NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT III, 485APOS, 1999-02-18

NYLIAC VARIABLE ANNUITY SEPARATE ACCOUNT III
485APOS, 1999-02-18

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 18, 1999

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. 6 ( X )
---

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 6 ( 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 May 1, 1999 pursuant to paragraph (b) of Rule 485.
- ---
60 days after filing pursuant to paragraph (a)(1) of Rule 485.
- ---
X on May 1, 1999 pursuant to paragraph (a)(1) of Rule 485.
- --- -----------------

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Securities Being Registered

Units of interest in a separate account under variable annuity contracts.

<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 MAY 1, 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 the individual flexible premium MainStay Plus
Variable Annuity policies. New York Life Insurance and Annuity Corporation
("NYLIAC") issues these policies. We designed these policies to assist
individuals with their long-term retirement planning needs. You can use these
policies 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 variable investment
divisions. Depending on current market conditions, you can make or lose money in
any of the investment divisions.

You should 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 OR ACCURACY 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............................ 3
FEE TABLE.............................. 5
QUESTIONS AND ANSWERS ABOUT MAINSTAY
PLUS VARIABLE ANNUITY................ 9
FINANCIAL STATEMENTS................... 16
CONDENSED FINANCIAL INFORMATION........ 17
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION AND THE SEPARATE
ACCOUNT.............................. 18
New York Life Insurance and Annuity
Corporation....................... 18
The Separate Account................. 18
The Portfolios....................... 18
Additions, Deletions or Substitutions
of Investments.................... 19
Reinvestment......................... 20
THE POLICIES........................... 20
Non-Qualified and Qualified
Policies.......................... 20
Issuing the Policy and Premium
Payments.......................... 21
Issue Ages........................... 21
Transfers............................ 22
Procedures for Telephone
Transactions...................... 22
Dollar Cost Averaging (DCA)
Programs.......................... 22
(a) Traditional Dollar Cost
Averaging.................... 22
(b) The DCA Advantage Plan........ 23
Automatic Asset Reallocation......... 24
Interest Sweep....................... 24
Accumulation Period.................. 24
(a) Crediting of Premium
Payments..................... 24
(b) Valuation of Accumulation
Units........................ 25
Third Party Investment Advisory
Arrangements...................... 25
Policy Owner Inquiries............... 25
CHARGES AND DEDUCTIONS................. 25
Surrender Charges.................... 25
Amount of Surrender Charge........... 26
Exceptions to Surrender Charges...... 26
Other Charges........................ 26
(a) Mortality and Expense Risk
Charges...................... 26
(b) Administration Fee............ 26
(c) Policy Service Charge......... 27
(d) Investment Protection Plan
Rider Charge................. 27
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
(e) Rider Risk Charge
Adjustment...................... 27
(f) Fund Charges.................. 27
Group and Sponsored Arrangements..... 27
Taxes................................ 28
DISTRIBUTIONS UNDER THE POLICY......... 28
Surrenders and Withdrawals........... 28
(a) Surrenders.................... 28
(b) Partial Withdrawals........... 29
(c) Periodic Partial
Withdrawals.................. 29
(d) Hardship Withdrawals.......... 29
Required Minimum Distribution
Option........................... 29
Cancellations........................ 29
Annuity Commencement Date............ 29
Death Before Annuity Commencement.... 30
Income Payments...................... 31
(a) Election of Income Payment
Options...................... 31
(b) Other Methods of Payment...... 31
(c) Proof of Survivorship......... 31
Delay of Payments.................... 31
Designation of Beneficiary........... 31
Restrictions Under Internal Revenue
Code Section 403(b)(11)........... 32
Loans................................ 32
Riders............................... 32
(a) Living Needs Benefit Rider.... 33
(b) Unemployment Benefit Rider... 33
(c) Investment Protection Plan
Rider........................ 33
THE FIXED ACCOUNT...................... 34
(a) Interest Crediting............ 34
(b) Transfers to Investment
Divisions.................... 35
(c) Fixed Account Initial Premium
Guarantee..................... 35
THE DCA ADVANTAGE PLAN ACCOUNTS........ 35
FEDERAL TAX MATTERS.................... 35
Introduction......................... 35
Taxation of Annuities in General..... 36
Qualified Plans...................... 37
(a) Section 403(b) Plans.......... 37
(b) Individual Retirement
Annuities.................... 37
(c) Roth Individual Retirement
Annuities.................... 37
(d) Deferred Compensation Plans... 37
DISTRIBUTOR OF THE POLICIES............ 37
VOTING RIGHTS.......................... 38
TABLE OF CONTENTS FOR THE STATEMENT OF
ADDITIONAL INFORMATION............... 39
</TABLE>

THIS PROSPECTUS IS NOT CONSIDERED AN OFFERING IN ANY STATE WHERE THE SALE
OF THIS POLICY CANNOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANY INFORMATION OR
REPRESENTATIONS REGARDING THE OFFERING OTHER THAN AS DESCRIBED IN THIS
PROSPECTUS OR IN ANY ATTACHED SUPPLEMENT TO THIS PROSPECTUS OR IN ANY
SUPPLEMENTAL SALES MATERIAL WE AUTHORIZE.

2
<PAGE> 6

DEFINITIONS

ACCUMULATION UNIT--An accounting unit we use 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 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 we are to make the first Income
Payment under the policy.

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 ("NYSE")
is open for trading. Our Business Day ends at 4:00 p.m. Eastern Time or the
closing of the NYSE, if earlier.

DOLLAR COST AVERAGING ("DCA") ADVANTAGE PLAN ACCOUNTS--The 6-month, 12-month and
18-month DCA accounts used specifically for the DCA Advantage Plan.

DOLLAR COST AVERAGING ("DCA") ADVANTAGE PLAN--A feature which permits automatic
dollar cost averaging using the DCA Advantage Plan Accounts.

DOLLAR COST AVERAGING ("DCA") ACCUMULATION VALUE--The sum of premium payments
allocated to the DCA Advantage Plan Accounts, plus interest credited on those
premium payments, less any transfers and partial withdrawals from the DCA
Advantage Plan, and less any surrender charges and any policy service charges
that may already have been assessed from the DCA Advantage Plan. The DCA
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 our 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 are not available for use in connection
with employee retirement plans that 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 which contains the policy specifications.

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

3
<PAGE> 7

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.

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 MAINSTAY VP
CAPITAL CASH MAINSTAY VP MAINSTAY VP CORPORATE INTERNATIONAL
APPRECIATION MANAGEMENT CONVERTIBLE GOVERNMENT BOND EQUITY
------------ ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Surrender Charge(as a % of amount withdrawn).. 7% during Payment Years 1-3; 6% during Payment Year 4; 5% during Payment Year 5;
4% during Payment Year 6; and 0% thereafter.
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.
Investment Protection Plan Rider Charge
(optional).................................. Maximum annual charge of 1% of the amount that is guaranteed.
Rider Risk Charge Adjustment (optional)....... Maximum charge of 2% of the amount that is guaranteed for cancellation of the
Investment Protection Plan.
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% 1.25%
Administration Fees........................... 0.15% 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% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the
fiscal year ended December 31,1998)(a)
Advisory Fees.................................
Administration Fees...........................
Other Expenses................................
Total Fund Annual Expenses....................
</TABLE>

