sum of the Variable Accumulation Value, the Fixed
Accumulation Value, and the DCA Program Accumulation Value of a policy.

ALLOCATION ALTERNATIVES--The Investment Divisions of the Separate Account and
the Fixed Account.

ANNUITANT--The person whose life determines the Income Payments, and upon whose
death prior to the Annuity Commencement Date, benefits under the policy may be
paid.

ANNUITY COMMENCEMENT DATE--The date on which the first Income Payment under the
policy is to be made.

BENEFICIARY--The person or entity having the right to receive the death benefit
set forth in the policy and who is the "designated beneficiary" for purposes of
Section 72 of the Internal Revenue Code in the event of the Annuitant's or the
policy owner's death.

BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open
for trading. Our Business Day ends at 4:00 p.m. Eastern Time or the closing of
the New York Stock Exchange, if earlier.

DOLLAR COST AVERAGING ("DCA") ACCOUNTS--The 6-month, 12-month and 18-month DCA
Accounts used specifically for the Dollar Cost Averaging ("DCA") Program.

DOLLAR COST AVERAGING ("DCA") PROGRAM--A program which permits automatic dollar
cost averaging using the DCA Accounts.

DOLLAR COST AVERAGING ("DCA") PROGRAM ACCUMULATION VALUE--The sum of premium
payments allocated to the DCA Accounts, plus interest credited on those premium
payments, less any transfers and partial withdrawals from the DCA Program, and
less any surrender charges and any policy service charges that may already have
been assessed from the DCA Program. The DCA Program Accumulation Value is
supported by assets in NYLIAC's general account. These assets are subject to the
claims of our general creditors.

ELIGIBLE PORTFOLIOS ("PORTFOLIOS")--The mutual fund portfolios of the Funds that
are available for investment through the Investment Divisions of the Separate
Account.

FIXED ACCOUNT--An account that is credited with a fixed interest rate which
NYLIAC declares and is not part of the Separate Account. The Accumulation Value
of the Fixed Account is supported by assets in NYLIAC's general account, which
are subject to the claims of its general creditors.

FIXED ACCUMULATION VALUE--The sum of premium payments and transfers allocated to
the Fixed Account, plus interest credited on those premium payments and
transfers, less any transfers and partial withdrawals from the Fixed Account,
and less any surrender charges and policy service charges that may have already
been assessed from the Fixed Account.

INCOME PAYMENTS--Periodic payments NYLIAC makes after the Annuity Commencement
Date.

INVESTMENT DIVISION--The variable investment options available with the policy.
Each Investment Division invests exclusively in shares of a specified Eligible
Portfolio.

NON-QUALIFIED POLICIES--Policies that do not qualify for special federal income
tax treatment.

PAYMENT YEAR(S)--With respect to any premium payment, the year(s) beginning on
the date such premium payment is made to the policy.

POLICY ANNIVERSARY--An anniversary of the Policy Date shown on the Policy Data
Page.

POLICY DATA PAGE--Page 2 of the policy, containing the policy specifications.

POLICY DATE--The date from which Policy Years, quarters, months and Policy
Anniversaries are measured. It is shown on the Policy Data Page.

POLICY YEAR--A year starting on the Policy Date. Subsequent Policy Years begin
on each Policy Anniversary, unless otherwise indicated.

QUALIFIED POLICIES--Policies issued under plans that qualify for special federal
income tax treatment.

3
<PAGE> 7

SEPARATE ACCOUNT--NYLIAC Variable Annuity Separate Account-III, a segregated
asset account we established to receive and invest premium payments paid under
the policies. The Separate Account's Investment Divisions, in turn, purchase
shares of Eligible Portfolios.

VARIABLE ACCUMULATION VALUE--The sum of the products of the current Accumulation
Unit value(s) for each of the Investment Divisions multiplied by the number of
Accumulation Units held in the respective Investment Division.

4
<PAGE> 8

FEE TABLE
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III

<TABLE>
<CAPTION>
MAINSTAY VP
MAINSTAY VP MAINSTAY VP HIGH YIELD
CAPITAL CASH MAINSTAY VP MAINSTAY VP CORPORATE
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT BOND
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a)
(as a % of amount withdrawn)............................ 7% 7% 7% 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
each transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
Policies with less than $20,000 of Accumulation Value.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15% 0.15% 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40% 1.40% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31,1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................

MAINSTAY VP
INTERNATIONAL
EQUITY
-------------
<S> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a)
(as a % of amount withdrawn)............................ 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
each transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
SEPARATE ACCOUNT ANNUAL EXPENSES Policies with less than $20,000 of Accumulation Value.
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25%
Administration Fees....................................... 0.15%
Total Separate Account Annual
Expenses................................................ 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31,1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................
</TABLE>

MAINSTAY VP MAINSTAY VP MAINSTAY VP
TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED
RETURN VALUE BOND EQUITY EQUITY
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a)
(as a % of amount withdrawn)............................ 7% 7% 7% 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
each transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
Policies with less than $20,000 of Accumulation Value.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15% 0.15% 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40% 1.40% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................

<CAPTION>
AMERICAN DREYFUS
CENTURY LARGE
INCOME & COMPANY
GROWTH VALUE
-------- -------
<S> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a)
(as a % of amount withdrawn)............................ 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
each transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
SEPARATE ACCOUNT ANNUAL EXPENSES Policies with less than $20,000 of Accumulation Value.
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................
</TABLE>

5
<PAGE> 9

FEE TABLE--(CONTINUED)
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III

<TABLE>
<CAPTION>
EAGLE
ASSET ALGER
MANAGEMENT LORD ABBETT AMERICAN CALVERT FIDELITY
GROWTH DEVELOPING SMALL SOCIAL VIP II
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND
---------- ----------- -------------- -------- ----------
<S> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a) (as a % of
amount withdrawn)....................................... 7% 7% 7% 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
Policies with less than $20,000 of Accumulation Value.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15% 0.15% 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40% 1.40% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................

JANUS
FIDELITY VIP ASPEN
EQUITY- SERIES
INCOME BALANCED
------------ --------
<S> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a) (as a % of
amount withdrawn)....................................... 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
each transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
SEPARATE ACCOUNT ANNUAL EXPENSES Policies with less than $20,000 of Accumulation Value.
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................
</TABLE>

<TABLE>
<CAPTION>
MORGAN
JANUS ASPEN STANLEY
SERIES MFS GROWTH MFS EMERGING T. ROWE PRICE
WORLDWIDE WITH INCOME RESEARCH MARKETS EQUITY
GROWTH SERIES SERIES EQUITY INCOME
----------- ----------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a) (as a % of
amount withdrawn)....................................... 7% 7% 7% 7% 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for each
transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
Policies with less than $20,000 of Accumulation Value.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Fees....................................... 0.15% 0.15% 0.15% 0.15% 0.15%
Total Separate Account Annual
Expenses................................................ 1.40% 1.40% 1.40% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................

VAN ECK
WORLDWIDE
HARD ASSETS
-----------
<S> <C>
OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Load(a) (as a % of
amount withdrawn)....................................... 7%
Transfer Fee.............................................. There is no transfer fee on the first 12 transfers in any Policy
Year. However, NYLIAC reserves the right to charge up to $30 for
transfer in excess of 12 transfers per Policy Year.
Annual Policy Service Charge.............................. Lesser of $30 per Policy or 2% of the Accumulation Value, for
SEPARATE ACCOUNT ANNUAL EXPENSES Policies with less than $20,000 of Accumulation Value.
(as a % of average account value)
Mortality and Expense Risk Fees........................... 1.25%
Administration Fees....................................... 0.15%
Total Separate Account Annual
Expenses................................................ 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the fiscal year ended
December 31, 1998)(b)
Advisory Fees.............................................
Administration Fees.......................................
Other Expenses............................................
Total Fund Annual Expenses................................
</TABLE>

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

<TABLE>
<C> <S>
(a) The contingent deferred sales load percentage applicable to
any amount withdrawn declines by 1% each Payment Year from
7% during the first three Payment Years to 4% in the sixth
Payment Year, with no charge thereafter. Certain exceptions
may apply. See "Surrender Charges" on page .
(b) The fees and charges were provided by the Fund or its
agents, which are based on 1998 expenses and may reflect
estimated changes. We have not verified the accuracy of the
information.
</TABLE>

6
<PAGE> 10

This table is to help you understand the various costs and expenses that
you will bear directly and indirectly. The table reflects charges and expenses
of the Separate Account and the Funds. Charges and expenses may be higher or
lower in future years. For more information on the charges reflected in this
table, see "Charges and Deductions" at page and the Fund prospectuses which
accompany this Prospectus. NYLIAC may, where premium taxes are imposed by state
law, deduct premium taxes on surrender of the policy or on the Annuity
Commencement Date.

EXAMPLES(1)

An Owner would pay the following expenses on a $1,000 investment in one of
the Investment Divisions listed, assuming a 5% annual return on assets:

1. If you surrender your policy at the end of the stated time period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
MainStay VP Capital Appreciation........................
MainStay VP Cash Management.............................
MainStay VP Convertible.................................
MainStay VP Government..................................
MainStay VP High Yield Corporate Bond...................
MainStay VP International Equity........................
MainStay VP Total Return................................
MainStay VP Value.......................................
MainStay VP Bond........................................
MainStay VP Growth Equity...............................
MainStay VP Indexed Equity..............................
American Century Income & Growth........................
Dreyfus Large Company Value.............................
Eagle Asset Management Growth Equity....................
Lord Abbett Developing Growth...........................
Alger American Small Capitalization.....................
Calvert Social Balanced.................................
Fidelity VIP II Contrafund..............................
Fidelity VIP Equity-Income..............................
Janus Aspen Series Balanced.............................
Janus Aspen Series Worldwide Growth.....................
MFS Growth With Income Series...........................
MFS Research Series.....................................
Morgan Stanley Emerging Markets Equity..................
T. Rowe Price Equity Income.............................
Van Eck Worldwide Hard Assets...........................
</TABLE>

2. If you annuitize your policy at the end of the stated time period:

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

(1) For purposes of calculating these examples, the annual policy service charge
has been expressed as an annual percentage of assets based on the average
size of policies having an Accumulation Value of less than $20,000 on
December 31, 1998. This calculation method reasonably reflects the annual
policy service charges applicable to policies having an Accumulation Value
of less than $20,000 but does not reflect the annual policy service charges
on policies having an Accumulation Value of $20,000 or greater. This means
that the fees would be slightly lower if your policy's Accumulation Value is
$20,000 or greater on the Policy Anniversary or date of surrender.

7
<PAGE> 11

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
MainStay VP Total Return................................
MainStay VP Value.......................................
MainStay VP Bond........................................
MainStay VP Growth Equity...............................
MainStay VP Indexed Equity..............................
American Century Income & Growth........................
Dreyfus Large Company Value.............................
Eagle Asset Management Growth Equity....................
Lord Abbett Developing Growth...........................
Alger American Small Capitalization.....................
Calvert Social Balanced.................................
Fidelity VIP II Contrafund..............................
Fidelity VIP Equity-Income..............................
Janus Aspen Series Balanced.............................
Janus Aspen Series Worldwide Growth.....................
MFS Growth With Income Series...........................
MFS Research Series.....................................
Morgan Stanley Emerging Markets Equity..................
T. Rowe Price Equity Income.............................
Van Eck Worldwide Hard Assets...........................
</TABLE>

3. If you do not surrender your policy:

<TABLE>
<S> <C> <C> <C> <C>
MainStay VP Capital Appreciation........................
MainStay VP Cash Management.............................
MainStay VP Convertible.................................
MainStay VP Government..................................
MainStay VP High Yield Corporate Bond...................
MainStay VP International Equity........................
MainStay VP Total Return................................
MainStay VP Value.......................................
MainStay VP Bond........................................
MainStay VP Growth Equity...............................
MainStay VP Indexed Equity..............................
American Century Income & Growth........................
Dreyfus Large Company Value.............................
Eagle Asset Management Growth Equity....................
Lord Abbett Developing Growth...........................
Alger American Small Capitalization.....................
Calvert Social Balanced.................................
Fidelity VIP II Contrafund..............................
Fidelity VIP Equity-Income..............................
Janus Aspen Series Balanced.............................
Janus Aspen Series Worldwide Growth.....................
MFS Growth With Income Series...........................
MFS Research Series.....................................
Morgan Stanley Emerging Markets Equity..................
T. Rowe Price Equity Income.............................
Van Eck Worldwide Hard Assets...........................
</TABLE>

THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE
PERFORMANCE OR EXPENSES. THE ACTUAL EXPENSES PAID OR PERFORMANCE ACHIEVED MAY BE
GREATER OR LESS THAN THOSE SHOWN.

8
<PAGE> 12

QUESTIONS AND ANSWERS ABOUT MAINSTAY PLUS VARIABLE ANNUITY

NOTE: THE FOLLOWING SECTION CONTAINS BRIEF QUESTIONS AND ANSWERS ABOUT
MAINSTAY PLUS VARIABLE ANNUITY. YOU SHOULD REFER TO THE BODY OF THIS PROSPECTUS
FOR MORE DETAILED INFORMATION.

1. WHAT IS MAINSTAY PLUS VARIABLE ANNUITY?

A Mainstay Plus Variable Annuity is a Flexible Premium Deferred Variable
Retirement Annuity policy issued by NYLIAC. Premium payments may be allocated to
one or more of the Investment Divisions of the Separate Account, or to the Fixed
Account. In addition, in states where approved, premium payments may also be
allocated to one or more DCA Accounts. The Accumulation Value will fluctuate
according to the performance of the Investment Divisions selected and the
interest credited on amounts in the Fixed Account and the DCA Accounts.

2. WHERE CAN I ALLOCATE MY PREMIUM PAYMENT?

(a) You can allocate your premium payments to one or more of the following
Allocation Alternatives:

(i) SEPARATE ACCOUNT

The Separate Account currently consists of thirty Investment
Divisions. Twenty-six of these Investment Divisions are available under
the policy. They are listed on the first page of this Prospectus. When
you allocate a premium payment to one of the Investment Divisions, the
Separate Account will invest your premium payment exclusively in shares
of the corresponding Eligible Portfolio of the relevant Fund.

(ii) FIXED ACCOUNT

Each premium payment, or the portion of any premium payment,
allocated to the Fixed Account will reflect a guaranteed interest rate.
(See "The Fixed Account" at page .)

(b) In states where approved, you can also allocate your premium payments
to the DCA Program. The DCA Program consists of three DCA Accounts: a 6-month,
12-month and an 18-month account. NYLIAC will credit interest to amounts held in
the DCA Accounts at rates we have set in advance. The DCA Program allows you to
set up automatic dollar cost averaging from the DCA Accounts into the Investment
Divisions and/or the Fixed Account. (See "DCA Program" at page .) Please check
with your registered representative to determine if the DCA Program has been
approved in your state.

3. CAN I MAKE TRANSFERS AMONG THE INVESTMENT DIVISIONS AND THE FIXED ACCOUNT?

You can transfer all or part of the Accumulation Value of your policy
between the Investment Divisions or from the Investment Divisions to the Fixed
Account at least 30 days before the Annuity Commencement Date. The minimum
amount which may be transferred generally is $500, unless we agree otherwise.
Unlimited transfers are permitted each Policy Year. We currently do not charge
for transfers. However, we reserve the right to charge up to $30 for each
transfer after the first twelve in a given Policy Year. (See "Transfers" at page
.)

You can make transfers from the Fixed Account and the DCA Accounts,
although certain restrictions may apply. (See "The Fixed Account" at page and
"The DCA Accounts" at page ). In addition, you can request transfers through
the Dollar Cost Averaging, Automatic Asset Reallocation, or Interest Sweep
options described at pages and of this Prospectus.

4. WHAT CHARGES ARE ASSESSED AGAINST THE POLICY?

Before the date we start making Income Payments to you, a policy service
charge will be made each year on the Policy Anniversary or upon surrender of the
policy if on that date the Accumulation Value is below $20,000. This charge will
be the lesser of $30 or 2% of the Accumulation Value at the end of the Policy
Year or on the date of surrender. In addition, all policies are subject to a
daily charge for policy administration expenses equal, on an annual basis, to
.15% of the daily net asset value of the Separate Account. (See "Other Charges"
at page .)

The policies are also subject to a daily charge for certain mortality and
expense risks NYLIAC assumes. This charge is equal, on an annual basis, to 1.25%
of the daily net asset value of the Separate Account. (See "Other Charges" at
page .)

We impose a Surrender Charge on certain partial withdrawals or surrenders
of the policies based on the amount of premium payments made. This charge is
assessed as a percentage of the amount withdrawn during the first six Payment
Years following each premium payment. We keep track of each premium payment and
assess a

9
<PAGE> 13

charge based on the length of time a premium payment is in your policy before it
is withdrawn. The percentage declines after the first three Payment Years as
follows:

<TABLE>
<CAPTION>
SURRENDER
PAYMENT YEAR CHARGE
------------ ---------
<S> <C>
1........................................................... 7%
2........................................................... 7%
3........................................................... 7%
4........................................................... 6%
5........................................................... 5%
6........................................................... 4%
7+.......................................................... 0%
</TABLE>

For purposes of calculating the Surrender Charge, we treat withdrawals as
coming from the oldest premium payment first (on a first-in, first-out basis).

The policies allow you to make withdrawals free from Surrender Charges. In
any one Policy Year, you may withdraw free of a Surrender Charge up to 10% of
the Accumulation Value at the time of withdrawal ("10% Window"). In addition,
for policies with total premium payments of $100,000 or more, you may withdraw
free of a Surrender Charge the greater of (a) the 10% Window or (b) the
Accumulation Value of the policy less the accumulated premium payments. (See
"Surrender Charges" at page and "Exceptions to Surrender Charges" at page .)

Finally, the value of the shares of each Fund reflects advisory fees,
administration fees and other expenses deducted from the assets of each Fund.
(See the Fund prospectuses which are attached to this Prospectus.)

5. WHAT ARE THE MINIMUM INITIAL AND MAXIMUM ADDITIONAL PREMIUM PAYMENTS?

Unless we permit otherwise, the minimum initial premium payment is $2,000
for Qualified Policies and $5,000 for Non-Qualified Policies. Additional premium
payments of at least $500 or such lower amount as we may permit can be made at
any time. You have a choice of sending premium payments directly to NYLIAC or
through pre-authorized monthly deductions from banks, credit unions or similar
accounts. We may agree to other methods of payment. The maximum aggregate amount
of premium payments we accept is $1,000,000 without prior approval. Premium
payments under Qualified Policies may not be more than the amount permitted by
law for the plan.

6. HOW ARE PREMIUM PAYMENTS ALLOCATED?

In states where approved, the initial premium payment is allocated
immediately to the Investment Divisions, Fixed Account and DCA Accounts you have
selected. Otherwise, except for premium payments or portions of premium payments
applied to the Fixed Account and the DCA Accounts, initial premium payments are
held in the MainStay VP Cash Management Division for 15 days after the policy is
issued. At the end of this period, we will allocate the premium payment to the
Investment Divisions you have selected. Initial premium payments allocated to
the Fixed Account or the DCA Accounts are applied immediately. Please check with
your registered representative to determine how the initial premium payment will
be allocated under your policy.

