ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE ACCOUNT 1, S-6/A, 2000-04-28

ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE ACCOUNT 1
S-6/A, 2000-04-28

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<PAGE> 1
As filed with the Securities and Exchange Commission on

April 28, 2000

Registration No. 333-95593
======================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------

Pre-Effective Amendment No. 1

Form S-6
---------------

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
----------------

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
(EXACT NAME OF REGISTRANT)
----------------

ACACIA NATIONAL LIFE INSURANCE COMPANY
(Depositor)
7315 Wisconsin Avenue
Bethesda, MD 20814
----------------

Robert-John H. Sands Senior Vice President
Corporate Secretary and General Counsel

Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20855
-----------------

Title of Securities Being Registered: Securities of Unit Investment Trust

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

Flexible Premium Variable Life Insurance Policies--Registration of an indefinite
amount of securities pursuant to Rule 24f-2 under the Investment Company Act of
1940

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a) may determine.

<PAGE> 2

RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS

ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
<S> <C>
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Acacia National Variable Life Insurance Separate Account I
6 Acacia National Variable Life Insurance Separate Account I
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion of Substitution of Investments; Policy Benefits;
Policy Rights; Payment and Allocation of Premiums; General Provisions; Voting Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds - Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; The Alger American Fund, Calvert Variable Series, Inc.,
Deutsche Asset Management VIT Funds, Variable
Insurance Products Fund, Variable Insurance
Products Fund II, Franklin Templeton Variable
Insurance Products Trust, Neuberger Berman
Advisers Management Trust, Oppenheimer Variable
Account Funds, and Van Eck Worldwide Insurance Trust
17 Summary, Policy Rights
18 The Alger American Fund, Calvert Variable
Series, Inc., Deutsche Asset Management VIT
Funds, Variable Insurance Products Fund,
Variable Insurance Products Fund II, Franklin
Templeton Variable Insurance Products Trust,
Neuberger Berman Advisers Management Trust,
Oppenheimer Variable Account Funds, and Van Eck
Worldwide Insurance Trust
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights, Loan Benefits; General Provisions
22 Not Applicable
23 Safekeeping of the Separate Account's Assets
24 General Provisions
25 Acacia National Life Insurance Company
26 Not Applicable
27 Acacia National Life Insurance Company
28 Executive Officers and Directors of ANLIC; Acacia National Life Insurance
Company
29 Acacia National Life Insurance Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
</TABLE>

<PAGE> 3

ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS

<S> <C>
42 Not Applicable
43 Not Applicable
44 Cash Value, Payment and Allocation of Premium
45 Not Applicable
46 The Funds; Cash Value
47 The Funds
48 State Regulation of ANLIC
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Policy Benefits; Payment and Allocation of Premiums,
Charges and Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements

</TABLE>

<PAGE> 4

PROSPECTUS
[THE ACACIA GROUP LOGO]
Acacia National Life
Insurance Company

Executive Select -- A Flexible Premium Variable Universal Life 7315 Wisconsin
Avenue

Insurance Policy issued by Acacia National Life Insurance Company Bethesda, MD
20814
- --------------------------------------------------------------------------------

Executive Select is a flexible premium variable universal life insurance
Policy ("Policy"), issued by Acacia National Life Insurance Company ("ANLIC").
The Policy is designed primarily for an employer who is seeking a cost-effective
and tax-efficient means of informally funding a non-qualified deferred
compensation plan for its key executives. Like traditional life insurance
policies, an Executive Select Policy provides Death Benefits to Beneficiaries
and gives you, the Policy Owner, the opportunity to increase the Policy's value.
Unlike traditional policies, Executive Select lets you vary the frequency and
amount of premium payments, rather than follow a fixed premium payment schedule.
It also lets you change the level of Death Benefits as often as once each year.

An Executive Select Policy is different from traditional life insurance
policies in another important way: the Policy Owner selects how Policy premiums
will be invested. Although the Policy guarantees a minimum Death Benefit as long
as the Policy remains in force, the value of the Policy, as well as the actual
Death Benefit, will vary with the performance of investments you select.

The Investment Options available through Executive Select include
investment portfolios from The Alger American Fund, Deutsche Asset Management
VIT Funds, Variable Insurance Products Fund, Variable Insurance Products Fund
II, Calvert Variable Series, Inc., Franklin Templeton Variable Insurance
Products Trust, Neuberger Berman Advisers Management Trust, Oppenheimer Variable
Account Funds, and Van Eck Worldwide Insurance Trust. Each of these portfolios
has its own investment objective and policies. These are described in the
prospectuses for each investment portfolio which must accompany this Executive
Select prospectus. You may also choose to allocate premium payments to the Fixed
Account managed by ANLIC.

An Executive Select Policy will be issued after ANLIC accepts a prospective
Policy Owner's application. Generally, an application must specify a Death
Benefit no less than $100,000 ($50,000 if the Term Coverage Rider is attached to
the Policy). Policies are available on individuals ages 18 to 65 at the time of
purchase if guaranteed or simplified underwriting is used and ages 18 to 85 with
regular underwriting. An Executive Select Policy, once purchased, may generally
be canceled within 10 days after you receive it.

This Executive Select prospectus is designed to assist you in understanding
the opportunities and risks associated with the purchase of an Executive Select
Policy. Prospective Policy Owners are urged to read the prospectus carefully and
retain it for future reference.

This prospectus includes a summary of the most important features of the
Executive Select Policy, information about ANLIC, a list of the investment
portfolios to which you may allocate premium payments, and a detailed
description of the Executive Select Policy. The appendix to the prospectus
includes tables designed to illustrate how values and Death Benefits may change
with the investment experience of the Investment Options.

This prospectus must be accompanied by a prospectus for each of the
investment portfolios available through this Policy.

Although the Executive Select Policy is designed to provide life insurance,
an Executive Select Policy is considered to be a security. It is not a deposit
with, an obligation of, or guaranteed or endorsed by any banking institution,
nor is it insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. The purchase of an Executive Select Policy
involves investment risk, including the possible loss of principal. For this
reason, Executive Select may not be suitable for all businesses. A Policy
provides employers with a means of funding non-qualified deferred compensation
plans for their key associates. It may not be advantageous to purchase an
Executive Select Policy as a replacement for another type of life insurance or
as a way to obtain additional insurance protection if the purchaser already owns
another flexible premium variable universal life insurance policy on the
Insured. In addition, the tax consequences of continuing coverage beyond age 100
are uncertain, and the Policy Owner should consult a tax advisor as to the
potential consequences.

The Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains other information regarding registrants that
file electronically with the Securities and Exchange Commission.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

May 11, 2000

EXECUTIVE SELECT
1
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
DEFINITIONS................................................. 3
SUMMARY..................................................... 5
YEAR 2000................................................... 12
ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS................... 12
Acacia National Life Insurance Company................ 12
The Separate Account.................................. 12
Performance Information............................... 13
The Funds............................................. 13
Investment Objectives and Policies Of The Funds'
Portfolios........................................... 15
Addition, Deletion or Substitution of Investments..... 17
Fixed Account......................................... 18
POLICY BENEFITS............................................. 18
Purposes of the Policy................................ 18
Death Benefit Proceeds................................ 19
Death Benefit Options................................. 19
Methods of Affecting Insurance Protection............. 21
Duration of Policy.................................... 21
Accumulation Value.................................... 21
Payment of Policy Benefits............................ 22
POLICY RIGHTS............................................... 23
Loan Benefits......................................... 23
Surrenders............................................ 24
Partial Withdrawals................................... 24
Transfers............................................. 25
Systematic Programs................................... 25
Free Look Privilege................................... 26
PAYMENT AND ALLOCATION OF PREMIUMS.......................... 26
Issuance of a Policy.................................. 26
Premiums.............................................. 27
Allocation of Premiums and Accumulation Value......... 28
Policy Lapse and Reinstatement........................ 28
CHARGES AND DEDUCTIONS...................................... 29
Deductions From Premium Payments...................... 29
Charges From Accumulation Value....................... 29
Daily Charges Against the Separate Account............ 30
GENERAL PROVISIONS.......................................... 31
DISTRIBUTION OF THE POLICIES................................ 33
ADMINISTRATION.............................................. 34
FEDERAL TAX MATTERS......................................... 34
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS................ 37
THIRD PARTY SERVICES........................................ 37
VOTING RIGHTS............................................... 37
STATE REGULATION OF ANLIC................................... 38
EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC................... 38
LEGAL MATTERS............................................... 39
LEGAL PROCEEDINGS........................................... 40
EXPERTS..................................................... 40
ADDITIONAL INFORMATION...................................... 40
FINANCIAL STATEMENTS........................................ 40
ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE
ACCOUNT I
ACACIA NATIONAL LIFE INSURANCE COMPANY
APPENDICES.................................................. A-1
</TABLE>

The Policy, certain Funds, and/or certain riders are not available in all
states.

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

EXECUTIVE SELECT
2
<PAGE> 6

DEFINITIONS

ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid.

ACCUMULATION VALUE - The total amount that the Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in Separate
Account I, the Fixed Account, and any Accumulation Value held in the General
Account which secures Outstanding Policy Debt.

ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy.

ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of Separate Account I to provide for expenses of ongoing
administrative services to the Policy Owners as a group.

ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.

ANLIC ("WE, US, OUR") - Acacia National Life Insurance Company, a Virginia stock
company. ANLIC's Home Office is located at 7315 Wisconsin Avenue, Bethesda, MD
20814.

BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are
payable upon the death of the Insured. (See the sections on Beneficiary and
Change of Beneficiary.)

COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection. The Cost of Insurance is calculated with
reference to an annual "Cost of Insurance Rate." This rate is based on the
Insured's gender (where applicable), Issue Age, Policy duration, and risk class.
The Cost of Insurance is part of the Monthly Deduction.

DEATH BENEFIT - The amount of insurance coverage provided under the selected
Death Benefit option of the Policy.

DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by
ANLIC of Satisfactory Proof of Death of the Insured while the Policy is in
force. It is equal to: (l) the Death Benefit; (2) plus additional life insurance
proceeds provided by any riders; (3) minus any Outstanding Policy Debt; (4)
minus any Accrued Expense Charges, including the Monthly Deduction through the
month of death.

FIXED ACCOUNT - An account that is a part of ANLIC's General Account to which
all or a portion of Net Premiums and transfers may be allocated for accumulation
at fixed rates of interest.

GENERAL ACCOUNT - The General Account of ANLIC includes all of ANLIC's assets
except those assets segregated into separate accounts such as Separate Account
I.

GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policy Owner's last known address. If the Policy Owner makes a payment
during the Grace Period such that the Net Cash Surrender Value of the Policy is
sufficient to pay the Monthly Deduction, the Policy will not lapse.

INSURED - The person whose life is insured under the Policy.

INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this Policy.

ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.

ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.

MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such Monthly Activity Date fall on a date other than a
Valuation Date, the Monthly Activity Date will be the next Valuation Date.

MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the
Monthly Activity Date. These deductions are equal to: (1) the current Cost of
Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any.

EXECUTIVE SELECT
3
<PAGE> 7

MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the
overall assets of Separate Account I to provide for the risk that mortality and
expense costs may be greater than expected.

NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Outstanding
Policy Debt and any Accrued Expense Charges.

NET PREMIUM - Premium paid less the Percent of Premium Charge.

OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued
interest on Policy loans.

PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses such as premium-based taxes, expressed as a percentage of
the premium. (See the section on Deductions From Premium Payment.)

PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force.

POLICY - The flexible premium variable universal life insurance Policy offered
by ANLIC and described in this prospectus.

POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.

POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: (1) an earlier
Policy Date is specifically requested, or (2) there are additional premiums or
application amendments at time of delivery. (See the section on Issuance of a
Policy.)

POLICY OWNER - ("you, your") The owner of the Policy, as designated in the
application or as subsequently changed. If a Policy has been absolutely
assigned, the assignee is the Policy Owner. A collateral assignee is not the
Policy Owner.

POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date. A "Policy Month" is measured from the same date in each
succeeding month as the Policy Date.

SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted:
(1) A certified copy of the death certificate;
(2) A Claimant Statement;
(3) The Policy; and
(4) Any other information that ANLIC may reasonably require to establish the
validity of the claim.

SEPARATE ACCOUNT I - This term refers to Separate Account I, a separate
investment account established by ANLIC to receive and invest the Net Premiums
paid under the Policy and allocated by the Policy Owner to Separate Account I.
Separate Account I is segregated from the General Account and all other assets
of ANLIC.

SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policy Owner.

SUBACCOUNT - A subdivision of the Separate Account I. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.

SURRENDER - The termination of the Policy during the Insured's life for the Net
Cash Surrender Value.

VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.

VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.

EXECUTIVE SELECT
4
<PAGE> 8

SUMMARY

The following summary of prospectus information and diagram of the Policy
should be read along with the detailed information found elsewhere in this
prospectus. Unless stated otherwise, this prospectus assumes that the Policy is
in force and that there is no Outstanding Policy Debt.

DIAGRAM OF POLICY

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

PREMIUM PAYMENTS

You can vary amount and frequency.
- ---------------------------------------------------

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

DEDUCTIONS FROM PREMIUMS

Percent of Premium Charge for Taxes -- currently 3.0% (maximum 5.0%)
- --------------------------------------------------------------------------------

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

NET PREMIUM

The net premium may be invested in the Fixed Account or in Separate Account I
which offers 25 different Subaccounts. The Subaccounts invest in the
corresponding portfolios of The Alger American Fund, Calvert Variable Series,
Inc., Deutsche Asset Management VIT Funds, Variable Insurance Products Fund,
Variable Insurance Product Fund II, Franklin Templeton Variable Insurance
Products Trust, Neuberger Berman Advisers Management Trust, Oppenheimer
Variable Account Funds, and Van Eck Worldwide Insurance Trust Funds.

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

DEDUCTIONS FROM ASSETS

Monthly Charge for Cost of Insurance and cost of any riders. The charge varies
by the Policy duration and the Issue Age, gender, and risk class of the
Insured. (See the Policy Schedule for rates.)Monthly per Policy charge for
administrative expenses:

<TABLE>
<CAPTION>
CURRENT MAXIMUM
MONTHLY MONTHLY
CHARGE CHARGE
------- -------
<S> <C> <C>
Policy Year
1 $15.00 $15.00
2+ $ 7.00 $12.00
</TABLE>

Monthly per $1000 charge for administrative expenses:

The first ten Policy Years (or for the life of the Policy where required by
state law), there is a monthly charge per $1000 of initial Specified Amount
(maximum monthly charge $1.97 per $1000). In addition, there is a monthly
charge per $1000 of each increase in Specified Amount for ten years from the
date of increase (or life of the Policy, where required) (maximum monthly
charge $1.97 per $1000). The per $1000 rates for both the initial Specified
Amount and each increase vary by Issue Age, gender, and risk class. (See the
Policy Schedule for rates.)

Daily charge from the Subaccounts (not deducted from the Fixed Account):

<TABLE>
<CAPTION>
CURRENT ANNUAL MAXIMUM
CHARGE ANNUAL CHARGE
POLICY YEARS POLICY YEARS
-------------- --------------
1-15 16+ 1-15 16+
----- ----- ----- -----
<S> <C> <C> <C> <C>
Mortality and Expense Risk Charge 0.75% 0.30% 0.95% 0.50%
Asset-Based Administrative Expense Charge 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Combined annual rate of Subaccount daily charges 0.90% 0.45% 1.10% 0.65%
</TABLE>

Fund expense charges, which ranged from 0.30% to 1.50% at the most recent
fiscal year end, are also deducted.

There is no surrender charge.
- --------------------------------------------------------------------------------

LIVING BENEFITS

You may make partial withdrawals, subject to certain restrictions. The Death
Benefit will be reduced by the amount of the partial withdrawal. Partial
withdrawals are subject to a maximum charge of the lesser of $50 (currently $25)
or 2% of the amount withdrawn. ANLIC guarantees up to 15 free transfers between
the Investment Options each Policy Year. After that, a $10 charge may be made
for each transfer. Under current practice, unlimited free transfers are
permitted.

You may Surrender the Policy at any time for its Net Cash Surrender Value.

RETIREMENT INCOME BENEFITS

Loans may be available on a more favorable interest rate basis after the tenth
Policy Year. Should the Policy lapse while loans are outstanding, the portion of
the loan attributable to earnings will become a taxable distribution. (See page
24.)

You may Surrender the Policy or make a partial withdrawal and take values as
payments under one or more of five different payment options.

DEATH BENEFITS

Generally, Death Benefit income is tax free to the Beneficiary. The Beneficiary
may be paid a lump sum or may select any of the five payment methods available
as retirement benefits.

EXECUTIVE SELECT
5
<PAGE> 9

SUMMARY
The following summary is intended to highlight the most important features
of an Executive Select Policy that you, as a prospective Policy Owner, should
consider. You will find more detailed information in the main portion of the
prospectus; cross-references are provided for your convenience. Capitalized
terms are defined in the Definitions section that begins on page 3 of this
prospectus. This summary and all other parts of this prospectus are qualified in
their entirety by the terms of the Executive Select Policy, which is available
upon request from ANLIC.

WHO IS THE ISSUER OF AN EXECUTIVE SELECT POLICY?
ANLIC is the issuer of each Executive Select Policy. ANLIC enjoys a rating
of A (Excellent) from A.M. Best Company, a firm that analyzes insurance
carriers. A stock life insurance company organized in Virginia, ANLIC is a
wholly owned subsidiary of Acacia Life Insurance Company which is, in turn, a
second tier subsidiary of Ameritas Acacia Mutual Holding Company. (See the
section on Acacia National Life Insurance Company.)

WHAT IS THE PRIMARY PURPOSE OF PURCHASING AN EXECUTIVE SELECT POLICY?
The primary purpose of an Executive Select Policy is to serve as an
informal funding vehicle for various executive benefit arrangements. These
arrangements typically focus on one or more financial objectives, which can be
met by the following characteristics of the Executive Select Policy:

- - payment of a Death Benefit, which will never be less than the Specified Amount
the Policy Owner selects (See the section on Death Benefit Options.)

- - accessibility of Policy values through Policy loan, Surrender and withdrawal
features (See the section on Policy Rights.)

- - ability to direct the manner in which the net premiums will be invested. So
long as the Policy is in force, the Policy Owner will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the value
of an Executive Select Policy will reflect your investment choices over the
life of the Policy.

An Executive Select Policy also includes an investment component. This
means that, so long as the Policy is in force, you will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the value of
an Executive Select Policy will reflect your investment choices over the life of
the Policy.

WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF AN EXECUTIVE SELECT POLICY?
Certain states impose premium and other taxes in connection with insurance
policies such as Executive Select. ANLIC may deduct up to 5.0% of each premium
as a Percent of Premium Charge. Currently, the charge is 3.0%.

Charges are deducted against the Accumulation Value to cover the Cost of
Insurance under the Policy and to compensate ANLIC for administering each
individual Executive Select Policy. These charges, which are part of the Monthly
Deduction, are calculated and deducted on each Monthly Activity Date. The Cost
of Insurance is calculated based on risk factors relating to the Insured as
reflected in relevant actuarial tables.

There are two separate charges for administration of the Policy -- a
monthly Administrative Expense Charge, and a daily Asset-Based Administrative
Expense Charge. The monthly Administrative Expense charge itself has three
components: (1) a per Policy charge; (2) a charge per $1000 of initial specified
amount; and (3) a charge per $1000 of each increase in specified amount.
Currently, the per Policy charge is $15 per month in the first Policy Year and
$7 per month thereafter. The per Policy portion of the Administrative Expense
Charge is levied throughout the life of the Policy and is guaranteed not to
increase above $15 per month in the first Policy Year and $12 per month
thereafter. During the first ten Policy Years (or for the life of the Policy
where required by state law), there is a monthly charge per $1000 of initial
Specified Amount. In addition, there is a monthly charge per $1000 of each
increase in Specified Amount for ten years from the date of increase (or life of
the Policy, where required). The per $1000 rates for both the initial Specified
Amount and each increase vary by Issue Age, gender, and risk class. The current
charge per $1000 is the same as the maximum charge. (See the section on Charges
from the Accumulation Value.)

EXECUTIVE SELECT
6
<PAGE> 10

For its services in administering Separate Account I and Subaccounts and as
compensation for bearing certain mortality and expense risks, ANLIC is also
entitled to receive fees. These fees are calculated and deducted daily during
the first 15 Policy Years, at a combined current annual rate of 0.90% (maximum
1.10%) of the value of the net assets of Separate Account I. After the 15th
Policy Anniversary Date, the combined current annual rate will decrease to 0.45%
(maximum 0.65%) of the daily net assets of Separate Account I. These charges
will not be deducted from the amounts in the Fixed Account. (See the section on
Daily Charges Against the Separate Account.)

FUND EXPENSE SUMMARY. In addition to the charges against Separate Account I
described just above, management fees and expenses will be assessed by the fund
managers against the amounts invested in the various portfolios. No portfolio
fees will be assessed against amounts placed in the Fixed Account.

The information shown below was provided to ANLIC by the Funds and ANLIC
has not independently verified such information. Each of the Funds is managed by
an investment advisory organization that is entitled to receive a fee for its
services based on the value of the relevant portfolio's net assets. Each Fund,
other than the Calvert Social portfolios, is managed by an organization that is
not affiliated with ANLIC. The Calvert Social portfolios are managed by Calvert
Asset Management Company, Inc., an ANLIC affiliate. Other Calvert companies
provide administrative services to certain of the portfolios. Unless otherwise
noted, the amount of expenses, including the asset based advisory fee referred
to above, borne by each portfolio for the fiscal year ended December 31, 1999,
was as follows:

<TABLE>
<CAPTION>
TOTAL
(Reflecting
INVESTMENT WAIVERS WAIVERS AND/OR
ADVISORY & 12B-1 OTHER AND/OR REIMBURSEMENTS,
PORTFOLIO MANAGEMENT EXPENSE EXPENSES TOTAL REIMBURSEMENTS IF ANY)
--------- ---------- ------- -------- ----- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ALGER AMERICAN(1)
Alger American Growth 0.75% -- 0.04% 0.79% -- 0.79%
Alger American MidCap Growth 0.80% -- 0.05% 0.85% -- 0.85%
Alger American Small
Capitalization 0.85% -- 0.05% 0.90% -- 0.90%
CALVERT SOCIAL(2)
Calvert Social Money Market 0.50% -- 0.17%(3) 0.67% -- 0.67%
Calvert Social Small Cap
Growth 1.00% -- 0.58%(3) 1.58% -- 1.58%
Calvert Social Mid Cap
Growth 0.90% -- 0.21%(3) 1.11% -- 1.11%
Calvert Social International
Equity 1.10% -- 0.50%(3) 1.60%(4) -- 1.60%
Calvert Social Balanced 0.70% -- 0.19%(3) 0.89% -- 0.89%
DEUTSCHE VIT(5)
Deutsche VIT Equity 500
Index 0.20% -- 0.23% 0.43% 0.13% 0.30%
Deutsche VIT Small Cap Index 0.35% -- 0.83% 1.18% 0.73% 0.45%
Deutsche VIT EAFE Equity
Index 0.45% -- 0.69% 1.15% 0.50% 0.65%
FIDELITY PORTFOLIOS(6)
VIP Equity-Income:
Service Class 2 0.48% 0.25% 0.10% 0.83% -- 0.83%(7)
VIP High Income:
Service Class 2 0.58% 0.25% 0.12% 0.95% -- 0.95%
VIP II Contrafund:
Service Class 2 0.58% 0.25% 0.12% 0.95% -- 0.95%(7)
FTVIP(8)
Templeton Asset Strategy
Fund(9) -- Class 2 0.60% 0.25%(10) 0.18% 1.03% -- 1.03%
Templeton International
Securities
Fund(11) -- Class 2 0.69% 0.25%(10) 0.19% 1.13% -- 1.13%
</TABLE>

EXECUTIVE SELECT
7
<PAGE> 11

<TABLE>
<CAPTION>
TOTAL
(Reflecting
INVESTMENT WAIVERS WAIVERS AND/OR
ADVISORY & 12B-1 OTHER AND/OR REIMBURSEMENTS,
PORTFOLIO MANAGEMENT EXPENSE EXPENSES TOTAL REIMBURSEMENTS IF ANY)
--------- ---------- ------- -------- ----- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
NEUBERGER BERMAN AMT(12)
Neuberger Berman AMT Limited
Maturity Bond 0.65% -- 0.11% 0.76% -- 0.76%
Neuberger Berman AMT Growth 0.84% -- 0.08% 0.92% -- 0.92%
Neuberger Berman AMT
Partners.................. 0.80% -- 0.07% 0.87% -- 0.87%
OPPENHEIMER VARIABLE ACCOUNT
FUNDS(13)
Oppenheimer Aggressive
Growth Fund/VA............ 0.66% -- 0.01% 0.67% -- 0.67%
Oppenheimer Capital
Appreciation Fund/VA...... 0.68% -- 0.02% 0.70% -- 0.70%
Oppenheimer Main Street
Growth & Income Fund/VA... 0.73% -- 0.05% 0.78% -- 0.78%
Oppenheimer High Income
Fund/VA................... 0.74% -- 0.01% 0.75% -- 0.75%
Oppenheimer Strategic Bond
Fund/VA................... 0.74% -- 0.04% 0.78% -- 0.78%
VAN ECK(14)
Worldwide Hard Assets
Fund...................... 1.00% -- 0.26% 1.26% -- 1.26%
</TABLE>

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

(1) Fred Alger Management, Inc. is manager to the Alger American portfolios.