<TABLE>
<CAPTION>
AMERICAN DREYFUS
MAINSTAY VP MAINSTAY VP MAINSTAY VP CENTURY LARGE
TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED INCOME & COMPANY
RETURN VALUE BOND EQUITY EQUITY GROWTH VALUE
----------- ----------- ----------- ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Surrender Charge (as a % of amount
withdrawn)............................... 7% during Payment Years 1-3; 6% during Payment Year 4; 5% during Payment Year 5;
4% during Payment Year 6; and 0% thereafter.
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.
Investment Protection Plan Rider
Charge (optional)........................ Maximum annual charge of 1% of the amount that is guaranteed.
Rider Risk Charge Adjustment (optional).... Maximum charge of 2% of the amount that is guaranteed for cancellation of the
Investment Protection Plan.
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% 1.25% 1.25%
Administration Fees........................ 0.15% 0.15% 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% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the
fiscal year ended December 31, 1998)(a)
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 JANUS
MANAGEMENT LORD ABBETT AMERICAN CALVERT FIDELITY FIDELITY VIP ASPEN
GROWTH DEVELOPING SMALL SOCIAL VIP II EQUITY- SERIES
EQUITY GROWTH CAPITALIZATION BALANCED CONTRAFUND INCOME BALANCED
---------- ----------- -------------- -------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Surrender Charge (as a % of
amount withdrawn)........................ 7% during Payment Years 1-3; 6% during Payment Year 4; 5% during Payment Year 5;
4% during Payment Year 6; and 0% thereafter.
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.
Investment Protection Plan Rider
Charge (optional)........................ Maximum annual charge of 1% of the amount that is guaranteed.
Rider Risk Charge Adjustment (optional).... Maximum charge of 2% of the amount that is guaranteed for cancellation of the
Investment Protection Plan.
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% 1.25% 1.25%
Administration Fees........................ 0.15% 0.15% 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% 1.40% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the
fiscal year ended December 31, 1998)(a)
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 VAN ECK
WORLDWIDE WITH INCOME RESEARCH MARKETS EQUITY WORLDWIDE
GROWTH SERIES SERIES EQUITY INCOME HARD ASSETS
----------- ----------- -------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OWNER TRANSACTION EXPENSES
Surrender Charge (as a % of
amount withdrawn)........................ 7% during Payment Years 1-3; 6% during Payment Year 4; 5% during Payment Year 5;
4% during Payment Year 6; and 0% thereafter.
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.
Investment Protection Plan Rider
Charge (optional)........................ Maximum annual charge of 1% of the amount that is guaranteed.
Rider Risk Charge Adjustment (optional).... Maximum charge of 2% of the amount that is guaranteed for cancellation of the
Investment Protection Plan.
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% 1.25%
Administration Fees........................ 0.15% 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% 1.40%
FUND ANNUAL EXPENSES AFTER REIMBURSEMENT
(as a % of average net assets for the
fiscal year ended December 31, 1998)(a)
Advisory Fees..............................
Administration Fees........................
Other Expenses.............................
Total Fund Annual Expenses.................
</TABLE>

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

<TABLE>
<C> <S>
(a) 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

We provide this table 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. However, the table does not
reflect any optional charges under the policy. 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)

You 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, we have expressed the annual
policy service charge 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. NYLIAC issues the policy. You may allocate premium
payments to one or more of the Investment Divisions of the Separate Account, or
to the Fixed Account. In addition, in states where approved, you may also
allocate premium payments to one or more DCA Advantage Plan 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, you
allocate 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 Advantage Plan. The DCA Advantage Plan consists of three DCA
Advantage Plan Accounts: a 6-month, 12-month and an 18-month account. NYLIAC
will credit interest to amounts held in the DCA Advantage Plan Accounts at rates
we have set in advance. The DCA Advantage Plan allows you to set up automatic
dollar cost averaging from the DCA Advantage Plan Accounts into the Investment
Divisions and/or the Fixed Account. (See "DCA Advantage Plan" at page .) You
should check with your registered representative to determine if the DCA
Advantage Plan 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. Generally, you
can transfer a minimum amount of $500, unless we agree otherwise. You can make
unlimited transfers 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 Advantage Plan
Accounts, although certain restrictions may apply. (See "The Fixed Account" at
page and "The DCA Advantage Plan Accounts" at page ). In addition, you can
request transfers through the traditional 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, we will deduct a
policy service charge on each 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, we deduct on a daily basis a charge for
policy administration expenses. This charge is equal, on an annual basis, to
.15% of the net asset value of the Separate Account. (See "Other Charges" at
page .)

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

9
<PAGE> 13

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 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).

You can make withdrawals from the policy free of surrender charges based on
certain limitations. 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 .)

If you selected the Investment Protection Plan (in states where available),
we will deduct a charge on each policy quarter, based on the amount that is
guaranteed. (See "Other Charges-Investment Protection Plan Rider Charge" at page
). The maximum annual charge for this feature is 1% of the amount that is
guaranteed. We may deduct a charge from your Accumulation Value if you cancel
the Investment Protection Plan. We call this charge a Rider Risk Charge
Adjustment. (See "Other Charges-Rider Risk Charge Adjustment" at page ). The
maximum Rider Risk Charge Adjustment is 2% of the amount that is guaranteed. We
set both of these charges in our sole discretion, subject to the stated
maximums. You should consult with your registered representative to determine
the percentages we are currently charging before you select the Investment
Protection Plan. We will not increase either of these charges after the date the
rider becomes effective for the Investment Protection Plan.

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. You can make
additional premium payments of at least $100 or such lower amount as we may
permit 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. For Qualified Policies, you may not make premium payments in excess of
the amount permitted by law for the plan.

6. HOW ARE PREMIUM PAYMENTS ALLOCATED?

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

10
<PAGE> 14

You may allocate the initial premium payment in a maximum of ten Allocation
Alternatives and the DCA Advantage Plan Accounts inclusively. Thereafter, you
may maintain the Accumulation Value in up to 18 Investment Divisions and the DCA
Advantage Plan 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 you place in
each Allocation Alternative at the time you make a premium payment. The minimum
amount which you may place in any one Allocation Alternative is $25, or such
lower amount as we may permit. The minimum amount which you may place in any DCA
Advantage Plan Account is $5,000. We reserve the right to limit the amount of a
premium payment that may be placed in any one Allocation Alternative and/or any
DCA Advantage Plan Account and the number of Allocation Alternatives and DCA
Advantage Plan Accounts to which you allocate your Accumulation Value.

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.

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, you may make a minimum
partial withdrawal of $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 NYLIAC MAKE INCOME PAYMENTS ON THE ANNUITY COMMENCEMENT DATE?

We will make Income Payments on a fixed basis. We do not currently offer a
variable income payment option. We will make payments under the Life Income
Payment Option 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 .)
We may offer other options, at our discretion, where permitted by state law.

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 the 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 IRA, TSA or
SEP policies only). If your spouse chooses to continue the policy, we will not
pay the death benefit proceeds as a consequence of your death, or the
Annuitant's death.

11
<PAGE> 15

13. CAN I RETURN THE POLICY AFTER IT IS DELIVERED?

You can cancel the policy by returning it to us, or to the registered
representative through whom you purchased it, 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 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 NYLIAC CALCULATE INVESTMENT PERFORMANCE OF THE SEPARATE ACCOUNT?