You may place the initial premium payment in up to ten Allocation
Alternatives and the DCA Accounts inclusively. Thereafter, you may maintain the
Accumulation Value in up to 18 Investment Divisions and the DCA Accounts
inclusively plus the Fixed Account at any one time. (See "Automatic Asset
Reallocation" at page .) Moreover, you may raise or lower the percentages
(which must be in whole numbers) of the premium payment placed to each
Allocation Alternative at the time you make a premium payment. The minimum
amount which may be placed to any one Allocation Alternative is $25, or such
lower amount as we may permit. The minimum amount which may be placed to any DCA
Account is $5,000. We reserve the right to limit the amount of a premium payment
that may be placed to any one Allocation Alternative and/or any DCA Account and
the number of Allocation Alternatives and DCA Accounts to which your
Accumulation Value may be allocated.

7. WHAT HAPPENS IF PREMIUM PAYMENTS ARE NOT MADE?

If we do not receive any premium payments for a period of two years, and
both the Accumulation Value of your policy and your total premium payments less
any withdrawals and Surrender Charges are less than $2,000, we reserve the right
to terminate your policy. We will notify you of our intention to exercise this
right and give you 90 days to make a premium payment. If we terminate your
policy, we will pay you the Accumulation Value of your policy in one lump sum.

10
<PAGE> 14

8. CAN I WITHDRAW MONEY FROM THE POLICY BEFORE THE ANNUITY COMMENCEMENT DATE?

You may make withdrawals from your policy before the Annuity Commencement
Date and while the Annuitant is alive. Your withdrawal request must be in a form
that is acceptable to us. Under most circumstances, the minimum partial
withdrawal amount is $500. Withdrawals may be subject to a Surrender Charge. In
addition, you may have to pay income tax and a 10% penalty tax may apply if you
are under age 59 1/2. (See "Distributions Under the Policy" at page and
"Federal Tax Matters" at page .)

9. HOW WILL INCOME PAYMENTS BE MADE ON THE ANNUITY COMMENCEMENT DATE?

Income Payments will be on a fixed basis. We do not currently offer a
variable income payment option. Payments under the Life Income Payment Option
will be paid over the life of the Annuitant with a guarantee of 10 years of
payments, even if the Annuitant dies sooner. (See "Income Payments" at page .)

10. WHAT IS A LIFE INCOME PAYMENT OPTION?

On the Annuity Commencement Date, we will make periodic payments for the
life of the Annuitant (or to the Annuitant and another person, the "Joint
Annuitants") with a guarantee of at least 10 years of payments. Income Payments
will always be the same specified amount. (See "Income Payments" at page .)

11. WHAT HAPPENS IF I DIE OR THE ANNUITANT DIES BEFORE THE ANNUITY COMMENCEMENT
DATE?

If you or the Annuitant dies before the Annuity Commencement Date, we will
pay the Beneficiary under the policy an amount equal to the greater of:

(a) the Accumulation Value, less any outstanding loan balance,

(b) the sum of all premium payments made, less any outstanding loan
balance, partial withdrawals and Surrender Charges previously
imposed, or

(c) the "reset value" (as described on page of this Prospectus) plus
any additional premium payments made since the most recent "reset
date," less any outstanding loan balance, partial withdrawals and
applicable Surrender Charges since the most recent "reset date."

If the Beneficiary is the spouse of the Annuitant or Owner, see Question
12. (Also see "Death Before Annuity Commencement" at page and "Federal Tax
Matters" at page .)

12. WHAT HAPPENS IF MY SPOUSE IS THE BENEFICIARY?

If you are the owner and Annuitant and you die before the Annuity
Commencement Date, your spouse may continue the policy as the new owner and
Annuitant if he/she is also the sole Beneficiary (for Non-Qualified Policies,
IRA, TSA or SEP only). If your spouse chooses to continue the policy, death
benefit proceeds will not be paid as a consequence of your death, or the
Annuitant's death.

13. CAN THE POLICY BE RETURNED AFTER IT IS DELIVERED?

You can cancel the policy by returning it to us, or to the registered
representative through whom it was purchased, within 10 days of delivery of the
policy or such longer period as required under state law. In states where
approved, you will receive the policy's Accumulation Value on the date we
receive the policy without any deduction for premium taxes or a Surrender
Charge. This amount may be more or less than your premium payments. Otherwise,
you will receive from us the greater of (i) the initial premium payment less any
prior partial withdrawals or (ii) the Accumulation Value on the date we receive
the policy, without any deduction for premium taxes or a Surrender Charge. The
provision that is applicable in your state will be set forth on your policy.

14. WHAT ABOUT VOTING RIGHTS?

You can instruct NYLIAC how to vote shares of the Funds in which you have a
voting interest through the Separate Account. (See "Voting Rights" at page .)

15. HOW WILL INVESTMENT PERFORMANCE OF THE SEPARATE ACCOUNT BE CALCULATED?

YIELDS. The yield of the MainStay VP Cash Management Investment Division
refers to the annualized income generated by an investment in that Investment
Division over a specified seven-day period. The yield is calculated by assuming
that the income generated for that seven-day period is generated each seven-day
period over a 52-week period. The current yield is shown as a percentage of the
investment. The effective yield is calculated similarly but, when annualized,
the income earned by an investment in the Cash Management Investment Division is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this

11
<PAGE> 15

assumed reinvestment. For the seven-day period ended December 31, 1998, the
MainStay VP Cash Management Investment Division's yield and effective yield were
% and %, respectively.

The yield of the MainStay VP Government, MainStay VP High Yield Corporate
Bond or MainStay VP Bond Investment Divisions refers to the annualized income
generated by an investment in that Investment Division over a specified
thirty-day period. The yield is calculated by assuming that the income generated
by the investment during that thirty-day period is generated each thirty-day
period over a 12-month period. The current yield is shown as a percentage of the
investment. For the 30-day period ended December 31, 1998, the annualized yields
for the MainStay VP Government, MainStay VP High Yield Corporate Bond and
MainStay VP Bond Investment Divisions were %, % and %,
respectively.

The yield calculations do not reflect the effect of any Surrender Charge
that may be applicable to a particular policy. To the extent that the Surrender
Charge is applicable to a particular Policy, the yield of that Policy will be
reduced. Past performance is no indication of future performance. For additional
information regarding the yields described above, please refer to the Statement
of Additional Information.

TOTAL RETURN CALCULATIONS. The following tables present performance data
for each of the Investment Divisions for periods ending December 31, 1998. The
average annual total return (if surrendered) data reflect all Separate Account
and Fund annual expenses shown in the Fee Table on pages and . The average
annual total return (if surrendered) figures assume that the policy is
surrendered at the end of the periods shown. The annual policy service charge,
which is charged to Policies with an Accumulation Value of less than $20,000, is
not reflected. This fee, if applicable, would reduce the rates of return. The
average annual total return (no surrenders) does not reflect the deduction of
any Surrender Charges. All rates of return include the reinvestment of
investment income, including interest and dividends.

Certain Portfolios existed prior to the date that they were added to an
Investment Division of the Separate Account. For periods prior to an Investment
Division's inception date, the performance of the Investment Division was
derived from the performance of the corresponding Portfolios, modified to
reflect the Separate Account and Fund annual expenses as if the Policy had been
available during the periods shown. The results shown are not an estimate or
guarantee of future investment performance for the Investment Divisions.

12
<PAGE> 16

(THIS PAGE INTENTIONALLY LEFT BLANK)

13
<PAGE> 17

AVERAGE ANNUAL TOTAL RETURN
(FOR PERIODS ENDED DECEMBER 31, 1998)

<TABLE>
<CAPTION>
MAINSTAY VP MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP
INVESTMENT DIVISIONS: APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT
--------------------- ------------ ----------- ----------- -----------
PORTFOLIO INCEPTION DATE: 1/29/93 1/29/93 10/1/96 1/29/93
-------------------------
INVESTMENT DIVISION INCEPTION DATE: 5/1/95 5/1/95 10/1/96 5/1/95
-----------------------------------
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN (IF SURRENDERED)
1 Year..................................................
3 Year..................................................
5 Year..................................................
10 Year.................................................
Since Portfolio Inception...............................
Since Investment Division Inception.....................
AVERAGE ANNUAL TOTAL RETURN (NO SURRENDERS)
1 Year..................................................
3 Year..................................................
5 Year..................................................
10 Year.................................................
Since Portfolio Inception...............................
Since Investment Division Inception.....................
</TABLE>

<TABLE>
<CAPTION>
EAGLE ASSET
MANAGEMENT LORD ABBETT CALVERT ALGER AMERICAN
GROWTH DEVELOPING SOCIAL SMALL
INVESTMENT DIVISIONS: EQUITY GROWTH BALANCED CAPITALIZATION
--------------------- ----------- ----------- -------- --------------
PORTFOLIO INCEPTION DATE: 5/1/98 5/1/98 9/2/86 9/20/88
-------------------------
INVESTMENT DIVISION INCEPTION DATE: 5/1/98 5/1/98 5/1/95 10/1/96
-----------------------------------
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN (IF SURRENDERED)
1 Year..................................................
3 Year..................................................
5 Year..................................................
10 Year.................................................
Since Portfolio Inception...............................
Since Investment Division Inception.....................
AVERAGE ANNUAL TOTAL RETURN (NO SURRENDERS)
1 Year..................................................
3 Year..................................................
5 Year..................................................
10 Year.................................................
Since Portfolio Inception...............................
Since Investment Division Inception.....................
</TABLE>

14
<PAGE> 18
<TABLE>
<CAPTION>
MAINSTAY VP
HIGH YIELD MAINSTAY VP MAINSTAY VP
CORPORATE INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP
BOND EQUITY RETURN VALUE BOND
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
5/1/95 5/1/95 1/29/93 5/1/95 1/23/84

5/1/95 5/1/95 5/1/95 5/1/95 5/1/95

<CAPTION>
AMERICAN
MAINSTAY VP MAINSTAY VP CENTURY
GROWTH INDEXED INCOME & DREYFUS LARGE
EQUITY EQUITY GROWTH COMPANY VALUE
- ----------- ----------- -------- -------------
<S> <C> <C> <C>
1/23/84 1/29/93 5/1/98 5/1/98

5/1/95 5/1/95 5/1/98 5/1/98
</TABLE>

JANUS ASPEN MFS
JANUS ASPEN SERIES GROWTH
FIDELITY VIP II FIDELITY VIP SERIES WORLDWIDE WITH INCOME
CONTRAFUND EQUITY INCOME BALANCED GROWTH SERIES
--------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1/3/95 10/9/86 9/13/93 9/13/93 10/9/95

10/1/96 10/1/96 10/1/96 10/1/96 5/1/98

<CAPTION>
MORGAN
STANLEY T. ROWE
MFS EMERGING PRICE VAN ECK
RESEARCH MARKETS EQUITY WORLDWIDE
SERIES EQUITY INCOME HARD ASSETS
- -------- -------- ------- -----------
<S> <C> <C> <C>
7/26/95 10/1/96 10/1/96 9/1/89

5/1/98 10/1/96 5/1/98 5/1/98
</TABLE>

15
<PAGE> 19

For additional information regarding the total return calculations
described above, please refer to the Statement of Additional Information.

16. ARE POLICY LOANS AVAILABLE?

If you have purchased your Policy in connection with a tax-sheltered
annuity "TSA" (Section 403(b)) Plan, you may be able to borrow some of your
Accumulation Value subject to certain conditions. (See "Loans" at page .)

17. HOW DO I CONTACT MAINSTAY ANNUITIES OR NYLIAC?

<TABLE>
GENERAL INQUIRIES AND WRITTEN PREMIUM PAYMENTS AND LOAN
REQUESTS PAYMENTS
------------------------------ ------------------------------
<S> <C> <C>
REGULAR MAIL MainStay Annuities MainStay Annuities
300 Berwyn Park, P.O. Box 3031 P.O. Box 8500-50880
Berwyn, PA 19312-0031 Philadelphia, PA 19178-8500

EXPRESS MAIL CoreStates Bank N.A. CoreStates Bank N.A.
One North Fifth Street One North Fifth Street
F.C. 1-2-3-4 F.C. 1-2-3-4
Philadelphia, PA 19106 Philadelphia, PA 19106
Attn: MainStay Annuities-50880 Attn: MainStay Annuities-50880

CUSTOMER SERVICE (888) 695-6246
AND UNIT VALUES
</TABLE>

FINANCIAL STATEMENTS

The audited financial statements of NYLIAC (including the auditor's report)
for the fiscal years ended December 31, 1998, 1997 and 1996, and of the Separate
Account (including the auditor's report) for the periods ended December 31, 1998
and 1997 are included in the Statement of Additional Information.

16
<PAGE> 20

CONDENSED FINANCIAL INFORMATION

The following Accumulation Unit values and the number of Accumulation Units
outstanding for each Investment Division for each fiscal year ended December 31
presented below have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report on the related financial statements appears in the
Statement of Additional Information. Values and units shown are for full year
periods, except where indicated. This information should be read in conjunction
with the Separate Account financial statements and notes thereto which appear in
the Statement of Additional Information.

MAINSTAY VP MAINSTAY VP MAINSTAY VP
CAPITAL APPRECIATION CASH MANAGEMENT CONVERTIBLE
----------------------------------- ----------------------------------- -------------------------
1998 1997 1996 1995(a) 1998 1997 1996 1995(a) 1998 1997 1996(b)
------ ------ ------- ------- ------ ------ ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $13.92 $11.89 $10.00 $ 1.06 $ 1.03 $ 1.00 $10.35 $10.00
Accumulation Unit value
(end of period)........ $16.95 $13.92 $11.89 $ 1.10 $ 1.06 $ 1.03 $11.78 $10.35
Number of units
outstanding
(in 000s) (end of
period)................ 11,001 6,949 951 43,157 32,709 13,190 2,205 1,250

<CAPTION>
MAINSTAY VP
MAINSTAY VP HIGH YIELD
GOVERNMENT CORPORATE BOND
----------------------------------- -----------------------------------
1998 1997 1996 1995(a) 1998 1997 1996 1995(a)
------ ------ ------- ------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $10.66 $10.57 $10.00 $12.52 $10.83 $10.00
Accumulation Unit value
(end of period)........ $11.51 $10.66 $10.57 $13.95 $12.52 $10.83
Number of units
outstanding
(in 000s) (end of
period)................ 1,103 855 178 14,577 6,539 648

MAINSTAY VP
INTERNATIONAL EQUITY
-----------------------------------
1998 1997 1996 1995(a)
------ ------ ------- -------
<S> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $11.88 $10.90 $10.00
Accumulation Unit value
(end of period)........ $12.32 $11.88 $10.90
Number of units
outstanding
(in 000s) (end of
period)................ 932 692 67
</TABLE>

MAINSTAY VP MAINSTAY VP MAINSTAY VP
TOTAL RETURN VALUE BOND
---------------------------------- ---------------------------------- ------------------------
1998 1997 1996 1995(a) 1998 1997 1996 1995(a) 1998 1997 1996
------ ------ ------ ------- ------ ------ ------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $12.55 $11.36 $10.00 $13.76 $11.32 $10.00 $10.64 $10.57
Accumulation Unit value
(end of period)........ $14.58 $12.55 $11.36 $16.67 $13.76 $11.32 $11.50 $10.64
Number of units
outstanding
(in 000s) (end of
period)................ 7,629 5,154 665 7,236 3,377 432 1,981 1,193

<CAPTION>
AMERICAN
CENTURY
MAINSTAY VP MAINSTAY VP MAINSTAY VP INCOME
BOND GROWTH EQUITY INDEXED EQUITY & GROWTH
--------- ---------------------------------- ---------------------------------- --------
1995(a) 1998 1997 1996 1995(a) 1998 1997 1996 1995(a) 1998(c)
------- ------ ------ ------ ------- ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $10.00 $14.01 $11.42 $10.00 $13.97 $11.58 $10.00
Accumulation Unit value
(end of period)........ $10.57 $17.52 $14.01 $11.42 $18.30 $13.97 $11.58
Number of units
outstanding
(in 000s) (end of
period)................ 173 4,979 2,276 241 9,982 4,327 358

<CAPTION>
DREYFUS EAGLE ASSET ALGER
LARGE MANAGEMENT LORD ABBETT AMERICAN
COMPANY GROWTH DEVELOPING SMALL
VALUE EQUITY GROWTH CAPITALIZATION
------- ----------- ----------- -------------------------
1998(c) 1998(c) 1998(c) 1998 1997 1996(b)
------- ----------- ----------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $ 9.57 $10.00
Accumulation Unit value
(end of period)........ $10.51 $ 9.57
Number of units
outstanding
(in 000s) (end of
period)................ 1,060 125
</TABLE>

JANUS
CALVERT FIDELITY VIP II FIDELITY VIP ASPEN SERIES
SOCIAL BALANCED CONTRAFUND EQUITY-INCOME BALANCED
---------------------------------- ------------------------- ------------------------- ------
1998 1997 1996 1995(a) 1998 1997 1996(b) 1998 1997 1996(b) 1998
------ ------ ------ ------- ------ ------ ------- ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $12.46 $11.22 $10.00 $10.63 $10.00 $10.45 $10.00
Accumulation Unit value
(end of period)........ $14.76 $12.46 $11.22 $13.01 $10.63 $13.20 $10.45
Number of units
outstanding
(in 000s) (end of
period)................ 282 123 17 3,079 241 2,267 149

JANUS JANUS MFS GROWTH MFS MORGAN STANLEY
ASPEN SERIES ASPEN SERIES WITH INCOME RESEARCH EMERGING MARKETS
BALANCED WORLDWIDE GROWTH SERIES SERIES EQUITY
---------------- ------------------------- ----------- -------- -------------------------
1997 1996(b) 1998 1997 1996(b) 1998(c) 1998(c) 1998 1997 1996(b)
------ ------- ------ ------ ------- ----------- -------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit value
(beginning of
period)................ $10.24 $10.00 $10.36 $10.00 $10.00 $10.00
Accumulation Unit value
(end of period)........ $12.32 $10.24 $12.48 $10.36 $ 9.89 $10.00
Number of units
outstanding
(in 000s) (end of
period)................ 2,043 125 4,392 269 827 80

VAN ECK
T. ROWE PRICE WORLDWIDE
EQUITY INCOME HARD ASSETS
------------- --------------
1998(c) 1998(c)
------------- --------------
<S> <C> <C>
Accumulation Unit value
(beginning of
period)................
Accumulation Unit value
(end of period)........
Number of units
outstanding
(in 000s) (end of
period)................
</TABLE>

- ------------
(a) For the period May 1, 1995 (commencement of operations) through December 31,
1995.
(b) For the period October 1, 1996 (commencement of operations) through December
31, 1996.

17
<PAGE> 21

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
AND THE SEPARATE ACCOUNT

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

New York Life Insurance and Annuity Corporation ("NYLIAC") is a stock life
insurance company incorporated in Delaware in 1980. NYLIAC is licensed to sell
life, accident and health insurance and annuities in the District of Columbia
and all states. In addition to the policies described in this Prospectus, NYLIAC
offers other life insurance policies and annuities.