(2) Calvert Asset Management Company, Inc., an affiliate of ANLIC, is
investment advisor of the Calvert Social Portfolios.

(3) "Other Expenses" reflect an indirect fee. Net fund operating expenses after
reductions for fees paid indirectly would be as follows:

<TABLE>
<S> <C>
Calvert Social Money Market 0.64%
Calvert Social Small Cap Growth 1.15%
Calvert Social Mid Cap Growth 1.02%
Calvert Social International Equity 1.50%
Calvert Social Balanced 0.86%
</TABLE>

(4) Total expenses have been restated to reflect expenses expected to be
incurred in 2000, resulting from a change in 1999 to the administrative
services agreement, as approved by the shareholders.

(5) Bankers Trust Company is the investment advisor to the Deutsche VIT. For
its services, the investment advisor receives a fee that is a percentage of
each fund's average daily net assets. The investment advisor has entered
into agreements to waive and/or reimburse operating expenses, including its
fees, that exceed certain percentages of the funds' aggregate average daily
net assets. Any differences in amounts are due to rounding.

(6) Fidelity Management & Research Company is manager of VIP and VIP II
(Fidelity Portfolios). Service Class 2 expenses are based on estimated
expenses for the first year.

(7) A portion of the brokerage commissions certain portfolios pay was used to
reduce portfolio expenses. In addition, through arrangements with the
portfolios's custodian, credits realized as a result of uninvested cash
balances were used to reduce a portion of the portfolios's expenses. After
these reductions, the total operating expenses presented in the table for
these portfolios would have been as follows:

<TABLE>
<S> <C>
VIP Equity Income: Service Class 2 0.82%
VIP II Contrafund: Service Class 2 0.92%
</TABLE>

EXECUTIVE SELECT
8
<PAGE> 12

(8) Templeton Investment Counsel, Inc. is investment adviser to the FTVIP
funds.

(9) (Previously the Templeton Asset Allocation Fund) On 2/8/00, shareholders
approved a merger and reorganization that combined the fund with the
Templeton Global Asset Allocation Fund, effective 5/1/00. The shareholders
of that fund had approved new management fees, which apply to the combined
fund effective 5/1/00. The table shows restated total expenses based on the
new fees and the assets of the fund as of 12/31/99, and not the assets of
the combined fund. However, if the table reflected both the new fees and
the combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.60%, Distribution and Service Fees 0.25% Other
Expenses 0.14%, and Total Fund Operating Expenses 0.99%.

(10) The fund's class 2 distribution plan or "rule 12b-1 plan" is described in
the fund's prospectus. While the maximum amount payable under the fund's
12b-1 plan is 0.35% per year of the fund's average daily net assets, the
Board of Trustees of FTVIP has set the current rate at 0.25% per year.

(11) (Previously the Templeton International Fund) On 2/8/00, shareholders
approved a merger and reorganization that combined the fund with the
Templeton International Equity Fund, effective 5/1/00. The shareholders of
that fund had approved new management fees, which apply to the combined
fund effective 5/1/00. The table shows restated total expenses based on the
new fees and the assets of the fund as of 12/31/99, and not the assets of
the combined fund. However, if the table reflected both the new fees and
the combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.65%, Distribution and Service Fees 0.25% Other
Expenses 0.20%, and Total Fund Operating Expenses 1.10%.

(12) Neuberger Berman Management Inc. ("NBMI") provides investment management
services to each Neuberger Berman AMT portfolio that include, among other
things, making and implementing investment decisions and providing
facilities and personnel necessary to operate the portfolio. NBMI provides
administrative services to each portfolio that include furnishing similar
facilities and personnel to the portfolio. With the portfolio's consent,
NBMI is authorized to subcontract some of its responsibilities under its
administration agreement with the portfolio to third parties. Each
portfolio bears all expenses of its operations other than those borne by
NBMI as administrator of the portfolio and as distributor of its shares.
Each portfolio bears all expenses of its operations other than those borne
by NBMI as investment manager of the series. These expenses include, but
are not limited to, for the portfolios and the series, legal and accounting
fees and compensation for trustees who are not affiliated with NBMI; for
the portfolios, transfer agent fees and the cost of printing and sending
reports and proxy materials to shareholders; and for the series, custodial
fees for securities. Any expenses which are not directly attributable to a
specific series are allocated on the basis of the net assets of the
respective series.

(13) OppenheimerFunds, Inc. serves as manager to the Oppenheimer portfolios.

(14) Van Eck Associates Corporation serves as investment adviser to the Van Eck
Worldwide Hard Assets Fund.

Expense reimbursement agreements are expected to continue in future years
but may be terminated at any time. As long as the expense limitations continue
for a portfolio, if a reimbursement occurs, it has the effect of lowering the
portfolio's expense ratio and increasing its total return.

ANLIC may receive administrative fees from the investment advisers of
certain Funds. ANLIC currently does not assess a separate charge against
Separate Account I or the Fixed Account for any federal, state or local income
taxes. ANLIC may, however, make such a charge in the future if income or gains
within Separate Account I will incur any federal, or any significant state or
local income tax liability, or if the federal, state or local tax treatment of
ANLIC changes.

HOW DOES THE INVESTMENT COMPONENT OF THE EXECUTIVE SELECT POLICY WORK?
ANLIC has established Separate Account I, which is separate from all other
assets of ANLIC, as a vehicle to receive and invest premiums received from
Executive Select Policy Owners and owners of certain other variable universal
life products offered by ANLIC. Separate Account I is divided into separate
Subaccounts. Each Subaccount invests exclusively in shares of one of the
investment portfolios available through Executive Select. Each Policy Owner may
allocate Net Premiums to one or more

EXECUTIVE SELECT
9
<PAGE> 13

Subaccounts, or to ANLIC's Fixed Account in the initial application. These
allocations may be changed, without charge, by notifying ANLIC's Administrative
Office. The aggregate value of your interests in the Subaccounts, the Fixed
Account and any amount held in the General Account to secure Policy debt will
represent the Accumulation Value of your Executive Select Policy. (See the
Section on Accumulation Value.)

WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE EXECUTIVE SELECT POLICY?

The Investment Options available through Executive Select include 25
investment portfolios, each of which is a separate series of a mutual fund from:
The Alger American Fund ("Alger American Fund"); Calvert Variable Series, Inc.
("Calvert");Deutsche Asset Management VIT Funds ("Deutsche VIT"); Variable
Insurance Products Fund ("VIP") and Variable Insurance Products Fund II ("VIP
II") (collectively "Fidelity"); Franklin Templeton Variable Insurance Products
Trust ("FTVIP"); Neuberger Berman Advisers Management Trust (Neuberger Berman");
Oppenheimer Variable Account Funds ("Oppenheimer"); and Van Eck Worldwide
Insurance Trust ("Van Eck"). These portfolios are listed in the Fund Expense
Summary above.

Details about the investment objectives and policies of each of the
available investment portfolios and management fees and expenses appear in the
sections on Investment Objectives and Policies of the Funds' Portfolios and Fund
Expense Summary. In addition to the listed portfolios, you may also elect to
allocate Net Premiums to ANLIC's Fixed Account. (See the section on the Fixed
Account.)

HOW DOES THE LIFE INSURANCE COMPONENT OF AN EXECUTIVE SELECT POLICY WORK?
An Executive Select Policy provides for the payment of a minimum Death
Benefit upon the death of the Insured. The amount of the minimum Death
Benefit -- sometimes referred to as the Specified Amount of the Executive Select
Policy -- is chosen by you at the time your Executive Select Policy is
established. However, Death Benefit Proceeds -- the actual amount that will be
paid after ANLIC receives Satisfactory Proof of Death -- may vary over the life
of your Executive Select Policy, depending on which of the two available
coverage options you select.

If you choose Option A, Death Benefit Proceeds payable under your Executive
Select Policy will be the Specified Amount of your Executive Select Policy or
the applicable percentage of its Accumulation Value, whichever is greater. If
you choose Option B, Death Benefit Proceeds payable under your Executive Select
Policy will be the Specified Amount of your Executive Select Policy plus the
Accumulation Value of your Executive Select Policy, or if it is higher, the
applicable percentage of the Accumulation Value on the date of death. In either
case, the applicable percentage is based on the age of the Insured at the date
of death. (See the section on Death Benefit Options.)

ARE THERE ANY RISKS INVOLVED IN OWNING AN EXECUTIVE SELECT POLICY?
Yes. Over the life of the Executive Select Policy, the Subaccounts to which
you allocate your premiums will fluctuate with changes in the stock market and
overall economic factors. These fluctuations will be reflected in the
Accumulation Value of your Executive Select Policy and may result in loss of
principal. For this reason, the purchase of an Executive Select Policy may not
be suitable for all businesses. It may not be advantageous to purchase an
Executive Select Policy to replace or augment your existing insurance
arrangements. Appendix A includes tables illustrating the impact that
hypothetical market returns would have on Accumulation Values under an Executive
Select Policy (page A-1).

WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP AN EXECUTIVE SELECT POLICY IN
FORCE?
Like traditional life insurance policies, an Executive Select Policy
requires the payment of periodic premiums in order to keep the Policy in force.
You will be asked to establish a payment schedule before an Executive Select
Policy becomes effective.

The distinction between traditional life policies and an Executive Select
Policy is that an Executive Select Policy will not lapse simply because premium
payments are not made according to that payment schedule. However, an Executive
Select Policy will lapse, even if scheduled premium payments are made, if the
Net Cash Surrender Value of your Executive Select Policy falls below zero. (See
the section on Premiums.)

EXECUTIVE SELECT
10
<PAGE> 14

HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED?
An Executive Select Policy will be issued after a completed application is
accepted, and the initial premium payment is received, by ANLIC at its
Administrative Office. ANLIC's Administrative Office is located at 5900 "O"
Street, P.O. Box 82550, Lincoln, NE 68501. The initial Net Premium will be
allocated on the Issue Date to the Subaccounts and/or the Fixed Account
according to the selections made in the application. When state or other
applicable law or regulation requires return of at least the premium payments,
should you return the Policy under the free-look privilege, the initial Net
Premium will be allocated to the Money Market Subaccount. Thirteen days after
the Issue Date, the Accumulation Value of the Policy will be allocated among the
Subaccounts and/or the Fixed Account according to the instructions in the
application. You have the right to examine the Executive Select Policy and
return it for a refund for a limited time, even after the Issue Date. (See the
section on Issuance of a Policy.)

You may make subsequent premium payments, although you are not required to
do so. ANLIC will send premium payment notices to you according to any schedule
you select. When ANLIC receives a premium payment at its Administrative Office,
we will deduct any applicable Percent of Premium Charge and allocate the Net
Premium to the Subaccounts and/or the Fixed Account according to your
selections. (See the sections on Premiums and Allocations of Premiums and
Accumulation Value.)

As already noted, Executive Select provides considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include the Cost
of Insurance needed to keep the Executive Select Policy in force; maximum
premium limitations established under the federal tax laws; and the impact that
reduced premium payments may have on the Net Cash Surrender Value of the
Executive Select Policy. (See the Section on Premiums.)

IS THE ACCUMULATION VALUE OF THE EXECUTIVE SELECT POLICY AVAILABLE WITHOUT
SURRENDER?
Yes. You may access the value of your Executive Select Policy in one of two
ways. After the first Policy Year, you may obtain a loan, secured by the
Accumulation Value of your Executive Select Policy. The maximum interest rate on
any such loan is 6% annually; the current rate is 5.5% annually. After the tenth
Policy Anniversary, you may borrow against a limited amount of the Net Cash
Surrender Value of your Executive Select Policy at a maximum annual interest
rate of 4%; the current rate for such loans is 3.5% annually. (See the section
on Loan Benefits.)

You may also access the value of your Executive Select Policy by making a
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). (See the section on Partial
Withdrawals.)

WHEN DOES THE EXECUTIVE SELECT POLICY TERMINATE?
You may terminate the Executive Select Policy by Surrendering the Policy
during the lifetime of the Insured for its Net Cash Surrender Value. If you
surrender the Policy in the first two Policy Years, we will refund a portion of
the Percent of Premium Charge deducted in the first Policy Year. As noted above,
the Executive Select Policy will terminate if you fail to maintain sufficient
Net Cash Surrender Value to cover Policy charges. (See the sections on
Surrenders and Premiums.)

EXECUTIVE SELECT
11
<PAGE> 15

YEAR 2000

Like other insurance companies and their separate accounts, ANLIC and
Separate Account I could be adversely affected if the computer systems they rely
upon do not properly process date-related information and data involving the
years 2000 and after. This issue arose because both mainframe and PC-based
computer hardware and software have traditionally used two digits to identify
the year. For example, the year 1998 is input, stored and calculated as "98."
Similarly, the year 2000 would be input, stored and calculated as "00." If
computers assume this means 1900, it could cause errors in calculations,
comparisons, and other computing functions.

Like all insurance companies, ANLIC makes extensive use of dates and date
calculations. We began a corporate-wide Year 2000 (Y2K) project in mid-1997. Our
goal is to ensure that our computer systems continue to operate smoothly with no
service disruptions before, during or after the year 2000.

As of April 15, 2000, ANLIC has experienced no known Y2K problems. All of
our computer application and operating systems had been updated for the year
2000 by July 31, 1999. Continuous testing and monitoring throughout the
remainder of 1999 helped ANLIC continue to meet our contractual and service
obligations to our customers. In addition to our internal efforts, ANLIC is
working closely with vendors and other business partners to confirm that they
too are addressing Y2K issues on a timely basis. In the event we or our service
providers, vendors, financial institutions or others with which we conduct
business, fail to be Y2K compliant, there would be a materially adverse effect
on us.

Certain vendors and/or business partners, due to their exposure to foreign
markets, may face additional Y2K issues. Please see the Funds' prospectuses for
information on the Funds' preparedness for Y2K.

ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS

ACACIA NATIONAL LIFE INSURANCE COMPANY
Acacia National Life Insurance Company ("ANLIC") is a stock life insurance
company organized in the Commonwealth of Virginia. ANLIC was incorporated on
December 9, 1974. ANLIC is currently licensed to sell life insurance in 46
states and the District of Columbia.

ANLIC is a wholly owned subsidiary of Acacia Life Insurance Company
("Acacia"), a District of Columbia stock company. Acacia is wholly owned by
Ameritas Holding Company, a subsidiary of Ameritas Acacia Mutual Holding
Company, a Nebraska mutual insurance holding company. The Administrative Offices
of both ANLIC and Acacia are at 5900 "O" Street, P.O. Box 81889, Lincoln,
Nebraska 68501. ANLIC's telephone number is 888-837-6791 and its website address
is www.acaciagroup.com.

On January 1, 1999, Ameritas Mutual Insurance Holding Company, a Nebraska
mutual insurance holding company and Acacia Mutual Holding Corporation, a
District of Columbia mutual holding corporation merged and became Ameritas
Acacia Mutual Holding Company ("Ameritas Acacia") a Nebraska mutual insurance
holding company. Both Ameritas Acacia and Ameritas Holding Company, an
intermediate holding company, are organized under the Nebraska Mutual Insurance
Holding Company Act. Ameritas Acacia and its subsidiaries had total statutory
assets at December 31, 1999 of over $6.3 billion and Acacia and its subsidiaries
had total assets as of December 31, 1999 of $1.7 billion.

THE SEPARATE ACCOUNT

Acacia National Variable Life Insurance Separate Account I ("Separate
Account I") was established under Virginia law on January 31, 1995. The assets
of Separate Account I are held by ANLIC segregated from all of ANLIC's other
assets, are not chargeable with liabilities arising out of any other business
which ANLIC may conduct, and income, gains, or losses of ANLIC. Although the
assets maintained in Separate Account I will not be charged with any liabilities
arising out of ANLIC's other business, all obligations arising under the
Policies are liabilities of ANLIC who will maintain assets in Separate Account I
of a total market value at least equal to the reserve and other contract
liabilities of Separate Account I. Separate Account I will at all times contain
assets equal to or greater than Accumulation Values invested in Separate Account
I. Nevertheless, to the extent assets in Separate Account I exceed

EXECUTIVE SELECT
12
<PAGE> 16

ANLIC's liabilities in Separate Account I, the assets are available to cover the
liabilities of ANLIC's General Account. ANLIC may, from time to time, withdraw
assets available to cover the General Account obligations.

Separate Account I is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a
unit investment trust, which is a type of investment company. This does not
involve any SEC supervision of the management or investment policies or
practices of Separate Account I. For state law purposes, Separate Account I is
treated as a Division of ANLIC.

PERFORMANCE INFORMATION
Performance information for the Subaccounts of Separate Account I and the
Funds available for investment by Separate Account I may appear in
advertisements, sales literature, or reports to Policy Owners or prospective
purchasers. ANLIC may also provide a hypothetical illustration of Accumulation
Value, Net Cash Surrender Value and Death Benefit based on historical investment
returns of the Funds for a sample Policy based on assumptions as to age, gender
and other Policy specific assumptions.

ANLIC may also provide individualized hypothetical illustrations of
Accumulation Value, Net Cash Surrender Value and Death Benefit based on
historical investment returns of the Funds. These illustrations will reflect
deductions for Fund expenses and Policy and Separate Account I charges,
including the Monthly Deduction and Percent of Premium Charge. These
hypothetical illustrations will be based on the actual historical experience of
the Funds as if the Subaccounts had been in existence and a Policy issued for
the same periods as those indicated for the Funds.

THE FUNDS

There are currently 25 Subaccounts within Separate Account I available to
Policy Owners for new allocations. The assets of each Subaccount are invested in
shares of a corresponding portfolio of one of the following mutual Funds
(collectively, the "Funds"): The Alger American Fund; Calvert Variable Series,
Inc.; Deutsche Asset Management VIT Funds; Variable Insurance Products Fund;
Variable Insurance Products Fund II; Franklin Templeton Variable Insurance
Products Trust; Neuberger Berman Advisers Management Trust; Oppenheimer Variable
Account Funds; and Van Eck Worldwide Insurance Trust. Each Fund is registered
with the SEC under the Investment Company Act of 1940 as an open-end management
investment company.

The assets of each portfolio of the Funds are held separate from the assets
of the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.

The investment objectives and policies of each portfolio are summarized
below. There is no assurance that any of the portfolios will achieve their
stated objectives. More detailed information, including a description of
investment objectives, policies, restrictions, expenses and risks, is in the
prospectuses for each of the Funds, which must accompany or precede this
Prospectus. All underlying fund information, including Fund prospectuses, has
been provided to ANLIC by the underlying Funds. ANLIC has not independently
verified this information. One or more of the Portfolios may employ investment
techniques that involve certain risks, including investing in non-investment
grade, high risk debt securities, entering into repurchase agreements and
reverse repurchase agreements, lending portfolio securities, hedging
instruments, interest rate swaps, engaging in "short sales against the box,"
investing in instruments issued by foreign banks, entering into firm commitment
agreements and investing in warrants and restricted securities. For example, the
Calvert Social Balanced Portfolio may invest up to 20% of its assets in non-
investment grade obligations, commonly referred to as "junk bonds". Oppenheimer
High Income Fund/ VA may also invest in "junk bonds". In addition, certain of
the portfolios may invest in securities of foreign issuers, such as the Calvert
Variable Series, Inc. MidCap Portfolio which may invest up to 25% of its funds
in foreign securities.

Other portfolios invest primarily in the securities markets of developing
nations. Investments of this type involve different risks than investments in
more established economies, and will be affected by greater volatility of
currency exchange rates and overall economic and political factors. Such
portfolios include the

EXECUTIVE SELECT
13
<PAGE> 17

Calvert Variable Series, Inc. Social International Equity Portfolio, and Van Eck
Worldwide Hard Assets Fund. The Van Eck Worldwide Hard Assets Fund will also
invest at least 25% of its total assets in "Hard Assets" including precious
metals, ferrous and non-ferrous metals, gas, petroleum, petrochemicals or other
hydrocarbons, forest products, real estate and other basic non-agricultural
commodities. It may invest up to 50% of its assets in any one of these sectors.
Therefore it may be subject to greater risks and market fluctuations than other
investment companies with more diversified portfolios. Further information about
the risks associated with investments in each of the Funds and their respective
portfolios is contained in the prospectus relating to that Fund. These
prospectuses, together with this prospectus, should be read carefully and
retained.

The investments in the Funds may be managed by Fund managers which manage
one or more other mutual funds that have similar names, investment objectives,
and investment styles as the Funds. You should be aware that the Funds are
likely to differ from the other mutual funds in size, cash flow pattern, and tax
matters. Thus, the holdings and performance of the Funds can be expected to vary
from those of the other mutual funds.

You should periodically consider the allocation among the Subaccounts in
light of current market conditions and the investment risks attendant to
investing in the Funds' various portfolios.

Separate Account I will purchase and redeem shares from the portfolios at
the net asset value. Shares will be redeemed to the extent necessary for ANLIC
to collect charges, pay the Net Cash Surrender Values, partial withdrawals, and
make policy loans or to transfer assets among Investment Options as you
requested. Any dividend or capital gain distribution received is automatically
reinvested in the corresponding Subaccount.