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. In calculating the yield, we assume
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 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 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 in that Investment Division over a specified thirty-day period. In
calculating the yield, we assume 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, as 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
--------------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
PORTFOLIO INCEPTION DATE: 1/29/93 1/29/93 10/1/96 1/29/93
- --------------------------------------------------------

<CAPTION>
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
--------------------- ----------- ----------- -------- --------------
<S> <C> <C> <C> <C>
PORTFOLIO INCEPTION DATE: 5/1/98 5/1/98 9/2/86 9/20/88
- --------------------------------------------------------

<CAPTION>
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 AMERICAN DREYFUS
HIGH YIELD MAINSTAY VP MAINSTAY VP MAINSTAY VP MAINSTAY VP CENTURY LARGE
CORPORATE INTERNATIONAL TOTAL MAINSTAY VP MAINSTAY VP GROWTH INDEXED INCOME & COMPANY
BOND EQUITY RETURN VALUE BOND EQUITY EQUITY GROWTH VALUE
- ----------- ------------- ----------- ----------- ----------- ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5/1/95 5/1/95 1/29/93 5/1/95 1/23/84 1/23/84 1/29/93 5/1/98 5/1/98
5/1/95 5/1/95 5/1/95 5/1/95 5/1/95 5/1/95 5/1/95 5/1/98 5/1/98
</TABLE>

<TABLE>
<CAPTION>
MORGAN
JANUS ASPEN MFS STANLEY T. ROWE
JANUS ASPEN SERIES GROWTH MFS EMERGING PRICE VAN ECK
FIDELITY VIP II FIDELITY VIP SERIES WORLDWIDE WITH INCOME RESEARCH MARKETS EQUITY WORLDWIDE
CONTRAFUND EQUITY INCOME BALANCED GROWTH SERIES SERIES EQUITY INCOME HARD ASSETS
- --------------- ------------- ----------- ----------- ----------- -------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1/3/95 10/9/86 9/13/93 9/13/93 10/9/95 7/26/95 10/1/96 10/1/96 9/1/89
10/1/96 10/1/96 10/1/96 10/1/96 5/1/98 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, you should 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>
<S> <C> <C>
GENERAL INQUIRIES AND WRITTEN PREMIUM PAYMENTS AND LOAN
REQUESTS PAYMENTS
------------------------------ ------------------------------
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 First Union National Bank First Union National Bank
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

<CAPTION>
JANUS
JANUS ASPEN SERIES MFS GROWTH MFS MORGAN STANLEY
ASPEN SERIES WORLDWIDE WITH INCOME RESEARCH EMERGING
BALANCED GROWTH SERIES SERIES MARKETS 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.
(c) For the period May 1, 1998 (commencement of operations) through December 31,
1998.

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 we describe 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 occasionally make additional contributions
to NYLIAC in order to maintain capital and surplus in accordance with state
requirements.

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.

WE OFFER NO ASSURANCE THAT ANY OF THE ELIGIBLE PORTFOLIOS WILL ATTAIN THEIR
RESPECTIVE STATED OBJECTIVES.

The Funds also make their shares available to certain other separate
accounts funding variable life insurance policies offered by NYLIAC. This is
called "mixed funding." Except for the MainStay VP Series Fund, all other Funds
also make their shares 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:

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

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. Madison Square Advisors, Inc. 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 Equity
Inc. Inc.
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, we will not make substitutions of shares attributable to your
interest in an Investment Division 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.

We may establish new Investment Divisions when we determine, in our sole
discretion, that marketing, tax, investment or other conditions so warrant. We
will make any new Investment Divisions available to existing

19
<PAGE> 23

policy owners on a basis we determine. We may also eliminate one or more
Investment Divisions, if we determine, in our sole discretion, that 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, we may (a)
operate the Separate Account as a management company under the Investment
Company Act of 1940, (b) deregister it under such Act in the event such
registration is no longer required, or (c) combine it with one or more other
separate accounts.

REINVESTMENT

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

THE POLICIES

We only offer the policies on the lives of individual Annuitants. We only
offer flexible premium policies which means additional premium payments can be
made.

The policies are variable. This means that the Accumulation Value will
fluctuate based on the investment experience of the Investment Divisions you
select, the interest credited on the Fixed Accumulation Value and, in states
where approved, the DCA 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. We offer no assurance that the investment
objectives of the Investment Divisions 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.

As the owner of the policy, you have the right to (a) change the
Beneficiary, (b) name a new owner, (c) receive Income Payments, and (d) name a
payee to receive Income Payments. You cannot lose these rights. However, all
rights of ownership cease upon your death.

NON-QUALIFIED AND QUALIFIED POLICIES

We designed the policies described in this Prospectus primarily to
establish retirement benefits for two types of purchasers.

The first type of purchaser is one, other than those described below, who
purchases a policy to provide supplemental retirement income. We refer to
policies purchased by these individuals as "Non-Qualified Policies."

The second 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.

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

Although earnings in both a tax qualified plan and a variable annuity are
tax-deferred, the policies offer certain other features that may make them
appropriate for purchase in a qualified plan. Three of these include:

(1) a guaranteed fixed interest rate offered in the Fixed Account;

(2) a death benefit that is payable should you die while the policy is in
force, which is reset every three years (or every year in states where
approved) and is guaranteed to be at least the amount of your premium
payments, less any outstanding loan balance, partial withdrawals and
surrender charges; and

(3) a Life Income Payment Option which will give the payee guaranteed
monthly income for his or her lifetime.

These features are explained in detail in this Prospectus. You should consult
with your tax or legal advisor to determine if the policy is suitable for your
tax qualified plan.

20
<PAGE> 24

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, we will
credit the initial premium payment within two Business Days after receipt. If we
cannot credit the initial premium payment 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 we issue your policy based on a Policy Request, we will require you to
provide to us either a signed acknowledgement of the information contained in
the Policy Request in a form acceptable to us, or, where required by applicable
state law or regulation, a signed application form. From the time we issue 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.

We will allocate the initial premium payments to the Fixed Account or the
DCA Advantage Plan Accounts immediately. In states where approved, we will also
allocate the initial premium payments designated to the Investment Divisions
immediately. Otherwise, we will allocate the initial premium payments designated
to the Investment Divisions 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.

You may allocate the initial premium payments in up to ten Allocation
Alternatives and the DCA Advantage Plan Accounts inclusively. Thereafter, you
may maintain the Accumulation Value in up to 18 Investment Divisions and the DCA
Advantage Plan Accounts inclusively plus the Fixed Account at any one time. We
will credit subsequent premium payments to the policy at the close of the
Business Day on which they are received at MainStay Annuities--Client Services.
Moreover, you may increase or decrease the percentages of the premium payments
(which must be in whole number percentages) allocated to each Allocation
Alternative 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 Advantage Plan 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. You may make
additional premium payments of at least $100 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 your bank, a credit union or similar accounts and any other
method agreed to by us. You may make additional premium payments 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, you may not make premium payments in any Policy
Year that exceed the amount permitted by the plan or by law.

ISSUE AGES

We can issue Non-Qualified Policies 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, Roth IRA, TSA and SEP plans, you
must also be the Annuitant. We can issue Qualified Policies 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.

21
<PAGE> 25

TRANSFERS

You may transfer amounts between Investment Divisions of the Separate
Account or to the Fixed Account at least 30 days before the Annuity Commencement
Date. You may not make transfers into the DCA Advantage Plan Accounts. Transfers
made from the DCA Advantage Plan Accounts (where available) to the Investment
Divisions are subject to different limitations (See "The DCA Advantage Plan" at
page .) Except in connection with transfers made pursuant to traditional
Dollar Cost Averaging, Automatic Asset Reallocation, Interest Sweep, and the DCA
Advantage Plan, the minimum amount that you may transfer from one Investment
Division to other Investment Divisions or to the Fixed Account, is $500. Except
for the traditional Dollar Cost Averaging, Automatic Asset Reallocation and
Interest Sweep options, and the DCA Advantage Plan (where available), if the
value of the remaining Accumulation Units in an Investment Division or Fixed
Account would be less than $500 after you make a transfer, we will transfer the
entire value 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 traditional Dollar Cost Averaging, Automatic Asset
Reallocation, Interest Sweep and the DCA Advantage Plan (where available) will
not count as a transfer toward the twelve transfer limit. You may make transfers
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 .)