NYLIAC is a wholly-owned subsidiary of New York Life Insurance Company
("New York Life"), a mutual life insurance company doing business in New York
since 1845. NYLIAC held assets of $ billion at the end of 1998. New York
Life has invested in NYLIAC, and will, in order to maintain capital and surplus
in accordance with state requirements, occasionally make additional
contributions to NYLIAC.

Year 2000 Readiness-The computer systems we use to process all policy
transactions and valuations need to be modified to accommodate the changeover to
Year 2000. These modifications are necessary for us to be able to continue to
administer the policies in Year 2000 and later. As is the case with most systems
projects, risks and uncertainties exist, and a project could be delayed. We are,
however, working to make these systems modifications, and we expect that the
necessary changes will be completed on time and in a way that will not result in
disruption to our policy servicing operations.

THE SEPARATE ACCOUNT

The Separate Account was established on November 30, 1994, pursuant to
resolutions of the NYLIAC Board of Directors. The Separate Account is registered
as a unit investment trust with the Securities and Exchange Commission under the
Investment Company Act of 1940. This registration does not signify that the
Securities and Exchange Commission supervises the management, or the investment
practices or policies, of the Separate Account.

Although the assets of the Separate Account belong to NYLIAC, these assets
are held separately from our other assets. The Separate Account's assets are not
chargeable with liabilities incurred in any of NYLIAC's other business
operations (except to the extent that assets in the Separate Account exceed the
reserves and other liabilities of that Separate Account). The income, capital
gains and capital losses incurred on the assets of the Separate Account are
credited to or charged against the assets of the Separate Account, without
regard to the income, capital gains or capital losses arising out of any other
business NYLIAC may conduct. Therefore, the investment performance of the
Separate Account is entirely independent of the investment performance of the
Fixed Account, the DCA Accounts and any other separate account of NYLIAC.

The Separate Account currently has 30 Investment Divisions, 26 of which are
available under the policies. Premium payments are invested solely in the
corresponding Eligible Portfolios of the relevant Fund.

THE PORTFOLIOS

The assets of each Eligible Portfolio are separate from the others and each
such Portfolio has different investment objectives and policies. As a result,
each Eligible Portfolio operates as a separate investment fund and the
investment performance of one Portfolio has no effect on the investment
performance of any other Portfolio.

THERE IS NO ASSURANCE THAT ANY OF THE ELIGIBLE PORTFOLIOS WILL ATTAIN THEIR
RESPECTIVE STATED OBJECTIVES.

The Funds' shares are also available to certain separate accounts funding
variable life insurance policies offered by NYLIAC. This is called "mixed
funding." Except for the MainStay VP Series Fund, shares of all other Funds may
also be available to separate accounts of insurance companies unaffiliated with
NYLIAC. This is called "shared funding." Although we do not anticipate any
inherent difficulties arising from mixed and shared funding, it is theoretically
possible that, due to differences in tax treatment or other considerations, the
interests of owners of various contracts participating in a certain Fund might
at some time be in conflict. The Board of Directors/Trustees of each Fund, each
Fund's investment advisers, and NYLIAC are required to monitor events to
identify any material conflicts that arise from the use of the Funds for mixed
and shared funding. For more information about the risks of mixed and shared
funding please refer to the relevant Fund prospectus.

We provide certain services to you in connection with the investment of
premium payments in the Investment Divisions, which, in turn, invest in the
Eligible Portfolios. These services include, among others, providing information
about the Eligible Portfolios. We receive a service fee from the investment
advisers or other service providers of some of the Funds in return for providing
services of this type. Currently, we receive service fees at annual rates
ranging from .10% to .21% of the aggregate net asset value of the shares of some
of the Eligible Portfolios held by the Investment Divisions.

18
<PAGE> 22

The Eligible Portfolios of the relevant Funds, along with their investment
advisers, are listed in the following table:
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
FUND INVESTMENT ADVISERS ELIGIBLE PORTFOLIOS
<S> <C> <C>
MainStay VP Series Fund, Inc. MacKay-Shields Financial MainStay VP Capital Appreciation; MainStay VP
Corporation Cash Management; MainStay VP Convertible;
MainStay VP Government; MainStay VP High Yield
Corporate Bond; MainStay VP International Equity;
MainStay VP Total Return; MainStay VP Value
- ----------------------------------------------------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. Monitor Capital Advisors, Inc. MainStay VP Indexed Equity
- ----------------------------------------------------------------------------------------------------------------------------
MainStay VP Series Fund, Inc. New York Life Insurance Company MainStay VP Bond; MainStay VP Growth Equity;
MainStay VP American Century Income & Growth;
MainStay VP Dreyfus Large Company Value;
MainStay VP Eagle Asset Management Growth
Equity; MainStay VP Lord Abbett Developing Growth
- ----------------------------------------------------------------------------------------------------------------------------
The Alger American Fund Fred Alger Management, Inc. Alger American Small
Capitalization
- ----------------------------------------------------------------------------------------------------------------------------
Calvert Variable Series, Inc. Calvert Asset Management Company Calvert Social Balanced
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity Variable Insurance Fidelity Management and Research Fidelity VIP II Contrafund
Products Fund II Company
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity Variable Insurance Fidelity Management and Research Fidelity VIP Equity-Income
Products Fund Company
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Janus Capital Corporation Janus Aspen Series Balanced;
Janus Aspen Series Worldwide Growth
- ----------------------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust Massachusetts Financial Services MFS Growth With Income Series;
Company MFS Research Series
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Universal Funds, Morgan Stanley Asset Management Morgan Stanley Emerging Markets
Inc. Inc. Equity
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Series, Inc. T. Rowe Price Associates, Inc. T. Rowe Price Equity Income
- ----------------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust Van Eck Associates Corporation Van Eck Worldwide Hard Assets
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Please refer to the attached prospectuses of the respective Funds for a complete
description of the Funds, the investment advisers and the Portfolios. The Funds'
prospectuses should be read carefully before any decision is made concerning the
allocation of Premium Payments to an Investment Division corresponding to a
particular Eligible Portfolio.

ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS

NYLIAC retains the right, subject to any applicable law, to make additions
to, deletions from, or substitutions for, the Eligible Portfolio shares held by
any Investment Division. NYLIAC reserves the right to eliminate the shares of
any of the Eligible Portfolios and to substitute shares of another portfolio of
a Fund, or of another registered open-end management investment company. We may
do this if the shares of the Eligible Portfolios are no longer available for
investment or if we believe investment in any Eligible Portfolio would become
inappropriate in view of the purposes of the Separate Account. To the extent
required by law, substitutions of shares attributable to your interest in an
Investment Division will not be made until you have been notified of the change.
This does not prevent the Separate Account from purchasing other securities for
other series or classes of policies, or from processing a conversion between
series or classes of policies on the basis of requests made by policy owners.

New Investment Divisions may be established when, in the sole discretion of
NYLIAC, marketing, tax, investment or other conditions so warrant. Any new
Investment Divisions will be made available to existing policy

19
<PAGE> 23

owners on a basis NYLIAC determines. NYLIAC may also eliminate one or more
Investment Divisions, if, in its sole discretion, marketing, tax, investment or
other conditions warrant.

In the event of any substitution or change, NYLIAC may, by appropriate
endorsement, change the policies to reflect such substitution or change. If
deemed to be in the best interests of persons having voting rights, the Separate
Account may be operated as a management company under the Investment Company Act
of 1940, may be deregistered under such Act in the event such registration is no
longer required, or may be combined with one or more other separate accounts.

REINVESTMENT

All dividends and capital gain distributions from Eligible Portfolios are
automatically reinvested in shares of the distributing Portfolio at their net
asset value on the payable date.

THE POLICIES

PURPOSE OF POLICIES

The Policies described in this Prospectus are primarily designed to
establish retirement benefits for two types of purchasers.

The first type of purchaser is one who is eligible to participate in, and
purchases a Policy for use with, any one of the following:

(1) annuity plans qualified under Section 403(a) of the Internal Revenue
Code (the "Code");

(2) annuity purchase plans adopted by certain private tax exempt
organizations and certain state supported educational institutions
under Section 403(b) of the Code;

(3) individual retirement annuities ("IRAs") meeting the relevant
requirements of Sections 408 or 408A of the Code; or

(4) deferred compensation plans for state and local governments (and
certain other entities) under Section 457 of the Code.

Policies purchased by these individuals for use with these plans are referred to
as "Qualified Policies." (See "Federal Tax Matters" at page .)

The second type of purchaser is one, other than those described above, who
purchases a Policy to provide supplemental retirement income. Policies purchased
by these individuals are referred to as "Non-Qualified Policies."

The Accumulation Value will fluctuate based on the investment experience of
the Investment Divisions you select and the interest credited on the Fixed
Accumulation Value and, in states where approved, the DCA Program Accumulation
Value. NYLIAC does not guarantee the investment performance of the Separate
Account or of the Funds. You bear the entire investment risk with respect to
amounts allocated to the Investment Divisions of the Separate Account. There is
no assurance that the investment objectives will be achieved. Accordingly,
amounts allocated to the Investment Divisions of the Separate Account are
subject to the risks inherent in the securities markets and, specifically, to
price fluctuations of the shares of the Funds.

TYPES OF POLICIES

The policies are only offered on the lives of individual Annuitants. Only
Flexible Premium Policies are available, which means additional Premium Payments
can be made. They may be either Qualified Policies or Non-Qualified Policies.

ISSUING THE POLICY AND PREMIUM PAYMENTS

You can purchase a policy by completing an application with a registered
representative. The application will be sent along with your initial premium
payment to NYLIAC. In addition, in states where permitted, you can also instruct
a broker-dealer with whom NYLIAC has entered into an agreement to forward the
initial premium payment along with a Policy Request to us. If the application or
Policy Request supplied by a broker-dealer is complete and accurate, the initial
premium payment will be credited within two Business Days after receipt. If the
initial premium payment cannot be credited within five Business Days after we
receive it because the application or Policy Request is incomplete or
inaccurate, we will contact you or the broker-dealer providing the application
or Policy Request and explain the reason for the delay. Unless you consent to
NYLIAC's retaining the initial Premium Payment and crediting it as soon as the
necessary requirements are fulfilled, we will offer to refund the initial
premium payment immediately. Acceptance of applications is subject to NYLIAC's
rules. We reserve the right to reject any application or initial premium
payment.

If your policy was issued based on a Policy Request, you will be required
to provide to NYLIAC either a signed acknowledgement of the information
contained in the Policy Request in a form acceptable to NYLIAC, or, where

20
<PAGE> 24

required by applicable state law or regulation, a signed application form. From
the time NYLIAC issues the policy until we receive the signed acknowledgement or
application, the Beneficiary under the policy will be the policy owner (or the
estate). Also policy transactions may not be made unless the Beneficiary
designation or transaction request is signature-guaranteed. Upon receipt of the
signed acknowledgement or application form, the Beneficiary will be specified
under the policy and we will process transactions requested with respect to the
policy without requiring a signature guarantee.

Initial premium payments allocated to the Fixed Account or the DCA Accounts
will be allocated immediately. In states where approved, we will also allocate
the initial premium payments designated to the Investment Divisions immediately.
Otherwise, the initial premium payments designated to Investment Divisions will
be allocated to the MainStay VP Cash Management Investment Division until 15
days after the policy is issued. At the end of this period, we will allocate the
premium payments in accordance with your instructions. Please check with your
registered representative to determine how the initial premium payment will be
allocated under your policy.

Initial premium payments may be allocated in up to ten Allocation
Alternatives and the DCA Accounts inclusively. Thereafter, you may maintain the
Accumulation Value in up to 18 Investment Divisions and the DCA Accounts
inclusively plus the Fixed Account at any one time. Subsequent premium payments
will be credited to the policy at the close of the Business Day on which they
are received at MainStay Annuities--Client Services. Moreover, the percentages
of the premium payments (which must be in whole number percentages) allocated to
each Allocation Alternative may be increased or decreased at the time a premium
payment is made. However, any change to the policy's allocations may not result
in the Accumulation Value being allocated to more than 18 Investment Divisions
and the DCA Accounts inclusively plus the Fixed Account.

Unless we permit otherwise, the minimum initial premium payment is $2,000
for Qualified Policies and $5,000 for Non-Qualified Policies. Additional premium
payments of at least $500 or such lower amount as we may permit can be made at
any time or by any method NYLIAC makes available. For residents of the states of
Maryland, New Jersey and Washington, however, additional premium payments may
only be made until either the Annuitant reaches age 64 or the fourth Policy
Year, whichever is later. The currently available methods of payment are direct
payments to NYLIAC, pre-authorized monthly deductions from bank, credit union or
similar accounts and any other method agreed to by us. Additional premium
payments may be made at any time before the Annuity Commencement Date and while
the Annuitant and the policy owner are living. The maximum aggregate amount of
premium payments we accept is $1,000,000 without prior approval. NYLIAC reserves
the right to limit the dollar amount of any premium payment.

For Qualified Policies, the premium payments made in any Policy Year may
not be more than the amount permitted by the plan or by law for the plan
indicated for the Policy.

ISSUE AGES

Non-Qualified Policies can be issued if both you and the Annuitant are not
older than age 85 (age 78 in Pennsylvania and age 80 in New York). We will
accept additional premium payments until either you or the Annuitant reaches the
age of 85, unless we agree otherwise. For IRA, TSA and SEP plans, you must also
be the Annuitant. Qualified Policies can be issued if the Owner/Annuitant is
between the ages of 18 and 80. We will accept additional premium payments until
the Owner/Annuitant reaches the age of 80, unless otherwise limited by the terms
of a particular plan or unless we agree otherwise.

TRANSFERS

Amounts may be transferred between Investment Divisions of the Separate
Account or to the Fixed Account at least 30 days before the Annuity Commencement
Date. Transfers may not be made into the DCA Accounts. Transfers made from the
DCA Accounts (where available) to the Investment Divisions are subject to
different limitations (See "The DCA Program -- DCA Accounts" at page .) Except
in connection with transfers made pursuant to the Dollar Cost Averaging,
Automatic Asset Reallocation or Interest Sweep options, and the DCA Program, the
minimum amount that may be transferred from one Investment Division to other
Investment Divisions or to the Fixed Account, is $500. Except for the Dollar
Cost Averaging, Automatic Asset Reallocation and Interest Sweep options, and the
DCA Program (where available), if the value of the remaining Accumulation Units
in an Investment Division or Fixed Account would be less than $500 after a
transfer is made, the entire value will be transferred unless NYLIAC in its
discretion determines otherwise. The amount(s) transferred to other Investment
Divisions must be a minimum of $25 for each Investment Division.

There is no charge for the first twelve transfers in any one Policy Year.
NYLIAC reserves the right to charge up to $30 for each transfer in excess of
twelve, subject to any applicable state insurance law requirements. Any transfer
made in connection with the Dollar Cost Averaging, Automatic Asset Reallocation,
and Interest Sweep

21
<PAGE> 25

options and the DCA Program (where available) will not count as a transfer
toward the twelve transfer limit. Transfers may be made from the Fixed Account
to the Investment Divisions in connection with the Interest Sweep option and in
certain other situations. (See "The Fixed Account" at page .)

Transfer requests must be in writing on a form approved by NYLIAC or by
telephone in accordance with established procedures. (See "Procedures for
Telephone Transactions" below.) Transfers from Investment Divisions will be made
based on the Accumulation Unit values at the end of the Business Day on which we
receive the transfer request. (See "Delay of Payments" at page .)

PROCEDURES FOR TELEPHONE TRANSACTIONS

You may authorize us to accept telephone instructions from you or other
persons you designate for the following types of transactions: premium
allocations, transfers among Allocation Alternatives and/or the DCA Program,
partial withdrawals, periodic partial withdrawals, Dollar Cost Averaging,
Automatic Asset Reallocation, and Interest Sweep. You can elect this feature by
completing and signing a Telephone Authorization form. Telephone Authorization
may be elected, changed, or canceled at any time.

You, or other persons you designate, may effect telephone transactions in
two ways: by speaking with a service representative or through access to an
electronic service known as an Interactive Voice Response system (IVR). A
Personal Identification Number (PIN) will be assigned to all individuals
authorized to effect telephone transactions. The caller will be required to
provide the PIN before any transactions will be allowed. Furthermore, we will
confirm all telephone transactions in writing.

NYLIAC is not liable for any loss, cost or expense for action on telephone
instructions which are believed to be genuine in accordance with these
procedures. Telephone transfer requests must be received no later than 4:00 p.m.
Eastern Time in order to assure same day processing. Requests received after
4:00 p.m. Eastern Time will be processed on the next Business Day.

DOLLAR COST AVERAGING

The main objective of dollar cost averaging is to achieve an average cost
per share that is lower than the average price per share during volatile market
conditions. Since the same dollar amount is transferred to an Investment
Division with each transfer, more units are purchased in an Investment Division
if the value per unit is low and fewer units are purchased if the value per unit
is high. Therefore, a lower than average cost per unit will be achieved if
prices fluctuate over the long term. Similarly, for each transfer out of an
Investment Division, more units are sold in an Investment Division if the value
per unit is low and fewer units are sold if the value per unit is high. Dollar
cost averaging does not assure a profit or protect against a loss in declining
markets. Because it involves continuous investing regardless of price levels,
you should consider your financial ability to continue to make purchases during
periods of low price levels. In states where approved, NYLIAC will also offer a
DCA Program under which you may utilize the 6-month, 12-month or 18-month DCA
Accounts. (See "DCA Program -- DCA Accounts" at page .) Transfers under dollar
cost averaging are not included as part of your 12 free transfers each Policy
Year.

(a) Traditional Dollar Cost Averaging

This option permits systematic investing to be made in equal installments
over various market cycles to help reduce risk. You may specify, prior to the
Annuity Commencement Date, a specific dollar amount to be transferred from any
Investment Divisions to any combination of Investment Divisions and/or the Fixed
Account. You will specify the Investment Divisions to transfer money from, the
Investment Divisions and/or Fixed Account to transfer money to, the amounts to
be transferred, the date on which transfers will be made, subject to our rules,
and the frequency of the transfers (either monthly, quarterly, semi-annually or
annually). Transfers are not available from the Fixed Account, but these
transfers may be made into the Fixed Account. Each transfer from an Investment
Division must be at least $100. The minimum Accumulation Value required to elect
this option is $5,000. The minimum transfer amount and minimum Accumulation
Value may be reduced at NYLIAC's discretion.

NYLIAC will make all dollar cost averaging transfers on the day of each
calendar month that you specify or on the next Business Day (if the day you have
specified is not a Business Day or does not exist in that month). You may
specify any day of the month. In order to process a transfer under our
traditional Dollar Cost Averaging option, NYLIAC must have received a request in
writing or by telephone (see "Procedures for Telephone Transactions" at page )
no later than one week prior to the date the transfers are to begin.

You may cancel the traditional Dollar Cost Averaging option at any time in
a written request or by telephone (see "Procedures for Telephone Transactions"
at page ). NYLIAC may also cancel this option if the Accumulation Value is
less than $5,000, or such lower amount as we may determine. The traditional
Dollar Cost Averaging option may not be elected if you have selected the
Automatic Asset Reallocation option.