Since each of the Funds is designed to provide investment vehicles for
variable annuity and variable life insurance contracts of various insurance
companies and will be sold to separate accounts of other insurance companies as
investment vehicles for various types of variable life insurance policies and
variable annuity contracts, there is a possibility that a material conflict may
arise between the interests of Separate Account I and one or more of the
separate accounts of another participating insurance company. In the event of a
material conflict, the affected insurance companies agree to take any necessary
steps, including removing their separate account from the Funds, to resolve the
matter. The risks of such mixed and shared funding are described further in the
prospectuses of the Funds.

EXECUTIVE SELECT
14
<PAGE> 18

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS' PORTFOLIOS

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
THE ALGER AMERICAN FUND
- -------------------------------------------------------------------------------------------------------------------
Alger American Focuses on growing companies that generally Seeks to provide long-term capital
Growth Portfolio have broad product lines, markets, appreciation.
financial resources and depth of
management. Under normal circumstances, the
portfolio invests primarily in the equity
securities of large companies. The
portfolio considers a large company to have
a market capitalization of $1 billion or
greater.
- -------------------------------------------------------------------------------------------------------------------
Alger American Focuses on midsize companies with promising Seeks to provide long-term capital
MidCap Growth growth potential. Under normal appreciation.
Portfolio circumstances, the portfolio invests
primarily in the equity securities of
companies having a market capitalization
within the range of companies in the S&P
MidCap 400 Index.
- -------------------------------------------------------------------------------------------------------------------
Alger American Small Focuses on small, fast-growing companies Seeks to provide long-term capital
Capitalization that offer innovative products, services or appreciation.
Portfolio technologies to a rapidly expanding
marketplace. Under normal circumstances,
the portfolio invests primarily in the
equity securities of small capitalization
companies. A small capitalization company
is one that has a market capitalization
within the range of the Russell 2000 Growth
Index or the S&P SmallCap 600 Index.
- -------------------------------------------------------------------------------------------------------------------
CALVERT VARIABLE SERIES, INC.
- -------------------------------------------------------------------------------------------------------------------
Social Money Market Invests in high quality, money market Seeks to provide current income by
Portfolio instruments, such as commercial paper, investing in enterprises that make a
variable rate demand notes, corporate, significant contribution to society
agency and taxable municipal obligations. through their products and services and
All investments must comply with the SEC through the way they do business.
money market fund requirements.*
- -------------------------------------------------------------------------------------------------------------------
Social Small Cap Invests at least 65% of assets in the Seeks to provide long-term capital
Growth Portfolio common stocks of small-cap companies. appreciation by investing primarily in
Returns in the portfolio will be mostly equity securities of companies that have
from the changes in the price of the small market capitalizations.
portfolio's holdings (capital
appreciation). The portfolio currently
defines small-cap companies as those with
market capitalization of $1 billion or less
at the time the portfolio initially
invests.*
- -------------------------------------------------------------------------------------------------------------------
Social Mid Cap Invests primarily in the common stocks of Seeks to provide long-term capital
Growth Portfolio mid- size companies. Returns in the appreciation by investing primarily in a
portfolio will be mostly from the changes nondiversified portfolio of the equity
in the price of the portfolio's holdings securities of mid-sized companies that are
(capital appreciation.) The portfolio undervalued but demonstrate a potential
currently defines mid-cap companies as for growth.
those within the range of market
capitalizations of the S&P's Mid-Cap 400
Index. Most companies in the Index have a
capitalization of $500 million to $10
billion.*
- -------------------------------------------------------------------------------------------------------------------
Social International Invests primarily in the common stocks of Seeks to provide a high total return
Equity Portfolio mid- to large-cap companies using a value consistent with reasonable risk by
approach. The portfolio identifies those investing primarily in a globally
countries with markets and economies that diversified portfolio for equity
it believes currently provide the most securities.
favorable climate for investing. The
portfolio invests primarily in more
developed economies and markets. No more
that 5% of Portfolio assets are invested in
the U.S.*
- -------------------------------------------------------------------------------------------------------------------
Social Balanced Typically invests about 60% of its assets Seeks to achieve a competitive total
Portfolio in stocks and 40% in bonds or other return through an actively managed
fixed-income investments. Stock investments portfolio of stocks, bonds and money
are primarily common stock in large-cap market instruments which offer income and
companies, while the fixed-income capital growth opportunity and which
investments are primarily a wide variety of satisfy the investment and social
investment grade bonds.* criteria.
- -------------------------------------------------------------------------------------------------------------------
*The portfolio invests with the philosophy
that long-term rewards to investors will
come from those organizations whose
products, services, and methods enhance the
human condition and the traditional
American values of individual initiative,
equality of opportunity and cooperative
effort. Investments are selected on the
basis of their ability to contribute to the
dual objectives of financial soundness and
social criteria.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

EXECUTIVE SELECT
15
<PAGE> 19

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DEUTSCHE ASSET MANAGEMENT VIT FUNDS
- -------------------------------------------------------------------------------------------------------------------
Equity 500 Index The Fund will invest primarily in common Seeks to match, before expenses, the risk
Fund stocks of companies that comprise the and return characteristics of the S&P 500
Standard & Poor's 500 Composite Stock Price Index.
Index ("S&P 500 Index(R)"), which
emphasizes stocks of large U.S. companies.
The Fund may also use stock index futures
and options.
- -------------------------------------------------------------------------------------------------------------------
Small Cap Index Fund The Fund will invest primarily in common Seeks to match, before expenses, the risk
stocks of companies that comprise the and return characteristics of the Russell
Russell 2000 Small Stock Index ("Russell 2000 Index.
2000 Index(R)"), which emphasizes stocks of
small U.S. companies. The Fund may also use
stock index futures and options.
- -------------------------------------------------------------------------------------------------------------------
EAFE(R) Equity Index The Fund will invest primarily in common Seeks to match, before expenses, the risk
Fund stocks of companies that comprise the and return characteristics of the
Morgan Stanley Capital International EAFE EAFE(R)Index.
Index(R) ("EAFE Index(R)"), which
emphasizes stocks of companies in major
markets in Europe, Australia and the Far
East. The Fund may also use stock index
futures and options.
- -------------------------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- -------------------------------------------------------------------------------------------------------------------
VIP Equity-Income: Investing at least 65% in income-producing Seeks reasonable income. Will also
Service Class II equity securities, which tens to lead to consider the potential for capital
investments in large cap "value" stocks. appreciation. Seeks a yield which exceeds
the composite yield on the securities
comprising the Standard & Poor's 500.
- -------------------------------------------------------------------------------------------------------------------
VIP High Income: Investing at least 65% of total assets in Seeks a high level of current income while
Service Class II income- producing debt securities, also considering growth of capital.
preferred stocks and convertible
securities, with an emphasis on lower-
quality debt securities.
- -------------------------------------------------------------------------------------------------------------------
VIP II Contrafund: Investing primarily in common stocks. Seeks long-term capital appreciation.
Service Class II Investing in securities of companies whose
value it believes is not fully recognized
by the public.
- -------------------------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
- -------------------------------------------------------------------------------------------------------------------
Templeton Asset The fund will invest in equity securities High total return.
Strategy of companies of any nation, debt securities
of companies and governments of any nation,
and in money market instruments.
- -------------------------------------------------------------------------------------------------------------------
Templeton The fund will invest in the equity Long-term capital growth.
International securities of companies located outside the
Securities U.S., including emerging markets.
- -------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN ADVISORS MANAGEMENT TRUST
- -------------------------------------------------------------------------------------------------------------------
Limited Maturity The portfolio will invest in a diversified Seeks to provide the highest current
Bond Fund portfolio of fixed and variable debt income consistent with low risk to
securities and seeks to increase income and principal and liquidity.
preserve or enhance total return by
actively managing average portfolio
maturity in light of market conditions and
trends.
- -------------------------------------------------------------------------------------------------------------------
Growth Portfolio The portfolio invests mainly in common Seeks growth of capital.
stocks of mid-cap companies. It does not
seek to invest in securities that pay
dividends or interest, and such income is
incidental.
- -------------------------------------------------------------------------------------------------------------------
Partners Portfolio Principal series investments are common Seeks capital growth.
stocks of mid-to large-cap companies.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

EXECUTIVE SELECT
16
<PAGE> 20

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
ANLIC reserves the right, subject to applicable law, to add, delete,
combine or substitute investments in Separate Account I if, in our judgment,
marketing needs, tax considerations, or investment conditions warrant. This may
happen due to a change in law or a change in a Fund's objectives or
restrictions, or for some other reason. ANLIC may operate Separate Account I as
a management company under the 1940 Act, it may be deregistered under that Act
if registration is no longer required, or it may be combined with other ANLIC
separate accounts. ANLIC may also transfer the assets of Separate Account I to
another separate account. If necessary, we will notify the SEC and/or state
insurance authorities and will obtain any required approvals before making these
changes.

If any changes are made, ANLIC may, by appropriate endorsement, change the
Policy to reflect the changes. In addition, ANLIC may, when permitted by law,
restrict or eliminate any voting rights of Policy Owners or other persons who
have voting rights as to Separate Account I. ANLIC will determine the basis for
making any new Subaccounts available to existing Policy Owners.

You will be notified of any material change in the investment policy of any
Fund in which you have an interest.

EXECUTIVE SELECT
17
<PAGE> 21

FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium payments to
the Fixed Account, and you may also transfer monies between Separate Account I
and the Fixed Account. (See the section on Transfers.)

Payments allocated to the Fixed Account and transferred from Separate
Account I to the Fixed Account are placed in ANLIC's General Account. The
General Account includes all of ANLIC's assets, except those assets segregated
in ANLIC's separate accounts. ANLIC has the sole discretion to invest the assets
of the General Account, subject to applicable law. ANLIC bears an investment
risk for all amounts allocated or transferred to the Fixed Account, plus
interest credited thereto, less any deduction for charges and expenses. The
Policy Owner bears the investment risk that the declared rate, described below,
will fall to a lower rate after the expiration of a declared rate period

Because of exemptions and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 (the "1933
Act"), nor is the General Account registered as an investment company under the
Investment Company Act of 1940. Accordingly, neither the General Account nor any
interest in it is generally subject to the provisions of the 1933 or 1940 Act.
We understand that the staff of the SEC has not reviewed the disclosures in this
prospectus relating to the Fixed Account portion of the Policy; however, these
disclosures may be subject to generally applicable provisions of the federal
securities laws regarding the accuracy and completeness of statements made in
prospectuses.

ANLIC guarantees that it will credit interest at a declared rate of at
least 3.5%. ANLIC may, at its discretion, set a higher declared rate(s). Each
month ANLIC will establish the declared rate for the Policies with a Policy Date
or Policy Anniversary Date in that month. Each month is assumed to have 30 days,
and each year to have 360 days for purposes of crediting interest on the Fixed
Account. The Policy Owner will earn interest on the amounts transferred or
allocated to the Fixed Account at the declared rate effective for the month in
which the Policy was issued, which rate is guaranteed for the remainder of the
first Policy Year. During later Policy Years, all amounts in the Fixed Account
will earn interest at the declared rate in effect in the month of the last
Policy Anniversary. Declared interest rates may increase or decrease from
previous periods, but will not fall below 3.5%. ANLIC reserves the right to
change the declaration practice and the period for which a declared rate will
apply.

POLICY BENEFITS

The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from ANLIC.

PURPOSES OF THE POLICY
The Policy is designed to provide the Policy Owner with both lifetime
insurance protection on the life of the Insured and flexibility in the amount
and frequency of premium payments and with the level of life insurance proceeds
payable under the Policy.

You are not required to pay scheduled premiums to keep the Policy in force,
but you may, subject to certain limitations, vary the frequency and amount of
premium payments. You also may adjust the level of Death Benefits payable under
the Policy without having to purchase a new Policy by increasing (with evidence
of insurability) or decreasing the Specified Amount. Thus, as insurance needs or
financial conditions change, you have the flexibility to adjust life insurance
benefits and vary premium payments.

The Death Benefit may, and the Accumulation Value will, vary with the
investment experience of the chosen Subaccounts of Separate Account I. Thus the
Policy Owner benefits from any appreciation in value of the underlying assets,
but bears the investment risk of any depreciation in value. As a result, whether
or not a Policy continues in force may depend in part upon the investment
experience of the chosen Subaccounts. The failure to pay a Planned Periodic
Premium will not necessarily cause the Policy to lapse, but the Policy could
lapse even if Planned Periodic Premiums have been paid, depending upon the
investment experience of Separate Account I.

EXECUTIVE SELECT
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<PAGE> 22

DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, ANLIC will pay the Death Benefit
Proceeds of the Policy upon Satisfactory Proof of Death, according to the Death
Benefit option in effect at the time of the Insured's death. The amount of the
Death Benefits payable will be determined at the end of the Valuation Period
during which the Insured's death occurs. The Death Benefit Proceeds may be paid
in a lump sum or under one or more of the payment options set forth in the
Policy. (See the section on Payment Options.)

Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or as subsequently changed. If
you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or if individually owned, to your estate.

DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options. The Policy Owner selects one
of the options in the application. The Death Benefit under either option will
never be less than the current Specified Amount of the Policy as long as the
Policy remains in force. (See the section on Policy Lapse and Reinstatement.)
The net amount at risk for Option A will generally be less than the net amount
at risk for Option B. If you choose Option A, your Cost of Insurance deduction
will generally be lower than if you choose Option B. (See the section on Charges
and Deductions.) The following graphs illustrate the differences in the two
Death Benefit options.

OPTION A.

[GRAPH]

Death Benefit Option A. Pays a Death Benefit
equal to the Specified Amount or the Accumulation
Value multiplied by the Death Benefit percentage (as
illustrated at Point A) whichever is greater.

Under Option A, the Death Benefit is the current Specified Amount of the
Policy or, if greater, the applicable percentage of Accumulation Value on the
date of death. The applicable percentage is 250% for Insureds with an Attained
Age 40 or younger on the Policy Anniversary Date prior to the date of death. For
Insureds with an Attained Age over 40 on that Policy Anniversary Date, the
percentage declines. For example, the percentage at Attained Age 40 is 250%, at
Attained Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%,
at Attained Age 80 is 105%, and Attained Age 90 is 105%. The applicable
percentage will never be less than 101%. Accordingly, under Option A the Death
Benefit will remain level at the Specified Amount unless the applicable
percentage of Accumulation Value exceeds the current Specified Amount, in which
case the amount of the Death Benefit will vary as the Accumulation Value varies.
Policy Owners who prefer to have favorable investment performance, if any,
reflected in higher Accumulation Value, rather than increased insurance
coverage, generally should select Option A.

EXECUTIVE SELECT
19
<PAGE> 23

OPTION B.

[GRAPH]

Death Benefit Option B. Pays a Death Benefit
equal to the Specified Amount plus the Policy's
Accumulation Value or the Accumulation Value
multiplied by the Death Benefit percentage,
whichever is greater.

Under Option B, the Death Benefit is equal to the current Specified Amount
plus the Accumulation Value of the Policy or, if greater, the applicable
percentage of the Accumulation Value on the date of death. The applicable
percentage is the same as under Option A: 250% for Insureds with an Attained Age
40 or younger on the Policy Anniversary Date prior to the date of death. For
Insureds with an Attained Age over 40 on that Policy Anniversary Date the
percentage declines. Accordingly, under Option B the amount of the Death Benefit
will always vary as the Accumulation Value varies (but will never be less than
the Specified Amount). Policy Owners who prefer to have favorable investment
performance, if any, reflected in increased insurance coverage, rather than
higher Accumulation Values, generally should select Option B.

CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed
once per year after the first Policy Year by sending ANLIC a written request.
The effective date of such a change will be the Monthly Activity Date on or
following the date the change is approved by ANLIC. A change may have federal
tax consequences.

If the Death Benefit option is changed from Option A to Option B, the
Specified Amount after the change will equal the Specified Amount before the
change less the Accumulation Value as of the date of the change. If the Death
Benefit option is changed from Option B to Option A, the Specified Amount under
Option A after the change will equal the Death Benefit under Option B on the
effective date of change.

No charges will be imposed upon a change in Death Benefit option, nor will
such a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the Cost of Insurance because this charge varies depending on the net
amount at risk (i.e. the amount by which the Death Benefit as calculated on a
Monthly Activity Date exceeds the Accumulation Value on that date). Changing
from Option B to Option A generally will decrease the net amount at risk in the
future, and will therefore decrease the Cost of Insurance. Changing from Option
A to Option B generally will result in an increase in the Cost of Insurance over
time because the Cost of Insurance Rate will increase with the Insured's age,
even though the net amount at risk will generally remain level. (See the
sections on Charges and Deductions and Federal Tax Matters.)

CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, a Policy Owner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the Cost of Insurance Rate and
the net amount at risk, both of which may affect a Policy Owner's Cost of
Insurance and have federal tax consequences. (See the sections on Charges and
Deductions and Federal Tax Matters.)

Any increase or decrease in the Specified Amount will become effective on
the Monthly Activity Date on or following the date a written request is approved
by ANLIC. The Specified Amount of a Policy may be changed only once per year and
ANLIC may limit the size of a change in a Policy Year. The Specified Amount
remaining in force after any requested decrease may not be less than $100,000
($50,000 if the Term Coverage Rider is attached to the Policy). After the
Insured reaches Attained Age 100, the Policy Owner may decrease the Specified
Amount to no less than $1000. If a decrease in the Specified

EXECUTIVE SELECT
20
<PAGE> 24

Amount makes the Policy not comply with the maximum premium limits required by
federal tax law, the decrease may be limited or the Accumulation Value may be
returned to you, at your election, to the extent necessary to meet the
requirements. (See the section on Premiums.) The Administrative Expense Charge
will include a monthly charge per $1000 of increase in Specified Amount for ten
years from the date of the increase.

Increases in the Specified Amount will be allowed after the first Policy
Year. For an increase in the Specified Amount, you must submit a written
supplemental application. ANLIC may also require additional evidence of
insurability. Although an increase need not necessarily be accompanied by an
additional premium, in certain cases an additional premium will be required to
put the requested increase in effect. (See the section on Premiums upon
Increases in Specified Amount.) The minimum amount of any increase is $25,000.
Generally an increase cannot be made if the Insured's Attained Age is over the
maximum age for the Insured's risk class. The increase may be subject to
guaranteed issue guidelines, if applicable.

In states which require Cost of Insurance charges to cease at a stated
Attained Age, the Specified Amount will decrease to $1000 when that age is
reached.

METHODS OF AFFECTING INSURANCE PROTECTION
You may increase or decrease the pure insurance protection provided by a
Policy -- the difference between the Death Benefit and the Accumulation
Value -- in several ways as your insurance needs change. These ways include
increasing or decreasing the Specified Amount of insurance, changing the level
of premium payments, and making a partial withdrawal of the Policy's
Accumulation Value. Certain of these changes may have federal tax consequences.
The consequences of each of these methods will depend upon the individual
circumstances.

DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value.
The Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the Monthly Deduction. (See the section on Charges from
Accumulation Value.) However, when the Net Cash Surrender Value is insufficient
to pay the Monthly Deduction and the Grace Period expires without an adequate
payment by the Policy Owner, the Policy will lapse and terminate without value.
(See the section on Policy Lapse and Reinstatement.)

ACCUMULATION VALUE
The Accumulation Value will reflect the investment performance of the
chosen Investment Options, the Net Premiums paid, any partial withdrawals, and
the charges assessed in connection with the Policy. You may Surrender the Policy
at any time and receive the Policy's Net Cash Surrender Value. (See the section
on Surrenders.) There is no guaranteed minimum Accumulation Value.

Accumulation Value is determined on each Valuation Date. On the Issue Date,
the Accumulation Value will equal the portion of any Net Premium allocated to
the Investment Options, reduced by the portion of the first Monthly Deduction
allocated to the Investment Options. (See the section on Allocation of Premiums
and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation
Value of the Policy will equal:

(1) The aggregate values belonging to the Policy in each of the Subaccounts
on the Valuation Date, determined by multiplying each Subaccount's unit
value by the number of Subaccount units you have allocated to the
Policy; plus

(2) The value of allocations to the Fixed Account; plus

(3) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus

(4) Any Net Premiums received on that Valuation Date; minus

(5) Any partial withdrawal, and its charge, made on that Valuation Date;
minus

(6) Any Monthly Deduction to be made on that Valuation Date.

EXECUTIVE SELECT
21
<PAGE> 25

In computing the Policy's Accumulation Value on the Valuation Date, the
number of Subaccount units allocated to the Policy is determined after any
transfers among Investment Options (and deduction of transfer charges), but
before any other Policy transactions, such as receipt of Net Premiums and
partial withdrawals. Because the Accumulation Value depends on a number of
variables, a Policy's Accumulation Value cannot be predetermined.

THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount is calculated
by:

(1) Multiplying the net asset value per share of each Fund portfolio on the
Valuation Date times the number of shares held by that Subaccount,
before the purchase or redemption of any shares on that Valuation Date;
minus

(2) A charge not exceeding an annual rate of 0.95% (years 1-15) or 0.50%
(years 16+) for mortality and expense risk; minus

(3) A charge not exceeding an annual rate of 0.15% for administrative
service expenses; minus

(4) Any taxes payable by Separate Account I; and

(5) Dividing the result by the total number of units held in the Subaccount
on the Valuation Date, before the purchase or redemption of any units
on that Valuation Date.

(See the section on Daily Charges Against the Separate Account I.)

VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which
the New York Stock Exchange ("NYSE") is open for trading. The net asset value
for each Fund portfolio is determined as of the close of regular trading on the
NYSE. The net investment return for each Subaccount and all transactions and
calculations with respect to the Policies as of any Valuation Date are
determined as of that time. A Valuation Period is the period between two
successive Valuation Dates, commencing at the close of the NYSE on each
Valuation Date and ending at the close of the NYSE on the next succeeding
Valuation Date.

PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven
days after ANLIC receives Satisfactory Proof of Death. Payments may be postponed
in certain circumstances. (See the section on Postponement of Payments.) The
Policy Owner may decide the form in which Death Benefit Proceeds will be paid.
During the Insured's lifetime, the Policy Owner may arrange for the Death
Benefit Proceeds to be paid in a lump sum or under one or more of the optional
methods of payment described below. Changes must be in writing and will revoke
all prior elections. If no election is made, ANLIC will pay Death Benefit
Proceeds or the Accumulation Value Benefit in a lump sum. When Death Benefit
Proceeds are payable in a lump sum and no election for an optional method of
payment is in force at the death of the Insured, the Beneficiary may select one
or more of the optional methods of payment. Further, if the Policy is assigned,
any amounts due to the assignee will first be paid in one sum. The balance, if
any, may be applied under any payment option. Once payments have begun, the
payment option may not be changed. (Also see the section on Surrenders.)

PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS. The minimum amount of each
payment is $100. If a payment would be less than $100, ANLIC has the right to
make payments less often so that the amount of each payment is at least $100.
Once a payment option is in effect, Death Benefit Proceeds will be transferred
to ANLIC's General Account. ANLIC may make other payment options available in
the future. For additional information concerning these options, see the Policy
itself. The following payment options are currently available:

INTEREST PAYMENT OPTION. ANLIC will hold any amount applied under this
option. Interest on the unpaid balance will be paid or credited each month
at a rate determined by ANLIC.

FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed
amount. Payments continue until the amount ANLIC holds runs out.

FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period
selected up to 20 years.