Your 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.) We will make transfers from Investment Divisions
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 Advantage
Plan, partial withdrawals, periodic partial withdrawals, traditional Dollar Cost
Averaging, Automatic Asset Reallocation, Interest Sweep, or to reset or cancel
the Investment Protection Plan. 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 by speaking with a service representative at (888)
695-6246. 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. We must receive telephone transfer requests no later than 4:00 p.m.
Eastern Time in order to assure same day processing. We will process requests
received after 4:00 p.m. Eastern Time on the next Business Day.

DOLLAR COST AVERAGING PROGRAMS

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 you transfer the same dollar amount to an Investment Division
with each transfer, you purchase more units in an Investment Division if the
value per unit is low and fewer units are purchased if the value per unit is
high. Therefore, you achieve a lower than average cost per unit if prices
fluctuate over the long term. Similarly, for each transfer out of an Investment
Division, you sell more units in an Investment Division if the value per unit is
low and you sell fewer units 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
the DCA Advantage Plan under which you may utilize the 6-month, 12-month or
18-month DCA Accounts. (See "The DCA Advantage Plan" at page .) We do not
count transfers under dollar cost averaging 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). You may not

22
<PAGE> 26

make transfers from the Fixed Account, but you may make transfers into the Fixed
Account. Each transfer from an Investment Division must be at least $100. You
must have a minimum Accumulation Value of $5,000 to elect this option. NYLIAC
may reduce the minimum transfer amount and minimum Accumulation Value at its
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. You may not elect
the traditional Dollar Cost Averaging option if you have selected the Automatic
Asset Reallocation option.

(b) The DCA Advantage Plan

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

You can enroll in any one, two or all three DCA Advantage Plan Accounts.
You must allocate a minimum of $5,000 in each DCA Advantage Plan Account that is
selected. You must specify the Investment Divisions into which transfers from
the DCA Advantage Plan Accounts are to be made. However, you may not select a
DCA Advantage Plan Account with a duration which would extend beyond the Annuity
Commencement Date. Amounts in the DCA Advantage Plan Accounts will be
transferred to the Investment Divisions in 6 monthly transfers if the 6-month
DCA Advantage Plan Account is selected, in 12-monthly or 4-quarterly transfers
if the 12-month DCA Advantage Plan Account is selected or in 18-monthly or
6-quarterly transfers if the 18-month DCA Advantage Plan 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 Advantage Plan
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 Advantage Plan 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 Advantage Plan Account.
For example, the amount of the first monthly transfer out of a 6-month DCA
Advantage Plan Account will equal 1/6 of the value of the DCA Advantage Plan
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 Advantage Plan Account on the date of each transfer.

You may have a 6-month, a 12-month and an 18-month DCA Advantage Plan
Account open simultaneously in accordance with established procedures. However,
you may not have more than one DCA Advantage Plan 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 Advantage
Plan Account already opened. The entire value of the DCA Advantage Plan Account
will be completely transferred to the Investment Divisions within the duration
specified. For example, if you allocate an initial premium payment to the
12-month DCA Advantage Plan 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
Advantage Plan Account before December 31, 1999, we will allocate the subsequent
premium payment to the same 12-month DCA Advantage Plan Account already opened
and transfer the entire value of the 12-month DCA Advantage Plan Account to the
Investment Divisions by December 31, 1999 even though a portion of the money was
not in that DCA Advantage Plan Account for the entire 12-month period.

You can make partial withdrawals and transfers (in addition to the
automatic transfers described above) from the DCA Advantage Plan Accounts. We
will make partial withdrawals and transfers first from the DCA Accumulation
Value attributed to the initial premium payment and then from the DCA
Accumulation Value attributed to subsequent allocations in the order received.

You cannot make transfers into the DCA Advantage Plan Accounts from any
Allocation Alternative.

23
<PAGE> 27

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. You may not elect the
Automatic Asset Reallocation option if you have selected the traditional Dollar
Cost Averaging option.

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.

You may request the Interest Sweep option in addition to either traditional
Dollar Cost Averaging, Automatic Asset Reallocation or the DCA Advantage Plan.
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 Advantage Plan, we will process the Interest
Sweep transfer 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 you may
allocate 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 Advantage Plan
Accounts. The minimum amount that you may allocate to a DCA Account is $5,000.
(See "The DCA Advantage Plan" at page .) In states where approved, we will
allocate the initial premium payment to the Investment Divisions you have
specified immediately. Otherwise, we will place the initial premium payment,
except any initial premium payment allocated to the Fixed Account or the DCA
Advantage Plan Accounts, in the MainStay VP Cash Management Investment Division
until 15 days after we issue the policy. Please check with your registered
representative to determine how the initial premium payment will be allocated
under your policy. We will allocate all additional premium payments to the
Investment Divisions and/or the Fixed Accounts as requested. We will allocate
all additional premium payments to the DCA Advantage Plan based on instructions
from you at the time the additional premium payment is made.

We will credit that portion of each premium payment you allocate to an
Investment Division in the form of Accumulation Units. We determine the number
of Accumulation Units we credit to a policy by dividing the amount allocated to
each Investment Division by the Accumulation Unit value for that Investment
Division on the

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<PAGE> 28

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 we credit 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 crediting.)

(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 we value the
Accumulation Units.

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.

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, we
impose a surrender charge 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. We measure the surrender charge 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, we deduct the surrender charge 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 Advantage Plan 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 Advantage Plan Accounts is less than
the necessary surrender charge, we will deduct the remainder of the charge from
the amount withdrawn from that Allocation Alternative and/or the DCA Advantage
Plan 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, we deem premium payments 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

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<PAGE> 29

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;

(d) when we pay proceeds upon the death of the policy owner or the
Annuitant;

(e) when you select an Income Payment Option 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 you make under the Living Needs Benefit Rider or
Unemployment Benefit Rider.

OTHER CHARGES

(a) Mortality and Expense Risk Charges

Prior the Annuity Commencement Date, NYLIAC imposes risk charges to
compensate it for bearing certain mortality and expense risks under the
policies. This charge is equal, on an annual basis, to 1.25% of the average net
asset value of the Separate Account and is deducted daily. We guarantee that
these charges will not increase. 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, we will add any excess to our general funds.

The mortality risk assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables predict. As a result, we would be
paying more Income Payments than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each policy, will differ from actual mortality experience. Lastly, we assume
a mortality risk that, at the time of death, the guaranteed minimum death
benefit will exceed the policy's Accumulation Value. The expense risk assumed is
the risk that the cost of issuing and administering the policies will exceed the
amount we charge for these services.

(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 and is deducted daily.

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<PAGE> 30

We deduct an annual policy service charge 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. We deduct the annual policy
service charge from each Allocation Alternative and each DCA Account, if
applicable, 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) Investment Protection Plan Rider Charge (optional)

If you selected the Investment Protection Plan (in states where available),
we will deduct a charge on each policy quarter that the rider is in effect based
on the amount that is guaranteed. (See "Riders - Investment Protection Plan
Rider" at page ). We will deduct the charge from each Allocation Alternative
and each DCA Advantage Plan Account in proportion to its percentage of the
Accumulation Value on the first Business Day of the applicable policy quarter.