22
<PAGE> 26

(b) The DCA Program

THE DCA PROGRAM IS AVAILABLE ONLY IN STATES WHERE APPROVED. This program
permits you to set up automatic dollar cost averaging using the 6-month,
12-month and/or 18-month DCA Account when an initial premium payment or a
subsequent premium payment is made. You can request the DCA Program in addition
to the traditional Dollar Cost Averaging, Automatic Asset Reallocation, or
Interest Sweep options.

You can enroll in the DCA Program by allocating at least $5,000 to one or
more DCA Accounts and specifying the Investment Divisions into which transfers
from the DCA Accounts are to be made. However, you may not select a DCA Account
with a duration which would extend beyond the Annuity Commencement Date. Amounts
in the DCA Accounts will be transferred to the Investment Divisions in 6 monthly
transfers if the 6-month DCA Account is selected, in 12 monthly or 4 quarterly
transfers if the 12-month DCA Account is selected or in 18 monthly or 6
quarterly transfers if the 18-month DCA Account is selected. For monthly
transfers, dollar cost averaging will begin one month from the date NYLIAC
receives the premium payment and transfers will be made on the same day or on
the next Business Day (if the day is not a Business Day or does not exist in
that month) each subsequent month for the duration of the DCA Account. For
quarterly transfers, dollar cost averaging will begin three months from the date
NYLIAC receives the premium payment and transfers will be made on the same day
or on the next Business Day (if the day is not a Business Day or does not exist
in that month) every subsequent three month period for the duration of the DCA
Account. The amount of each transfer will be calculated at the time of the
transfer based on the number of remaining monthly or quarterly transfers and the
remaining value in a DCA Account. For example, the amount of the first monthly
transfer out of a 6-month DCA Account will equal 1/6 of the value of the DCA
Account on the date of the transfer. The amount of each of the five remaining
transfers will equal 1/5, 1/4, 1/3, 1/2 and the balance, respectively, of the
value of the DCA Account on the date of each transfer.

You may have a 6-month, a 12-month, and an 18-month DCA Account open
simultaneously in accordance with established procedures. However, you may not
have more than one DCA Account with the same duration open at the same time.
Accordingly, any subsequent premium payment we receive for a duration that is
already open will be allocated to that same DCA Account already opened. The
entire value of the DCA Account will be completely transferred to the Investment
Divisions within the duration specified. For example, if an initial premium
payment is allocated to the 12-month DCA Account under which the 12-month term
will end on December 31, 1999 and you make a subsequent premium payment to the
12-month DCA Account before December 31, 1999, the subsequent premium payment
will be allocated to the same 12-month DCA Account already opened and the entire
value of the 12-month DCA Account will be transferred to the Investment
Divisions by December 31, 1999 even though a portion of the money was not in
that DCA Account for the entire 12-month period.

Partial withdrawals and transfers (in addition to the automatic transfers
described above) can be made from the DCA Accounts. Partial withdrawals and
transfers will be made first from the DCA Program Accumulation Value attributed
to the initial premium payment and then from the DCA Program Accumulation Value
attributed to subsequent allocations in the order received.

Transfers can not be made into the DCA Accounts from any Allocation
Alternative.

AUTOMATIC ASSET REALLOCATION

This option allows you to maintain the percentage allocated to each
Investment Division at a pre-set level. For example, you might specify that 50%
of the Variable Accumulation Value of your policy be allocated to the MainStay
VP Convertible Investment Division and 50% of the Variable Accumulation Value be
allocated to the MainStay VP International Equity Investment Division. Over
time, the fluctuations in each of these Investment Division's investment results
will shift the percentages. If you elect this Automatic Asset Reallocation
option, NYLIAC will automatically transfer your Variable Accumulation Value back
to the percentages you specify. You may choose to have reallocations made
quarterly, semi-annually or annually. The minimum Variable Accumulation Value
required to elect this option is $5,000. There is no minimum amount which you
must allocate among the Investment Divisions under this option.

You can cancel the Automatic Asset Reallocation option at any time in a
written request or by telephone (see "Procedures for Telephone Transactions" at
page ). NYLIAC may also cancel this option if the Accumulation Value is less
than $5,000, or such a lower amount as we may determine. The Automatic Asset
Reallocation option may not be elected if you have selected the traditional
Dollar Cost Averaging option.

23
<PAGE> 27

INTEREST SWEEP

You can request, prior to the Annuity Commencement Date, that the interest
earned on monies allocated to the Fixed Account be transferred from the Fixed
Account to any combination of Investment Divisions. You will specify the
Investment Divisions, the frequency of the transfers (either monthly, quarterly,
semi-annually or annually), and the day of each calendar month to make the
transfers. The minimum Fixed Accumulation Value required to elect this option is
$5,000, but this amount may be reduced at our discretion. NYLIAC will make all
Interest Sweep transfers on the day of each calendar month you have specified or
on the next Business Day.

The Interest Sweep option may be requested in addition to either
traditional Dollar Cost Averaging, Automatic Asset Reallocation or the DCA
Program. If an Interest Sweep transfer is scheduled for the same day as a
transfer related to the traditional Dollar Cost Averaging option, the Automatic
Asset Reallocation option or the DCA Program, the Interest Sweep transfer will
be processed first.

YOU MAY NOT TRANSFER MORE THAN 20% of the Fixed Accumulation Value at the
beginning of the Policy Year from the Fixed Account to the Investment Divisions
during a Policy Year. (See "The Fixed Account--Transfers to Investment
Divisions" at page .) If an Interest Sweep option transfer would cause more
than 20% of the Fixed Accumulation Value at the beginning of the Policy Year to
be transferred from the Fixed Account, we will not process the transfer and the
Interest Sweep option will be automatically suspended. Participation in the
Interest Sweep option will not affect the applicability of the Fixed Account
Initial Premium Guarantee described on page .

You can cancel the Interest Sweep option at any time in a written request
or by telephone (see "Procedures for Telephone Transactions" at page ). We may
also cancel this option if the Fixed Accumulation Value is less than $5,000, or
such a lower amount as we may determine.

ACCUMULATION PERIOD

(a) Crediting of Premium Payments

You can allocate a portion of each premium payment to one or more
Investment Divisions or the Fixed Account. The minimum amount that may be
allocated to any one Investment Division or the Fixed Account is $25 (or such
lower amount as we may permit). In states where approved, you may also allocate
all or a portion of each premium payment to one or more DCA Accounts. The
minimum amount that may be allocated to a DCA Account is $5,000. (See "DCA
Program--DCA Accounts" at page .) In states where approved, we will allocate
the initial premium payment to the Investment Divisions you have specified
immediately. Otherwise, the initial premium payment, except any initial premium
payment allocated to the Fixed Account or the DCA Accounts, will be placed in
the MainStay VP Cash Management Investment Division until 15 days after the
policy is issued. Please check with your registered representative to determine
how the initial premium payment will be allocated under your policy. All
additional premium payments to the Investment Divisions and/or the Fixed
Accounts will be allocated as requested. All additional premium payments to the
DCA Program will be allocated based on instructions from you at the time the
additional premium payment is made.

That portion of each premium payment allocated to an Investment Division is
credited to the policy in the form of Accumulation Units. The number of
Accumulation Units credited to a policy is determined by dividing the amount
allocated to each Investment Division by the Accumulation Unit value for that
Investment Division on the day we are making this calculation. The value of an
Accumulation Unit will vary depending on the investment experience of the
Portfolio in which the Investment Division invests. The number of Accumulation
Units credited to a policy will not, however, change as a result of any
fluctuations in the value of an Accumulation Unit. (See "The Fixed Account" at
page for a description of interest credited thereto.)

(b) Valuation of Accumulation Units

The value of Accumulation Units in each Investment Division will change
daily to reflect the investment experience of the corresponding Portfolio as
well as the daily deduction of the Separate Account charges. The Statement of
Additional Information contains a detailed description of how the Accumulation
Units are valued.

THIRD PARTY INVESTMENT ADVISORY ARRANGEMENTS

In some cases, the policy may be sold to policy owners who independently
utilize the services of a third party advisor offering asset allocation and/or
market timing services. NYLIAC may honor transfer and withdrawal instructions
from such asset allocation and market timing services if it has received
authorization to do so from the policy owner participating in the service. We do
not endorse, approve or recommend such services in any way and you should be
aware that fees paid for such services are separate from and in addition to fees
paid under the policy.

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<PAGE> 28

Because the amounts associated with some of these transactions may be
unusually large, the investment advisers for the Eligible Portfolios may have
difficulty processing the transactions. Accordingly, NYLIAC reserves the right
to not accept transfer instructions which are submitted by asset allocation
and/or market timing services on behalf of policy owners. In addition, execution
of such transactions may possibly adversely affect the Variable Accumulation
Values of policy owners who are not utilizing asset allocation or market timing
services.

POLICY OWNER INQUIRIES

Your inquiries should be addressed to MainStay Annuities. (See page ).

CHARGES AND DEDUCTIONS

SURRENDER CHARGES

Since no deduction for a sales charge is made from premium payments, a
Surrender Charge is imposed on certain partial withdrawals and surrenders of the
Policies. The Surrender Charge is based on your premium payments and is not
assessed on any earnings. The Surrender Charge covers certain expenses relating
to the sale of the policies, including commissions to registered representatives
and other promotional expenses. The Surrender Charge is measured as a percentage
of the amount withdrawn or surrendered. The Surrender Charge may apply to
amounts applied under certain Income Payment options.

If you surrender your policy, the Surrender Charge is deducted from the
amount paid to you. In the case of a partial withdrawal, you can direct NYLIAC
to take Surrender Charges either from the remaining value of the Allocation
Alternatives and/or the DCA Accounts from which the partial withdrawals are
made, or from the amount paid to you. If the remaining value in an Allocation
Alternative and/or the DCA Accounts is less than the necessary Surrender Charge,
the remainder of the charge will be deducted from the amount withdrawn from that
Allocation Alternative and/or the DCA Accounts.

The maximum Surrender Charge will be 7% of the amount withdrawn. The
percentage of the Surrender Charge varies, depending upon the length of time a
premium payment is in your policy before it is withdrawn. For purposes of
calculating the applicable Surrender Charge, premium payments will be deemed to
be withdrawn on a first-in, first-out basis. Unless required otherwise by state
law, the Surrender Charge for amounts withdrawn or surrendered during the first
three Payment Years following the premium payment to which such withdrawal or
surrender is attributable is 7% of the amount withdrawn or surrendered. This
charge then declines by 1% per year for each additional Payment Year, until the
sixth Payment Year, after which no charge is made, as shown in the following
chart:

AMOUNT OF SURRENDER CHARGE

<TABLE>
<CAPTION>
SURRENDER
CHARGE
--------
<S> <C>
1........................................................... 7%
2........................................................... 7%
3........................................................... 7%
4........................................................... 6%
5........................................................... 5%
6........................................................... 4%
7+.......................................................... 0%
</TABLE>

EXCEPTIONS TO SURRENDER CHARGES

We will not assess a Surrender Charge:

(a) on amounts you withdraw in any one Policy Year which do not exceed
10% of the Accumulation Value at the time of surrender or
withdrawal ("10% Window");

(b) on amounts you withdraw in any Policy Year which are less than or
equal to the greater of (i) the 10% Window or (ii) the
Accumulation Value less accumulated premium payments, for policies
with total premium payments of $100,000 or more;

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<PAGE> 29

(d) when proceeds are paid upon the death of the policy owner or the
Annuitant;

(e) when an Income Payment Option is selected in any Policy Year after
the first Policy Year;

(f) when a required minimum distribution is made under a Qualified
Policy (this amount will, however, count against the first
exception described above);

(g) on withdrawals at age 59 1/2 or older if the policy is
tax-qualified and if the money withdrawn from the policy is
transferred or rolled over to a NYLIAC annuity policy; and

(h) on withdrawals made under the Living Needs Benefit Rider or
Unemployment Benefit Rider.

OTHER CHARGES

(a) Mortality and Expense Risk Charges

Prior to the Annuity Commencement Date, NYLIAC imposes risk charges to
compensate it for bearing certain mortality and expense risks under the
policies. These risks include our obligation to make Income Payments to each
policy owner regardless of how long the Annuitant lives (which may be longer
than his or her anticipated life expectancy) and our obligation to guarantee a
minimum death benefit. In addition, we assume the risk that the charges for
providing policy administration services to policy owners may not be sufficient
to cover the actual costs we incur.

For assuming these risks, NYLIAC makes a daily charge equal to a percentage
of the value of the net assets in the Separate Account. This charge is equal, on
an annual basis, to 1.25% of the average daily net asset values. If these
charges are insufficient to cover actual costs and assumed risks, the loss will
fall on NYLIAC. If the charges are more than sufficient, any excess will be
added to our general funds. We guarantee that these charges will not increase.

(b) Administration Fee

Prior to the Annuity Commencement Date, we also impose an administration
fee to cover the cost of providing policy administration services. This charge
is equal, on an annual basis, to .15% of the average daily net asset value of
the Separate Account.

An annual policy service charge is deducted each Policy Year on the Policy
Anniversary or upon surrender of the policy if on the Policy Anniversary or date
of surrender the Accumulation Value is less than $20,000. This charge is the
lesser of $30 or 2% of the Accumulation Value at the end of the Policy Year or
on the date of surrender, whichever is applicable. The annual policy service
charge is deducted from each Allocation Alternative and each DCA Account (where
available) in proportion to its percentage of the Accumulation Value on the
Policy Anniversary. This charge covers the costs for providing services under
the policy such as collecting, processing and confirming premium payments and
establishing and maintaining the available methods of payment.

(d) Fund Charges

The value of the assets of the Separate Account will indirectly reflect the
Funds' total fees and expenses. The Funds' total fees and expenses are not part
of the policy. They may vary in amount from year to year. These fees and
expenses are described in detail in the relevant Fund's prospectus.

GROUP AND SPONSORED ARRANGEMENTS

For certain group or sponsored arrangements, we may reduce the Surrender
Charge and the policy service charge or change the minimum initial and
additional premium payment requirements. Group arrangements include those in
which a trustee or an employer, for example, purchases policies covering a group
of individuals on a group basis. Sponsored arrangements include those in which
an employer allows us to sell policies to its employees or retirees on an
individual basis.

Our costs for sales, administration, and mortality generally vary with the
size and stability of the group among other factors. We take all these factors
into account when reducing charges. To qualify for reduced charges, a group or
sponsored arrangement must meet certain requirements, including our requirements
for size and number of years in existence. Group or sponsored arrangements that
have been set up solely to buy policies or that have been in existence less than
six months will not qualify for reduced charges.

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<PAGE> 30

We will make any reductions according to our rules in effect when a request
for a policy is approved. We may change these rules from time to time. Any
variation in the Surrender Charge or policy service charge will reflect
differences in costs or services and will not be unfairly discriminatory.

TAXES

NYLIAC may, where premium taxes are imposed by state law, deduct such taxes
from your policy either (i) when a surrender or cancellation occurs, or (ii) at
the Annuity Commencement Date. Applicable premium tax rates depend upon such
factors as your current state of residency, and the insurance laws and NYLIAC's
status in states where premium taxes are incurred. Current premium tax rates
range from 0% to 3.5%. Applicable premium tax rates are subject to change by
legislation, administrative interpretations or judicial acts.

Under present laws, NYLIAC will also incur state and local taxes (in
addition to the premium taxes described above) in several states. At present,
these taxes are not significant. If they increase, however, NYLIAC may make
charges for such taxes.

NYLIAC does not expect to incur any federal income tax liability
attributable to investment income or capital gains retained as part of the
reserves under the policies. (See "Federal Tax Matters" at page .) Based upon
these expectations, no charge is being made currently for corporate federal
income taxes which may be attributable to the Separate Account. Such a charge
may be made in future years for any federal income taxes NYLIAC incurs.

DISTRIBUTIONS UNDER THE POLICY

SURRENDERS AND WITHDRAWALS

You can make a partial withdrawal, periodic partial withdrawals, hardship
withdrawals or surrender the policy to receive part or all of the Accumulation
Value at any time before the Annuity Commencement Date and while the Annuitant
is living, by sending a written request to MainStay Annuities. In addition,
partial withdrawals and periodic partial withdrawals may be requested by
telephone. (See "Procedures for Telephone Transactions" at page .) The amount
available for withdrawal is the Accumulation Value at the end of the Business
Day during which we receive the written or telephonic surrender or withdrawal
request, less any outstanding loan balance, Surrender Charges, premium taxes
which we may deduct, and policy service charge, if applicable. If you have not
provided us with a written election not to withhold federal income taxes at the
time you make a withdrawal or surrender request, NYLIAC must by law withhold
such taxes from the taxable portion of any surrender or withdrawal. We will
remit that amount to the federal government. In addition, some states have
enacted legislation requiring withholding. All surrenders or withdrawals will be
paid within seven days of receipt of all documents (including documents
necessary to comply with federal and state tax law), subject to postponement in
certain circumstances. (See "Delay of Payments" at page .)

Since you assume the investment risk with respect to amounts allocated to
the Separate Account and because certain surrenders or withdrawals are subject
to a Surrender Charge and premium tax deduction, the total amount paid upon
surrender of the policy (taking into account any prior withdrawals) may be more
or less than the total premium payments made.

Surrenders and withdrawals may be taxable transactions, and the Internal
Revenue Code provides that a 10% penalty tax may be imposed on certain early
surrenders or withdrawals. (See "Federal Tax Matters--Taxation of Annuities in
General" at pages and .)

(a) Surrenders

A Surrender Charge and any state premium tax, if applicable, less any
outstanding loan balance, and less the charge for Policy administration
expenses, if applicable, may be deducted from the amount paid. The proceeds will
be paid in a lump sum to you unless you elect a different Income Payment method.
(See "Income Payments" at page .) Surrenders may be taxable transactions and
the 10% penalty tax provisions may be applicable. (See "Federal Tax
Matters--Taxation of Annuities in General" at pages and .)

(b) Partial Withdrawals

The minimum amount that can be withdrawn is $500, unless we agree
otherwise. The amount will be withdrawn from the Allocation Alternatives and/or
the DCA Accounts (where available) in accordance with your request. If the Owner
does not specify how to allocate a partial withdrawal among the Allocation
Alternatives and/or the DCA Accounts (where available), we will allocate the
partial withdrawal on a pro-rata basis. Partial withdrawals may be

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<PAGE> 31

taxable transactions and the 10% penalty tax provisions may be applicable. (See
"Federal Tax Matters--Taxation of Annuities in General" at pages and .)

If the requested partial withdrawal is greater than the value in any of the
Allocation Alternatives and/or the DCA Accounts from which the partial
withdrawal is being made, we will pay the entire value of that Allocation
Alternative and/or the DCA Accounts, less any Surrender Charge that may apply,
to you. We will not process partial withdrawal requests if honoring such
requests would result in an Accumulation Value of less than $2,000.