EXECUTIVE SELECT
22
<PAGE> 26

If the beneficiary is a natural person, the following payment options are
also currently available:

LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life of a
named person. Payments will continue for the lifetime of that person.
Variations provide for guaranteed payments for a period of time.

JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
lives of two named persons. While both are living, one payment will be made
each month. When one dies, the same payment will continue for the lifetime
of the other.

As an alternative to the above payment options, Death Benefits Proceeds may
be paid in any other manner approved by ANLIC. Further, one of ANLIC's
affiliates may make payments under the above payment options. If an affiliate
makes the payment, it will do so according to the request of the Policy Owner,
using the rules set out above.

POLICY RIGHTS

LOAN BENEFITS

LOAN PRIVILEGES. The Policy Owner may borrow an amount up to the current
Net Cash Surrender Value less twelve times the most recent Monthly Deduction, at
regular or reduced loan rates (described below). Loans usually are funded within
seven days after receipt of a written request. The loan may be repaid at any
time while the Insured is living. Policy Owners in certain states may borrow
100% of the Net Cash Surrender Value after deducting Monthly Deductions and any
interest on Policy loans that will be due for the remainder of the Policy Year.
Loans may have tax consequences. (See the section on Federal Tax Matters).

LOAN INTEREST. ANLIC charges interest to Policy Owners at regular and
reduced rates. Regular loans will accrue interest on a daily basis at a rate of
up to 6% per year; currently the interest rate on regular Policy loans is 5.5%.
Each year after the tenth Policy Anniversary Date, the Policy Owner may borrow a
limited amount of the Net Cash Surrender Value at a reduced interest rate. For
those loans, interest will accrue on a daily basis at a rate of up to 4% per
year; the current reduced loan rate is 3.5%. The amount available at the reduced
loan rate is:

(1) The Accumulation Value, minus

(2) Total premiums paid minus any partial withdrawals previously taken,
minus

(3) Any Outstanding Policy Debt held at a reduced loan rate.

However, this amount may not exceed the maximum loan amount described above.
(See the section on Loan Privileges.) If unpaid when due, interest will be added
to the amount of the loan and bear interest at the same rate. The Policy Owner
earns 3.5% interest on the Accumulation Values held in the General Account
securing the loans.

EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to
the amount of the loan will be transferred from the Investment Options to the
General Account as security for the loan. The Accumulation Value transferred
will be allocated from the Investment Options according to the instructions you
give when you request the loan. The minimum amount which can remain in a
Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options. In any Policy Year that
loan interest is not paid when due, ANLIC will add the interest due to the
principal amount of the Policy loan on the next Policy Anniversary. This loan
interest due will be transferred from the Investment Options as set out above.
No charge will be made for these transfers. A Policy loan will permanently
affect the Accumulation Value and may permanently affect the amount of the Death
Benefits, even if the loan is repaid.

Interest earned on amounts held in the General Account will be allocated to
the Investment Options on each Policy Anniversary in the same proportion that
Net Premiums are being allocated to those Investment Options at the time. Upon
repayment of loan amounts, the portion of the repayment allocated

EXECUTIVE SELECT
23
<PAGE> 27

in accordance with the repayment of loan provision (see below) will be
transferred to increase the Accumulation Value in that Investment Option.

OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of
all Policy loans and accrued interest on Policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value less any Accrued Expense Charges, the Policy
Owner must pay the excess. ANLIC will send a notice of the amount which must be
paid. If you do not make the required payment within the 61 days after ANLIC
sends the notice, the Policy will terminate without value ("lapse".) Should the
Policy lapse while Policy loans are outstanding, the portion of the loans
attributable to earnings will become taxable. You may lower the risk of a Policy
lapsing while loans are outstanding as a result of a reduction in the market
value of investments in the Subaccounts by investing in a diversified group of
lower risk investment portfolios and/or transferring the funds to the Fixed
Account and receiving a guaranteed rate of return. Should you experience a
substantial reduction, you may need to lower anticipated withdrawals and loans,
repay loans, make additional premium payments, or take other action to avoid
Policy lapse. A lapsed Policy may later be reinstated. (See the section on
Policy Lapse and Reinstatement.)

REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is
outstanding are treated as repayment of the debt only if the Policy Owner so
requests. As a loan is repaid, the Accumulation Value in the General Account
securing the repaid loan will be allocated among the Subaccounts and the Fixed
Account in the same proportion that Net Premiums are being allocated at the time
of repayment.

SURRENDERS
At any time during the lifetime of the Insured, the Policy Owner may
withdraw a portion of the Accumulation Value or Surrender the Policy by sending
a written request to ANLIC. The amount available for Surrender is the Net Cash
Surrender Value at the end of the Valuation Period when the Surrender request is
received at ANLIC's Administrative Office. Surrenders will generally be paid
within seven days of receipt of the written request. (See the section on
Postponement of Payments.) Surrenders may have tax consequences. Once a Policy
is Surrendered, it may not be reinstated. (See the section on Tax Treatment of
Policy Proceeds.)

If the Policy is being Surrendered in its entirety, the Policy itself must
be returned to ANLIC along with the request. ANLIC will pay the Net Cash
Surrender Value. Coverage under the Policy will terminate as of the date of a
total Surrender. A Policy Owner may elect to have the amount paid in a lump sum
or under a payment option. (See the section on Payment Options.)

If you surrender the Policy in the first two Policy Years, we will refund a
portion of the Percent of Premium Charge deducted in the first Policy Year. The
applicable portion is 100% in the first Policy Year and 50% in the second Policy
Year.

PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may
not be less than $500. After a partial withdrawal, the Net Cash Surrender Value,
not including any percent of premium refund, must be at least $1,000 or an
amount sufficient to maintain the Policy in force for the remainder of the
Policy Year.

The amount paid will be deducted from the Investment Options according to
your instructions when you request the withdrawal. However, the minimum amount
remaining in a Subaccount as a result of the allocation is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options.

The Death Benefit will be reduced by the amount of any partial withdrawal
and may affect the way the Cost of Insurance is calculated and the amount of
pure insurance protection under the Policy. (See the sections on Monthly
Deduction -- Cost of Insurance and Death Benefit Options -- Methods of Affecting
Insurance Protection.) If Death Benefit option B is in effect, the Specified
Amount will not change, but the Accumulation Value will be reduced.

EXECUTIVE SELECT
24
<PAGE> 28

A fee which does not exceed the lesser of $50 or 2% of the amount withdrawn
is deducted from the Accumulation Value. Currently, the charge is the lesser of
$25 or 2% of the amount withdrawn. (See the section on Partial Withdrawal
Charge.)

TRANSFERS

Accumulation Value may be transferred among the Subaccounts of Separate
Account I and to the Fixed Account as often as desired. However, you may make
only one transfer out of the Fixed Account per Policy Year. We may limit the
transfer period to the 30 day period following the Policy Anniversary Date. The
transfers may be ordered in person, by mail, by telephone or, when available,
through our website. The total amount transferred each time must be at least
$250, or the balance of the Subaccount, if less. The minimum amount that may
remain in a Subaccount or the Fixed Account after a transfer is $100. The first
15 transfers per Policy Year will be permitted free of charge. After that, a
transfer charge of $10 may be imposed each additional time amounts are
transferred. Currently, no charge is imposed for additional transfers. This
charge will be deducted pro rata from each Subaccount (and, if applicable, the
Fixed Account) in which the Policy Owner is invested. (See the section on
Transfer Charge.)

Additional restrictions on transfers may be imposed at the Fund level.
Specifically, Fund managers may have the right to refuse sales, or suspend or
terminate the offering of portfolio shares, if they determine that such action
is necessary in the best interests of the portfolio's shareholders. If a Fund
manager refuses a transfer for any reason, the transfer will not be allowed.
ANLIC will not be able to process the transfer if the Fund manager refuses.

Transfers resulting from Policy loans will not be subject to a transfer
charge and will not be counted towards the guaranteed 15 free transfers per
Policy Year. ANLIC may at any time revoke or modify the transfer privilege,
including the minimum amount transferable.

Transfers out of the Fixed Account, unless part of the dollar cost
averaging systematic program described below, are limited to one per Policy
Year. Transfers out of the Fixed Account are limited to the greater of (1) 25%
of the Fixed Account attributable to the Policy; (2) the largest transfer made
by the Policy Owner out of the Fixed Account during the last 13 months; or (3)
$1,000. This provision is not available while dollar cost averaging from the
Fixed Account.

The privilege to initiate transactions by telephone or through our website,
when available, will be made available to Policy Owners automatically. The
registered representative designated on the application will have the authority
to initiate telephone transfers. ANLIC will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and if it does
not, ANLIC may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures ANLIC follows for transactions initiated by
telephone include, but are not limited to, requiring the Policy Owner to provide
the Policy number at the time of giving transfer instructions; ANLIC's tape
recording of all telephone transfer instructions; and ANLIC providing written
confirmation of telephone transactions.

When available procedures for making transfers through our website can be
accessed at the Internet address stated in the Acacia National Life Insurance
Company section of this prospectus.

SYSTEMATIC PROGRAMS
ANLIC may offer systematic programs as discussed below. These programs will
be subject to administrative guidelines ANLIC may establish from time to time.
We will count your transfers in these programs when determining whether any
transfer fee applies. Lower minimum amounts may be allowed to transfer as part
of a systematic program. No other separate fee is assessed when one of these
options is chosen. All other normal transfer restrictions, as described above,
also apply.

You can request participation in the available programs when purchasing the
Policy or at a later date. You can change the allocation percentage or
discontinue any program by sending written notice or calling the Administrative
Office. Other scheduled programs may be made available. ANLIC reserves the right
to modify, suspend or terminate such programs at any time. Participation in any
systematic program will automatically terminate upon death of the Insured. Use
of systematic programs may not be advantageous, and does not guarantee success.

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PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can
instruct ANLIC to reallocate the Accumulation Value among the Subaccounts (but
not the Fixed Account) on a systematic basis according to your specified
allocation instructions.

DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can
instruct ANLIC to automatically transfer, on a systematic basis, a predetermined
amount or specified percentage from the Fixed Account or the Money Market
Subaccount to any other Subaccount(s). Dollar cost averaging is permitted from
the Fixed Account if each monthly transfer is no more than 1/36th of the value
of the Fixed Account at the time dollar cost averaging is established.

EARNINGS SWEEP. This program permits systematic redistribution of earnings
among Investment Options.

For more information on asset allocation programs, see Appendix B.

FREE-LOOK PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10
days after ANLIC delivers a notice of your right of cancellation, or within 45
days of completing Part I of the application, whichever is later. When allowed
by state law, the amount of the refund is the Net Premiums allocated to the
Investment Options, adjusted by investment gains and losses, plus the sum of all
charges deducted from premiums paid. Otherwise, the amount of the refund will
equal the gross premiums paid. To cancel the Policy, you should mail or deliver
it to the selling agent, or to ANLIC at its Administrative Office. A refund of
premiums paid by check may be delayed until the check has cleared your bank.
(See the section on Postponement of Payments.)

PAYMENT AND ALLOCATION OF PREMIUMS

ISSUANCE OF A POLICY

Individuals wishing to purchase a Policy must complete an application and
submit it to ANLIC's Administrative Office (5900 "O" Street, P.O. Box 82550,
Lincoln, Nebraska 68501). With guaranteed or simplified underwriting, a Policy
will be issued to individuals ages 18 to 65 on their nearest birthday. With
regular underwriting, a Policy will generally be issued only to individuals age
18 to 85 on their nearest birthday who supply satisfactory evidence of
insurability to ANLIC. Preferred class regular issue Policies are available only
for ages 18 to 75. Acceptance of a regular underwriting application is subject
to ANLIC's underwriting rules, and ANLIC reserves the right to reject an
application for any reason.

The Policy Date is the effective date for all coverage in the original
application. The Policy Date is used to determine Policy Anniversary Dates,
Policy Years and Policy Months. The Issue Date is the date that all financial,
contractual and administrative requirements have been met and processed for the
Policy. The Policy Date and the Issue Date will be the same unless: (1) an
earlier Policy Date is specifically requested, or (2) additional premiums or
application amendments are needed. When there are additional requirements before
issue (see below) the Policy Date will be the date the Policy is sent for
delivery and the Issue Date will be the date the requirements are met.

When all required premiums and application amendments have been received by
ANLIC in its Administrative Office, the Issue Date will be the date the Policy
is mailed to you or sent to the agent for delivery to you. When application
amendments or additional premiums need to be obtained upon delivery of the
Policy, the Issue Date will be when the Policy receipt and federal funds (monies
of member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received and available to ANLIC, and the application
amendments are received and reviewed in ANLIC's Administrative Office. The
initial Net Premium will be allocated on the Issue Date to the Subaccounts
and/or the Fixed Account according to the selections made in the application.
When state or other applicable law or regulation requires return of at least the
premium payments if you return the Policy under the free-look privilege, the
initial Net Premium will be allocated to the Money Market Subaccount. Then,
thirteen days after the Issue Date, the Accumulation Value of the Policy will be
allocated among the Subaccounts and/or Fixed Account according to the
instructions in the application.

Subject to approval, a Policy may be backdated, but the Policy Date may not
be more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue

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Age results in lower Cost of Insurance Rates. If a Policy is backdated, the
minimum initial premium required will include sufficient premium to cover the
backdating period. Monthly deductions will be made for the period the Policy
Date is backdated.

Conditional receipt coverage may be available prior to the Policy Date,
provided that certain conditions are met, upon the completion of an application
and the payment of the required premium at the time of the application. The
maximum total amount of insurance which will be payable pursuant to all
conditional receipts received by the applicant as a result of pending
applications with ANLIC and its affiliates is limited to the smaller of:

(1) The total amount of insurance applied for with ANLIC and its
affiliates; or

(2) $250,000 minus the total amount of insurance in force with ANLIC and
its affiliates, but not less than zero.

As used above, total amount of insurance includes any amounts payable under
any Accidental Death Benefit provision.

PREMIUMS
No insurance will take effect before the minimum initial premium payment is
received by ANLIC in federal funds. Subsequent premiums are payable at ANLIC's
Administrative Office. A Policy Owner has flexibility in determining the
frequency and amount of premiums. However, unless you have paid sufficient
premiums to pay the Monthly Deduction and Percent of Premium Charge, the Policy
may have a zero Net Cash Surrender Value and lapse. (See the section on Policy
Benefits, Purposes of the Policy.)

PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may
determine a Planned Periodic Premium schedule that provides for the payment of
level premiums at selected intervals. You are not required to pay premiums
according to this schedule. You have considerable flexibility to alter the
amount and frequency of premiums paid. ANLIC reserves the right to limit the
number and amount of additional or unscheduled premium payments.

You may also change the frequency and amount of Planned Periodic Premiums
by sending a written request to the Administrative Office, although ANLIC
reserves the right to limit any increase. Premium payment notices will be sent
annually, semi-annually or quarterly, depending upon the frequency of the
Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not
guarantee that the Policy remains in force. Instead, the duration of the Policy
depends upon the Policy's Net Cash Surrender Value. (See the section on Duration
of the Policy.) Even if Planned Periodic Premiums are paid, the Policy will
lapse any time the Net Cash Surrender Value is insufficient to pay the Monthly
Deduction, and the Grace Period expires without a sufficient payment. (See the
section on Policy Lapse and Reinstatement.)

PREMIUM LIMITS. ANLIC's current minimum premium limit is $45, $15 if paid
by automatic bank draft. ANLIC currently has no maximum premium limit, other
than the current maximum premium limits established by federal tax laws. ANLIC
reserves the right to change any premium limit. In no event may the total of all
premiums paid, both planned and unscheduled, exceed the current maximum premium
limits established by federal tax laws. (See the section on Tax Status of the
Policy.)

If at any time a premium is paid which would result in total premiums
exceeding the current maximum premium limits, ANLIC will accept only that
portion of the premium which will make total premiums equal the maximum. Any
part of the premium in excess of that amount will be returned or applied as
otherwise agreed and no further premiums will be accepted until allowed by the
current maximum premium limits allowed by law. ANLIC may require additional
evidence of insurability if any premium payment would result in an increase in
the Policy's net amount at risk on the date the premium is received.

PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the
Accumulation Value of the Policy at the time of an increase in the Specified
Amount of the Policy and the amount of the increase requested by the Policy
Owner, an additional premium payment may be required. ANLIC will notify you of
any premium required to fund the increase, which premium must be made in a
single payment. The

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Accumulation Value of the Policy will be immediately increased by the amount of
the payment, less the applicable Percent of Premium Charge.

ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policy
Owner allocates Net Premiums to one or more Subaccounts and/or to the Fixed
Account. Allocations must be whole number percentages and must total 100%. The
allocation of future Net Premiums may be changed without charge by providing
proper notification to the Administrative Office. If there is any Outstanding
Policy Debt at the time of a payment, ANLIC will treat the payment as a premium
payment unless you instruct otherwise by proper written notice.

The initial Net Premium will be allocated on the Issue Date to the
Subaccounts and/or the Fixed Account according to the selections made in the
application. When state or other applicable law or regulation requires return of
at least the premium payments if you return the Policy under the free-look
privilege, the initial Net Premium will be allocated to the Money Market
Subaccount. Then, thirteen days after the Issue Date, the Accumulation Value of
the Policy will be allocated among the Subaccounts and/or Fixed Account
according to the instructions in the application. Premium payments received by
ANLIC prior to the Issue Date are held in the General Account until the Issue
Date and are credited with interest at a rate determined by ANLIC for the period
from the date the payment has been converted into federal funds and is available
to ANLIC. In no event will interest be credited prior to the Policy Date.

The Accumulation Value of the Subaccounts will vary with the investment
performance of these Subaccounts and you, as the Policy Owner, will bear the
entire investment risk. This will affect the Policy's Accumulation Value, and
may affect the Death Benefit as well. You should periodically review your
allocations of premiums and values in light of market conditions and overall
financial planning requirements.

POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period expires without a sufficient payment. The
Grace Period is 61 days from the date ANLIC mails a notice that the Grace Period
has begun. ANLIC will notify you at the beginning of the Grace Period by mail
addressed to your last known address on file with ANLIC.

The notice will specify the premium required to keep the Policy in force.
The required premium will equal the amount necessary to cover the Monthly
Deductions and Percent of Premium Charges for the three Policy Months after
commencement of the Grace Period. Failure to pay the required premium within the
Grace Period will result in lapse of the Policy. If the Insured dies during the
Grace Period, any overdue Monthly Deductions and Outstanding Policy Debt will be
deducted from the Death Benefit Proceeds. (See the section on Charges and
Deductions.)

REINSTATEMENT. A lapsed Policy may be reinstated any time within three
years (five years in Missouri) after the beginning of the Grace Period. We will
reinstate the Policy based on the Insured's risk class at the time of the
reinstatement.

Reinstatement is subject to the following:

(1) Evidence of insurability of the Insured satisfactory to ANLIC
(including evidence of insurability of any person covered by a rider to
reinstate the rider);

(2) Any Outstanding Policy Debt on the date of lapse will be reinstated
with interest due and accrued;

(3) The Policy cannot be reinstated if it has been Surrendered for its full
Net Cash Surrender Value;

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(4) The minimum premium required at reinstatement is the greater of:

(a) the amount necessary to raise the Net Cash Surrender Value as of the
date of reinstatement to equal to or greater than zero; or

(b) three times the current Monthly Deduction.

The amount of Accumulation Value on the date of reinstatement will equal:

(1) The amount of the Net Cash Surrender Value on the date of lapse,
increased by

(2) The premium paid at reinstatement, less

(3) The Percent of Premium Charge.

If any Outstanding Policy Debt is reinstated, that debt will be held in
ANLIC's General Account. Accumulation Value calculations will then proceed as
described under the section on Accumulation Value.

The effective date of reinstatement will be the first Monthly Activity Date
on or next following the date of approval by ANLIC of the application for
reinstatement.

CHARGES AND DEDUCTIONS

Charges will be deducted in connection with the Policy to compensate ANLIC
for: (1) providing the insurance benefits set forth in the Policy and any
optional insurance benefits added by rider; (2) administering the Policy and
payment of applicable taxes; (3) assuming certain risks in connection with the
Policy; and (4) incurring expenses in distributing the Policy. The nature and
amount of these charges are described more fully below. The charges are
determined by us according to our expectations of future experience for
mortality, lapse, interest and expenses. If our expectations of future
experience for mortality, lapse, interest and expenses change, we may increase
or decrease charges where permitted by the Policy, but we will never charge more
than the maximum amount specified in the Policy. Any change in the charges will
apply to all Insureds of the same age, gender, and risk class and whose Policies
have been in effect for the same length of time.

DEDUCTIONS FROM PREMIUM PAYMENTS
PERCENT OF PREMIUM CHARGE. A deduction of up to 5.0% of the premium is made
from each premium payment; currently the charge is 3.0%. The deduction is
intended to partially offset the premium taxes imposed by the states and their
subdivisions, and to help defray the tax cost due to capitalizing certain Policy
acquisition expenses as required under applicable federal tax laws. (See the
section on Federal Tax Matters.) ANLIC does not expect to derive a profit from
the Percent of Premium Charge. If you Surrender the Policy in the first two
Policy Years, we will refund a portion of the Percent of Premium Charge deducted
in the first Policy Year. The applicable portion is 100% in the first Policy
Year and 50% in the second Policy Year.

CHARGES FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on
each Monthly Activity Date thereafter from the Accumulation Value of the Policy
to compensate ANLIC for administrative expenses and insurance provided. These
charges will be allocated from the Investment Options in accordance with your
instructions. If no instructions are given the charges will be allocated
pro-rata among the Investment Options. Each of these charges is described in
more detail below.

ADMINISTRATIVE EXPENSE CHARGE. To compensate ANLIC for the ordinary
administrative expenses expected to be incurred in connection with a Policy, we
deduct an Administrative Expense Charge based on the Specified Amount and the
Policy duration. Currently, the per Policy charge is $15 per month in the first
Policy Year and $7 per month thereafter. The per Policy portion of the
Administrative Expense Charge is levied throughout the life of the Policy and is
guaranteed not to increase above $15 per month in the first Policy Year and $12
per month thereafter. During the first ten Policy Years (or for the life of the
Policy where required by state law), there is a monthly charge per $1000 of
initial Specified Amount. In addition, there is a monthly charge per $1000 of
each increase in Specified Amount for ten years from the date of increase (or
life of the Policy, where required). The per $1000 rates for both the initial

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Specified Amount and each increase vary by Issue Age, gender, and risk class.
The current charge per $1000 is the same as the maximum charge. (See the Policy
Schedule for rates.)

COST OF INSURANCE. Because the Cost of Insurance depends upon several
variables, the cost for each Policy Month can vary from month to month. ANLIC
will determine the monthly Cost of Insurance by multiplying the applicable Cost
of Insurance Rate by the Net Amount at Risk for each Policy Month. The net
amount at risk on any Monthly Activity Date is based on the amount by which the
Death Benefit which would have been payable on that Monthly Activity Date
exceeds the Accumulation Value on that date.