The maximum annual charge is 1% of the amount that is guaranteed. We may
set a lower charge at our sole discretion. You should check with your registered
representative to determine the percentage we are currently charging before you
select this feature.

If you reset the amount that is guaranteed, a new charge for the rider will
apply. This charge may be more or less than the charge currently in effect on
your policy, but will never exceed the stated maximum. The charge in effect on
the effective date of the rider or on the effective date of any reset will not
change after the date the rider becomes effective. We will continue to deduct
the current charge until the first policy quarter following the effective date
of the reset.

(e) Rider Risk Charge Adjustment (optional)

If you cancel the Investment Protection Plan, we may deduct a Rider Risk
Charge Adjustment from your Accumulation Value. The cancellation will be
effective on the date we receive your request. (See "Riders - Investment
Protection Plan Rider" at page ). We will deduct the Rider Risk Charge
Adjustment from each Allocation Alternative and each DCA Advantage Plan Account
in proportion to its percentage of the Accumulation Value on that day. We will
not deduct this charge if you surrender your policy. However, surrender charges
may apply.

We will not change the adjustment for a particular policy once it is set on
the date the rider takes effect. The maximum Rider Risk Charge Adjustment is 2%
of the amount that is guaranteed. We may set a lower charge at our sole
discretion. You should check with your registered representative to determine
the percentage we are currently charging before you select this feature.

If you reset the amount that is guaranteed, a new Rider Risk Charge
Adjustment may apply. This charge may be more or less than the charge currently
in effect on your policy, but will never exceed the stated maximum. The
adjustment charge in effect on the effective date of the rider or on the
effective date of any reset will not increase after the rider is issued.

(f) 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

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<PAGE> 31

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.

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, you
may request partial withdrawals and periodic partial withdrawals 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. We will pay all surrenders or withdrawals
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

We may deduct a surrender charge and any state premium tax, if applicable,
less any outstanding loan balance, and less the annual policy service charge, if
applicable, from the amount paid. We will pay the proceeds 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 .)

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<PAGE> 32

(b) Partial Withdrawals

The minimum amount that can be withdrawn is $500, unless we agree
otherwise. We will withdraw the amount from the Allocation Alternatives and/or
the DCA Advantage Plan 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 Advantage Plan Accounts (where
available), we will allocate the partial withdrawal on a pro-rata basis. 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 the requested partial withdrawal is greater than the value in any of the
Allocation Alternatives and/or the DCA Advantage Plan Accounts from which the
partial withdrawal is being made, we will pay the entire value of that
Allocation Alternative and/or the DCA Advantage Plan 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. You may make periodic partial withdrawals from the DCA Advantage
Plan 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, you must have 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 later.

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

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<PAGE> 33

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, we
will pay an amount as proceeds to the designated Beneficiary, as of the date we
receive proof of death and all requirements necessary to make the payment. That
amount will be 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 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, we recalculate the reset value, with respect to
any policy, 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, we calculate the reset value every three years from the date of
the initial premium payment until you or the Annuitant reaches age 85. We
calculate the reset value on the Reset Anniversary 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. Please consult with your registered representative
regarding the reset value that is available under your particular policy.

The formula guarantees that the amount we pay 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 Advantage Plan
Account in which the policy is invested as of the date we receive proof of death
and all requirements necessary to make the payment to that Beneficiary. We will
keep the remaining balance in the policy to pay the other Beneficiaries.
Therefore, due to market fluctuations, the remaining Accumulation Value may
increase or decrease and we may pay subsequent Beneficiaries a different amount.

We will make payments 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, we
will apply all or part of these proceeds:

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

(ii) 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, we can pay the proceeds to the surviving
spouse if you die before the Annuity Commencement Date or the policy can
continue with the surviving spouse as (a) the new policy owner and, (b) 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.

We will make any distribution or application of policy proceeds 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 .)

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<PAGE> 34

INCOME PAYMENTS

(a) Election of Income Payment Options

We will make Income Payments 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, we may require proof of birth date
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. We will make payments under
the Life Income Payment Option in the same specified amount and over the life of
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. We base Income Payment
Options involving life income 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.

We may require satisfactory proof of survival from time to time before we
pay any Income Payments or other benefits. We will request the proof at least 30
days prior to the next scheduled payment date.

DELAY OF PAYMENTS

We will pay any amounts due from the Separate Account under the policy
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 ("SEC");

3. The SEC 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, we will delay transfers from the Separate Account to
the Fixed Account.

We may also delay payments of any amount due from the Fixed Account and/or
the DCA Program. 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. We will pay interest of
at least 3.5% per year 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 .

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<PAGE> 35

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 no-
action 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.

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 you may take is the lesser
of: (a) 50% of the policy's Accumulation Value on the date of the loan or (b)
$50,000. We withdraw a loan processing fee of $25 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, we will transfer sufficient
Accumulation Value from the Investment Divisions and/or DCA Advantage Plan
Accounts 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, you may not
make partial withdrawals or transfers 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%. We will credit 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, we will apply the interest charged on the loan at the
then current Prime Rate plus 1%. We will credit the money being held in the
Fixed Account to secure the loan with a rate of interest that is the Prime Rate
less 1%, but it will always be at least equal to the minimum guaranteed interest
rate of 3%. For all plans, we will assess interest in arrears as part of the
periodic loan repayments.

You must repay the loan 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. We will take such a repayment on a first-in, first-out (FIFO)
basis from amounts allocated to the Fixed Account.

We permit loans to acquire a principal residence 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.

We deduct any outstanding loan balance including any accrued interest 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, we deduct
any outstanding loan balance from the Fixed Accumulation Value as a partial
withdrawal as of the date we receive the notice of death.

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, we include two riders under the policy: an
Unemployment Benefit Rider, for Non-Qualified and IRA policies, and a Living
Needs Benefit Rider, for all types of policies. The first two riders described
below 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 Investment Protection Plan

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<PAGE> 36

rider is available at an additional cost. 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 and IRA policies, 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.

THE INVESTMENT PROTECTION PLAN RIDER IS AVAILABLE ONLY IN STATES WHERE
APPROVED. If you select this rider, you will be able to surrender the policy and
receive the greater of the policy Accumulation Value or the amount that is
guaranteed under the rider. While this rider is in effect, we will deduct a
charge from your Accumulation Value on each policy quarter. (See "Other
Charges-Investment Protection Plan Rider Charge" at page ). When you make a
partial withdrawal, we will reduce the amount that is guaranteed under the rider
by the amount of the proportional withdrawal. The proportional withdrawal is
equal to the amount withdrawn from the policy (including any amount withdrawn
for the surrender charge) divided by the Accumulation Value immediately
preceding the withdrawal, multiplied by the amount that is guaranteed
immediately preceding the withdrawal.

The amount that is guaranteed under the rider will depend on when you
select or reset it:

(i) At the time of application: The amount that is guaranteed will
equal the initial premium payment plus any additional premium
payments we receive in the first Policy Year, less all
proportional withdrawals. Premium payments made after the first
Policy Year will not be included in the amount that is
guaranteed. The rider will take effect on the Policy Date.

(ii) While the policy is in force: The amount that is guaranteed will
equal the Accumulation Value on the date the rider takes effect,
less all proportional withdrawals. The rider will take effect on
the next Policy Anniversary following the date we receive your
application for the rider.