You may elect to receive regularly scheduled partial withdrawals from the
policy. These periodic partial withdrawals may be paid on a monthly, quarterly,
semi-annual, or annual basis. You will elect the frequency of the withdrawals
and the day of the month for the withdrawals to be made. We will make all
withdrawals on the day of each calendar month you specify, or on the next
Business Day. You must specify the Investment Divisions and/or the Fixed Account
from which the periodic partial withdrawals will be made. The minimum amount
under this feature is $100, or such lower amount as we may permit. Periodic
partial withdrawals may be taxable transactions and the 10% penalty tax
provisions may be applicable. (See "Federal Tax Matters--Taxation of Annuities
in General" at pages and .) If you do not specify otherwise, we will
withdraw money on a pro-rata basis from each Investment Division and/or the
Fixed Account. Periodic partial withdrawals may not be made from the DCA
Accounts.

You can elect to receive "Interest Only" periodic partial withdrawals for
the interest earned on monies allocated to the Fixed Account. If this option is
chosen, the $100 minimum for periodic partial withdrawals will be waived.
However, there must be at least $5,000 in the Fixed Account at the time of each
periodic partial withdrawal, unless we agree otherwise. This option will void
the Fixed Account Initial Premium Guarantee, described at page .

(d) Hardship Withdrawals

Under certain Qualified Policies, the Plan Administrator may allow, in its
sole discretion, certain withdrawals it determines to be "Hardship Withdrawals."
The Surrender Charge and 10% penalty tax, if applicable, and provisions
applicable to partial withdrawals apply to Hardship Withdrawals.

REQUIRED MINIMUM DISTRIBUTION

For IRAs and IRA SEPs, the policy owner is generally not required to elect
the required minimum distribution option until April 1st of the year following
the calendar year he or she attains age 70 1/2. For TSAs, the policy owner is
generally not required to elect the required minimum distribution option until
April 1st of the year following the calendar year he or she attains age 70 1/2
or until April 1st of the year following the calendar year he or she retires,
whichever occurs last.

CANCELLATIONS

If we do not receive any premium payments for a period of two years, and
both the Accumulation Value of your policy and your total premium payments less
any withdrawals and Surrender Charges are less than $2,000, we reserve the right
to terminate your policy subject to any applicable state insurance law or
regulation. We will notify you of our intention to exercise this right and give
you 90 days to make a premium payment. If we terminate your policy, we will pay
you the Accumulation Value of your policy in one lump sum.

ANNUITY COMMENCEMENT DATE

The Annuity Commencement Date is the date specified on the Policy Data
Page. The Annuity Commencement Date is the day that Income Payments are
scheduled to commence unless the policy has been surrendered or an amount has
been paid as proceeds to the designated Beneficiary prior to that date. You may
change the Annuity Commencement Date to an earlier date by providing written
notice to NYLIAC. You may defer the Annuity Commencement Date to a later date if
we agree to it, provided that we receive a written notice of the request at
least one month before the last selected Annuity Commencement Date. The Annuity
Commencement Date and Income Payment method for Qualified Policies may also be
controlled by endorsements, the plan, or applicable law.

DEATH BEFORE ANNUITY COMMENCEMENT

If you or the Annuitant dies prior to the Annuity Commencement Date, an
amount will be paid as proceeds to the designated Beneficiary, as of the date
proof of death and all requirements necessary to make the payment are received.
That amount will be the greater of:

(a) the Accumulation Value, less any outstanding loan balance,

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<PAGE> 32

(b) the sum of all premium payments made, less any outstanding loan
balance, partial withdrawals and Surrender Charges on those partial
withdrawals or,

(c) the "reset value" plus any additional premium payments made since the
most recent "Reset Anniversary," less any outstanding loan balance,
partial withdrawals made since the most recent Reset Anniversary and
any Surrender Charges applicable to such partial withdrawals.

In states where approved, the reset value, with respect to any policy, is
recalculated every year (six years in Texas) from the date of the initial
premium payment ("Reset Anniversary") until you or the Annuitant reaches age 85.
For all other policies, the reset value is calculated every three years from the
date of the initial premium payment until you or the Annuitant reaches age 85.
The reset value is calculated on the Reset Anniversary and is based on a
comparison between (a) the current Reset Anniversary's Accumulation Value, and
(b) the prior Reset Anniversary's value, plus any premiums since the prior Reset
Anniversary date, less any partial withdrawals and Surrender Charges on those
partial withdrawals since the last Reset Anniversary date. The greater of the
compared values will be the new reset value.

The formula guarantees that the amount paid will at least equal the sum of
all Premium Payments (less any outstanding loan balance, partial withdrawals and
Surrender Charges on such partial withdrawals), independent of the investment
experience of the Separate Account. The Beneficiary may receive the amount
payable in a lump sum or under any life income payment option which is then
available. If more than one Beneficiary is named, each Beneficiary will be paid
a pro rata portion from each Allocation Alternative and the DCA Account in which
the policy is invested as of the date proof of death and all requirements
necessary to make the payment to that Beneficiary is received. Please consult
with your registered representative regarding the reset value that is available
under your particular Policy.

Payments will be made in a lump sum to the Beneficiary unless you have
elected or the Beneficiary elects otherwise in a signed written notice which
gives us the information that we need. If such an election is properly made, all
or part of these proceeds will be:

(i) applied under the Life Income Payment Option to provide an
immediate annuity for the Beneficiary who will be the policy
owner and Annuitant; or

(ii) applied under another Income Payment option we may offer at the
time. Payments under the annuity or under any other method of
payment we make available must be for the life of the
Beneficiary, or for a number of years that is not more than the
life expectancy of the Beneficiary at the time of the policy
owner's death (as determined for federal tax purposes), and must
begin within one year after the policy owner's death. (See
"Income Payments" below.)

If your spouse is the Beneficiary, the proceeds can be paid to the
surviving spouse if you die before the Annuity Commencement Date or the policy
can continue with the surviving spouse as the new policy owner and, if you were
the Annuitant, as the Annuitant. If a policy is jointly owned, ownership rights
and privileges under the Policy must be exercised jointly and benefits under the
policy will be paid upon the death of any joint owner. (See "Federal Tax
Matters--Taxation of Annuities in General" at pages and .)

If the Annuitant and, where applicable under another Income Payment option,
the Joint Annuitant, if any, die after the Annuity Commencement Date, NYLIAC
will pay the sum required by the Income Payment option in effect.

Any distribution or application of Policy proceeds will be made within 7
days after NYLIAC receives all documents (including documents necessary to
comply with federal and state tax law) in connection with the event or election
that causes the distribution to take place, subject to postponement in certain
circumstances. (See "Delay of Payments" at page .)

INCOME PAYMENTS

(a) Election of Income Payment Options

Income Payments will be made under the Life Income Payment Option or under
such other option we may offer at that time where permitted by state laws. We
will require that a lump sum payment be made if the Accumulation Value is less
than $2,000. At any time before the Annuity Commencement Date, you may change
the Income Payment option or request any other method of payment we agree to. If
the Life Income Payment Option is chosen, proof of birth date may be required
before Income Payments begin. For Income Payment options involving life income,
the actual age of the Annuitant will affect the amount of each payment. Since
payments based on older Annuitants are expected to be fewer in number, the
amount of each annuity payment should be greater. Payments under the Life Income
Payment Option will always be in the same specified amount and will be paid over
the life of

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<PAGE> 33

the Annuitant with a guarantee of 10 years of payments, even if the Annuitant
dies sooner. NYLIAC does not currently offer variable Income Payment Options.

Under Income Payment Options involving life income, the Payee may not
receive Income Payments equal to the total Premium Payments if the Annuitant
dies before the actuarially predicted date of death. Income Payment Options
involving life income are based on annuity tables that vary on the basis of sex,
unless the Policy was issued under an employer sponsored plan or in a state
which requires unisex rates.

(b) Other Methods of Payment

If NYLIAC agrees, you (or the Beneficiary upon the death of you or the
Annuitant prior to the Annuity Commencement Date) may choose to have Income
Payments made under some other method of payment or in a lump sum.

Satisfactory proof of survival may also be required, from time to time
before any Income Payments or other benefits will be paid. The proof will be
requested at least 30 days prior to the next scheduled payment date.

DELAY OF PAYMENTS

Payment of any amounts due from the Separate Account under the policy will
occur within seven days of the date NYLIAC receives all documents (including
documents necessary to comply with federal and state tax law) in connection with
a request unless:

1. The New York Stock Exchange ("NYSE") is closed for other than usual
weekends or holidays, or trading on the NYSE is otherwise
restricted;

2. An emergency exists as defined by the Securities and Exchange
Commission;

3. The Securities and Exchange Commission permits a delay for the
protection of security holders; or

4. The check used to pay the premium has not cleared through the
banking system. This may take up to 15 days.

For the same reasons, transfers from the Separate Account to the Fixed
Account may be delayed.

Payments of any amount due from the Fixed Account and/or the DCA Program
may also be delayed. When permitted by law, we may defer payment of any partial
withdrawal or full surrender request for up to six months from the date of
surrender from the Fixed Account and/or the DCA Program. Interest of at least
3.5% per year will be paid on any partial withdrawal or full surrender request
deferred for 30 days or more.

DESIGNATION OF BENEFICIARY

You may name, in a written form acceptable to us, one or more
Beneficiaries. Thereafter, before the Annuity Commencement Date and while the
Annuitant is living, you may change the Beneficiary by written notice in a form
acceptable to NYLIAC. If before the Annuity Commencement Date, the Annuitant
dies before you and no Beneficiary for the proceeds or for a stated share of the
proceeds survives, the right to the proceeds or shares of the proceeds passes to
you. If you are the Annuitant, the proceeds pass to your estate. However, if the
policy owner who is not the Annuitant dies before the Annuity Commencement Date,
and no Beneficiary for the proceeds or for a stated share of the proceeds
survives, the right to the proceeds or shares of the proceeds passes to the
policy owner's estate.

For policies issued through a Policy Request, the Beneficiary will be the
policy owner or his/her estate until the Beneficiary is designated as described
under "Issuing the Policy and Premium Payments" at page .

RESTRICTIONS UNDER INTERNAL REVENUE CODE SECTION 403(b)(11)

Distributions attributable to salary reduction contributions made in years
beginning after December 31, 1988 (including the earnings on these
contributions), as well as to earnings in such years on salary reduction
accumulations held as of the end of the last year beginning before January 1,
1989, may not begin before the employee attains age 59 1/2, separates from
service, dies or becomes disabled. The plan may also provide for distribution in
the case of hardship. However, hardship distributions are limited to amounts
contributed by salary reduction. The earnings on such amounts may not be
withdrawn. Even though a distribution may be permitted under these rules (e.g.
for hardship or after separation from service), it may still be subject to a 10%
additional income tax as a premature distribution. To the extent that these
limitations on distributions conflict with the redeemability provisions of the
Investment Company Act of 1940, NYLIAC relies upon a November 28, 1988 letter
for exemptive relief.

Under the terms of your plan, you may have the option to invest in other
403(b) funding vehicles, including 403(b)(7) custodial accounts. You should
consult your plan document to make this determination.

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<PAGE> 34

LOANS

Loans are available only if you have purchased your policy in connection
with a 403(b) plan. Under your 403(b) policy, you may borrow against your
policy's Accumulation Value after the first Policy Year and prior to the Annuity
Commencement Date. Unless we agree otherwise, only one loan may be outstanding
at a time. A minimum Accumulation Value of $5,000 must remain in the policy. The
minimum loan amount is $500. The maximum loan that may be taken is the lesser
of: (a) 50% of the policy's Accumulation Value on the date of the loan or (b)
$50,000. A loan processing fee of $25 will be withdrawn from the Accumulation
Value on a pro rata basis, unless prohibited by applicable state law or
regulation. If on the date of the loan you do not have a Fixed Accumulation
Value equal to at least 125% (110% in New York) of the loan amount, sufficient
Accumulation Value will be transferred from the Investment Divisions on a pro
rata basis so that the Fixed Accumulation Value equals 125% (110% in New York)
of the loan amount. While a loan is outstanding no partial withdrawals or
transfers may be made which would reduce the Fixed Accumulation Value to an
amount less than 125% (110% in New York) of the outstanding loan balance.

For plans not subject to the Employee Retirement Income Security Act of
1974 ("ERISA"), the interest rate paid by the policy owner of the loan will
equal 5%. The assets being held in the Fixed Account to secure the loan will be
credited with the minimum guaranteed interest rate of 3%. For plans subject to
ERISA, the interest charged on the loan will be applied at the then current
Prime Rate plus 1%. The money being held in the Fixed Account to secure the loan
will be credited with a rate of interest that is the Prime Rate less 1%, but
will always be at least equal to the minimum guaranteed interest rate of 3%. For
all plans, interest will be assessed in arrears as part of the periodic loan
repayments.

The loan must be repaid on a periodic basis at a frequency not less
frequently than quarterly and over a period no greater than five years from the
date it is taken. If a loan repayment is in default we will withdraw the amount
in default from the Fixed Accumulation Value to the extent permitted by Federal
income tax rules. Such a repayment will be taken on a first-in, first-out (FIFO)
basis from amounts allocated to the Fixed Account.

Loans to acquire a principal residence are permitted under the same terms
described above, except that:

(a) the minimum loan amount is $5,000; and

(b) repayment of the loan amount may be extended to a maximum of
twenty-five years.

Any outstanding loan balance including any accrued interest will be
deducted from the Fixed Accumulation Value prior to payment of a surrender or
the commencement of the annuity benefits. On death of the policy owner or
Annuitant, any outstanding loan balance will be deducted from the Fixed
Accumulation Value as a partial withdrawal as of the date the notice of death is
received.

Loans are subject to the terms of the policy, your 403(b) Plan and the
Code, which may impose restrictions upon them. We reserve the right to suspend,
modify, or terminate the availability of loans under this policy at any time.
However, any action taken by us will not affect already outstanding loans.

RIDERS

At no additional charge, two riders are included under the policy: an
Unemployment Benefit Rider, for Non-Qualified and IRA Policies, and a Living
Needs Benefit Rider, for all types of policies. Both riders provide for an
increase in the amount that can be withdrawn from your policy which will not be
subject to a Surrender Charge upon the happening of certain qualifying events.
The riders are only available in those states where they have been approved.
Please consult with your registered representative regarding the availability of
these riders in your state.

(a) Living Needs Benefit Rider

If the Annuitant enters a nursing home, becomes terminally ill or disabled,
you may be eligible to receive all or a portion of the Accumulation Value
without paying a Surrender Charge. The Policy must have been inforce for at
least one year and have a minimum Accumulation Value of $5,000. Withdrawals will
be taxable to the extent of gain and, prior to age 59 1/2, may be subject to a
10% IRS penalty. This rider is in effect in all states where approved.

(b) Unemployment Benefit Rider

For all Non-Qualified Policies and IRAs, if you become unemployed, you may
be eligible to increase the amount that can be withdrawn from your policy up to
50% without paying Surrender Charges. This rider can only be used once. The
policy must have been inforce for at least one year and have a minimum
Accumulation Value of $5,000. Withdrawals may be taxable transactions and, prior
to age 59 1/2, may be subject to a 10% IRS penalty. This rider is in effect in
all states where approved.

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THE FIXED ACCOUNT

The Fixed Account is supported by the assets in NYLIAC's general account,
which includes all of NYLIAC's assets except those assets specifically allocated
to NYLIAC's separate accounts. NYLIAC has sole discretion to invest the assets
of the Fixed Account subject to applicable law. The Fixed Account is not
registered under the federal securities laws and is generally not subject to
their provisions. Furthermore, the staff of the Securities and Exchange
Commission has not reviewed the disclosures in this Prospectus relating to the
Fixed Account. These disclosures regarding the Fixed Account may be subject to
certain applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.

(a) Interest Crediting

NYLIAC guarantees that it will credit interest at an annual effective rate
of at least 3% to amounts allocated or transferred to the Fixed Account under
the policies. NYLIAC may, AT ITS SOLE DISCRETION, credit a higher rate or rates
of interest to amounts allocated or transferred to the Fixed Account. Interest
rates will be set on the anniversary of each premium payment or transfer. All
premium payments and additional amounts (including transfers from other
Investment Divisions) allocated to the Fixed Account, plus prior interest earned
on such amounts, will receive their applicable interest rate for one-year
periods from the anniversary on which the allocation or transfer was made.

(b) Transfers to Investment Divisions

Amounts may be transferred from the Fixed Account to the Investment
Divisions up to 30 days prior to the Annuity Commencement Date, subject to the
following conditions.

1. The maximum amount you are allowed to transfer from the Fixed
Account to the Investment Divisions during any Policy Year is 20% of the
Fixed Accumulation Value at the beginning of the Policy Year.

2. The minimum amount that may be transferred from the Fixed Account
to the Investment Divisions is the lesser of (i) $500 or (ii) the Fixed
Accumulation Value, unless we agree otherwise. Additionally, the remaining
value in the Fixed Account must be at least $500. If, after a contemplated
transfer, the remaining values in the Fixed Account would be less than
$500, that amount must be included in the transfer, unless NYLIAC in its
discretion permits otherwise. Amounts transferred from the Fixed Account
will be determined on a first-in, first-out ("FIFO") basis, for purposes of
determining the rate at which interest will be credited on monies remaining
in the Fixed Account.

Except as part of an existing request relating to the traditional Dollar
Cost Averaging option, the Interest Sweep option or the DCA Program (where
available), money may not be transferred into the Fixed Account if a transfer
was made out of the Fixed Account during the previous six-month period.

Transfer requests must be in writing on a form approved by NYLIAC or by
telephone in accordance with established procedures. (See "Procedures for
Telephone Transactions" at page .)

Partial withdrawals will be deducted and any Surrender Charges will be
applied to the Fixed Account on a FIFO basis (i.e., from any value in the Fixed
Account attributable to premium payments or transfers from Investment Divisions
in the same order in which such payments or transfers were allocated to the
Fixed Account during the life of the policy).

NYLIAC guarantees that upon any surrender of a policy, you will receive an
amount equal to at least that portion of the initial premium payment which was
initially allocated to the Fixed Account. However, this guarantee will not apply
if you transfer any amount out of the Fixed Account (except transfers made under
the Interest Sweep option) or make any partial withdrawals from the Fixed
Account, a DCA Account or the Separate Account.

THE DCA ACCOUNT

Like the Fixed Account, the DCA Accounts are also supported by the assets
in NYLIAC's general account. The DCA Accounts are not registered under the
federal securities laws. The information contained in the first paragraph under
"The Fixed Account" on page , equally applies to the DCA Accounts.

NYLIAC will set interest rates in advance at least once a year for each
date on which we may receive a premium payment to a DCA Account. The rate will
never be less than 3%. Premium payments into a DCA Account will receive

32
<PAGE> 36

the applicable interest rate in effect on the Business Day we receive the
premium payment. Interest rates for subsequent premium payments made into the
same DCA Account may be different from the rate applied to prior premium
payments made into the DCA Account.