COST OF INSURANCE RATE. The Annual Cost of Insurance Rates are based on the
Insured's gender, Issue Age, Policy duration and risk class. The rates will vary
depending upon tobacco use and other risk factors. For the initial Specified
Amount, the Cost of Insurance Rates will not exceed those shown in the Schedule
of Guaranteed Annual Cost of Insurance Rates shown in the schedule pages of the
Policy. These guaranteed rates are based on the Insured's Attained Age and are
equal to the 1980 Insurance Commissioners Standard Ordinary Male and Female
Mortality Tables without smoker distinction. The maximum rates for the
table-rated substandard Insureds are based on a multiple (shown in the schedule
pages of the Policy) of the above rates. We may add flat extra ratings to an
Insured to reflect higher mortality risk. Any change in the Cost of Insurance
Rates will apply to all Insureds of the same age, gender, risk class and whose
Policies have been in effect for the same length of time.

The Cost of Insurance Rates, Policy charges, and payment options for
Policies issued in Montana, and perhaps other states or in connection with
certain employee benefit arrangements, are issued on a gender-neutral (unisex)
basis. The unisex rates will be higher than those applicable to females and
lower than those applicable to males.

If the rating class for any increase in the Specified Amount is not the
same as the rating class at issue, the Cost of Insurance Rate used after such
increase will be a composite rate based upon a weighted average of the rates of
the different rating classes. Decreases may be reflected in the Cost of
Insurance Rate, as discussed earlier.

The actual charges made during the Policy year will be shown in the annual
report delivered to Policy Owners.

RATING CLASS. The rating class of the Insured will affect the Cost of
Insurance Rate. ANLIC currently places Insureds into both standard rating
classes and substandard rating classes that involve a higher mortality risk. In
an otherwise identical Policy, Insureds in the standard rating class will have a
lower Cost of Insurance Rate than Insureds in a rating class with higher
mortality risks.

TRANSFER CHARGE. Currently there is no charge for transfers among the
Investment Options in excess of 15 per Policy Year. A charge of $10 (guaranteed
not to increase) for each transfer in excess of 15 may be imposed to compensate
ANLIC for the costs of processing the transfer. Since the charge reimburses
ANLIC only for the cost of processing the transfer, ANLIC does not expect to
make any profit from the transfer charge. This charge will be deducted pro rata
from each Subaccount (and, if applicable, the Fixed Account) in which the Policy
Owner is invested. The transfer charge will not be imposed on transfers that
occur as a result of Policy loans or the exercise of exchange rights.

PARTIAL WITHDRAWAL CHARGE. A charge will be imposed for each partial
withdrawal. This charge will compensate ANLIC for the administrative costs of
processing the requested payment and in making necessary calculations for any
reductions in Specified Amount which may be required because of the partial
withdrawal. This charge is currently the lesser of $25 or 2% of the amount
withdrawn (guaranteed not to be greater than the lesser of $50 or 2% of the
amount withdrawn). A partial withdrawal charge is not assessed when a Policy is
Surrendered.

DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value
of the net assets of Separate Account I to compensate ANLIC for mortality and
expense risks assumed in connection with the Policy. This daily charge from
Separate Account I is currently at the rate of 0.002050% (equivalent to an
annual rate of 0.75%) for Policy Years 1-15 and will not exceed 0.95% annually.
After the fifteenth Policy

EXECUTIVE SELECT
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Year the daily charge will be applied at the rate of 0.000820% (equivalent to an
annual rate of 0.30%) and will not exceed 0.50% annually. The daily charge will
be deducted from the net asset value of Separate Account I, and therefore the
Subaccounts, on each Valuation Date. Where the previous day or days was not a
Valuation Date, the deduction on the Valuation Date will be the applicable daily
rate multiplied by the number of days since the last Valuation Date. No
Mortality and Expense Risk Charges will be deducted from the amounts in the
Fixed Account.

ANLIC believes that this level of charge is within the range of industry
practice for comparable flexible premium variable universal life policies. The
mortality risk assumed by ANLIC is that Insureds may live for a shorter time
than calculated, and that the aggregate amount of Death Benefits paid will be
greater than initially estimated. The expense risk assumed is that expenses
incurred in issuing and administering the Policies will exceed the
administrative charges provided in the Policies.

An Asset-Based Administrative Expense Charge will also be deducted from the
value of the net assets of Separate Account I on a daily basis. This charge is
applied at a rate of 0.000409% (equivalent to 0.15% annually). The rate of this
charge will never exceed 0.15% annually. No Asset-Based Administrative Expense
Charge will be deducted from the amounts in the Fixed Account.

Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various Subaccounts
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account. (See the Summary section for the Fund Expense Summary.)

GENERAL PROVISIONS

THE CONTRACT. The Policy, the application, any supplemental applications,
and any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by ANLIC. No agent has
the authority to alter or modify any of the terms, conditions or agreements of
the Policy or to waive any of its provisions. The rights and benefits under the
Policy are summarized in this prospectus; however prospectus disclosure
regarding the Policy is qualified in its entirety by the Policy itself, a copy
of which is available upon request from ANLIC.

CONTROL OF POLICY. The Policy Owner is as shown in the application or
subsequent written endorsement. Subject to the rights of any irrevocable
Beneficiary and any assignee of record, all rights, options, and privileges
belong to the Policy Owner. If the Policy Owner is a natural person, upon the
death of the Policy Owner, all rights, options, and privileges pass to any
successor-owner or owners, if living; otherwise to the estate of the last Policy
Owner to die.

BENEFICIARY. Policy Owners may name both primary and contingent
Beneficiaries in the application. Payments will be shared equally among
Beneficiaries of the same class unless otherwise stated. If a Beneficiary dies
before the Insured, payments will be made to any surviving Beneficiaries of the
same class; otherwise to any Beneficiaries of the next class; otherwise to the
Policy Owner; otherwise to the estate of the Policy Owner, if a natural person.

CHANGE OF BENEFICIARY. The Policy Owner may change the Beneficiary by
written request at any time during the Insured's lifetime unless otherwise
provided in the previous designation of Beneficiary. The change will take effect
as of the date the change is recorded at the Administrative Office. ANLIC will
not be liable for any payment made or action taken before the change is
recorded.

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CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy Owner
of the Policy or assign Policy rights, an assignment of the Policy must be made
in writing and filed with ANLIC at its Administrative Office. Any such
assignment is subject to Outstanding Policy Debt. The change will take effect as
of the date the change is recorded at the Administrative Office, and ANLIC will
not be liable for any payment made or action taken before the change is
recorded. Payment of Death Benefit Proceeds is subject to the rights of any
assignee of record. A collateral assignment is not a change of ownership.

PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any
debt to ANLIC and then to the interest of any assignee of record. The balance of
any Death Benefit Proceeds shall be paid in one sum to the designated
Beneficiary unless an Optional Method of Payment is selected. If no Beneficiary
survives the Insured, the Death Benefit Proceeds shall be paid in one sum to the
Policy Owner. If the Policy Owner is a natural person and is no longer living,
the Death Benefit Proceeds shall be paid to any successor-owner, if living;
otherwise to the Policy Owner's estate. Any proceeds payable upon Surrender
shall be paid in one sum unless an Optional Method of Payment is elected.

INCONTESTABILITY. ANLIC cannot contest the Policy or reinstated Policy
during the Insured's lifetime after it has been in force for two years from the
Policy Date (or reinstatement effective date). After the Policy Date, ANLIC
cannot contest an increase in the Specified Amount or addition of a rider during
the Insured's lifetime, after such increase or addition has been in force for
two years from its effective date. However, this two year provision shall not
apply to riders with their own contestability provision.

MISSTATEMENT OF AGE AND GENDER. If the age or gender of the Insured or any
person insured by rider has been misstated, the amount of the Death Benefit and
any added riders provided will be those that would be purchased by the most
recent deduction for the Cost of Insurance and the cost of any additional riders
at the Insured's correct age or gender. The Death Benefit Proceeds will be
adjusted correspondingly.

SUICIDE. The Policy does not cover suicide within two years of the Policy
Date unless otherwise provided by a state's Insurance law. If the Insured, while
sane or insane, commits suicide within two years after the Policy Date, ANLIC
will pay only the premiums received less any partial withdrawals, the cost for
riders and any outstanding Policy debt. If the Insured, while sane or insane,
commits suicide within two years after the effective date of any increase in the
Specified Amount, ANLIC's liability with respect to such increase will only be
its total Cost of Insurance applicable to the increase. The laws of Missouri
provide that death by suicide at any time is covered by the Policy, and further
that suicide by an insane person may be considered an accidental death.

POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, Policy loans, benefits payable at death, and transfers may be
postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed other
than customary weekend and holiday closings, or trading on the NYSE is
restricted as determined by the SEC; (2) the SEC by order permits postponement
for the protection of Policy Owners; (3) an emergency exists, as determined by
the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
Separate Account I's net assets; or (4) Surrenders, loans or partial withdrawals
from the Fixed Account may be deferred for up to 6 months from the date of
written request. Payments under the Policy of any amounts derived from premiums
paid by check may be delayed until such time as the check has cleared the Policy
Owner's bank.

REPORTS AND RECORDS. ANLIC will maintain all records relating to the
Separate Account I and will mail to the Policy Owner, at the last known address
of record, within 30 days after each Policy Anniversary, an annual report which
shows the current Accumulation Value, Net Cash Surrender Value, Death Benefit,
premiums paid, Outstanding Policy Debt and other information. Quarterly
statements are also mailed detailing Policy activity during the calendar
quarter. Instead of receiving an immediate confirmation of transactions made
pursuant to some types of periodic payment plan (such as a dollar cost averaging
program, or payment made by automatic bank draft or salary reduction
arrangement), the Policy Owner may receive confirmation of such transactions in
their quarterly statements. The Policy Owner should review the information in
these statements carefully. All errors or corrections must be reported to ANLIC
immediately to assure proper crediting to the Policy. ANLIC will assume all
transactions are accurately reported on quarterly statements unless ANLIC is
notified otherwise within 30 days after

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receipt of the statement. The Policy Owner will also be sent a periodic report
for the Funds and a list of the portfolio securities held in each portfolio of
the Funds.

ADDITIONAL INSURANCE BENEFITS (RIDERS.) Subject to certain requirements,
one or more of the following additional insurance benefits may be added to a
Policy by rider. All riders are not available in all states. The cost, if any,
of additional insurance benefits will be deducted as part of the Monthly
Deduction. (See the section on Charges From Accumulation Value -- Monthly
Deduction.)

TERM COVERAGE RIDER. You may increase the total coverage by adding a
term insurance rider, at issue, on the Insured person's life. The death
benefit provided by the rider adjusts over time.

If you purchase this rider, the total specified amount is the total of
the specified amount for the base Policy plus the specified amount for this
rider. We generally restrict the total specified amount at issue to an
amount not more than ten times the base Policy specified amount. For
example, if the base Policy specified amount is $100,000, then the maximum
total specified amount we allow is $1,000,000.

The death benefit for the term insurance rider is the difference
between the total death benefit and the base Policy death benefit. (See the
section on Death Benefit Options.) The total death benefit depends upon
which Death Benefit option is in effect. If Option A is in effect, the
total death benefit is the greater of (1) the total specified amount, or
(2) the Accumulation Value multiplied by the appropriate Death Benefit
percentage. If Option B is in effect, the total death benefit is the
greater of (1) the total specified amount plus the Accumulation Value, or
(2) the Accumulation Value multiplied by the appropriate Death Benefit
percentage.

Over time, it is possible that the base Policy Death Benefit could
grow and cause a corresponding reduction in the term rider death benefit.
If the base Policy Death Benefit becomes equal to the total death benefit,
the term rider death benefit drops to zero, but it will never be less than
zero. Even if the death benefit for the rider is reduced to zero, the rider
remains in effect until you remove it from the Policy. Therefore, if later
the base Policy death benefit is reduced below the total death benefit, the
rider death benefit reappears to maintain the total death benefit.

There is no defined premium for a given amount of term insurance
coverage. Instead, we deduct a monthly cost of insurance charge from the
Accumulation Value. The cost of insurance for this rider is calculated as
the monthly cost of insurance rate for the rider coverage multiplied by the
term death benefit in effect that month. The cost of insurance rates will
be determined by us from time to time. They will be based on the Insured's
gender, Issue Age, Policy duration ,and risk class. The monthly maximum
cost of insurance rates for this rider will be in the Policy.

Subject to certain limitations, after the first Policy Year you may
decrease the specified amount for this rider. The specified amount
remaining in force for this rider after any requested decrease may not be
less than $50,000. You may terminate all coverage under this rider at any
time after the first Policy Year. You may not increase the specified amount
of this rider nor add this rider to your Policy after issue. Coverage under
this rider is not convertible.

You may select only one of the following riders:

WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides
for the waiver of Monthly Deductions for the Policy and all riders while
the Insured is disabled.

TOTAL DISABILITY RIDER. This rider provides for the payment by ANLIC
of a disability benefit in the form of premiums while the Insured is
disabled. The benefit amount may be chosen by the Policy Owner at the issue
of the rider. In addition, while the Insured is totally disabled, the Cost
of Insurance for the rider will not be deducted from Accumulation Value.

DISTRIBUTION OF THE POLICIES

The principal underwriter for the Policies is The Advisors Group, Inc.
("TAG"), a second tier wholly owned subsidiary of Acacia Life Insurance Company
and an affiliate of ANLIC. TAG is registered as a

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broker-dealer with the SEC and is a member of the National Association of
Securities Dealers ("NASD"). ANLIC pays TAG for acting as the principal
underwriter under an Underwriting Agreement.

TAG offers its clients a wide variety of financial products and services
and has the ability to execute stock and bond transactions on a number of
national exchanges. TAG also serves as principal underwriter for ANLIC's
variable annuities and variable life contracts. It also has executed selling
agreements with a variety of mutual funds, issuers of unit investment trusts,
and direct participation programs.

The Policies are sold through Registered Representatives of TAG or other
broker-dealers which have entered into selling agreements with ANLIC or TAG.
These Registered Representatives are also licensed by state insurance officials
to sell ANLIC's variable life policies. Each of the broker-dealers with a
selling agreement is registered with the SEC and is a member of the NASD. In
1999, TAG received gross variable universal life compensation of $3,480,522 and
retained $7,200 in underwriting fees, and $0 in brokerage commissions on ANLIC's
variable universal life policies.

Under these selling agreements, ANLIC pays commission to the
broker-dealers, which in turn pay commissions to the registered representative
who sells this Policy. The commission may equal an amount up to 30% of premium
in the first Policy Year and up to 12% of premium in renewal years.
Broker-dealers may also receive a service fee up to an annualized rate of .50%
of the Accumulation Value beginning in the sixth Policy Year. Compensation
arrangements may vary among broker-dealers. In addition, ANLIC may also pay
override payments, expense allowances, bonuses, wholesaler fees, and training
allowances. Registered Representatives who meet certain production standards may
receive additional compensation. ANLIC may reduce or waive the sales charge
and/or other charges on any Policy sold to directors, officers or employees of
ANLIC or any of its affiliates, employees and registered representatives of any
broker dealer that has entered into a sales agreement with ANLIC or TAG and the
spouses or children of the above persons. In no event will any such reduction or
waiver be permitted where it would be unfairly discriminatory to any person.

ADMINISTRATION

ANLIC has contracted with Ameritas Life Insurance Corp. ("Ameritas"),
having its principal place of business at 5900 "O" Street, Lincoln, Nebraska
68501 for it to provide ANLIC with certain administrative services for the
flexible premium variable life policies. Ameritas is an affiliate of ANLIC and a
member of the Ameritas Acacia family of companies. Pursuant to the terms of a
Service Agreement, Ameritas will act as record keeping Service Agent for the
policies and riders for an initial term of three years and any subsequent
renewals thereof. Ameritas under the direction of ANLIC will perform
Administrative functions including issuance of policies for reinstatement, term
conversion, plan changes and guaranteed insurability options, generation of
billing and posting of premium, computation of valuations, calculation of
benefits payable, maintenance of administrative controls over all activities,
correspondence, and data, and providing management reports to ANLIC.

FEDERAL TAX MATTERS

The following discussion provides a general description of the federal
income tax considerations associated with the Policy and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
laws except premium taxes (See discussion in the section on Percent of Premium
Charge). This discussion is based upon ANLIC's understanding of the relevant
laws at the time of filing. Counsel and other competent tax advisors should be
consulted for more complete information before a Policy is purchased. ANLIC
makes no representation as to the likelihood of the continuation of present
federal income tax laws nor of the interpretations by the Internal Revenue
Service. Federal tax laws are subject to change and thus tax consequences to the
Insured, Policy Owner or Beneficiary may be altered.

(1) TAXATION OF ANLIC. ANLIC is taxed as a life insurance company under
Part I of Subchapter L of the Internal Revenue Code of 1986, (the
"Code"). At this time, since Separate Account I is not a separate
entity from ANLIC, and its operations form a part of ANLIC, it will not
be taxed separately as a "regulated investment company" under
Subchapter M of the Code. Net investment income and realized net
capital gains on the assets of Separate Account I are

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reinvested and automatically retained as a part of the reserves of the
Policy and are taken into account in determining the Death Benefit and
Accumulation Value of the Policy. ANLIC believes that Separate Account
I net investment income and realized net capital gains will not be
taxable to the extent that such income and gains are retained as
reserves under the Policy.

ANLIC does not currently expect to incur any federal income tax
liability attributable to Separate Account I with respect to the sale
of the Policies. Accordingly, no charge is being made currently to
Separate Account I for federal income taxes. If, however, ANLIC
determines that it may incur such taxes attributable to Separate
Account I, it may assess a charge for such taxes against Separate
Account I.

ANLIC may also incur state and local taxes (in addition to premium
taxes for which a deduction from premiums is currently made). At
present, they are not charges against Separate Account I. If there is a
material change in state or local tax laws, charges for such taxes
attributable to Separate Account I, if any, may be assessed against
Separate Account I.

(2) TAX STATUS OF THE POLICY. The Code (Section 7702) includes a definition
of a life insurance contract for federal tax purposes which places
limitations on the amount of premiums that may be paid for the Policy
and the relationship of the Accumulation Value to the Death Benefit.
ANLIC believes that the Policy meets the statutory definition of a life
insurance contract. If the Death Benefit of a Policy is changed, the
applicable defined limits may change. In the case of a decrease in the
Death Benefit, a partial withdrawal, a change in Death Benefit option,
or any other such change that reduces future benefits under the Policy
during the first 15 years after a Policy is issued and that results in
a cash distribution to the Policy Owners in order for the Policy to
continue complying with the Section 7702 defined limits on premiums and
Accumulation Values, such distributions may be taxable in whole or in
part as ordinary income to the Policy Owner (to the extent of any gain
in the Policy) as prescribed in Section 7702.

The Code (Section 7702A) also defines a "modified endowment
contract" for federal tax purposes. If a life insurance policy is
classified as a modified endowment contract, distributions from it
(including loans) are taxed as ordinary income to the extent of any
gain. This Policy will become a "modified endowment contract" if the
premiums paid into the Policy fail to meet a 7-pay premium test as
outlined in Section 7702A of the Code.

Certain benefits the Policy Owner may elect under this Policy may
be material changes affecting the 7-pay premium test. These include,
but are not limited to, changes in Death Benefits and changes in the
Specified Amount. Should the Policy become a "modified endowment
contract" partial withdrawals, full Surrenders, assignments, pledges,
and loans (including loans to pay loan interest) under the Policy will
be taxable to the extent of any gain under the Policy. A 10% penalty
tax also applies to the taxable portion of any distribution made prior
to the taxpayer's age 59 1/2. The 10% penalty tax does not apply if the
distribution is made because the taxpayer becomes disabled as defined
under the Code or if the distribution is paid out in the form of a life
annuity on the life of the taxpayer or the joint lives of the taxpayer
and Beneficiary. One may avoid a Policy becoming a modified endowment
contract by, among other things, not making excessive payments or
reducing benefits. Should you deposit excessive premiums during a
Policy Year, that portion that is returned by ANLIC within 60 days
after the Policy Anniversary Date will reduce the premiums paid to
avoid the Policy becoming a modified endowment contract. All modified
endowment policies issued by ANLIC to the same Policy Owner in any 12
month period are treated as one modified endowment contract for
purposes of determining taxable gain under Section 72(e) of the
Internal Revenue Code. Any life insurance policy received in exchange
for a modified endowment contract will also be treated as a modified
endowment contract. You should contact a competent tax professional
before paying additional premiums or making other changes to the Policy
to determine whether such payments or changes would cause the Policy to
become a modified endowment contract.

The Code (Section 817(h)) also authorizes the Secretary of the
Treasury (the "Treasury") to set standards by regulation or otherwise
for the investments of Separate Account I to be "adequately
diversified" in order for the Policy to be treated as a life insurance
contract for federal tax purposes. If the Policy is not treated as life
insurance because it fails the

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diversification requirements, the Policy Owner is then subject to
federal income tax on gain in the Policy as it is earned. Separate
Account I, through the Funds, intends to comply with the
diversification requirements prescribed by the Treasury in regulations
published in the Federal Register on March 2, 1989, which affect how
the Fund's assets may be invested.

While Calvert, an ANLIC affiliate, is the trust for certain of the
portfolios, ANLIC does not have control over any of the Funds or their
investments. However, ANLIC believes that the Funds will be operated in
compliance with the diversification requirements of the Internal
Revenue Code. Thus, ANLIC believes that the Policy will be treated as a
life insurance contract for federal tax purposes.

In connection with the issuance of regulations relating to the
diversification requirements, the Treasury announced that such
regulations do not provide guidance concerning the extent to which
policy owners may direct their investments to particular divisions of a
separate account. Regulations in this regard may be issued in the
future. It is not clear what these regulations will provide nor whether
they will be prospective only. It is possible that when regulations are
issued, the Policy may need to be modified to comply with such
regulations. For these reasons, ANLIC reserves the right to modify the
Policy as necessary to prevent the Policy Owner from being considered
the owner of the assets of Separate Account I or otherwise to qualify
the Policy for favorable tax treatment.

The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.

(3)TAX TREATMENT OF POLICY PROCEEDS. ANLIC believes that the Policy will be
treated in a manner consistent with a fixed benefit life insurance
policy for federal income tax purposes. Thus, ANLIC believes that the
Death Benefit will generally be excludable from the gross income of the
Beneficiary under Section 101(a)(1) of the Code and the Policy Owner
will not be deemed to be in constructive receipt of the Accumulation
Value under the Policy until its actual Surrender. However, in the event
of certain cash distributions under the Policy resulting from any change
which reduces future benefits under the Policy, the distribution may be
taxed in whole or in part as ordinary income (to the extent of gain in
the Policy.) See previous discussion on Tax Status of the Policy. In
addition, certain exceptions apply to the general rule that death
benefit proceeds are non-taxable. Federal, state, and local tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policy Owner and Beneficiary.

ANLIC also believes that loans received under a Policy will be
treated as debt of the Policy Owner and that no part of any loan under a
Policy will constitute income to the Policy Owner so long as the Policy
remains in force, unless the Policy becomes a "modified endowment
contract." See discussion of modified endowment contract distributions
in the section on Tax Status of the Policy. Should the Policy lapse
while Policy loans are outstanding the portion of the loans attributable
to earnings will become taxable. Generally, interest paid on any loan
under a Policy owned by an individual will not be tax-deductible.