(iii) Resetting the guaranteed amount: You may request to reset the
amount that is guaranteed at any time while the rider is in
effect. The new rider will take effect on the Policy Anniversary
immediately following the date we receive your request to reset.
The amount that is guaranteed will equal the Accumulation Value
on the next Policy Anniversary, less all proportional
withdrawals. We will also reset a new charge for the rider and
the Rider Risk Charge Adjustment on that Policy Anniversary.
(See "Other Charges-Investment Protection Plan Rider Charge" and
"Other Charges - Rider Risk Charge Adjustment" at page ).

You will be eligible to receive the benefit under this rider beginning on
the tenth Policy Anniversary after the later of (1) the effective date of the
rider or (2) the effective date of any reset. You may also exercise this benefit
on any Policy Anniversary subsequent to the tenth. To exercise this benefit, you
must send us a written request to surrender the policy no later than ten
Business Days after the applicable Policy Anniversary. Amounts paid to you under
the terms of this rider may be taxable and you may be subject to a 10% tax
penalty if paid before you reach age 59 1/2.

You may cancel this rider within 30 days after delivery of the rider or, if
you selected this feature at the time of application, within 30 days after
delivery of the policy. You must return the rider to us or to the registered
representative through whom it was purchased, with a written request for
cancellation. Upon receipt of this request, we will promptly cancel the rider
and refund any Investment Protection Plan Rider charge which may have been
deducted. After this 30-day period, you still have the right to discontinue the
rider. However, we may

33
<PAGE> 37

deduct a Rider Risk Charge Adjustment from your Accumulation Value and we will
not refund any Investment Protection Plan Rider charge which may have been
deducted. (See "Other Charges - Rider Risk Charge Adjustment" at page ). The
cancellation will be effective on the date we receive your request.

This rider is available on all Non-Qualified and Roth IRA policies so long
as the first date that you can exercise and receive benefits under the rider is
before the Annuity Commencement Date. The rider is also available on IRA and
SEP-IRA policies if the policy owner is younger than age 66 on the date the
rider takes effect.

Because this rider generally provides protection against decreases in the
policy's Accumulation Value due to negative investment performance, this rider
may not be a benefit to you if all or most of your Accumulation Value is
allocated to the Fixed Account. You should select this rider only if you have or
intend to have most or all of your Accumulation Value allocated to the
Investment Divisions. You also will not receive the benefit of this rider if you
surrender the policy before the Policy Anniversary on which you are eligible to
exercise the rider.

We have set forth below an example of how the benefit of this rider may be
realized and how partial withdrawals will impact the guaranteed amount. In this
example, we have assumed the following:

(1) the rider is selected at the time of application;

(2) an initial premium payment of $100,000 is made;

(3) no additional premium payments are made;

(4) a withdrawal of $20,000 is made in the eighth Policy Year;

(5) the Accumulation Value immediately preceding the withdrawal has
decreased to $80,000; and

(6) the Accumulation Value on the tenth Policy Year has decreased to
$50,000.

The guaranteed amount at time of application was $100,000. When the partial
withdrawal was made in the eighth Policy Year, we reduced the guaranteed amount
by the amount of the proportional withdrawal. We calculated the amount of the
proportional withdrawal by taking the requested withdrawal amount, dividing it
by the Accumulation Value immediately preceding the withdrawal, and then
multiplying that number by the guaranteed amount immediately preceding the
withdrawal.

Proportional withdrawal = ($20,000/$80,000) x $100,000 = $25,000

To determine the new guaranteed amount after the withdrawal, we subtracted
the amount of the proportional withdrawal from the initial guaranteed amount:
($100,000 -- $25,000) = $75,000. If this policy is surrendered in the tenth
Policy Year, the policy owner receives $75,000 even though the Accumulation
Value has decreased to $50,000.

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. We credit interest on a daily basis. 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.

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<PAGE> 38

(b) Transfers to Investment Divisions

You may transfer amounts 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 you may be transfer 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. We determine amounts transferred from the
Fixed Account on a first-in, first-out ("FIFO") basis, for purposes of
determining the rate at which we credit interest 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 Advantage Plan
(where available), you may not transfer money into the Fixed Account if you made
a transfer out of the Fixed Account during the previous six-month period.

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

We will deduct partial withdrawals and apply any surrender charges 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 you allocated such payments or transfers 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 ADVANTAGE PLAN ACCOUNTS

Like the Fixed Account, the DCA Advantage Plan Accounts are also supported
by the assets in NYLIAC's general account. The DCA Advantage Plan 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 Advantage Plan Accounts.

NYLIAC will set interest rates in advance for each date on which we may
receive a premium payment to a DCA Advantage Plan Account. We will never declare
less than a 3% annual effective rate. Premium payments into a DCA Advantage Plan
Account will receive 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 Advantage Plan Account may be different from the rate
applied to prior premium payments made into the DCA Advantage Plan Account.

The annual effective rate that we declare is credited only to amounts
remaining in a DCA Advantage Plan Account. We credit the interest on a daily
basis. Because money is periodically transferred out of the DCA Advantage Plan
Account, amounts in the DCA Advantage Plan Account will not achieve the declared
annual effective rate.

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

35
<PAGE> 39

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 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.

36
<PAGE> 40

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. 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

37
<PAGE> 41

Distributors is not expected to exceed 7%. A portion of this amount is 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 are amended, or if NYLIAC's 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.

Prior to the Annuity Commencement Date, you hold a voting interest in each
Investment Division to which you have money allocated. We will determine the
number of votes which are available to you by dividing the Accumulation Value
attributable to an Investment Division by the net asset value per share of the
applicable Eligible Portfolios. We will calculate the number of votes which are
available to you separately for each Investment Division. We will determine that
number by applying your percentage interest, if any, in a particular Investment
Division to the total number of votes attributable to the Investment Division.

We will determine the number of votes of the Eligible Portfolio which are
available 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. We will apply voting
instructions to abstain on any item to be voted upon 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.

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<PAGE> 42

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 May 1, 1999:

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

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

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

39
<PAGE> 43

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 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. This
SAI contains information that expands upon subjects discussed in the current
MainStay Plus Variable Annuity Prospectus. You should read the SAI in
conjunction with the current MainStay Plus Variable Annuity Prospectus dated May
1, 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 ( )........................................... 2
Valuation of Accumulation Units ( )................... 2
INVESTMENT PERFORMANCE CALCULATIONS......................... 2
MainStay VP Cash Management Investment Division........ 2
MainStay VP Government, MainStay VP High Yield
Corporate Bond and MainStay VP Bond Investment
Division Yields...................................... 3
Average Annual Total Return............................ 3
GENERAL MATTERS............................................. 4
FEDERAL TAX MATTERS ( ).................................... 4
Taxation of New York Life Insurance and Annuity
Corporation.......................................... 4
Tax Status of the Policies............................. 4
DISTRIBUTOR OF THE POLICIES ( )............................ 5
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS...................... 6
STATE REGULATION............................................ 6
RECORDS AND REPORTS......................................... 6
LEGAL PROCEEDINGS........................................... 6
INDEPENDENT ACCOUNTANTS..................................... 6
OTHER INFORMATION........................................... 7
FINANCIAL STATEMENTS........................................ 8
</TABLE>

- ------------
* (Numbers in parentheses refer to page numbers of corresponding sections of the
current MainStay Plus Variable Annuity Prospectus.)
<PAGE> 44

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. We arbitrarily set the value of each
Accumulation Unit 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.