FEDERAL TAX MATTERS

INTRODUCTION

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. The
Qualified Policies are designed for use by individuals in retirement plans which
are intended to qualify as plans qualified for special income tax treatment
under Sections 219, 403, 408, 408A or 457 of the Code. The ultimate effect of
federal income taxes on the Accumulation Value, on Income Payments and on the
economic benefit to you, the Annuitant or the Beneficiary depends on the type of
retirement plan for which the Qualified Policy is purchased, on the tax and
employment status of the individual concerned and on NYLIAC's tax status. The
following discussion assumes that Qualified Policies are used in retirement
plans that qualify for the special federal income tax treatment described above.
This discussion is not intended to address the tax consequences resulting from
all of the situations in which a person may be entitled to or may receive a
distribution under a policy. Any person concerned about these tax implications
should consult a competent tax adviser before making a premium payment. This
discussion is based upon NYLIAC's understanding of the present federal income
tax laws as they are currently interpreted by the Internal Revenue Service. We
cannot predict the likelihood of continuation of the present federal income tax
laws or of the current interpretations by the Internal Revenue Service, which
may change from time to time without notice. Any such change could have
retroactive effects regardless of the date of enactment. Moreover, this
discussion does not take into consideration any applicable state or other tax
laws except with respect to the imposition of any state premium taxes. We
suggest you consult with your tax adviser.

TAXATION OF ANNUITIES IN GENERAL

The following discussion assumes that the policies will qualify as annuity
contracts for federal income tax purposes. The Statement of Additional
Information discusses such qualifications.

Section 72 of the Code governs taxation of annuities in general. NYLIAC
believes that an annuity policy owner generally is not taxed on increases in the
value of a policy until distribution occurs either in the form of a lump sum
received by withdrawing all or part of the Accumulation Value (i.e., surrenders
or partial withdrawals) or as Income Payments under the Income Payment option
elected. The exception to this rule is that generally, a policy owner of any
deferred annuity policy who is not a natural person must include in income any
increase in the excess of the policy owner's Accumulation Value over the policy
owner's investment in the contract during the taxable year. However, there are
some exceptions to this exception. You may wish to discuss these with your tax
counsel. The taxable portion of a distribution (in the form of an annuity or
lump sum payment) is generally taxed as ordinary income. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the
Accumulation Value generally will be treated as a distribution.

In the case of a withdrawal or surrender distributed to a participant or
Beneficiary under a Qualified Policy (other than a Qualified Policy used in a
retirement plan that qualifies for special federal income tax treatment under
Section 457 of the Code as to which there are special rules), a ratable portion
of the amount received is taxable, generally based on the ratio of the
investment in the contract to the total policy value. The "investment in the
contract" generally equals the portion, if any, of any premium payments paid by
or on behalf of an individual under a policy which is not excluded from the
individual's gross income. For policies issued in connection with qualified
plans, the "investment in the contract" can be zero. The law requires the use of
special simplified methods to determine the taxable amount of payments that are
based in whole or in part on the Annuitant's life and that are paid from
qualified retirement plans under Section 401(a) and from qualified annuities and
Tax Sheltered Annuities under Sections 403(a) and 403(b).

Generally, in the case of a withdrawal under a Non-Qualified Policy before
the Annuity Commencement Date, amounts received are first treated as taxable
income to the extent that the Accumulation Value immediately before the
withdrawal exceeds the "investment in the contract" at that time. Any additional
amount withdrawn is not taxable.

Although the tax consequences may vary depending on the Income Payment
option elected under the policy, in general, only the portion of the Income
Payment that represents the amount by which the Accumulation Value exceeds the
"investment in the contract" will be taxed. After the investment in the policy
is recovered, the full amount of any additional Income Payments is taxable. For
fixed Income Payments, in general, there is no tax on the

33
<PAGE> 37

portion of each payment which represents the same ratio that the "investment in
the contract" bears to the total expected value of the Income Payments for the
term of the payments. However, the remainder of each Income Payment is taxable
until the recovery of the investment in the contract, and thereafter the full
amount of each annuity payment is taxable. If death occurs before full recovery
of the investment in the contract, the unrecovered amount may be deducted on the
annuitant's final tax return.

In the case of a distribution, a penalty tax equal to 10% of the amount
treated as taxable income may be imposed. The penalty tax is not imposed in
certain circumstances, including, generally, distributions: (1) made on or after
the date on which the taxpayer is actual age 59 1/2, (2) made as a result of the
policy owner's or Annuitant's death or disability, or (3) received in
substantially equal installments paid at least annually as a life annuity. Other
tax penalties may apply to certain distributions pursuant to a Qualified Policy.

All non-qualified, deferred annuity contracts issued by NYLIAC (or its
affiliates) to the same policy owner during any calendar year are to be treated
as one annuity contract for purposes of determining the amount includable in an
individual's gross income. In addition, there may be other situations in which
the Treasury Department may conclude (under its authority to issue regulations)
that it would be appropriate to aggregate two or more annuity contracts
purchased by the same policy owner. Accordingly, a policy owner should consult a
competent tax adviser before purchasing more than one policy or other annuity
contract.

A transfer of ownership of a policy, or designation of an Annuitant or
other Beneficiary who is not also the policy owner, may result in certain income
or gift tax consequences to the policy owner. A policy owner contemplating any
transfer or assignment of a policy should contact a competent tax adviser with
respect to the potential tax effects of such a transaction.

QUALIFIED PLANS

The Qualified Policy is designed for use with several types of qualified
plans. The tax rules applicable to participants and beneficiaries in such
qualified plans vary according to the type of plan and the terms and conditions
of the plan itself. Special favorable tax treatment may be available for certain
types of contributions and distributions (including special rules for certain
lump sum distributions to individuals who attained the age of 50 by January 1,
1986). Adverse tax consequences may result from contributions in excess of
specified limits, distributions prior to age 59 1/2 (subject to certain
exceptions), distributions that do not conform to specified minimum distribution
rules and in certain other circumstances. Therefore, this discussion only
provides general information about use of the Policies with the various types of
qualified plans. Policy owners and participants under qualified plans as well as
Annuitants and Beneficiaries are cautioned that the rights of any person to any
benefits under qualified plans may be subject to the terms and conditions of the
plans themselves, regardless of the terms and conditions of the policy issued in
connection with the plan. Purchasers of policies for use with any qualified plan
should seek competent legal and tax advice regarding the suitability of the
policy.

(a) Section 403(b) Plans. Under Section 403(b) of the Code, payments
made by public school systems and certain tax exempt organizations to
purchase annuity policies for their employees are excludable from the gross
income of the employee, subject to certain limitations. However, such
payments may be subject to FICA (Social Security) taxes.

(b) Individual Retirement Annuities. Sections 219 and 408 of the Code
permit individuals or their employers to contribute to an individual
retirement program known as an "Individual Retirement Annuity" or "IRA",
including an employer-sponsored Simplified Employee Pension or "SEP".
Individual Retirement Annuities are subject to limitations on the amount
which may be contributed and deducted and the time when distributions may
commence. In addition, distributions from certain other types of qualified
plans may be placed into Individual Retirement Annuities on a tax-deferred
basis.

(c) Roth Individual Retirement Annuities. Section 408A of the Code
permits individuals with incomes below a certain level to contribute to an
individual retirement program known as a "Roth Individual Retirement
Annuity" or "Roth IRA." Roth IRAs are subject to limitations on the amount
that may be contributed. Contributions to Roth IRAs are not deductible, but
distributions from Roth IRAs that meet certain requirements are not
included in gross income. Certain individuals are eligible to convert their
existing non-Roth IRAs into Roth IRAs. They will be subject to income tax
at the time of conversion.

(d) Deferred Compensation Plans. Section 457 of the Code, while not
actually providing for a qualified plan as that term is normally used,
provides for certain deferred compensation plans with respect to service
for state governments, local governments, political subdivisions, agencies,
instrumentalities and certain affiliates of such entities and tax exempt
organizations which enjoy special treatment. The policies can be used with
such plans. Under such plans, a participant may specify the form of
investment in which his or her participation will be made.

34
<PAGE> 38

Such investments are generally owned by, and are subject to, the claims of
the general creditors of the sponsoring employer, except that Section 457
plans of state and local government must be held and used for the exclusive
benefit of participants and beneficiaries in a trust or annuity contract.

DISTRIBUTOR OF THE POLICIES

NYLIFE Distributors Inc. ("NYLIFE Distributors"), 51 Madison Avenue, New
York, New York 10010, is the principal underwriter and the distributor of the
Policies. It is an indirect wholly-owned subsidiary of New York Life. The
maximum commission paid to broker-dealers who have entered into dealer
agreements with NYLIFE Distributors is not expected to exceed 7%. A portion of
this amount will be paid as commissions to registered representatives.

VOTING RIGHTS

The Funds are not required to and typically do not hold routine annual
stockholder meetings. Special stockholder meetings will be called when
necessary. To the extent required by law, NYLIAC will vote the Eligible
Portfolio shares held in the Investment Divisions at special shareholder
meetings of the Funds in accordance with instructions we receive from persons
having voting interests in the corresponding Investment Division. If, however,
the federal securities laws is amended, or if its present interpretation should
change, and as a result, NYLIAC determines that it is allowed to vote the
Eligible Portfolio shares in its own right, we may elect to do so.

The number of votes which are available to you will be calculated
separately for each Investment Division. That number will be determined by
applying your percentage interest, if any, in a particular Investment Division
to the total number of votes attributable to the Investment Division.

Prior to the Annuity Commencement Date, you hold a voting interest in each
Investment Division to which you have money allocated. The number of votes which
are available to you will be determined by dividing the Accumulation Value
attributable to an Investment Division by the net asset value per share of the
applicable Eligible Portfolios.

The number of votes of the Eligible Portfolio which are available will be
determined as of the date established by the Portfolio of the relevant Fund.
Voting instructions will be solicited by written communication prior to such
meeting in accordance with procedures established by the relevant Fund.

If we do not receive timely instructions, we will vote those shares in
proportion to the voting instructions which are received with respect to all
policies participating in that Investment Division. Voting instructions to
abstain on any item to be voted upon will be applied on a pro rata basis to
reduce the votes eligible to be cast. Each person having a voting interest in an
Investment Division will receive proxy material, reports and other materials
relating to the appropriate Eligible Portfolio.

35
<PAGE> 39

TABLE OF CONTENTS FOR THE
STATEMENT OF ADDITIONAL INFORMATION ("SAI")

The SAI contains more details concerning the subjects discussed in this
Prospectus. The following is the Table of Contents for that SAI:

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE POLICIES................................................
INVESTMENT PERFORMANCE CALCULATIONS.........................
GENERAL MATTERS.............................................
FEDERAL TAX MATTERS.........................................
DISTRIBUTOR OF THE POLICIES.................................
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS......................
STATE REGULATION............................................
RECORDS AND REPORTS.........................................
LEGAL PROCEEDINGS...........................................
INDEPENDENT ACCOUNTANTS.....................................
OTHER INFORMATION...........................................
FINANCIAL STATEMENTS........................................
</TABLE>

How to obtain a MainStay Plus Variable Annuity Statement of Additional
Information.

Call (888) 695-6246 or send this request form to:

MainStay Annuities
300 Berwyn Park, P.O. Box 3031
Berwyn, PA 19312-0031

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

Please send me a MainStay Plus Variable Annuity Statement of Additional
Information dated , 1999:

- --------------------------------------------------------------------------------
Name

- --------------------------------------------------------------------------------
Address

- --------------------------------------------------------------------------------
City State Zip

36
<PAGE> 40

(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE> 41

STATEMENT OF ADDITIONAL INFORMATION

, 1999

FOR

MAINSTAY PLUS VARIABLE ANNUITY
FROM
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INVESTING IN
NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT-III

This Statement of Additional Information ("SAI") is not a prospectus. Much
of the information contained in this SAI expands upon subjects discussed in the
current MainStay Plus Variable Annuity Prospectus. The SAI should be read in
conjunction with the current MainStay Plus Variable Annuity Prospectus dated
, 1999. You may obtain a copy of the Prospectus by calling MainStay
Annuities at (888) 695-6246 or writing to MainStay Annuities, 300 Berwyn Park,
P.O. Box 3031, Berwyn, PA 19312-0031. Terms used but not defined in this SAI
have the same meaning as in the current MainStay Plus Variable Annuity(SM)
Prospectus.

TABLE OF CONTENTS*

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE POLICIES ( )...........................................
Valuation of Accumulation Units ( )...................
INVESTMENT PERFORMANCE CALCULATIONS.........................
MainStay VP Cash Management Investment Division........
MainStay VP Government, MainStay VP High Yield
Corporate Bond and MainStay VP Bond Investment
Division Yields......................................
Average Annual Total Return............................
GENERAL MATTERS.............................................
FEDERAL TAX MATTERS ( )....................................
Taxation of New York Life Insurance and Annuity
Corporation..........................................
Tax Status of the Policies.............................
DISTRIBUTOR OF THE POLICIES ( )............................
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS......................
STATE REGULATION............................................
RECORDS AND REPORTS.........................................
LEGAL PROCEEDINGS...........................................
INDEPENDENT ACCOUNTANTS.....................................
OTHER INFORMATION...........................................
FINANCIAL STATEMENTS........................................
</TABLE>

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

* (Numbers in parentheses refer to page numbers of corresponding sections of the
current MainStay Plus Variable Annuity Prospectus.)

<PAGE> 42

THE POLICIES

The following provides additional information about the policies and
supplements the description in the Prospectus.

VALUATION OF ACCUMULATION UNITS

Accumulation Units are valued separately for each Investment Division of
the Separate Account. The method used for valuing Accumulation Units in each
Investment Division is the same. The value of each Accumulation Unit was
arbitrarily set as of the date operations began for the Investment Division.
Thereafter, the value of an Accumulation Unit of an Investment Division for any
Business Day equals the value of an Accumulation Unit in that Investment
Division as of the immediately preceding Business Day multiplied by the "Net
Investment Factor" for that Investment Division for the current Business Day.

The Net Investment Factor for each Investment Division for any period from
the close of the preceding Business Day to the close of the current Business Day
(the "Valuation Period") is determined by the following formula:

(a/b) - c

Where: a = the result of:

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

(2) the per share amount of any dividend or capital gain distribution
made by the Eligible Portfolio for shares held in the Investment
Division if the "ex-dividend" date occurs during the current Valuation
Period;

b = the net asset value per share of the Eligible Portfolio shares held
in the Investment Division determined as of the end of the
immediately preceding Valuation Period; and

c = a factor representing the charges deducted from the applicable
Investment Division on a daily basis. Such factor is equal, on an
annual basis, to 1.40% of the daily net asset value of the Separate
Account and represents the 1.25% charge for mortality and expense
risks (of which .75% is attributable to mortality risks and .50% to
expense risks), and the .15% charge for policy administration
expenses. (See "Other Charges" at page of the Prospectus.)

The Net Investment Factor may be greater or less than one. Therefore, the
value of an Accumulation Unit in an Investment Division may increase or decrease
from Valuation Period to Valuation Period.

INVESTMENT PERFORMANCE CALCULATIONS

MAINSTAY VP CASH MANAGEMENT INVESTMENT DIVISION

NYLIAC calculates the MainStay VP Cash Management Investment Division's
current annualized yield for a seven-day period in a manner which does not take
into consideration any realized or unrealized gains or losses on shares of the
MainStay VP Cash Management Portfolio or on its portfolio securities. This
current annualized yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation) in the value of a hypothetical account having a balance of one
unit of the MainStay VP Cash Management Investment Division at the beginning of
such seven-day period, dividing such net change in account value by the value of
the account at the beginning of the period to determine the base period return
and annualizing this quotient on a 365-day basis. The net change in account
value reflects the deductions for the administration fee and the mortality and
expense risk charge, and income and expenses accrued during the period. Because
of these deductions, the yield for the MainStay VP Cash Management Division will
be lower than the yield for the MainStay VP Cash Management Portfolio.

NYLIAC also calculates the effective yield of the MainStay VP Cash
Management Investment Division for the same seven-day period on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result.

The yield on amounts held in the MainStay VP Cash Management Investment
Division normally will fluctuate on a daily basis. Therefore, the disclosed
yield for any given past period is not an indication or representation of future
yields or rates of return. The MainStay VP Cash Management Investment Division's
actual yield is affected by

2
<PAGE> 43

changes in interest rates on money market securities, average portfolio maturity
of the MainStay VP Cash Management Portfolio, the types and quality of portfolio
securities held by the MainStay VP Cash Management Portfolio, and its operating
expenses.

MAINSTAY VP GOVERNMENT, MAINSTAY VP HIGH YIELD CORPORATE BOND AND MAINSTAY
VP BOND INVESTMENT DIVISION YIELDS

The current annualized yield of the MainStay VP Government, MainStay VP
High Yield Corporate Bond and MainStay VP Bond Investment Divisions refers to
the income generated by these Investment Divisions over a specified 30-day
period. Because the yield is annualized, the yield generated by an Investment
Division during the 30-day period is assumed to be generated each 30-day period.
The yield is computed by dividing the net investment income per accumulation
unit earned during the period by the price per unit on the last day of the
period, according to the following formula:
6
- ---- YIELD = 2[(a-b+1) -1]
---
cd

Where: a = net investment income earned during the period by the Portfolio
attributable to shares owned by the MainStay VP Government, MainStay
VP High Yield Corporate Bond or MainStay VP Bond Investment Division.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of accumulation units outstanding during
the period.

d = the maximum offering price per accumulation unit on the last day of
the period.

Accrued expenses will include all recurring fees that are charged to all
Owner accounts. The yield calculations do not reflect the effect of any
Surrender Charges that may be applicable to a particular Policy. Surrender
Charges range from 7% to 0% of the Premium Payments withdrawn depending on the
elapsed time since the relevant Premium Payment was made.

Because of the charges and deductions imposed by the Separate Account the
yield for the Investment Divisions will be lower than the yield for the
corresponding Portfolio of the Fund. The yield on amounts held in the Investment
Divisions normally will fluctuate over time. Therefore, the disclosed yield for
any given past period is not an indication or representation of future yields or
rates of return. The MainStay VP Government, MainStay VP High Yield Corporate
Bond or MainStay VP Bond Investment Division's actual yield will be affected by
the types and quality of portfolio securities held by the MainStay VP
Government, MainStay VP High Yield Corporate Bond and MainStay VP Bond
Portfolios of the Fund and their operating expenses.

AVERAGE ANNUAL TOTAL RETURN. Average annual total return quotations for
the Investment Divisions are computed by finding the average annual compounded
rates of return over the periods shown that would equate the initial amount
invested to the ending redeemable value, according to the following formula:

n
P(1+T) = ERV

Where: P = a hypothetical initial payment of $1,000.

T = average annual total return.

n = number of years.

ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one, five, or ten-year period or the inception date,
at the end of the one, five or ten-year period (or fractional portion
thereof).

All total return figures are prepared under methods the SEC requires when
advertising performance information. For periods beginning on or after the dates
when the Investment Divisions started operations, the average annual total
return (if surrendered) figures may be referred to as "standardized"
performance. For periods before the dates when the Investment Divisions started
operations, the figures are considered "non-standardized". The average annual
total return (no surrender) figures are all considered "non-standardized".

Performance data for the Investment Divisions may be compared, in
advertisements, sales literature and reports to shareholders, to: (i) the
investment returns on various mutual funds, stocks, bonds, certificates of
deposit, tax free bonds, or common stock and bond indexes; and (ii) other groups
of variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services, a widely used independent research

3
<PAGE> 44

firm which ranks mutual funds and other investment companies by overall
performance, investment objectives, and assets, or tracked by other services,
companies, publications, or persons who rank such investment companies on
overall performance or other criteria.