Except for policies with respect to a limited number of key persons
of an employer (both as defined in the Internal Revenue Code), and
subject to applicable interest rate caps and debt limits, the Health
Insurance Portability and Accountability Act of 1996 (the "Health
Insurance Act") generally repealed the deduction for interest paid or
accrued after October 13, 1995 on loans from corporate owned life
insurance policies on the lives of officers, employees or persons
financially interested in the taxpayer's trade or business. Certain
transitional rules for then existing debt are included in the Health
Insurance Act. The transitional rules included a phase-out of the
deduction for debt incurred (1) before January 1, 1996, or (2) before
January 1, 1997, for policies entered into in 1994 or 1995. The
phase-out of the interest expense deduction occurred over a transition
period between October 13, 1995 and January 1, 1999. There is also a
special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of
1997 ("TRA '97"), further expanded the interest deduction disallowance
for businesses by providing, with respect to policies issued after June
8, 1997, that no deduction is allowed for interest paid or accrued on
any debt with respect to life insurance covering the life of any
individual (except as noted above under pre-'97 law with respect to key
persons and pre-June 21, 1986 policies). Any material

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change in a policy (including a material increase in the death benefit)
may cause the policy to be treated as a new policy for purposes of this
rule. TRA '97 also provides that no deduction is permissible for
premiums paid on a life insurance policy if the taxpayer is directly or
indirectly a beneficiary under the policy. Also under TRA '97 and
subject to certain exceptions, for policies issued after June 8, 1997,
no deduction is allowed for that portion of a taxpayer's interest
expense that is allocable to unborrowed policy cash values. This
disallowance generally does not apply to policies owned by natural
persons. BUSINESSES CONTEMPLATING THE PURCHASE OF A NEW POLICY OR A
CHANGE TO AN EXISTING POLICY SHOULD CONSULT A QUALIFIED TAX ADVISOR
REGARDING THE TAX IMPLICATIONS OF THESE RULES FOR THEIR PARTICULAR
SITUATIONS.

The right to change Policy Owners (See the section on General
Provisions.) and the provision for partial withdrawals (See the section
on Partial Withdrawals.) may have tax consequences depending on the
circumstances of such exchange, change, or partial withdrawal. Upon
complete Surrender, if the amount received plus any Outstanding Policy
Debt exceeds the total premiums paid (the "basis") that are not treated
as previously withdrawn by the Policy Owner, the excess generally will
be taxed as ordinary income.

Federal, state and local tax consequences of ownership or receipt
of Death Benefit Proceeds depend on applicable law and the circumstances
of each Policy Owner or Beneficiary. In addition, the tax consequences
of using the Policy in non-qualified deferred compensation, salary
continuance, split-dollar insurance, and executive bonus plans may vary
depending on the particular facts and circumstances of the arrangement.
Further, if the Policy is used in connection with tax-qualified
retirement plans, certain limitations prescribed by the Internal Revenue
Service on, and rules with respect to the taxation of, life insurance
protection provided through such plans may apply. The advice of
qualified tax counsel should be sought in connection with use of life
insurance in non-qualified or qualified plans.

YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION ON FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO YOUR
PARTICULAR SITUATION

SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS

ANLIC holds the assets of Separate Account I. The assets are kept
physically segregated and held separately and apart from the General Account
assets, except for the Fixed Account. ANLIC maintains records of all purchases
and redemptions of Funds' shares by each of the Subaccounts.

THIRD PARTY SERVICES

ANLIC is aware that certain third parties are offering investment advisory,
asset allocation, money management and timing services in connection with the
Policies. Except for Model Asset Allocation Programs (which include automatic
rebalancing) offered through Ibbotsen Associates (See Appendix B.), ANLIC does
not engage third parties to offer such services. In certain cases, ANLIC has
agreed to honor transfer instructions from other such services where it has
received powers of attorney, in a form acceptable to it, from the Policy Owners
participating in the service. Firms or persons offering such services do so
independently from any agency relationship they may have with ANLIC for the sale
of Policies. ANLIC takes no responsibility for the investment allocations and
transfers transacted on a Policy Owner's behalf by such third parties or any
investment allocation recommendations made by such parties. Policy Owners should
be aware that fees paid for such services are separate and in addition to fees
paid under the Policies.

VOTING RIGHTS

ANLIC is the legal holder of the shares held in the Subaccounts of Separate
Account I and as such has the right to vote the shares, to elect Directors of
the Funds, and to vote on matters that are required by the Investment Company
Act of 1940 and upon any other matter that may be voted upon at a shareholder
meeting. To the extent required by law, ANLIC will vote all shares of each of
the Funds held in Separate Account I at regular and special shareholder meetings
of the Funds according to instructions received from Policy Owners based on the
number of shares held as of the record date for such meeting.

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The number of Fund shares in a Subaccount for which instructions may be
given by a Policy Owner is determined by dividing the Accumulation Value held in
that Subaccount by the net asset value of one share in the corresponding
portfolio of the Fund. Fractional shares will be counted. Fund shares held in
each Subaccount for which no timely instructions from Policy Owners are received
and Fund shares held in each Subaccount which do not support Policy Owner
interests will be voted by ANLIC in the same proportion as those shares in that
Subaccount for which timely instructions are received. Voting instructions to
abstain on any item to be voted will be applied on a pro rata basis to reduce
the votes eligible to be cast. Should applicable federal securities laws or
regulations permit, ANLIC may elect to vote shares of the Fund in its own right.

DISREGARD OF VOTING INSTRUCTION. ANLIC may, if required by state insurance
officials, disregard voting instructions if those instructions would require
shares to be voted to cause a change in the subclassification or investment
objectives or policies of one or more of the Funds' portfolios, or to approve or
disapprove an investment adviser or principal underwriter for the Funds. In
addition, ANLIC itself may disregard voting instructions that would require
changes in the investment objectives or policies of any portfolio or in an
investment adviser or principal underwriter for the Funds, if ANLIC reasonably
disapproves those changes in accordance with applicable federal regulations. If
ANLIC does disregard voting instructions, it will advise Policy Owners of that
action and its reasons for the action in the next annual report or proxy
statement to Policy Owners.

STATE REGULATION OF ANLIC

ANLIC, a stock life insurance company organized under the laws of Virginia,
is subject to regulation by the Bureau of Insurance, State Corporation
Commission of the Commonwealth of Virginia ("Virginia Bureau of Insurance"). On
or before March 1 of each year an NAIC convention blank covering the operations
and reporting on the financial condition of ANLIC and Separate Account I as of
December 31 of the preceding year must be filed with the Virginia Bureau of
Insurance. Periodically, the Virginia Bureau of Insurance examines the
liabilities and reserves of ANLIC and Separate Account I.

In addition, ANLIC is subject to the insurance laws and regulations of
other states within which it is licensed or may become licensed to operate. The
Policies offered by the prospectus are available in the various states as
approved. Generally, the insurance department of any other state applies the
laws of the state of domicile in determining permissible investments.

EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC

This list shows name and position(s) with ANLIC followed by the principal
occupations for the last five years. Where an individual has held more than one
position with an organization during the last 5-year period, the last position
held has been given.

CHARLES T. NASON, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER*
Vice Chairman of Board and President, Director: Ameritas Acacia Mutual Holding
Company
Vice Chairman of Board and President, Director: Ameritas Holding Company
Chairman of the Board and Chief Executive Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

ROBERT W. CLYDE, PRESIDENT AND CHIEF OPERATING OFFICER*
Executive Vice President, Director: Ameritas Acacia Mutual Holding Company
Executive Vice President, Director: Ameritas Holding Company
President and Chief Operating Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

HALUK ARITURK, SENIOR VICE PRESIDENT, PRODUCT MANAGEMENT AND ADMINISTRATION**
Senior Vice President, Product Management and Administration: Acacia Life
Insurance Company Executive Vice President, Ameritas Acacia Shared Services
Center: Ameritas Life Insurance Corp. Formerly: Senior Vice President,
Operations and Chief Actuary: Acacia Life Insurance Company.

EXECUTIVE SELECT
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JOANN M. MARTIN, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, DIRECTOR**
Senior Vice President, Chief Financial Officer and Corporate Treasurer: Ameritas
Acacia Mutual Holding Company and Ameritas Holding Company
Senior Vice President and Chief Financial Officer: Acacia Life Insurance Company

Senior Vice President and Chief Financial Officer: Ameritas Life Insurance Corp.

Also serves as officer and /or director of subsidiaries and/or affiliates of
Ameritas Life Insurance Corp.

BRIAN J. OWENS, SENIOR VICE PRESIDENT, CAREER DISTRIBUTION*
Senior Vice President, Career Distribution: Acacia Life Insurance Company;
Director: The Advisors Group, Inc.

BARRY C. RITTER, SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER**
Senior Vice President and Chief Information Officer, Acacia Life Insurance
Company
Senior Vice President -- Information Services: Ameritas Life Insurance Corp.

ROBERT-JOHN H. SANDS, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE
SECRETARY*
Senior Vice President and General Counsel: Ameritas Acacia Mutual Holding
Company
Senior Vice President and General Counsel: Ameritas Holding Company
Senior Vice President, General Counsel and Corporate Secretary: Acacia Life
Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

JANET L. SCHMIDT, SENIOR VICE PRESIDENT, HUMAN RESOURCES*
Senior Vice President and Director of Human Resources: Ameritas Acacia Mutual
Holding Company Senior Vice President and Director of Human Resources: Ameritas
Holding Company
Senior Vice President, Human Resources: Acacia Life Insurance Company

RICHARD W. VAUTRAVERS, SENIOR VICE PRESIDENT AND CORPORATE ACTUARY**
Senior Vice President and Corporate Actuary: Ameritas Life Insurance Corp.
Senior Vice President and Corporate Actuary: Acacia Life Insurance Company

WILLIAM W. LESTER, VICE PRESIDENT AND TREASURER**
Treasurer: Ameritas Life Insurance Corp.
Also serves as officer of subsidiaries of Ameritas Life Insurance Corp.
Vice President and Treasurer, Acacia Life Insurance Company

RENO J. MARTINI, DIRECTOR***
Senior Vice President, Calvert Group, Ltd.
- ---------------
* The principal business address of each person is Acacia National Life
Insurance Company, 7315 Wisconsin Avenue, Bethesda, Maryland 20814.

** The principal business address of each person is Ameritas Life Insurance
Corp., 5900 "O" Street, Lincoln, Nebraska 68510.

*** The principal business address of each person is Calvert Group, Ltd., 4550
Montgomery Avenue, Bethesda, Maryland 20814.

LEGAL MATTERS

All matters of Virginia law pertaining to the Policies, including the
validity of the Policy and ANLIC's right to issue the Policy under Virginia
Insurance Law, have been passed upon by Robert-John H. Sands, Senior Vice
President and General Counsel of ANLIC.

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LEGAL PROCEEDINGS

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

EXPERTS

The statutory basis financial statements of ANLIC as of December 31, 1999
and for the year then ended, and the financial statements of the subaccounts of
Separate Account I as of December 31, 1999 and for the year then ended, included
in this prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports appearing herein, and are included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The statutory basis financial statements of ANLIC as of December 31, 1998
and for the year then ended, and the financial statements of the subaccounts of
Separate Account I for each of the two years in the period ended December 31,
1998, included in this prospectus have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their reports appearing herein, and
are included in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

Actuarial matters included in this prospectus have been examined by Russell
J. Wiltgen, Vice President -- Individual Product Management, of Ameritas Life
Insurance Corp., as stated in the opinion filed as an exhibit to the
registration statement.

ADDITIONAL INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning Separate Account I, ANLIC and the Policy offered hereby.
Statements contained in this Prospectus as to the contents of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.

FINANCIAL STATEMENTS

The financial statements of ANLIC which are included in this prospectus
should be considered only as bearing on the ability of ANLIC to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in Separate Account I.

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INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company
Bethesda, Maryland

We have audited the accompanying statement of net assets of each of the
subaccounts of Acacia National Variable Life Insurance Separate Account I
(comprising, respectively, the Social Money Market Portfolio, Social Balanced
Portfolio, Social Small Cap Growth Portfolio, Social Mid Cap Growth Portfolio,
and Social International Equity Portfolio of the Calvert Variable Series, Inc.;
the Growth Portfolio, MidCap Growth Portfolio, and Small Capitalization
Portfolio of the Alger American Fund; the Stock Index Portfolio of the Dreyfus
Stock Index Fund; the Limited Maturity Bond Portfolio, and the Growth Portfolio
of the Neuberger & Berman Advisers Management Trust; the International Stock
Fund II Portfolio, and Discovery Fund II Portfolio of the Strong Variable
Insurance Funds, Inc.; the Worldwide Hard Assets Portfolio of the Van Eck
Worldwide Insurance Trust; and the Capital Appreciation Portfolio, Aggressive
Growth Portfolio, Growth and Income Portfolio, High Income Portfolio, and
Strategic Bond Portfolio of the Oppenheimer Variable Accounts Fund) as of
December 31, 1999, and the related statements of operations and changes in net
assets for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1999. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.

In our opinion, such 1999 financial statements present fairly, in all material
respects, the financial position of each of the subaccounts constituting Acacia
National Variable Life Insurance Separate Account I as of December 31, 1999, and
the results of its operations and changes in net assets for the year then ended,
in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Lincoln, Nebraska
April 7, 2000

F-I- 1
<PAGE> 45

[PRICEWATERHOUSECOOPERS LOGO]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Acacia National Life Insurance Company and Contract
Owners of Acacia National Variable Life Insurance Separate Account I

In our opinion, the accompanying statements of operations and changes in net
assets present fairly, in all material respects, the results of their operations
and changes in their net assets of each of the following sub-accounts comprising
the Acacia National Variable Life Insurance Separate Account I (the Account):
the Social Money Market Portfolio, Social Balanced Portfolio, Social Small Cap
Growth Portfolio, Social Mid Cap Growth Portfolio, and Social International
Equity Portfolio of the Calvert Variable Series, Inc.; the Growth Portfolio,
MidCap Growth Portfolio, and Small Capitalization Portfolio of The Alger
American Fund; the Stock Index Portfolio of the Dreyfus Stock Index Fund; the
Limited Maturity Bond Portfolio, and Growth Portfolio of the Neuberger & Berman
Advisers Management Trust; the Advantage Fund II, Asset Allocation Fund II,
International Stock Fund II Portfolio, and Discovery Fund II Portfolio of the
Strong Variable Insurance Funds, Inc.; the Worldwide Hard Assets Portfolio of
the Van Eck Worldwide Insurance Trust; and the Capital Appreciation Portfolio,
Aggressive Growth Portfolio, Growth and Income Portfolio, High Income Portfolio,
and Strategic Bond Portfolio of the Oppenheimer Variable Accounts Fund for each
of the periods presented in the years ended December 31, 1998 and 1997, in
conformity with accounting principles generally accepted in the United States.
The financial statements are the responsibility of the Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

[/s/ PRICEWATERHOUSECOOPERS LLP]

Washington, D.C.
April 30, 1999

F-I- 2
<PAGE> 46

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENT OF NET ASSETS
DECEMBER 31, 1999

<TABLE>
<CAPTION>
INVESTMENT DUE (TO)/FROM
AT NET ASSET GENERAL
VALUE ACCOUNT TOTAL
------------ ------------- -----------
<S> <C> <C> <C>
ASSETS
CALVERT VARIABLE SERIES, INC.
Social Money Market Portfolio -- 1,593,462.820 shares at
$1.00 per share (cost $1,593,463)....................... $1,593,463 $11,356 $ 1,604,819
Social Balanced Portfolio -- 150,081.351 shares at $2.169
per share (cost $322,380)............................... 325,527 5,122 330,649
Social Small Cap Growth Portfolio -- 10,561.351 shares at
$13.27 per share (cost $119,854)........................ 140,149 36 140,185
Social Mid Cap Growth Portfolio -- 9,034.095 shares at
$30.03 per share (cost $269,942)........................ 271,294 47 271,341
Social International Equity Portfolio -- 29,100.595 shares
at $25.66 per share (cost $641,008)..................... 746,721 3,890 750,611
THE ALGER AMERICAN FUND:
Growth Portfolio -- 82,340.183 shares at $64.38 per share
(cost $4,009,881)....................................... 5,301,060 4,776 5,305,836
MidCap Growth Portfolio -- 55,027.791 shares at $32.23 per
share (cost $1,399,016)................................. 1,773,545 (1,860) 1,771,685
Small Capitalization Portfolio -- 73,412.631 shares at
$55.15 per share (cost $3,008,216)...................... 4,048,707 5,921 4,054,628
DREYFUS STOCK INDEX FUND:
Stock Index Portfolio -- 346,564.572 shares at $38.45 per
share (cost $10,584,530)................................ 13,325,408 24,551 13,349,959
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
Limited Maturity Bond Portfolio -- 235,622.603 shares at
$13.24 per share (cost $3,133,285)...................... 3,119,644 21,108 3,140,752
Growth Portfolio -- 72,247.130 shares at $37.27 per share
(cost $1,744,031)....................................... 2,692,651 29,495 2,722,146
STRONG VARIABLE INSURANCE FUNDS, INC.:
International Stock Fund II Portfolio -- 310,700.181
shares at $16.37 per share (cost $2,859,587)............ 5,086,161 13,561 5,099,722
Discovery Fund II Portfolio -- 36,560.925 shares at $11.38
per share (cost $408,153)............................... 416,063 2,048 418,111
VAN ECK WORLDWIDE INSURANCE TRUST:
Worldwide Hard Assets Portfolio -- 94,197.681 shares at
$10.96 per share (cost $1,022,812)...................... 1,032,407 1,746 1,034,153
OPPENHEIMER VARIABLE ACCOUNTS FUND:
Capital Appreciation Portfolio -- 86,724.242 shares at
$49.84 per share (cost $3,441,580)...................... 4,322,337 -- 4,322,337
Aggressive Growth Portfolio -- 39,022.477 shares at $82.31
per share (cost $1,768,125)............................. 3,211,939 24,156 3,236,095
Growth and Income Portfolio -- 54,758.167 shares at $24.63
per share (cost $1,152,379)............................. 1,348,694 3,110 1,351,804
High Income Portfolio -- 65,811.897 shares at $10.72 per
share (cost $708,959)................................... 705,503 3,845 709,348
Strategic Bond Portfolio -- 101,576.323 shares at $4.97
per share (cost $525,198)............................... 504,835 (112) 504,723
-----------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS.............. $50,118,904
===========
</TABLE>

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

F-I- 3
<PAGE> 47

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC.
--------------------------------------
SOCIAL
SOCIAL SOCIAL SMALL CAP
MONEY MARKET BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------
<S> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received........................... $43,128 $ 7,030 $ 52
Mortality and expense risk charge......................... 7,218 1,511 839
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 35,910 5,519 (787)
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- 24,085 --
Net change in unrealized appreciation (depreciation)...... 12,253 1,900 23,977
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 12,253 25,985 23,977
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $48,163 $31,504 $23,190
======= ======= =======
1998
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $21,621 $ 3,409 $ 1,105
Mortality and expense risk charge......................... 4,679 308 588
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 16,942 3,101 517
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. 99 611 (2,513)
Net change in unrealized appreciation (depreciation)...... 3,000 1,900 (1,616)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 3,099 2,511 (4,129)
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $20,041 $ 5,612 $(3,612)
======= ======= =======
1997
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 7,942 $ 1,565 $ 4,107
Mortality and expense risk charge......................... 4,111 72 355
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 3,831 1,493 3,752
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. -- 204 (1,773)
Net change in unrealized appreciation (depreciation)...... 440 (515) (2,228)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 440 (311) (4,001)
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 4,271 $ 1,182 $ (249)
======= ======= =======
</TABLE>

- ---------------
(1) Commenced business May, 1997

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

F-I- 4
<PAGE> 48

<TABLE>
<CAPTION>
DREYFUS STOCK
CALVERT VARIABLE SERIES, INC. THE ALGER AMERICAN FUND INDEX FUND
------------------------------ --------------------------------------- -------------
SOCIAL
SOCIAL INTERNATIONAL MIDCAP SMALL
MID CAP GROWTH EQUITY GROWTH GROWTH CAPITALIZATION STOCK INDEX
PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ---------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ 380 $ 4,285 $ -- $ -- $ 111,343
1,517 3,400 28,150 9,224 21,737 75,772
------- -------- ---------- -------- ---------- ----------
(1,517) (3,020) (23,865) (9,224) (21,737) 35,571
------- -------- ---------- -------- ---------- ----------
20,944 52,658 292,559 152,575 303,027 98,876
2,980 113,538 882,734 257,406 903,837 1,835,918
------- -------- ---------- -------- ---------- ----------
23,924 166,196 1,175,293 409,981 1,206,864 1,934,794
------- -------- ---------- -------- ---------- ----------
$22,407 $163,176 $1,151,428 $400,757 $1,185,127 $1,970,365
======= ======== ========== ======== ========== ==========
$13,549 $ 15,115 $ 232,531 $ 40,068 $ 173,190 $ 130,875
594 990 14,481 5,140 12,562 38,276
------- -------- ---------- -------- ---------- ----------
12,955 14,125 218,050 34,928 160,628 92,599
------- -------- ---------- -------- ---------- ----------
2,455 1,263 98,690 13,059 4,107 184,713
(1,025) (5,285) 297,960 98,503 62,991 729,209
------- -------- ---------- -------- ---------- ----------
1,430 (4,022) 396,650 111,562 67,098 913,922
------- -------- ---------- -------- ---------- ----------
$14,385 $ 10,103 $ 614,700 $146,490 $ 227,726 $1,006,521
======= ======== ========== ======== ========== ==========
$ 1,160 $ 1,968 $ 5,840 $ 2,687 $ 27,461 $ 43,942
28 50 5,914 1,692 6,075 11,588
------- -------- ---------- -------- ---------- ----------
1,132 1,918 (74) 995 21,386 32,354
------- -------- ---------- -------- ---------- ----------
100 4 39,995 11,425 9,397 112,714
(603) (2,540) 95,625 15,140 70,132 146,383
------- -------- ---------- -------- ---------- ----------
(503) (2,536) 135,620 26,565 79,529 259,097
------- -------- ---------- -------- ---------- ----------
$ 629 $ (618) $ 135,546 $ 27,560 $ 100,915 $ 291,451
======= ======== ========== ======== ========== ==========
</TABLE>

F-I- 5
<PAGE> 49

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
NEUBERGER & BERMAN STRONG VARIABLE
ADVISERS MANAGEMENT TRUST INSURANCE FUNDS, INC.
--------------------------- ------------------------
LIMITED ASSET
MATURITY BOND GROWTH ADVANTAGE ALLOCATION
PORTFOLIO PORTFOLIO FUND II(2) FUND II(2)
-------------- --------- ---------- ----------
<S> <C> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received................ $132,944 $ -- $ -- $ --
Mortality and expense risk charge.............. 20,050 14,860 -- --
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 112,894 (14,860) -- --
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on distributions............. -- 88,404 -- --
Net change in unrealized appreciation
(depreciation).............................. (30,899) 857,225 -- --
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... (30,899) 945,629 -- --
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 81,995 $930,769 $ -- $ --
======== ======== ==== =======
1998
INVESTMENT INCOME:
Dividend and capital gains distributions
received.................................... $ 58,873 $188,569 $ -- $ --
Mortality and expense risk charge.............. 12,750 9,585 -- --
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 46,123 178,984 -- --
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from redemptions of
fund shares................................. 1,107 (18,723) -- --
Net change in unrealized appreciation
(depreciation).............................. (2,543) 22,943 -- --
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... (1,436) 4,220 -- --
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 44,687 $183,204 $ -- $ --
======== ======== ==== =======
1997
INVESTMENT INCOME:
Dividend and capital gains distributions
received.................................... $ 20,653 $ 23,873 $359 $ 6,377
Mortality and expense risk charge.............. 4,295 3,395 49 516
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 16,358 20,478 310 5,861
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from redemptions of
fund shares................................. 1,905 16,065 (38) 11,629
Net change in unrealized appreciation
(depreciation).............................. 15,273 59,454 52 2,621
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... 17,178 75,519 14 14,250
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 33,536 $ 95,997 $324 $20,111
======== ======== ==== =======
</TABLE>

- ---------------
(1) Commenced business May, 1997

(2) Subaccount closed November, 1997.