We determine 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") 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. (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 changes in interest rates on money market
securities, average portfolio maturity of the MainStay VP Cash

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<PAGE> 45

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.
We compute the yield 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
policy 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 firm which ranks
mutual funds and other investment companies by overall performance, investment

3
<PAGE> 46

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 we made payments 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, you may assign a Non-Qualified Policy or any
interest in it 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. We will not contest
the policy 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

4
<PAGE> 47

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
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 policy 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 is 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.

5
<PAGE> 48

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.

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. We file an annual statement 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

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

6
<PAGE> 49

OTHER INFORMATION

NYLIAC filed a registration statement 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. We have not
included all of the information set forth in the registration statement,
amendments and exhibits to the registration statement in this Statement of
Additional Information. We intend the statements contained in this Statement of
Additional Information concerning the content of the policies and other legal
instruments to be summaries. For a complete statement of the terms of these
documents, you should refer to the instruments filed with the Securities and
Exchange Commission.

7
<PAGE> 50

FINANCIAL STATEMENTS

[TO BE FILED BY AMENDMENT]

8
<PAGE> 51

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

a. Financial Statements.

All required financial statements will be 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.

(4)(b) Rider to Specimen Policy for the MainStay Plus Variable Annuity
- Filed herewith.

(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

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<PAGE> 52

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

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<PAGE> 53

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. - Not
applicable.

(10)(a) Consent of PricewaterhouseCoopers 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.

(10)(e) Power of Attorney for Certain Directors of NYLIAC - Filed
herewith for the following:

George J. Trapp, Director
Frank M. Boccio, Director
Phillip J. Hildebrand, Director
Michael G. Gallo, Director
Solomon Goldfinger, Director
Howard I. Atkins, Director

(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.

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<PAGE> 54

(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.

Name: Title:
----- ------
<S> <C>
Seymour Sternberg Director
Richard M. Kernan, Jr. Director
Frederick J. Sievert Director and President
George J. Trapp Director
Frank M. Boccio Director
Robert D. Rock Director and Senior Vice President
Howard I. Atkins Director, Executive Vice President and Chief Financial Officer
Michael Gallo Director, Senior Vice President
Solomon Goldfinger Director, Senior Vice President
Phillip J. Hildebrand Director, Senior Vice President
Jean E. Hoysradt Senior Vice President
Gary G. Benanav Executive Vice President and Chairman of Taiwan Branch
Jay S. Calhoun Senior Vice President and Treasurer
Judith E. Campbell Senior Vice President and Chief Information Officer
Shiela K. Davidson Senior Vice President
Richard D. Levy Senior Vice President
Michael J. McLaughlin Senior Vice President and General Counsel
Michael J. Nocera Senior Vice President
Frank J. Ollari Senior Vice President
Anne F. Pollack Senior Vice President
Stephen N. Steinig Senior Vice President and Chief Actuary
Thomas J. Warga Senior Vice President and General Auditor
Edward C. Wilson Senior Vice President and Chief Sales Officer
William Cheng Vice President
Limim 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
Melvin J. Feinberg Vice President
Jane L. Hamrick Vice President and Actuary
David A.K. Harland Vice President and Secretary
Robert E. Hebron Vice President
Celia J. 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 Tax Counsel
Danny Ramjit Vice President and CFO Taiwan Branch
Andrew N. Reiss Vice President and National Sales Manager
Joel Steinberg Vice President and Actuary
Lawrence R. Stoehr Vice President
Richard W. Zuccaro Vice President

</TABLE>

C-4

<PAGE> 55

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 Insurance and Annuity Corporation Delaware

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

NYLIFE Inc. New York
Avanti Corporate Health Systems, Inc. Delaware
Avanti of the District, Inc. Maryland
Avanti of New Jersey, Inc. New Jersey
Docservco, Inc. New York
Eagle Strategies Corp. Arizona
Greystone Realty Corporation Delaware
Greystone Realty Management, Inc. Delaware
MacKay-Shields Financial Corporation Delaware
Madison Square Advisers, Inc. Delaware
MainStay Management, Inc. Delaware
MainStay Shareholder Services Inc. Delaware
MSC Holding, Inc. Georgia 85.43%
Monitor Capital Advisors, Inc. Delaware
New York Life Benefit Services, Inc. Massachusetts
</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 this entity, the
shares of which are held of record by separate accounts of NYLIAC. New York Life
disclaims any beneficial ownership and control of this entity. 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. It is not
a subsidiary of New York Life, but is 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.

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

(+) 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.

C-5

<PAGE> 56

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
ADQ Insurance Agency, Inc. Massachusetts
New York Life Capital Corporation Delaware
New York Life International Investment Inc. Delaware
Monetary Research Ltd. Bermuda
NYL Management Limited United Kingdom
Taiyo Life Gamma Asset Management Ltd(5) Japan 16.7%
New York Life International Investment Asia Ltd. Mauritius
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.) Ltd.(6) United Kingdom 99.97%
Life Assurance Holding Corporation Limited United Kingdom 23%
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 50.2%
GEO New York Life, S.A. Mexico 49%
New York Life Trust Company New York
NYLIFE Administration Corp. 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 HealthCare Management, Inc. Delaware
Express Scripts, Inc. Delaware 44.8% of total
combined stock and
89.1% 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
</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> 57

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Organization Securities Owned
<S> <C> <C>
(NYLIFE Inc. subsidiaries cont.)
WellPath of Arizona Reinsurance Company Arizona
NYLCare NC Holdings, Inc.
WellPath Community Health Plans, L.L.C. North Carolina Duke Medical
Strategies, Inc. holds
50%; 50% LLC interest

WPCHP Holdings, Inc. Delaware

WellPath Preferred Services, L.L.C. North Carolina 99.9%; WPCHP
Holdings, Inc. owns
other 11%
WellPath Select Holdings, L.L.C. North Carolina WPCHP Holdings,
Inc. holds 11%;
99% LLC Interest
WellPath Select, Inc. North Carolina
WellPath of Carolina, Inc. 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 Southeast, Inc. North Carolina
Benefit Panel Services, Inc. California 50%; 50%
owned by
Anthem Companies,
Inc.
BPS Health Plan Administrators California
VivaHealth, Incorporated California
One Liberty Plaza Holdings, Inc. Delaware
NYLIFE Refinery 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
NYLINK Insurance Agency of Massachusetts, Incorporated Massachusetts
</TABLE>

C-7

<PAGE> 58

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

NYLINK Insurance Agency of Ohio, Incorporated(7) Ohio

NYLINK Insurance Agency of Oklahoma, Incorporated(7) Oklahoma

NYLINK Insurance Agency of Texas, Incorporated(7) Texas

NYLTEMPS Inc. Delaware

NYLIFE Insurance Company of Arizona Arizona

The MainStay Funds(8) Massachusetts
</TABLE>

- -----------
(7) This entity is an unaffiliated insurance agency for which New York
Life and its subsidiaries perform administrative services. It is not a
subsidiary of New York Life but is included for informational purposes only.

(8) 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.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of January 31, 1999, there were approximately 65,352 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 $150 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

C-8

<PAGE> 59

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 M. Boccio Director
Jefferson C. Boyce Director
Michael G. Gallo Director
Phillip J. Hildebrand Director
Robert D. Rock Director
Stephen C. Roussin Director and Senior Vice President
Robert E. Brady Director and Vice President
Mark Gordon 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
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
Arphiela Arizmendi Assistant Vice President
Antoinette B. Cirillo Assistant Vice President
George R. Daoust Assistant Vice President
Geraldine Lorito Assistant Vice President
Mark A. Gomez Secretary
Ronald M. Jamison Assistant Secretary
Lori S. Whittaker Assistant Secretary
</TABLE>

C-9

<PAGE> 60

<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-10

<PAGE> 61

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-11

<PAGE> 62

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it has caused this Amendment to the
Registration Statement to be signed on its behalf, in the City and State of New
York on this 16th day of February, 1999.