Reports and promotional literature may also contain the ratings New York
Life and NYLIAC have received from independent rating agencies. New York Life
and NYLIAC are among only a few companies that have consistently received among
the highest possible ratings from the four major independent rating companies:
A.M. Best and Moody's (for financial stability and strength) and Standard and
Poor's and Duff & Phelps (for claims paying ability). However, neither New York
Life nor NYLIAC guarantees the investment performance of the Investment
Divisions.

GENERAL MATTERS

NON-PARTICIPATING. The Policies are non-participating. Dividends are not
paid.

MISSTATEMENT OF AGE OR SEX. If the Annuitant's stated age and/or sex in
the policy are incorrect, NYLIAC will change the benefits payable to those which
the premium payments would have purchased for the correct age and sex. Sex is
not a factor when annuity benefits are based on unisex annuity payment rate
tables. (See "Income Payments--Election of Income Payment Options" at page of
the Prospectus.) If payments were made based on incorrect age or sex, we will
increase or reduce a later payment or payments to adjust for the error. Any
adjustment will include interest, at 3.5% per year, from the date of the wrong
payment to the date the adjustment is made.

ASSIGNMENTS. If permitted by the plan or by law for the plan indicated in
the application for the policy, a Non-Qualified Policy or any interest in it may
be assigned prior to the Annuity Commencement Date and during the Annuitant's
lifetime. NYLIAC will not be deemed to know of an assignment unless it receives
a copy of a duly executed instrument evidencing such assignment. Further, NYLIAC
assumes no responsibility for the validity of any assignment. (See "Federal Tax
Matters--Taxation of Annuities in General" at pages and of the Prospectus.)

MODIFICATION. NYLIAC may not modify the Policy without your consent except
to make the Policy meet the requirements of the Investment Company Act of 1940,
or to make the policy comply with any changes in the Internal Revenue Code or as
required by the Code in order to continue treatment of the policy as an annuity,
or by any other applicable law.

INCONTESTABILITY. We rely on statements made in the application or a
Policy Request. They are representations, not warranties. The Policy will not be
contested after it has been in force during the lifetime of the Annuitant for
two years from the Policy Date.

FEDERAL TAX MATTERS

TAXATION OF NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NYLIAC is taxed as a life insurance company. Because the Separate Account
is not an entity separate from NYLIAC, and its operations form a part of NYLIAC,
it will not be taxed separately as a "regulated investment company" under
Subchapter M of the Code. Investment income and realized net capital gains on
the assets of the Separate Account are reinvested and are taken into account in
determining the Accumulation Value. As a result, such investment income and
realized net capital gains are automatically retained as part of the reserves
under the policy. Under existing federal income tax law, NYLIAC believes that
Separate Account investment income and realized net capital gains should not be
taxed to the extent that such income and gains are retained as part of the
reserves under the Policy.

TAX STATUS OF THE POLICIES

Section 817(h) of the Code requires that the investments of the Separate
Account must be "adequately diversified" in accordance with Treasury regulations
in order for the policies to qualify as annuity contracts under Section 72 of
the Code. The Separate Account intends to comply with the diversification
requirements prescribed by the Treasury under Treasury Regulation Section
1.817-5.

To comply with regulations under Section 817(h) of the Code, the Separate
Account is required to diversify its investments, so that on the last day of
each quarter of a calendar year, no more than 55% of the value of its assets is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. For this purpose,
securities of a single issuer are treated as one investment and each U.S.
Government agency or instrumentality is treated as a separate issuer. Any
security issued, guaranteed, or insured (to the extent so

4
<PAGE> 45

guaranteed or insured) by the U.S. Government or an agency or instrumentality of
the U.S. Government is treated as a security issued by the U.S. Government or
its agency or instrumentality, whichever is applicable.

Although the Treasury Department has issued regulations on the
diversification requirements, such regulations do not provide guidance
concerning the extent to which Owners may direct their investments to particular
subaccounts of a separate account, or the permitted number of such subaccounts.
It is unclear whether additional guidance in this regard will be issued in the
future. It is possible that if such guidance is issued, the policy may need to
be modified to comply with such additional guidance. For these reasons, NYLIAC
reserves the right to modify the policy as necessary to attempt to prevent the
policy owner from being considered the owner of the assets of the Separate
Account or otherwise to qualify the policy for favorable tax treatment.

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

Withholding of federal income taxes on the taxable portion of all
distributions may be required unless the recipient elects not to have any such
amounts withheld and properly notifies NYLIAC of that election. Different rules
may apply to United States citizens or expatriates living abroad. In addition,
some states have enacted legislation requiring withholding.

Even if a recipient elects no withholding, special rules may require NYLIAC
to disregard the recipient's election if the recipient fails to supply NYLIAC
with a "TIN" or taxpayer identification number (social security number for
individuals) or if the Internal Revenue Service notifies NYLIAC that the TIN
provided by the recipient is incorrect.

DISTRIBUTOR OF THE POLICIES

NYLIFE Distributors Inc. ("NYLIFE Distributors") is the distributor of the
policies. NYLIFE Distributors is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc. NYLIFE
Distributors is an indirect wholly-owned subsidiary of New York Life. The
maximum commission paid to broker-dealers who have entered into dealer
agreements with NYLIFE Distributors is not expected to exceed 7%. A portion of
this amount will be paid as commissions to registered representatives.

For the years ended December 31, 1996, 1997 and 1998, the aggregate amount
of underwriting commissions paid to NYLIFE Distributors was $528,880, $1,662,404
and $ , respectively, of which $264,440, $831,203 and $ was retained by
them, respectively.

The policies are sold and premium payments are accepted on a continuous
basis.

SAFEKEEPING OF SEPARATE ACCOUNT ASSETS

The Separate Account holds title to assets of the Separate Account. The
assets are kept physically segregated and held separate and apart from NYLIAC's
general corporate assets. Records are maintained of all purchases and
redemptions of Eligible Portfolio shares held by each of the Investment
Divisions.

5
<PAGE> 46

STATE REGULATION

NYLIAC is a stock life insurance company organized under the laws of
Delaware, and is subject to regulation by the Delaware State Insurance
Department. An annual statement is filed with the Delaware Commissioner of
Insurance on or before March 1 of each year covering the operations and
reporting on the financial condition of NYLIAC as of December 31 of the
preceding calendar year. Periodically, the Delaware Commissioner of Insurance
examines the financial condition of NYLIAC, including the liabilities and
reserves of the Separate Account.

In addition, NYLIAC is subject to the insurance laws and regulations of all
the states where it is licensed to operate. The availability of certain policy
rights and provisions depends on state approval and/or filing and review
processes. Where required by state law or regulation, the Policies will be
modified accordingly.

RECORDS AND REPORTS

NYLIAC maintains all records and accounts relating to the Separate Account.
As presently required by the federal securities laws, NYLIAC will mail to you at
your last known address of record, at least semi-annually after the first Policy
Year, reports containing information required under the federal securities laws
or by any other applicable law or regulation.

LEGAL PROCEEDINGS

In 1995, NYLIAC and New York Life settled a nationwide class action brought
in New York State court related to the sale of whole life and universal life
insurance policies from 1982 through 1994. In entering into the settlement,
NYLIAC specifically denied any wrongdoing. The settlement was approved by the
judge and has been upheld on appeal.

There are also actions in various jurisdictions by individual policyowners
who either did or did not exclude themselves from the settlement of the
nationwide class action and a purported class action claiming to include
numerous policyowners in one jurisdiction who did not exclude themselves from
the nationwide class action. The certification by a non-New York State court of
a purported class action claiming to include numerous policyholders in that
state who excluded themselves from the settlement of the nationwide class action
was recently reversed by an intermediate appellate court; plaintiffs filed a
motion for rehearing in the intermediate appellate court and the motion was
denied. Plaintiffs may file a petition with the highest court within the
statutory time allowed to do so.

NYLIAC is also a defendant in other individual suits arising from its
insurance (including variable contracts registered under the federal securities
law), investment and/or other operations, including actions involving retail
sales practices. Most of these actions also seek substantial or unspecified
compensatory and punitive damages. NYLIAC is also from time to time involved as
a party in various governmental, administrative, and investigative proceedings
and inquiries.

Given the uncertain nature of litigation and regulatory inquiries, the
outcome of the above cannot be predicted. NYLIAC nevertheless believes that,
after provisions made in the financial statements, the ultimate liability that
could result from such litigation and proceedings would not have a material
adverse effect on NYLIAC's financial position; however, it is possible that
settlements or adverse determinations in one or more actions or other
proceedings in the future could have a material adverse effect on NYLIAC's
operating results for a given year.

INDEPENDENT ACCOUNTANTS

The annual financial statements of the Separate Account and NYLIAC have
been audited by PricewaterhouseCoopers LLP, independent accountants, 1177 Avenue
of the Americas, New York, New York. The financial statements included in this
Statement of Additional Information have been included in reliance on the
reports of PricewaterhouseCoopers LLP, given on the authority of that firm as
experts in auditing and accounting.

OTHER INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
policies discussed in this Statement of Additional Information. Not all of the
information set forth in the registration statement, amendments and exhibits to
the registration statement has been included in this Statement of Additional
Information. Statements contained in this Statement of Additional Information
concerning the content of the policies and other legal instruments are intended
to be summaries. For a complete statement of the terms of these documents,
reference should be made to the instruments filed with the Securities and
Exchange Commission.

6
<PAGE> 47

FINANCIAL STATEMENTS

[TO BE FILED BY AMENDMENT]

7
<PAGE> 48

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

a. Financial Statements.

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

b. Exhibits.

(1) Resolution of the Board of Directors of New York Life Insurance
and Annuity Corporation ("NYLIAC") authorizing establishment of
the Separate Account - Previously filed as Exhibit (1) to
Registrant's initial Registration Statement, re-filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(1) to Registrant's Post-Effective Amendment No. 2 on Form N-4,
and incorporated herein by reference.

(2) Not applicable.

(3)(a) Distribution Agreement between NYLIFE Securities Inc. and
NYLIAC - Previously filed as Exhibit (3)(a) to Post-Effective
Amendment No. 1 to the registration statement on Form S-6 for
NYLIAC MFA Separate Account-I (File No. 2-86084), re-filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(3)(a) to Post-Effective Amendment No. 4 to the registration
statement on Form S-6 for NYLIAC Variable Universal Life
Separate Account-I (File No. 33-64410), and incorporated herein
by reference.

(3)(b) Distribution Agreement between NYLIFE Distributors Inc. and
NYLIAC - Previously filed as Exhibit (3)(b) to Registrant's
Post-Effective Amendment No. 1 on Form N-4, and incorporated
herein by reference.

(4) Specimen Policy - Previously filed as Exhibit (4) to
Registrant's initial Registration Statement, re-filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(4) to Registrant's Post-Effective Amendment No. 2 on Form N-4,
and incorporated herein by reference. Specimen policy for the
MainStay Plus Variable Annuity - Previously filed in accordance
with Regulation S-T, 17 CFR 232.102(3) as Exhibit (4) to
Registrant's Post-Effective Amendment No. 4 on Form N-4 and
incorporated herein by reference.

(4)(a) Endorsements to Specimen Policy for the MainStay Plus Variable
Annuity - Previously filed in accordance with Regulation S-T,
17 CFR 232.102(e) as Exhibit (4)(a) to Registrant's
Post-Effective Amendment No. 4 and incorporated herein by
reference.

(5) Form of application for a Policy - Previously filed as Exhibit
(5) to the initial registration statement on Form N-4 for
NYLIAC Variable Annuity Separate Account-I (File No. 33-53342),
re-filed in accordance with Regulation S-T, 17 CFR 232.102(e)
as Exhibit (5) to Registrant's Post-Effective Amendment No. 2
on Form N-4, and incorporated herein by reference. Form of
application for the MainStay Plus Variable Annuity - Previously
filed in accordance with Regulation S-T, 17 CFR 232.102(e) as
Exhibit (5) to Registrant's Post-Effective Amendment No. 3 on
Form N-4, and incorporated herein by reference.

(6)(a) Certificate of Incorporation of NYLIAC - Previously filed as
Exhibit (6)(a) to the registration statement on Form S-6 for
NYLIAC MFA Separate Account-I (File No. 2-86083), re-filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(6)(a) to the initial registration statement on Form S-6 for
NYLIAC Corporate Sponsored Variable Universal Life Separate
Account-I (File No. 333-07617), and incorporated herein by
reference.

(6)(b)(1) By-Laws of NYLIAC - Previously filed as Exhibit (6)(b) to the
registration statement on Form S-6 for NYLIAC MFA Separate
Account-I (File No. 2-86083), re-filed in accordance with
Regulation S-T, 17 CFR 232.102(e) as Exhibit (6)(b) to the
initial registration statement on Form S-6 for NYLIAC Corporate

C-1
<PAGE> 49

Sponsored Variable Universal Life Separate Account-I (File No.
333-07617), and incorporated herein by reference.

(6)(b)(2) Amendments to By-Laws of NYLIAC - Previously filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(6)(b) to Pre-Effective Amendment No. 1 to the registration
statement on Form S-6 for NYLIAC Variable Universal Life
Separate Account-I (File No. 333-39157), and incorporated
herein by reference.

(7) Contract of Reinsurance between Connecticut General Life
Insurance Company/Cigna Reinsurance and NYLIAC - Previously
filed as Exhibit (7) to Registrant's Post-Effective Amendment
No. 1 on Form N-4, and incorporated herein by reference.

(8)(a) Stock Sale Agreement between NYLIAC and MainStay VP Series
Fund, Inc. (formerly New York Life MFA Series Fund, Inc.) -
Previously filed as Exhibit (8)(a) to Pre-Effective Amendment
No. 1 to the registration statement on Form N-1 for New York
Life MFA Series Fund, Inc. (File No. 2-86082), re-filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(9)(a) to Pre-Effective Amendment No. 1 to the registration
statement on Form S-6 for NYLIAC Corporate Sponsored Variable
Universal Life Separate Account-I (File No. 333-07617), and
incorporated herein by reference.

(8)(b) Participation Agreement among Acacia Capital Corporation,
Calvert Asset Management Company, Inc. and NYLIAC, as amended -
Previously filed in accordance with Regulation S-T, 17 CFR
232.102(e) as Exhibit (9)(b)(1) to Pre-Effective Amendment No.
1 to the registration statement on Form S-6 for NYLIAC
Corporate Sponsored Variable Universal Life Separate Account-I
(File No. 333-07617), and incorporated herein by reference.

(8)(c) Participation Agreement among The Alger American Fund, Fred
Alger and Company, Incorporated and NYLIAC - Previously filed
in accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(9)(b)(2) to Pre-Effective Amendment No. 1 to the registration
statement on Form S-6 for NYLIAC Corporate Sponsored Variable
Universal Life Separate Account-I (File No. 333-07617), and
incorporated herein by reference.

(8)(d) Participation Agreement between Janus Aspen Series and NYLIAC -
Previously filed in accordance with Regulation S-T, 17 CFR
232.102(e) as Exhibit (9)(b)(3) to Pre-Effective Amendment No.
1 to the registration statement on Form S-6 for NYLIAC
Corporate Sponsored Variable Universal Life Separate Account-I
(File No. 333-07617), and incorporated herein by reference.

(8)(e) Participation Agreement among Morgan Stanley Universal Funds,
Inc., Morgan Stanley Asset Management Inc. and NYLIAC -
Previously filed in accordance with Regulation S-T, 17 CFR
232.102(e) as Exhibit (9)(b)(4) to Pre-Effective Amendment No.
1 to the registration statement on Form S-6 for NYLIAC
Corporate Sponsored Variable Universal Life Separate Account-I
(File No. 333-07617), and incorporated herein by reference.

(8)(f) Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation and NYLIAC - Previously filed
in accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(9)(b)(5) to Pre-Effective Amendment No. 1 to the registration
statement on Form S-6 for NYLIAC Corporate Sponsored Variable
Universal Life Separate Account-I (File No. 333-07617), and
incorporated herein by reference.

(8)(g) Participation Agreement among Variable Insurance Products Fund
II, Fidelity Distributors Corporation and NYLIAC - Previously
filed in accordance with Regulation S-T, 17 CFR 232.102(e) as
Exhibit (9)(b)(6) to Pre-Effective Amendment No. 1 to the
registration statement on Form S-6 for NYLIAC Corporate

C-2

<PAGE> 50

Sponsored Variable Universal Life Separate Account-I (File No.
333-07617), and incorporated herein by reference.

(8)(h) Form of Participation Agreement among T. Rowe Price Equity
Series, Inc., T. Rowe Price Associates, Inc. and NYLIAC -
Incorporated herein by reference to Exhibit (8)(h) to
Post-Effective Amendment No. 7 to the registration statement on
Form N-4 for NYLIAC Variable Annuity Separate Account-I (File
No. 33-53342).

(8)(i) Form of Participation Agreement among Van Eck Worldwide
Insurance Trust, Van Eck Associates Corporation and NYLIAC -
Incorporated herein by reference to Exhibit (8)(i) to
Post-Effective Amendment No. 7 to the registration statement on
Form N-4 for NYLIAC Variable Annuity Separate Account-I (File
No. 33-53342).

(8)(j) Form of Participation Agreement among MFS Variable Insurance
Trust, Massachusetts Financial Services Company and NYLIAC -
Incorporated herein by reference to Exhibit (8)(j) to
Post-Effective Amendment No. 7 to the registration statement on
Form N-4 for NYLIAC Variable Annuity Separate Account-I (File
No. 33-53342).

(9) Opinion and Consent of Jonathan E. Gaines, Esq. - Previously
filed as Exhibit (9) to Registrant's Post- Effective Amendment
No. 3 on Form N-4 and incorporated herein by reference.

(10)(a) Consent of Price Waterhouse LLP - Not applicable.

(10)(b) Powers of Attorney for the Directors and Officers of NYLIAC -
Previously filed in accordance with Regulation S-T, 17 CFR
232.102(e) as Exhibit (9)(c) to Pre-Effective Amendment No. 2
to the registration statement on Form S-6 for NYLIAC Corporate
Sponsored Variable Universal Life Separate Account-I (File No.
333-07617) for the following, and incorporated herein by
reference:

Jay S. Calhoun, Vice President, Treasurer and Director
(Principal Financial Officer)
Richard M. Kernan, Jr., Director
Robert D. Rock, Senior Vice President and Director
Frederick J. Sievert, President and Director (Principal
Executive Officer)
Stephen N. Steinig, Senior Vice President, Chief Actuary and
Director
Seymour Sternberg, Director

(10)(c) Power of Attorney for Maryann L. Ingenito, Vice President and
Controller (Principal Accounting Officer) Previously filed in
accordance with Regulation S-T, 17 CFR 232.102(e) as Exhibit
(9)(d) to Pre-Effective Amendment No. 1 to the registration
statement on Form S-6 for NYLIAC Corporate Sponsored Variable
Universal Life Separate Account-I (File No. 333-07617), and
incorporated herein by reference.

(10)(d) Power of Attorney for Howard I. Atkins, Executive Vice
President (Principal Financial Officer) - Previously filed as
Exhibit 8 (d) to Pre-Effective Amendment No. 1 to the
registration statement on Form S-6 for NYLIAC Variable
Universal Life Separate Account-I (File No. 333-39157), and
incorporated herein by reference.