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

F-I- 6
<PAGE> 50

<TABLE>
<CAPTION>
VAN ECK
STRONG VARIABLE WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST OPPENHEIMER VARIABLE ACCOUNTS FUND
------------------------- --------------- ------------------------------------------
INTERNATIONAL DISCOVERY WORLDWIDE CAPITAL AGGRESSIVE GROWTH AND
STOCK FUND II FUND II HARD ASSETS APPRECIATION GROWTH INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO(1)
------------- --------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 11,187 $ -- $ 9,610 $ 9,060 $ -- $ 3,439
25,477 2,621 6,153 20,639 17,873 7,399
---------- ------- --------- -------- ---------- --------
(14,290) (2,621) 3,457 (11,579) (17,873) (3,960)
---------- ------- --------- -------- ---------- --------
-- 44,830 -- 99,521 -- 5,794
2,395,242 (15,057) 164,247 634,969 1,323,874 197,475
---------- ------- --------- -------- ---------- --------
2,395,242 29,773 164,247 734,490 1,323,874 203,269
---------- ------- --------- -------- ---------- --------
$2,380,952 $27,152 $ 167,704 $722,911 $1,306,001 $199,309
========== ======= ========= ======== ========== ========
$ 61,955 $ 3,760 $ 41,873 $ 82,136 $ 13,351 $ 10,963
16,284 2,398 3,681 12,581 7,499 3,138
---------- ------- --------- -------- ---------- --------
45,671 1,362 38,192 69,555 5,852 7,825
---------- ------- --------- -------- ---------- --------
(206,240) 5,905 (41,446) 24,932 10,354 1,441
59,071 8,186 (148,313) 224,336 118,634 (4,187)
---------- ------- --------- -------- ---------- --------
(147,169) 14,091 (189,759) 249,268 128,988 (2,746)
---------- ------- --------- -------- ---------- --------
$ (101,498) $15,453 $(151,567) $318,823 $ 134,840 $ 5,079
========== ======= ========= ======== ========== ========
$ 8,037 $ -- $ 5,120 $ -- $ -- $ 267
8,011 1,084 1,655 2,354 1,370 272
---------- ------- --------- -------- ---------- --------
26 (1,084) 3,465 (2,354) (1,370) (5)
---------- ------- --------- -------- ---------- --------
(3,230) 5,524 2,494 2,729 4,036 1,288
(230,017) 12,920 (10,841) 21,451 1,306 3,027
---------- ------- --------- -------- ---------- --------
(233,247) 18,444 (8,347) 24,180 5,342 4,315
---------- ------- --------- -------- ---------- --------
$ (233,221) $17,360 $ (4,882) $ 21,826 $ 3,972 $ 4,310
========== ======= ========= ======== ========== ========
</TABLE>

F-I- 7
<PAGE> 51

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
OPPENHEIMER VARIABLE
ACCOUNTS FUND
----------------------------
STRATEGIC
HIGH INCOME BOND
PORTFOLIO(1) PORTFOLIO(1)
1999 ------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend distributions received........................... $ 30,951 $ 37,569
Mortality and expense risk charge......................... 4,163 3,598
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 26,788 33,971
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... 6,886 (19,428)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. 6,886 (19,428)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 33,674 $ 14,543
======== ========
1998
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 6,494 $ 14,163
Mortality and expense risk charge......................... 1,942 1,297
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 4,552 12,866
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. (1,436) (5,635)
Net change in unrealized appreciation (depreciation)...... (10,716) (740)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. (12,152) (6,375)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ (7,600) $ 6,491
======== ========
1997
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 2,165 $ 765
Mortality and expense risk charge......................... 248 45
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 1,917 720
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. 270 4
Net change in unrealized appreciation (depreciation)...... 375 (196)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. 645 (192)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 2,562 $ 528
======== ========
</TABLE>

- ---------------
(1) Commenced business May, 1997

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

F-I- 8
<PAGE> 52

[This page intentionally left blank.]

F-I- 9
<PAGE> 53

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC.
--------------------------------------
SOCIAL
SOCIAL SOCIAL SMALL CAP
MONEY MARKET BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------
<S> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 35,910 $ 5,519 $ (787)
Net realized gain distributions.......................... -- 24,085 --
Net change in unrealized appreciation (depreciation)..... 12,253 1,900 23,977
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 48,163 31,504 23,190
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 860,441 251,997 29,588
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 908,604 283,501 52,778
---------- -------- --------
NET ASSETS AT JANUARY 1, 1999.............................. $ 696,215 $ 47,148 $ 87,407
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1999............................ $1,604,819 $330,649 $140,185
========== ======== ========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 16,942 $ 3,101 $ 517
Net realized gain (loss) from redemption of fund
shares................................................ 99 611 (2,513)
Net change in unrealized appreciation (depreciation)..... 3,000 1,900 (1,616)
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 20,041 5,612 (3,612)
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 309,331 18,777 44,873
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 329,372 24,389 41,261
---------- -------- --------
NET ASSETS AT JANUARY 1, 1998.............................. $ 366,843 $ 22,759 $ 46,146
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1998............................ $ 696,215 $ 47,148 $ 87,407
========== ======== ========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 3,831 $ 1,493 $ 3,752
Net realized gain (loss) from redemption of fund
shares................................................ -- 204 (1,773)
Net change in unrealized appreciation (depreciation)..... 440 (515) (2,228)
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 4,271 1,182 (249)
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 216,346 18,745 25,899
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 220,617 19,927 25,650
---------- -------- --------
NET ASSETS AT JANUARY 1, 1997.............................. $ 146,226 $ 2,832 $ 20,496
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1997............................ $ 366,843 $ 22,759 $ 46,146
========== ======== ========
</TABLE>

- ---------------
(1) Commenced business May, 1997

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

F-I- 10
<PAGE> 54

<TABLE>
<CAPTION>
DREYFUS STOCK
CALVERT VARIABLE SERIES, INC. THE ALGER AMERICAN FUND INDEX FUND
------------------------------ ---------------------------------------- -------------
SOCIAL
SOCIAL INTERNATIONAL MID CAP SMALL
MID CAP GROWTH EQUITY GROWTH GROWTH CAPITALIZATION STOCK INDEX
PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ---------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ (1,517) $ (3,020) $ (23,865) $ (9,224) $ (21,737) $ 35,571
20,944 52,658 292,559 152,575 303,027 98,876
2,980 113,538 882,734 257,406 903,837 1,835,918
-------- -------- ---------- ---------- ---------- -------------
22,407 163,176 1,151,428 400,757 1,185,127 1,970,365
125,068 383,269 1,752,646 519,905 823,820 4,711,735
-------- -------- ---------- ---------- ---------- -------------
147,475 545,445 2,904,074 920,662 2,008,947 6,682,100
-------- -------- ---------- ---------- ---------- -------------
$123,866 $205,166 $2,401,762 $ 851,023 $2,045,681 $ 6,667,859
-------- -------- ---------- ---------- ---------- -------------
$271,341 $750,611 $5,305,836 $1,771,685 $4,054,628 $ 13,349,959
======== ======== ========== ========== ========== =============
$ 12,955 $ 14,125 $ 218,050 $ 34,928 $ 160,628 $ 92,599
2,455 1,263 98,690 13,059 4,107 184,713
(1,025) (5,285) 297,960 98,503 62,991 729,209
-------- -------- ---------- ---------- ---------- -------------
14,385 10,103 614,700 146,490 227,726 1,006,521
98,279 175,356 898,671 387,686 1,009,524 3,632,941
-------- -------- ---------- ---------- ---------- -------------
112,664 185,459 1,513,371 534,176 1,237,250 4,639,462
-------- -------- ---------- ---------- ---------- -------------
$ 11,202 $ 19,707 $ 888,391 $ 316,847 $ 808,431 $ 2,028,397
-------- -------- ---------- ---------- ---------- -------------
$123,866 $205,166 $2,401,762 $ 851,023 $2,045,681 $ 6,667,859
======== ======== ========== ========== ========== =============
$ 1,132 $ 1,918 $ (74) $ 995 $ 21,386 $ 32,354
100 4 39,995 11,425 9,397 112,714
(603) (2,540) 95,625 15,140 70,132 146,383
-------- -------- ---------- ---------- ---------- -------------
629 (618) 135,546 27,560 100,915 291,451
10,573 20,325 431,691 198,748 303,922 1,185,520
-------- -------- ---------- ---------- ---------- -------------
11,202 19,707 567,237 226,308 404,837 1,476,971
-------- -------- ---------- ---------- ---------- -------------
$ -- $ -- $ 321,154 $ 90,539 $ 403,594 $ 551,426
-------- -------- ---------- ---------- ---------- -------------
$ 11,202 $ 19,707 $ 888,391 $ 316,847 $ 808,431 $ 2,028,397
======== ======== ========== ========== ========== =============
</TABLE>

F-I- 11
<PAGE> 55

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
NEUBERGER & BERMAN STRONG VARIABLE
ADVISERS MANAGEMENT TRUST INSURANCE FUNDS, INC.
-------------------------- ------------------------
LIMITED
MATURITY ASSET
BOND GROWTH ADVANTAGE ALLOCATION
PORTFOLIO PORTFOLIO FUND II(2) FUND II(2)
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 112,894 $ (14,860) $ -- $ --
Net realized gain distributions.................... -- 88,404 -- --
Net change in unrealized appreciation
(depreciation)................................... (30,899) 857,225 -- --
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 81,995 930,769 -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 1,025,930 243,298 -- --
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 1,107,925 1,174,067 -- --
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1999........................ $2,032,827 $1,548,079 $ -- $ --
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1999...................... $3,140,752 $2,722,146 $ -- $ --
========== ========== ======== =========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 46,123 $ 178,984 $ -- $ --
Net realized gain (loss) from redemption of fund
shares........................................... 1,107 (18,723) -- --
Net change in unrealized appreciation
(depreciation)................................... (2,543) 22,943 -- --
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 44,687 183,204 -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 1,124,307 735,204 -- --
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 1,168,994 918,408 -- --
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1998........................ $ 863,833 $ 629,671 $ -- $ --
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1998...................... $2,032,827 $1,548,079 $ -- $ --
========== ========== ======== =========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 16,358 $ 20,478 $ 310 $ 5,861
Net realized gain (loss) from redemption of fund
shares........................................... 1,905 16,065 (38) 11,629
Net change in unrealized appreciation
(depreciation)................................... 15,273 59,454 52 2,621
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 33,536 95,997 324 20,111
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 624,805 352,564 (10,234) (107,191)
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 658,341 448,561 (9,910) (87,080)
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1997........................ $ 205,492 $ 181,110 $ 9,910 $ 87,080
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1997...................... $ 863,833 $ 629,671 $ 0 $ 0
========== ========== ======== =========
</TABLE>

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

(1) Commenced business May, 1997

(2) Subaccount closed November, 1997

F-I- 12
<PAGE> 56

<TABLE>
<CAPTION>
STRONG VARIABLE VAN ECK WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST OPPENHEIMER VARIABLE ACCOUNTS FUND
------------------------- ----------------- ------------------------------------------
INTERNATIONAL DISCOVERY WORLDWIDE CAPITAL AGGRESSIVE GROWTH &
STOCK FUND II FUND II HARD ASSETS APPRECIATION GROWTH INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO(1)
------------- --------- ----------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ (14,290) $ (2,621) $ 3,457 $ (11,579) $ (17,873) $ (3,960)
-- 44,830 -- 99,521 -- 5,794
2,395,242 (15,057) 164,247 634,969 1,323,874 197,475
---------- -------- ---------- ---------- ---------- ----------
2,380,952 27,152 167,704 722,911 1,306,001 199,309
305,865 54,601 284,172 1,345,599 582,546 514,599
---------- -------- ---------- ---------- ---------- ----------
2,686,817 81,753 451,876 2,068,510 1,888,547 713,908
---------- -------- ---------- ---------- ---------- ----------
$2,412,905 $336,358 $ 582,277 $2,253,827 $1,347,548 $ 637,896
---------- -------- ---------- ---------- ---------- ----------
$5,099,722 $418,111 $1,034,153 $4,322,337 $3,236,095 $1,351,804
========== ======== ========== ========== ========== ==========
$ 45,671 $ 1,362 $ 38,192 $ 69,555 $ 5,852 $ 7,825
(206,240) 5,905 (41,446) 24,932 10,354 1,441
59,071 8,186 (148,313) 224,336 118,634 (4,187)
---------- -------- ---------- ---------- ---------- ----------
(101,498) 15,453 (151,567) 318,823 134,840 5,079
1,227,685 112,491 479,900 1,330,394 856,576 557,879
---------- -------- ---------- ---------- ---------- ----------
1,126,187 127,944 328,333 1,649,217 991,416 562,958
---------- -------- ---------- ---------- ---------- ----------
$1,286,718 $208,414 $ 253,944 $ 604,610 $ 356,132 $ 74,938
---------- -------- ---------- ---------- ---------- ----------
$2,412,905 $336,358 $ 582,277 $2,253,827 $1,347,548 $ 637,896
========== ======== ========== ========== ========== ==========
$ 26 $ (1,084) $ 3,465 $ (2,354) $ (1,370) $ (5)
(3,230) 5,524 2,494 2,729 4,036 1,288
(230,017) 12,920 (10,841) 21,451 1,306 3,027
---------- -------- ---------- ---------- ---------- ----------
(233,221) 17,360 (4,882) 21,826 3,972 4,310
1,076,576 114,093 170,829 582,784 352,160 70,628
---------- -------- ---------- ---------- ---------- ----------
843,355 131,453 165,947 604,610 356,132 74,938
---------- -------- ---------- ---------- ---------- ----------
$ 443,363 $ 76,961 $ 87,997 $ -- $ -- $ --
---------- -------- ---------- ---------- ---------- ----------
$1,286,718 $208,414 $ 253,944 $ 604,610 $ 356,132 $ 74,938
========== ======== ========== ========== ========== ==========
</TABLE>

F-I- 13
<PAGE> 57

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
OPPENHEIMER VARIABLE
ACCOUNTS FUND
------------------------------
HIGH INCOME STRATEGIC BOND
PORTFOLIO(1) PORTFOLIO(1)
1999 ------------ --------------
<S> <C> <C>
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 26,788 $ 33,971
Net realized gain distributions........................... -- --
Net change in unrealized appreciation(depreciation)....... 6,886 (19,428)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 33,674 14,543
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 304,273 214,887
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 337,947 229,430
-------- --------
NET ASSETS AT JANUARY 1, 1999............................... 371,401 275,293
-------- --------
NET ASSETS AT DECEMBER 31, 1999............................. $709,348 $504,723
======== ========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 4,552 $ 12,866
Net realized gain(loss) from redemption of fund shares.... (1,436) (5,635)
Net change in unrealized appreciation(depreciation)....... (10,716) (740)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ (7,600) 6,491
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 309,237 249,444
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 301,637 255,935
-------- --------
NET ASSETS AT JANUARY 1, 1998............................... 69,764 19,358
-------- --------
NET ASSETS AT DECEMBER 31, 1998............................. $371,401 $275,293
======== ========
1997
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 1,917 $ 720
Net realized gain(loss) from redemption of fund shares.... 270 4
Net change in unrealized appreciation(depreciation)....... 375 (196)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 2,562 528
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 67,202 18,830
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 69,764 19,358
-------- --------
NET ASSETS AT JANUARY 1, 1997............................... -- --
-------- --------
NET ASSETS AT DECEMBER 31, 1997............................. $ 69,764 $ 19,358
======== ========
</TABLE>

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

(1) Commenced business May, 1997

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

F-I- 14
<PAGE> 58

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The Acacia National Variable Life Insurance Separate Account I (the Account)
began operations on December 1, 1995 as a separate investment account within
Acacia National Life Insurance Company (the Company), a wholly owned subsidiary
of Acacia Life Insurance Company. The assets of the Account are held by the
Company and are segregated from all of the Company's other assets.

The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. At December 31, 1999 there are nineteen subaccounts
within the Account. Five of the subaccounts invest only in a corresponding
Portfolio of the Calvert Variable Series, Inc. which is a diversified open-end
management investment company managed by the Calvert Asset Management Company,
Inc. (see note 3). Three of the subaccounts invest only in a corresponding
Portfolio of The Alger American Fund which is a diversified open-end management
investment company managed by Fred Alger Management, Inc. (Alger Management).
One subaccount invests only in a corresponding Portfolio of Dreyfus Stock Index
Fund which is a non-diversified open-end management investment company managed
by Dreyfus Service Corporation. Two of the subaccounts invest only in a
corresponding Portfolio of the Neuberger & Berman Advisers Management Trust
which is a diversified open-end management investment company managed by
Neuberger & Berman Management Incorporated. Two of the subaccounts invest only
in a corresponding Portfolio of the Strong Variable Insurance Fund, Inc. which
is a diversified open-end management investment company managed by Strong
Capital Management, Inc. One of the subaccounts invest only in a corresponding
Portfolio of the Van Eck Worldwide Insurance Trust which is a non-diversified
open-end management investment company managed by Van Eck Associates
Corporation. Five of the subaccounts invest only in a corresponding Portfolio of
the Oppenheimer Variable Accounts Fund which is a diversified open-end
management investment company managed by Oppenheimer Funds, Inc. Each Portfolio
pays the manager a monthly fee for managing its investments and business
affairs.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CONSISTENCY

Due to changes in the processing environment during 1999, certain information is
presented differently between years. In 1999, net realized gains/losses on
redemption of fund shares is included in net change in unrealized
appreciation/depreciation. Capital gain distributions received are reflected in
net realized gain distributions.

In 1998 and 1997, net realized gains and losses on redemption of fund shares are
separately presented. Capital gain distributions received from funds are
included in dividend distributions received.

VALUATION OF INVESTMENTS

The assets of the account are carried at the net asset value of the underlying
Portfolios. The value of the policyowners' units corresponds to the Account's
investment in the underlying subaccounts. The availability of investment
portfolio and subaccount options may vary between products. Share transactions
and security transactions are accounted for on a trade date basis. However,
dividends of $30,157 for the Stock Index Portfolio and $21,938 for the
International Stock Fund II Portfolio were received in 1997 and recorded in
1998. All affected policyholder accounts were adjusted.

F-I- 15
<PAGE> 59
ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
FEDERAL AND STATE TAXES

The operations of the Account are included in the federal income tax return of
the Company, which is taxed as a life insurance company under the Internal
Revenue Code. The Company has the right to charge the Account any federal income
taxes, or provision for federal income taxes, attributable to the operations of
the Account or to the policies funded in the Account. Currently, the Company
does not make a charge for income or other taxes. Charges for state and local
taxes, if any, attributable to the Account may also be made.

2. POLICYOWNER CHARGES

The Company charges the Account for mortality and expense risks assumed. A daily
charge is made on the average daily value of the net assets representing equity
of policyowners held in each subaccount per each product's current policy
provisions. Additional charges are made at intervals and in amounts per each
product's current policy provisions. These charges are prorated against the
balance in each investment option of the policyowner, including the Fixed
Account option which is not reflected in this separate account.

3. RELATED PARTIES

Calvert Asset Management Company, Inc., an affiliate of the Company, serves as
an investment advisor to the Calvert Variable Series, Inc. Social Money Market,
Social Balanced, Social Small Cap Growth, Social Mid Cap Growth and Social
International Equity Portfolios. The Advisors Group, Inc., an affiliate of the
Company, acts as a principal underwriter of the policies pursuant to an
underwriting agreement with the Company.

F-I- 16
<PAGE> 60

[This page intentionally left blank.]