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.

Howard I. Atkins* Executive Vice President and Director
(Principal Financial Officer)

Frank M. Boccio* Director

Michael G. Gallo* Director

Solomon Goldfinger* Director

Phillip J. Hildebrand* 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)

Seymour Sternberg* Director

George J. Trapp* Director

*By: /s/ DAVID J. KRYSTEL
----------------------------------
David J. Krystel
Attorney-in-Fact
February 16, 1999

<PAGE> 63

EXHIBIT INDEX

Exhibit
Number Description

(4)(b) Rider to Specimen Policy for the MainStay Plus Variable Annuity.

(10)(e) Powers of Attorney for Certain Directors of NYLIAC

<PAGE> 1

RIDER

INVESTMENT PROTECTION PLAN

This rider is attached to and made part of your policy.

WHAT BENEFIT DOES THIS RIDER PROVIDE?

This rider allows you to surrender the policy and receive the greater of the
policy Accumulation Value or the Guaranteed Amount. You are eligible to exercise
this benefit beginning on the tenth Policy Anniversary after the later of the
Rider Effective Date or the Rider Reset Effective Date.

WHAT IS THE GUARANTEED AMOUNT?

(a) At Issue: When this benefit is elected at the time of the application for
the policy, the Guaranteed Amount is equal to the initial Premium Payment
plus any additional Premium Payments received by us in the first Policy
Year less all Proportional Withdrawals. The Rider Effective Date will be
the Policy Date.

(b) For an in force policy: When this benefit is elected on an in force
policy, the Guaranteed Amount is equal to the policy Accumulation Value on
the Rider Effective Date less all Proportional Withdrawals thereafter. The
Rider Effective Date will be the Policy Anniversary immediately following
the date we receive the application for the rider.

(c) At reset: When you elect to reset this benefit, the Guaranteed Amount is
equal to the policy's Accumulation Value at the next Policy Anniversary
less all Proportional Withdrawals thereafter. The Rider Reset Effective
Date will be the Policy Anniversary immediately following the date we
receive your request to reset this benefit.

WHAT IS A PROPORTIONAL WITHDRAWAL?

When you make a Partial Withdrawal from the policy, we reduce the Guaranteed
Amount by the amount of the Proportional Withdrawal. This amount is equal to the
amount withdrawn from the policy (including any amount withdrawn for the
Surrender Charge) divided by the Accumulation Value immediately preceding the
withdrawal, multiplied by the Guaranteed Amount immediately preceding the
withdrawal.

WHEN CAN YOU RECEIVE THIS BENEFIT?

You are eligible to exercise this benefit beginning on the tenth Policy
Anniversary after the later of the Rider Effective Date or the Rider Reset
Effective Date. You may also exercise this benefit on any Policy Anniversary
thereafter. If you wish to exercise this benefit, you must submit a written
request to us to surrender the policy no later than ten (10) business days after
the applicable Policy Anniversary. Amounts paid to you pursuant to the terms of
this rider are taxable and you may be subject to a ten percent (10%) tax penalty
if made before age 59 1/2. You should consult with your tax advisor regarding
your particular situation.

CAN YOU CHANGE THE GUARANTEED AMOUNT AFTER THE RIDER EFFECTIVE DATE?

You have the right to "reset" the Guaranteed Amount at any time. The new
Guaranteed Amount will be the policy's Accumulation Value at the next Policy
Anniversary after we receive your request. The Rider Reset Effective Date, the
Rider Risk Charge Adjustment and the new charge for the rider will also be reset
on the next Policy Anniversary.

ARE CHARGES DEDUCTED FROM YOUR POLICY FOR THIS BENEFIT?

A charge is deducted on the first business day of each policy quarter based on
the Guaranteed Amount on that day, while the rider is in effect. The charge will
be deducted from each Allocation Alternative and each DCA Account (if
applicable) in proportion to its percentage of the Accumulation Value on the
first business day of the applicable policy quarter. If you reset the Guaranteed
Amount, a new charge for the rider will apply. This charge may be more or less
than the charge currently in effect. The charge in effect on the Rider Effective
Date or the Rider Reset Effective Date cannot be increased

<PAGE> 2

after the rider is issued. The maximum charge for this benefit is one percent
(1%) annually based on the Guaranteed Amount.

WHAT HAPPENS IF ADDITIONAL PREMIUM PAYMENTS ARE MADE TO THE POLICY?

If the rider is elected at the time of the application for the policy, only the
Premium Payments received during the first Policy Year will be included in the
Guaranteed Amount. If the rider is elected after the policy is in force, Premium
Payments received after the Rider Effective Date will not be included in the
Guaranteed Amount. If you elect to reset the Guaranteed Amount, Premium Payments
received after the Rider Reset Effective Date will not be included in the
Guaranteed Amount.

WHAT HAPPENS IF THE POLICY IS SURRENDERED BEFORE THE BENEFIT BECOMES
EXERCISABLE?

If you surrender the policy before this benefit becomes exercisable, the
provisions under this rider will no longer apply.

CAN THIS BENEFIT BE CANCELLED?

Within 30 days after delivery of your policy and/or rider, you may return the
rider to us or to the Registered Representative through whom it was purchased,
with a written request for a cancellation. Upon receipt of this request, we will
promptly cancel the rider and refund any rider charges that may have been
assessed for the rider.

WHAT IF I WANT TO CANCEL THIS RIDER AFTER THE 30 DAY REVIEW PERIOD?

You have the right to cancel the rider. However, we may deduct a Rider Risk
Charge Adjustment from your Accumulation Value. The cancellation will be
effective on the date we receive your request. The Rider Risk Charge Adjustment
will be deducted from each Allocation Alternative and each DCA Account (if
applicable) in proportion to its percentage of the Accumulation Value on the
cancellation date.

The Rider Risk Charge Adjustment for a particular policy will not change once it
is set on the Rider Effective Date unless you reset the Guaranteed Amount. If
you reset the Guaranteed Amount, a new Rider Risk Charge Adjustment may apply.
This new charge may be more or less than the charge currently in effect. The
Rider Risk Charge Adjustment in effect on the Rider Effective Date or the Rider
Reset Effective Date cannot be increased after the rider is issued. The maximum
Rider Risk Charge Adjustment is two percent (2%) of the Guaranteed Amount.

The Rider Risk Charge Adjustment will not apply if you surrender the policy.

GENERAL PROVISIONS

NO VALUES

This rider does not have cash values.

ASSIGNMENTS

If the policy is subject to an assignment, you must provide us with a written
consent by the assignee prior to receiving any benefit provided by this rider.

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

- ------------------------------------------
President

- ------------------------------------------
Secretary

<PAGE> 1
POWER OF ATTORNEY

I, the undersigned Director of New York Life Insurance and Annuity
Corporation ("NYLIAC"), hereby constitute Patrick G. Colloton, Melvin J.
Feinberg, Michael G. Gallo, David A. K. Harland, Robert J. Hebron, David J.
Krystel, Robert D. Rock, Lawrence R. Stoehr and George J. Trapp, and each of
them singly, my true and lawful attorneys with full power to them and each of
them to sign for me, and in my name, registration statements to be filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940, and
any and all amendments thereto, with respect to any variable life insurance
policies or variable annuity contracts issued by NYLIAC and related units in
NYLIAC separate accounts.