(11) Not applicable.

(12) Not applicable.

(13) Schedule of Computations - Previously filed as Exhibit (13) to
Post-Effective Amendment No. 7 to the Registration Statement on
Form N-4 for NYLIAC Variable Annuity Separate Account-I (File
No. 33- 53342), and incorporated herein by reference.

C-3

<PAGE> 51

(14) Not applicable.

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

The business address of each director and officer of NYLIAC is 51 Madison
Avenue, New York, NY 10010.

<TABLE>
<CAPTION>
Name: Title:
----- ------
<S> <C>
Seymour Sternberg Director
Richard M. Kernan, Jr. Director
Frederick J. Sievert Director and President
Robert D. Rock Director and Senior Vice President
Jay S. Calhoun Director, Senior Vice President and Treasurer
Stephen N. Steinig Director, Senior Vice President and Chief Actuary
Howard I. Atkins Executive Vice President and Chief Financial Officer
Michael L. Callahan Senior Vice President
Marc J. Chalfin Senior Vice President
John J. DiNiro Senior Vice President
Michael Gallo Senior Vice President
Solomon Goldfinger Senior Vice President
Phillip J. Hildebrand Senior Vice President
Jean E. Hoysradt Senior Vice President
Gerald Kaplan Senior Vice President and Tax Counsel
Richard D. Levy Senior Vice President
Paul Morris Senior Vice President
Michael J. Nocera Senior Vice President
Frank J. Ollari Senior Vice President
Anne F. Pollack Senior Vice President
Steven Ray Senior Vice President
Thomas J. Warga Senior Vice President and General Auditor
Edward C. Wilson Senior Vice President and Chief Sales Officer
William Cheng Vice President
Limin Chu General Manager and President of Taiwan Branch
Henry Ciapas Vice President
Patrick Colloton Vice President
John A. Cullen Vice President and Assistant Controller
Lisa O. Cullity Vice President
Sheila K. Davidson Vice President
Melvin J. Feinberg Vice President
Jane L. Hamrick Vice President and Actuary
Celia M. Holtzberg Vice President
Robert Hynes Vice President
Maryann L. Ingenito Vice President and Controller
Himi L. Kittner Vice President
David Krystel Vice President
Thomas S. McArdle Vice President
Daniel J. McKillop Vice President
John R. Meyer Vice President
William H. Mowat Vice President
Michael M. Oleske Vice President and Associate Tax Counsel
Andrew N. Reiss Vice President and National Sales Manager
Lawrence R. Stoehr Vice President
</TABLE>

C-4

<PAGE> 52

<TABLE>
<S> <C>
Richard W. Zuccaro Vice President
George J. Trapp Secretary
</TABLE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR
REGISTRANT

The Depositor, NYLIAC, is a wholly-owned subsidiary of New York Life Insurance
Company ("New York Life"). The Registrant is a segregated asset account of
NYLIAC. The following chart indicates persons presumed to be controlled by New
York Life+, unless otherwise indicated. Subsidiaries of other subsidiaries are
indented accordingly, and ownership is 100% unless otherwise indicated.

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
- ---- ------------ ----------------
<S> <C> <C>
Aegis Technologies, Inc.(1) Delaware

MainStay Institutional Funds Inc.(2) Maryland

MainStay VP Series Fund, Inc.(3) Maryland

New York Life Fund, Inc.(3) New York

New York Life Insurance and Annuity Corporation Delaware

New York Life Irrevocable Trust of 1996(4) New York N/A
</TABLE>

- ------------------------------------
+ By including the indicated corporations in this list, New York Life is not
stating or admitting that said corporations are under its actual control;
rather, these corporations are listed here to ensure full compliance with
the requirements of this Form N-4.

<TABLE>
<S> <C> <C>
NYLIFE Inc. New York
Eagle Strategies Corp. Arizona
Greystone Realty Corporation Delaware
Greystone Realty Management, Inc. Delaware
MacKay-Shields Financial Corporation Delaware
MainStay Shareholder Services, Inc. Delaware
MSC Holding, Inc. Georgia 85.43%
Monitor Capital Advisors, Inc. Delaware
</TABLE>

- ------------------------
(1)A Certificate of Dissolution was filed for this Company on April 9, 1996.
Pursuant to Delaware law, the Company's existence is "continued" for a period of
three years following dissolution for purposes of winding up. Therefore, this
Company is included here for informational purposes only.

(2)This entity is an unaffiliated registered investment company as to which
New York Life and/or its subsidiaries perform investment management,
administrative, distribution and underwriting services. It is not a subsidiary
of New York Life but is included here for informational
purposes only.

(3)New York Life serves as investment adviser to these entities, the shares
of which are held of record by separate accounts of New York Life (in the case
of New York Life Fund, Inc.) and New York Life Insurance and Annuity Corporation
("NYLIAC") (for MainStay VP Series Fund, Inc.). New York Life disclaims any
beneficial ownership and control of these entities. New York Life and NYLIAC as
depositors of said separate accounts have agreed to vote their shares as to
matters covered in the proxy statements in accordance with voting instructions
received from holders of variable annuity and variable life insurance policies
at the shareholders meeting of these entities. They are not subsidiaries of New
York Life, but are included here for informational purposes only.

(4)An unaffiliated trust formed solely for the purpose of holding shares of
New York Life Settlement Corporation. It is not a subsidiary of New York Life,
but is included here for informational purposes only.

C-5

<PAGE> 53

<TABLE>
<S> <C> <C>
New York Life Benefit Services, Inc. Massachusetts
ADQ Insurance Agency, Inc. Massachusetts
</TABLE>

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
- ---- ------------ ----------------
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
New York Life Capital Corporation Delaware
MainStay Management, Inc. Delaware
Madison Square Advisors, Inc. Delaware
New York Life International Investment Inc. Delaware
Monetary Research Ltd. Bermuda
NYL Management Limited United Kingdom
Taiyo Life Gamma Asset Management Limited(5) Japan 33.345%
New York Life International, Inc. Delaware
New York Life Worldwide Capital, Inc. Delaware
New York Life Worldwide Development, Inc. Delaware
New York Life Worldwide (Bermuda) Ltd. Bermuda
New York Life Insurance Worldwide Ltd. Bermuda
New York Life (U.K.) Limited(6) United Kingdom 99.97%
Life Assurance Holding Corporation Limited United Kingdom 31.25%
Windsor Life Assurance Company Limited United Kingdom
Windsor Construction Company Limited United Kingdom
KOHAP New York Life Insurance Ltd. South Korea 51%
P.T. Asuransi Jiwa Sewu-New York Life Indonesia
GEO New York Life, S.A. Mexico 49%
NYLIFE Administration Corp. (doing business as NYLACOR) Texas
NYLIFE Depositary Corporation Delaware
NYLIFE Structured Asset Management Company Ltd. Texas 16.67%; NYLIFE
SFD Holding Inc.
owns the remaining
83.33%
NYLIFE Distributors Inc. Delaware
NYLIFE Funding Inc. Delaware
NYLIFE HealthCare Management, Inc. Delaware
Express Scripts, Inc. Delaware 46.3% of total
combined stock and
89.6% of the voting
rights
Express Scripts Vision Corporation Delaware
Great Plains Reinsurance Company Arizona
Practice Patterns Science, Inc. Delaware 80%
ESI Canada Holdings, Inc. Canada
ESI Canada, Inc. Canada
IVTx of Houston, Inc. Texas
IVTx of Dallas, Inc. Texas
PhyNet, Inc. Delaware
NYLCare Health Plans, Inc. Delaware
New York Life and Health Insurance Company Delaware
Avanti Corporate Health Systems, Inc. Delaware

</TABLE>

- --------

(5)Based on the percentage of ownership as well as the lack of "control" by
New York Life over management or policies of this company, this entity is not
considered a subsidiary of New York Life but is included here for informational
purposes only.

(6)One share is held by NYLIFE, Inc., a Nominee, as required by British law.

C-6

<PAGE> 54

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
- ---- ------------ ----------------
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
Avanti Health Systems of Texas, Inc. Texas
Avanti of the District, Inc. Maryland
Avanti of Illinois, Inc. Illinois
Avanti of New York, Inc. New York
MBS IPA, Inc. New York
Avanti of New Jersey, Inc. New Jersey
NYLCare Health Plans of the Mid-Atlantic, Inc. Maryland 80%; Physicians
Health Services
Foundation, Inc.
owns 20%
Physicians Health Services Foundation, Inc. Maryland
Lonestar Holding Co. Delaware
Lone Star Health Plan, Inc. Texas 90%; NYLCare
Health Plans, Inc.
owns 10%
NYLCare Health Plans of the Gulf Coast, Inc. Texas
Prime Provider Corp. New York
Prime Provider Corp. of Texas Texas
NYLCare of Connecticut, Inc. Connecticut
Sanus Dental Plan of New Jersey, Inc. New Jersey
NYLCare Dental Plans of the Southwest, Inc. Texas
NYLCare Health Plans of New York, Inc. New York
NYLCare Health Plans of Connecticut, Inc. Connecticut
NYLCare Health Plans of the Midwest, Inc. Illinois
NYLCare Health Plans of New Jersey, Inc. New Jersey
NYLCare of Texas, Inc. Texas
NYLCare Passport PPO of the Southwest, Inc. Texas
NYLCare Preferred Services, Inc. Maryland
Sanus Preferred Providers West, Inc. California
Sanus Preferred Services of Illinois, Inc. Illinois
NYLCare Health Plans of the Southwest, Inc. Texas
NYLCare Health Plans of Louisiana, Inc. Louisiana 99.8%; Patrick D.
Seiter and
E. L. Henry each
own .1% of the
remaining stocks
NYLCare of New England, Inc. Delaware
Sanus - Northeast, Inc. Delaware
NYLCare Health Plans of Maine, Inc. Maine
NYLCare NC Holdings, Inc. Delaware
WellPath Community Health Plans, L.L.C. North Carolina Duke Medical
Strategies, Inc.
holds 50%;
50% LLC interest
WPCHP Holdings, Inc. Delaware
</TABLE>

C-7

<PAGE> 55

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
- ---- ------------ ----------------
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
WellPath Preferred Services, L.L.C. North Carolina 99%;WPCHP
Holdings, Inc. owns
other 1%
WellPath Select Holdings, L.L.C. North Carolina WPCHP Holdings,
Inc. holds 1%;
99% LLC Interest
WellPath Select, Inc. North Carolina
WellPath of Carolina, Inc. Delaware
WellPath of Arizona Reinsurance Company Arizona
Sanus of New York and New Jersey, Inc. New York
NYLCare Health Plans of Pennsylvania, Inc. Pennsylvania
Docservco, Inc. New York
The ETHIX Corporation Delaware
ETHIX Great Lakes, Inc. Michigan
ETHIX Mid-Atlantic, Inc. Pennsylvania
ETHIX Midlands, Inc. Delaware
ETHIX Mid-Rivers, Inc. Missouri
ETHIX Northwest Public Services, Inc. Washington
ETHIX Northwest, Inc. Washington
NYLCare Health Plans Northwest, Inc. Washington
ETHIX Pacific, Inc. Oregon
ETHIX Risk Management, Inc. Oregon
ETHIX Southeast, Inc. North Carolina
ETHIX Southwest, Inc. Texas
Benefit Panel Services, Inc. California 33 1/3% owned
by Mass Mutual
Holding Company
Two MSC, Inc. and
33 1/3% owned by
Anthem Companies,
Inc.
BPS Health Plan Administrators California
VivaHealth, Incorporated California
One Liberty Plaza Holdings, Inc. Delaware
NYLIFE Refinery Inc. Delaware
NYLIFE Resources Inc. Delaware
NYLIFE Securities Inc. New York
NYLIFE SFD Holding Inc. Delaware
NYLIFE Structured Asset Management Company, Ltd. Texas 83.33%; NYLIFE
Depositary Corp.
owns the remaining
16.67%
NYLINK Insurance Agency Incorporated Delaware
NYLINK Insurance Agency of Alabama, Incorporated Alabama
NYLINK Insurance Agency of Hawaii, Incorporated Hawaii
</TABLE>

C-8

<PAGE> 56

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
- ---- ------------ ----------------
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
NYLINK Insurance Agency of Massachusetts, Incorporated Massachusetts
NYLINK Insurance Agency of New Mexico New Mexico
Incorporated

NYLTEMPS Inc. Delaware

New York Life Trust Company New York

NYLIFE Insurance Company of Arizona Arizona

NYLINK Insurance Agency of Ohio, Incorporated(7) Ohio

NYLINK Insurance Agency of Oklahoma, Incorporated(8) Oklahoma

NYLINK Insurance Agency of Texas, Incorporated(9) Texas

The MainStay Funds(10) Massachusetts
</TABLE>

ITEM 27. NUMBER OF CONTRACT OWNERS

As of October 31, 1998, there were approximately 59,570 owners of Policies
offered under NYLIAC Variable Annuity Separate Account-III.

ITEM 28. INDEMNIFICATION

Reference is made to Article VIII of the Depositor's By-Laws.

New York Life maintains Directors and Officers Liability/Company
Reimbursement ("D&O") insurance which covers directors, officers and trustees of
New York Life, its subsidiaries, and its subsidiaries and certain affiliates
including the Depositor while acting in their capacity as such. The total annual
aggregate of D&O coverage is $100 million applicable to all insureds under the
D&O policies. There is no assurance that such coverage will be maintained by New
York Life or for the Depositor in the future as, in the past, there have been
large variances in the availability of D&O insurance for financial institutions.

Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Depositor pursuant to the foregoing provisions, or otherwise, the Depositor has

- -------------------
(7)This affiliated corporation is organized to conduct the business of
NYLINK Insurance Agency Incorporated in the state of Ohio.

(8)This affiliated corporation is organized to conduct the business of
NYLINK Insurance Agency Incorporated in the state of Oklahoma.

(9)This affiliated corporation is organized to conduct the business of
NYLINK Insurance Agency Incorporated in the state of Texas.

(10)This entity is an unaffiliated registered investment company for which
New York Life subsidiaries perform investment management, administrative,
distribution and underwriting services. It is not a subsidiary of New York Life,
but is included here for informational purposes only.

C-9

<PAGE> 57

been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Depositor of expenses incurred
or paid by a director, officer or controlling person of the Depositor in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Depositor will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Investment companies (other than the Registrant) for which NYLIFE
Distributors Inc. is currently acting as underwriter:

NYLIAC Corporate Sponsored Variable Universal Life Separate Account-I
NYLIAC MFA Separate Account-I
NYLIAC MFA Separate Account-II
NYLIAC Variable Annuity Separate Account-I
NYLIAC Variable Annuity Separate Account-II
NYLIAC Variable Universal Life Separate Account-I
NYLIAC VLI Separate Account

(b) Directors and Officers.

The business address of each director and officer of NYLIFE Distributors
Inc. is 300 Interpace Parkway, Parsippany, New Jersey 07054.

<TABLE>
<CAPTION>
Names of Directors and Officers Positions and Offices with Underwriter
------------------------------- --------------------------------------
<S> <C>
Frank Mistero Director and President
Frank M. Boccio Director
Jefferson C. Boyce Director
Michael G. Gallo Director
Phillip J. Hildebrand Director
Robert D. Rock Director
Stephen C. Roussin Director
Walter W. Ubl Director and Senior Vice President
Robert E. Brady Director and Vice President
Sheila K. Davidson Chief Compliance Officer
Thomas J. Warga Senior Vice President and General Auditor
Jay S. Calhoun Vice President and Treasurer
David J. Krystel Vice President
Linda M. Livornese Vice President
John H. O'Byrne Vice President and Chief Compliance Officer
Anthony W. Polis Vice President and Chief Financial Officer
Richard W. Zuccaro Tax Vice President
Louis H. Adasse Corporate Vice President
Thomas J. Murray Corporate Vice President
Phyllis Zwarick Corporate Vice President
Arphiela Arizmendi Assistant Vice President
</TABLE>

C-10

<PAGE> 58

<TABLE>
<CAPTION>
Names of Directors and Officers Positions and Offices with Underwriter
------------------------------- --------------------------------------
<S> <C>
Antoinette B. Cirillo Assistant Vice President
George R. Daoust Assistant Vice President
Geraldine Lorito Assistant Vice President
Mark A. Gomez Assistant Secretary
</TABLE>

<TABLE>
<CAPTION>
Name of New Underwriting Compensation on
Principal Discounts and Redemption or Brokerage
Underwriter Commissions Annuitization Commission Compensation
----------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
NYLIFE Distributors
Inc. -0- -0- -0- -0-
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts and records required to be maintained by Section 31(a) of the
1940 Act and the rules under it are maintained by NYLIAC at its home office, 51
Madison Avenue, Room 0150, New York, New York 10010; New York Life - Records
Division, 110 Cokesbury Road, Lebanon, New Jersey 08833 and with Iron Mountain
Records Management, Inc. at both 8 Neptune Drive, Poughkeepsie, New York 12601
and Route 9W South, Port Ewen, New York 12466-0477.

ITEM 31. MANAGEMENT SERVICES - Not applicable.

ITEM 32. UNDERTAKINGS - Registrant hereby undertakes:

(a) to file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial statements in
the registration statement are never more than 16 months old for so long as
payments under the variable annuity contracts may be accepted;

(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a post card or similar
written communication affixed to or included in the prospectus that the
applicant can remove to send for a Statement of Additional Information;

(c) to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form promptly upon written
or oral request.

REPRESENTATION AS TO THE REASONABLENESS OF AGGREGATE FEES AND CHARGES

New York Life Insurance and Annuity Corporation ("NYLIAC"), the sponsoring
insurance company of the NYLIAC Variable Annuity Separate Account-I, hereby
represents that the fees and charges deducted under the NYLIAC Individual
Flexible Premium Multi-Funded Variable Retirement Annuity Policies are
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by NYLIAC.

C-11

<PAGE> 59

SECTION 403(b) REPRESENTATIONS

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

C-12

<PAGE> 60

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Amendment to the Registration
Statement and has caused this Amendment to the Registration Statement to be
signed on its behalf, in the City and State of New York on this 30th day of
November, 1998.

NYLIAC VARIABLE ANNUITY
SEPARATE ACCOUNT-III
(Registrant)

By: /s/ DAVID J. KRYSTEL
-----------------------------
David J. Krystel
Vice President

NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
(Depositor)

By: /s/ DAVID J. KRYSTEL
-----------------------------
David J. Krystel
Vice President

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

<TABLE>
<S> <C>
Howard I. Atkins* Executive Vice President (Principal Financial Officer)

Jay S. Calhoun* Vice President, Treasurer and Director

Maryann L. Ingenito* Vice President and Controller (Principal Accounting Officer)

Richard M. Kernan, Jr.* Director

Robert D. Rock* Senior Vice President and Director

Frederick J. Sievert* President and Director (Principal Executive Officer)

Stephen N. Steinig* Senior Vice President, Chief Actuary and Director

Seymour Sternberg* Director
</TABLE>

*By: /s/ DAVID J. KRYSTEL
----------------------------------
David J. Krystel
Attorney-in-Fact
November 30, 1998