F-I- 17
<PAGE> 61
ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. UNITS OWNED

Units owned in the Account are as follows:

CALVERT VARIABLE SERIES, INC.
-------------------------------------------------------------------------
SOCIAL SOCIAL
SOCIAL SOCIAL SMALL CAP SOCIAL INTERNATIONAL
MONEY MARKET BALANCED GROWTH MID CAP GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Units owned at January 1, 1999..... 598,035 2,990 7,476 7,670 15,712
Units acquired..................... 5,307,754 17,585 7,132 26,315 33,694
Units disposed..................... 4,539,913 2,073 4,511 18,191 6,276
--------- ------ ------ ------ ------
Units owned at December 31, 1999... 1,365,876 18,502 10,097 15,794 43,130
========= ====== ====== ====== ======

Units owned at January 1, 1998..... 330,489 1,678 3,703 900 1,788
Units acquired..................... 2,498,903 2,971 5,008 7,984 17,004
Units disposed..................... 2,231,357 1,659 1,235 1,214 3,080
--------- ------ ------ ------ ------
Units owned at December 31, 1998... 598,035 2,990 7,476 7,670 15,712
========= ====== ====== ====== ======

Units owned at January 1, 1997..... 138,906 251 1,482 -- --
Units acquired..................... 1,439,931 1,655 4,603 994 1,939
Units disposed..................... 1,248,348 228 2,382 94 151
--------- ------ ------ ------ ------
Units owned at December 31, 1997... 330,489 1,678 3,703 900 1,788
========= ====== ====== ====== ======
</TABLE>

F-I- 18
<PAGE> 62

<TABLE>
<CAPTION>
DREYFUS NEUBERGER & BERMAN
STOCK ADVISERS STRONG VARIABLE
THE ALGER AMERICAN FUND INDEX FUND MANAGEMENT TRUST INSURANCE FUNDS, INC.
- -------------------------------------- ----------- --------------------- ----------------------------
LIMITED
MIDCAP SMALL MATURITY
GROWTH GROWTH CAPITALIZATION STOCK INDEX BOND GROWTH ADVANTAGE ASSET ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND II FUND II
- --------- --------- -------------- ----------- --------- --------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
113,872 50,595 153,159 320,865 173,713 97,419 -- --
146,269 79,523 151,870 357,435 200,479 48,449 -- --
71,718 49,811 92,843 144,982 111,058 33,014 -- --
------- ------ ------- ------- ------- ------- ----- ------
188,423 80,307 212,186 533,318 263,134 112,854 -- --
======= ====== ======= ======= ======= ======= ===== ======

62,387 24,543 69,933 125,133 77,059 45,761 -- --
78,302 32,437 103,745 230,164 136,118 65,880 -- --
26,817 6,385 20,519 34,432 39,464 14,222 -- --
------- ------ ------- ------- ------- ------- ----- ------
113,872 50,595 153,159 320,865 173,713 97,419 -- --
======= ====== ======= ======= ======= ======= ===== ======

28,351 8,066 38,887 45,236 19,571 16,990 984 7,816
64,768 26,097 83,058 141,619 84,591 46,395 677 11,884
30,732 9,620 52,012 61,722 27,103 17,624 1,661 19,700
------- ------ ------- ------- ------- ------- ----- ------
62,387 24,543 69,933 125,133 77,059 45,761 -- --
======= ====== ======= ======= ======= ======= ===== ======
</TABLE>

F-I- 19
<PAGE> 63

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. UNITS OWNED -- (CONTINUED)

Units owned in the Account are as follows:

<TABLE>
<CAPTION>
VAN ECK
STRONG VARIABLE WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST
-------------------------- ---------------
INTERNATIONAL DISCOVERY WORLDWIDE
STOCK FUND II FUND II HARD ASSETS
PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------- ---------------
<S> <C> <C> <C>
Units owned at January 1, 1999........................... 262,868 28,197 73,721
Units acquired........................................... 258,376 91,292 105,757
Units disposed........................................... 223,453 86,116 71,150
------- ------ -------
Units owned at December 31, 1999......................... 297,791 33,373 108,328
======= ====== =======

Units owned at January 1, 1998........................... 137,912 18,742 22,198
Units acquired........................................... 201,600 14,670 59,926
Units disposed........................................... 76,644 5,215 8,403
------- ------ -------
Units owned at December 31, 1998......................... 262,868 28,197 73,721
======= ====== =======

Units owned at January 1, 1997........................... 39,763 7,708 7,560
Units acquired........................................... 132,459 17,417 22,271
Units disposed........................................... 34,310 6,383 7,633
------- ------ -------
Units owned at December 31, 1997......................... 137,912 18,742 22,198
======= ====== =======
</TABLE>

F-I- 20
<PAGE> 64

<TABLE>
<CAPTION>
OPPENHEIMER VARIABLE ACCOUNTS FUND
----------------------------------------------------------------
CAPITAL AGGRESSIVE GROWTH AND STRATEGIC
APPRECIATION GROWTH INCOME HIGH INCOME BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
150,216 95,687 47,458 33,313.. 24,847
135,346 159,858 93,705 60,039.. 54,441
82,628 131,625 58,251 32,216.. 34,723
------- ------- ------ ------ ------
202,934 123,920 82,912 61,136.. 44,565
======= ======= ====== ====== ======
49,967 28,422 5,836 6,274... 1,797
119,856 77,765 48,498 33,123.. 77,960
19,607 10,500 6,876 6,084... 54,910
------- ------- ------ ------ ------
150,216 95,687 47,458 33,313.. 24,847
======= ======= ====== ====== ======

-- -- -- -- --
59,904 36,728 7,354 7,955... 2,265
9,937 8,306 1,518 1,681... 468
------- ------- ------ ------ ------
49,967 28,422 5,836 6,274... 1,797
======= ======= ====== ====== ======
</TABLE>

F-I- 21
<PAGE> 65

INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company
Bethesda, Maryland

We have audited the accompanying statement of admitted assets, liabilities, and
surplus -- statutory basis of Acacia National Life Insurance Company (a wholly
owned subsidiary of Acacia Life Insurance Company) as of December 31, 1999, and
the related statements of operations -- statutory basis, changes in
surplus -- statutory basis, and cash flows -- statutory basis for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Bureau of Insurance, State Corporation Commission of the
Commonwealth of Virginia, which practices differ from generally accepted
accounting principles. The effects on the financial statements of the variances
between the statutory basis of accounting and generally accepted accounting
principles, although not reasonably determinable, are presumed to be material.

In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the 1999 financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of Acacia National Life Insurance Company as of December 31,
1999, or the results of its operations or its cash flows for the year then
ended.

In our opinion, the 1999 financial statements referred to above present fairly,
in all material respects, the admitted assets, liabilities, and surplus of
Acacia National Life Insurance Company as of December 31, 1999, and the results
of its operations and its cash flows for the year then ended, on the basis of
accounting described in Note 1.

/s/ DELOITTE & TOUCHE LLP

Lincoln, Nebraska
April 7, 2000

F-II- 1
<PAGE> 66

[PRICEWATERHOUSECOOPERS LOGO]

INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company

We have audited the accompanying statement of admitted assets, liabilities, and
surplus -- statutory basis of Acacia National Life Insurance Company (the
Company) as of December 31, 1998, and the related statutory statements of
operations and changes in surplus, and cash flow, for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

As described more fully in Note 1 to the financial statements, these financial
statements were prepared in conformity with accounting practices prescribed or
permitted by the Bureau of Insurance, State Corporation Commission of the
Commonwealth of Virginia, which practices differ from accounting principles
generally accepted in the United states. The effects on the financial statements
of the variances between the statutory basis of accounting and accounting
principles generally accepted in the United States are material.

In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with accounting principles generally accepted in the United States,
the financial position of the Company as of December 31, 1998 or the results of
its operations or its cash flow for the years then ended.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities, and surplus of the
Company as of December 31, 1998, and the results of its operations and its cash
flow for the year then ended, on the basis of accounting described in Note 1.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP

Washington, D.C.
March 31, 1999

F-II- 2
<PAGE> 67

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS -- STATUTORY BASIS
(COLUMNAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
ADMITTED ASSETS
Investments
Bonds..................................................... $522,328 $556,127
Mortgage loans............................................ 894 --
Preferred stocks.......................................... 70 546
Common stocks............................................. 385 1,778
Short-term investments.................................... 5,685 13,614
Other investments......................................... 495 682
Loans on insurance policies............................... 7,955 7,579
-------- --------
Total investments...................................... 537,812 580,326
Cash........................................................ 5,195 64
Accrued investment income................................... 9,157 9,775
Reinsurance recoverable -- affiliate........................ 1,162 --
Income taxes receivable -- affiliate........................ 1,203 400
Other assets................................................ 370 2,169
Separate accounts........................................... 140,638 73,334
-------- --------
$695,537 $666,068
======== ========
LIABILITIES AND SURPLUS
LIABILITIES
Life and annuity reserves................................. $464,615 $483,126
Funds left on deposit..................................... 65,002 62,065
Reserve for unpaid claims................................. 1,461 2,113
Interest maintenance reserve.............................. 1,684 3,202
Accrued separate account transfers........................ (7,702) (6,297)
Accounts payable -- affiliates............................ 999 7,586
Other liabilities......................................... 2,927 3,736
Asset valuation reserve................................... 1,805 5,513
Separate accounts......................................... 140,638 73,334
-------- --------
671,429 634,378
-------- --------
SURPLUS
Preferred stock, 8% non-voting, non-cumulative, $1,000 par
value, 10,000 shares authorized; 6,000 shares issued
and outstanding........................................ 6,000 6,000
Common stock, $170 par value; 15,000 shares authorized,
issued and outstanding................................. 2,550 2,550
Additional paid-in capital................................ 13,450 13,450
Retained earnings......................................... 2,108 9,690
-------- --------
24,108 31,690
-------- --------
$695,537 $666,068
======== ========
</TABLE>

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

F-II- 3
<PAGE> 68

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS -- STATUTORY BASIS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
INCOME
Premium income............................................ $ 79,057 $ 67,919
Less net reinsurance:
Yearly renewable term.................................. (5,318) (4,601)
-------- --------
Net premium income................................... 73,739 63,318
Funds left on deposit..................................... 8,257 8,292
Net investment income..................................... 41,553 46,305
Miscellaneous insurance income............................ 1,481 25
-------- --------
125,030 117,940
-------- --------
EXPENSES
Benefits to policyowners.................................. 86,472 83,190
Decrease in reserves...................................... (15,569) (18,937)
Commissions............................................... 7,256 7,353
General insurance expenses................................ 13,562 16,377
Taxes, licenses and fees.................................. 2,154 1,167
Amortization of goodwill.................................. 382 684
Net premium transferred to separate accounts.............. 34,764 30,725
-------- --------
129,021 120,559
-------- --------
Loss before federal income taxes and realized capital
losses................................................. (3,991) (2,619)
Income taxes (benefit).................................... (439) (1,822)
-------- --------
Loss before realized capital losses....................... (3,552) (797)
Realized capital losses (net of tax of ($972) and $760 and
transfers to interest maintenance reserve of ($1,111)
and $965 for 1999 and 1998, respectively).............. (6,244) (209)
-------- --------
Net loss.................................................. $ (9,796) $ (1,006)
======== ========
</TABLE>

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

F-II- 4
<PAGE> 69

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF CHANGES IN SURPLUS -- STATUTORY BASIS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARES)

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL
---------------- ---------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ------ ------ ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998............... 6,000 $6,000 15,000 $2,550 $13,450 $10,506 $32,506
Change in non-admitted assets........ -- -- -- -- -- 684 684
Change in net unrealized capital
gains.............................. -- -- -- -- -- (49) (49)
Change in valuation basis of
reserves........................... -- -- -- -- -- (120) (120)
Transfer to asset valuation
reserve............................ -- -- -- -- -- (325) (325)
Net loss............................. -- -- -- -- -- (1,006) (1,006)
----- ------ ------ ------ ------- ------- -------
BALANCE, December 31, 1998............. 6,000 6,000 15,000 2,550 13,450 9,690 31,690
Change in non-admitted assets........ -- -- -- -- -- (3) (3)
Change in net unrealized capital
gains.............................. -- -- -- -- -- (1,491) (1,491)
Transfer from asset valuation
reserve............................ -- -- -- -- -- 3,708 3,708
Net loss............................. -- -- -- -- -- (9,796) (9,796)
----- ------ ------ ------ ------- ------- -------
BALANCE, December 31, 1999............. 6,000 $6,000 15,000 $2,550 $13,450 $ 2,108 $24,108
===== ====== ====== ====== ======= ======= =======
</TABLE>

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

F-II- 5
<PAGE> 70

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS -- STATUTORY BASIS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net premium income received............................... $ 74,462 $ 63,318
Miscellaneous insurance income............................ 8,904 8,176
Net investment income received............................ 43,690 44,953
Net premium transferred to separate accounts.............. (37,511) (34,192)
Benefits paid to policyowners............................. (89,096) (84,359)
Commissions, expenses and taxes, other than federal income
tax.................................................... (21,394) (23,804)
Federal income tax received............................... 608 2,596
Other operating income and disbursements.................. (7,174) 8,488
--------- ---------
Net cash used in operating activities..................... (27,511) (14,824)
--------- ---------
INVESTING ACTIVITIES:
Proceeds from investments sold, matured or repaid......... 337,366 182,412
Purchase of investments................................... (312,277) (161,169)
Net decrease (increase) in loans on insurance policies.... (376) 522
--------- ---------
Net cash provided by investing activities................. 24,713 21,765
--------- ---------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM
INVESTMENTS............................................... (2,798) 6,941
CASH AND SHORT-TERM INVESTMENTS -- BEGINNING OF PERIOD...... 13,678 6,737
--------- ---------
CASH AND SHORT-TERM INVESTMENTS -- END OF PERIOD............ $ 10,880 $ 13,678
========= =========
</TABLE>

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

F-II- 6
<PAGE> 71

ACACIA NATIONAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF OPERATIONS
Acacia National Life Insurance Company (the Company) is a wholly owned
subsidiary of Acacia Life Insurance Company (Acacia Life). Acacia Life is a
wholly owned subsidiary of Ameritas Holding Company (AHC) which is a wholly
owned subsidiary of Ameritas Acacia Mutual Holding Company (AAMHC).

The Board of Directors of Ameritas Mutual Insurance Holding Company (AMIHC) and
Acacia Mutual Holding Corporation (AMHC) approved and adopted a plan of merger
under which the two would merge to form AAMHC. In addition their two wholly
owned subsidiaries, AHC and Acacia Financial Group, Ltd. (AFG), would merge to
form Ameritas Holding Company. Public informational hearings on the proposed
merger were held on November 20, 1998 with the Nebraska Insurance Director and
on December 17, 1998 with the D.C. Insurance Commissioner. Following the
commissioner's approval a special meeting with the eligible members of AMHC was
held on December 22, 1998 and with the members of AMIHC on December 29, 1998.
With the members approval the merger became effective January 1, 1999. The
business combination was accounted for as a pooling of interests.

AMHC was formed in 1997 in conjunction with a plan of reorganization
(Reorganization) of the former Acacia Life, Acacia Mutual Life Insurance Company
(Acacia). Pursuant to the Reorganization which was approved by the Department of
Insurance and Securities Regulation of the District of Columbia and the eligible
members of Acacia and became effective June 30, 1997, Acacia was converted to a
mutual insurance holding company structure whereby AMHC and AFG were formed and
Acacia was converted to a stock life insurance company wholly owned by AFG. As
of the effective date of the reorganization, the membership interests and the
contractual rights of the policyowners of Acacia were separated -- the
membership interests automatically became, by operation of law, membership
interests in AMHC and the contractual rights remained in Acacia. Each person who
becomes the owner of a designated policy issued by Acacia after the effective
date of the Reorganization became a member of AMHC, now AAMHC.

The Company, domiciled in Virginia, underwrites and markets deferred and
immediate annuities and life insurance products within the United States and is
licensed to operate in 46 states and the District of Columbia. On December 1,
1995 and September 9, 1996, respectively, operations began for the Acacia
National Variable Life Insurance Separate Account I and Acacia National Variable
Annuity Separate Account II which are separate investment accounts within the
Company.

Non-insurance products and services are offered by an affiliate of the Company,
Acacia Financial Corporation (AFC), a wholly owned subsidiary of Acacia Life,
which is a holding company of several financial service companies. Principal
subsidiaries include: Calvert Group Ltd. (Calvert), a provider of investment
advisory, management and administrative services to The Calvert Group of mutual
funds; Acacia Federal Savings Bank (AFSB), a federally chartered savings bank;
and The Advisors Group, Inc., a broker/dealer.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared, except as to form, on
the basis of accounting practices prescribed or permitted by the Bureau of
Insurance, State Corporate Commission of the Commonwealth of Virginia (statutory
basis or SAP), which are designed primarily to demonstrate ability to meet
claims of policyowners. These practices differ in certain respects, which in
some cases may be material, from generally accepted accounting principles (GAAP)
applied in the presentation of financial condition and results of operations on
the "going concern" basis commonly followed by other types of enterprises.

In March of 1998, the National Association of Insurance Commissioners adopted
the Codification of Statutory Accounting Principles (Codification). The
Codification, which is intended to standardize

F-II- 7
<PAGE> 72
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)

BASIS OF PRESENTATION -- (CONTINUED)

regulatory accounting and reporting for the insurance industry, is proposed to
be effective January 1, 2001. However, statutory accounting principles will
continue to be established by individual state laws and permitted practices and
it is uncertain when, or if, the state of Virginia will require adoption of
Codification for the preparation of statutory financial statements. The Company
has not finalized the quantification of the effects of Codification on its
statutory financial statements.

The accompanying statutory financial statements vary in some respects from
generally accepted accounting principles. The most significant differences
include: (a) bonds are generally carried at amortized cost rather than being
valued at either amortized cost or fair value based on their classification
according to the Company's ability and intent to hold or trade the securities;
(b) costs related to acquiring new business are charged to operations as
incurred and not deferred, whereas premiums are taken into income on a pro rata
basis over the respective term of the policies; (c) policy reserves are carried
at amounts which approximate surrender values rather than accumulation values
and statutory investment reserves are established; (d) a provision has not been
made for federal income taxes resulting from all of the cumulative differences
in assets and liabilities determined on a tax return and financial statement
basis; and (e) changes in certain assets designated as "non-admitted" assets
have been charged to surplus.

In 1998, the Company's financial information was included in the determination
of consolidated GAAP amounts for Acacia Mutual Holding Corporation. The Acacia
National Life Insurance Company GAAP amounts were derived from this consolidated
financial information. The Company does not prepare separate financial
statements on a GAAP basis.

The impact of the estimated differences between SAP and GAAP in 1998 were as
follows:

<TABLE>
<CAPTION>
CAPITAL
NET LOSS AND SURPLUS
-------- -----------
<S> <C> <C>
AS REPORTED UNDER SAP....................................... $(1,006) $ 31,690
Adjustments:
Deferred policy acquisition costs......................... 2,874 58,017
AVR and IMR............................................... 615 8,715
Deferred Federal income tax............................... (732) (20,077)
Net policyholder liabilities.............................. (1,601) (11,291)
Investments............................................... (59) 20,013
Other..................................................... (500) (946)
------- --------
AMOUNTS UNDER GAAP.......................................... $ (409) $ 86,121
======= ========
</TABLE>

For 1999, it is not practicable to determine the above information.

USE OF ESTIMATES
The preparation of financial statements in conformity with statutory accounting
practices requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.

F-II- 8
<PAGE> 73
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

USE OF ESTIMATES -- (CONTINUED)
The principal accounting and reporting practices followed are:

INVESTMENTS
Investments are reported according to valuation procedures prescribed by the
National Association of Insurance Commissioners (NAIC), and generally: bonds and
mortgage loans are valued at amortized cost; preferred stock at cost; common
stock at fair value; other investments on the equity method; and separate
account assets are carried at fair value.

Realized capital gains and losses, including valuation allowances on specific
investments, are recorded in the Statement of Operations and unrealized gains
and losses are credited or charged to retained earnings.

SEPARATE ACCOUNTS
The Company operates separate accounts on which the earnings or losses accrue
exclusively to contract holders. The assets (mutual fund investments) and
liabilities of each account are clearly identifiable and distinguishable from
other assets and liabilities of the Company. Amounts are reported at fair value.

NON-ADMITTED ASSETS
Certain assets (primarily goodwill) are designated as "non-admitted" under
statutory accounting requirements. These assets are excluded from the statements
of admitted assets, liabilities and surplus by adjustments to retained earnings.
Total "non-admitted assets" were $2,981 and $2,978 in 1999 and 1998,
respectively.

RESERVES
Life policy reserves are computed by using the Commissioners Reserve Valuation
Method (CRVM) and the Commissioners Standard Ordinary Mortality table. Annuity
reserves are calculated using the Commissioners Annuity Reserve Valuation Method
(CARVM) and the maximum valuation interest rate; for annuities with life
contingencies, the prescribed valuation mortality table is used. Reserves for
unpaid claims include claims reported and unpaid and claims not yet reported,
the latter estimated on the basis of historical experience. As such amounts are
necessarily estimates, the ultimate liability will differ from the amount
recorded and will be reflected in operations when additional information becomes
known.

Accrued separate account transfers primarily consists of the amount of
policyholder account values over modified reserves used in the separate account,
such as the use of CARVM and CRVM.

The interest maintenance reserve (IMR) is calculated based on the prescribed
methods developed by the NAIC. Realized gains and losses, net of tax, resulting
from interest rate changes on fixed income investments are deferred and credited
to this reserve. These gains and losses are then amortized into investment
income over what would have been the remaining years to maturity of the
underlying investment. Amortization included in net investment income was $407
and $350 for 1999 and 1998, respectively.

The asset valuation reserve (AVR) is a required appropriation of surplus to
provide for possible losses that may occur on certain investments held by the
Company. The reserve is computed based on holdings of bonds, stocks, and
short-term investments and realized and unrealized gains and losses, other than
those resulting from interest rate changes. Changes in the reserve are charged
or credited to retained earnings.

INCOME TAXES
The Company, beginning in 1999, will file a consolidated tax return with Acacia
Life Insurance Company. Prior to 1999, Acacia National filed a consolidated
return with Acacia Mutual Holding Corporation and its

F-II- 9
<PAGE> 74
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

USE OF ESTIMATES -- (CONTINUED)
INCOME TAXES -- (CONTINUED)
subsidiaries. An agreement among the members of the consolidated group,
generally, provides for distribution of consolidated tax results as if filed on
a separate return basis.

The Company's federal income tax returns have been examined by and settled with
the Internal Revenue Service through 1995.

Under statutory accounting practices, no provision is made for deferred federal
income taxes related to temporary differences between statutory and taxable
income. Such temporary differences arise primarily from capitalization and
amortization of deferred policy acquisition costs, certain reserve calculations
and recognition of realized gains or losses on sales of bonds.

Federal income tax regulations allowed certain special deductions for 1983 and
prior years which are accumulated in a memorandum tax account designated as
"policyholders' surplus". Generally, this policyholders' surplus account (PSA)
will become subject to tax at the then current rates only if the accumulated PSA
exceeds certain maximum limitations or if certain cash distributions are deemed
to be paid out of the account. At December 31, 1999 and 1998, the Company has
$6.6 million in their policyholders' surplus accounts which is not reflected in
the financial statements.

RECOGNITION OF PREMIUM INCOME AND RELATED EXPENSES
Premiums are reported as income when collected over the premium paying periods
of the policies. Annuity and fund deposits are included as income when received.
Policy acquisition costs, such as commissions and other marketing and issuance
expenses incurred in connection with acquiring new business, are charged to
operations as incurred. Premium income consists of:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31
------------------
1999 1998
------- -------
<S> <C> <C>
Life........................................................ $27,747 $23,552
Annuity..................................................... 51,310 44,367
------- -------
$79,057 $67,919
======= =======
</TABLE>

RECLASSIFICATIONS
Certain items on the prior year financial statements have been reclassified to
conform to current year presentation.

2. FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate a
value:

BONDS -- For publicly traded securities, fair value is determined
using an independent pricing source. For securities without a readily
ascertainable fair value, fair value has been determined using an interest
rate spread matrix based upon quality, weighted average maturity and
Treasury yields.

MORTGAGE LOANS -- Mortgage loans in good standing are valued on the
basis of discounted cash flow. The interest rate that is assumed is based
upon the weighted average term of the mortgage and appropriate spread over
Treasuries. There were no mortgage loans in default at December 31, 1999.

PREFERRED STOCKS -- For publicly traded securities, fair value is
determined using an independent pricing source.

F-II- 10
<PAGE> 75
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

2. FINANCIAL INSTRUMENTS -- (CONTINUED)
COMMON STOCKS -- For publicly traded securities, fair value is
determined using an independent pricing source.

SHORT-TERM INVESTMENTS -- The carrying amount approximates fair value
because of the short maturity of these instruments.

OTHER INVESTMENTS -- Fair value for venture capital partnerships is
estimated based on values as last reported by the partnership and
discounted for their lack of marketability.

LOANS ON INSURANCE POLICIES -- Fair values for loans on insurance
policies are estimated using a discounted cash flow analysis at interest
rates currently offered for similar loans. Loans on insurance policies with
similar characteristics are aggregated for purposes of the calculations.

CASH -- The carrying amount equals fair value.

ACCRUED INVESTMENT INCOME -- Fair value of accrued investment income
equals book value.

INVESTMENT-TYPE CONTRACTS -- Reserves held on investment-type
insurance contracts, i.e. contracts which do not contain significant
morbidity risks, are carried at amounts which approximate fair value.

FUNDS LEFT ON DEPOSIT -- Funds on deposit which do not have fixed
maturities are carried at the amount payable on demand at the reporting
date.

The estimated fair values of the Company's financial instruments are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
1999 1998
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Financial assets:
Bonds............................................. $522,328 $517,993 $556,127 $591,776
Preferred stocks.................................. 70 106 546 798
Common stocks..................................... 385 385 1,778 1,778
Mortgage loans.................................... 894 861 -- --
Short-term investments............................ 5,685 5,685 13,614 13,614
Other investments................................. 495 495 682 682
Loans on insurance policies....................... 7,955 6,816 7,579 6,996
Cash.............................................. 5,195 5,195 64 64
Accrued investment income......................... 9,157 9,157 9,775 9,775
Financial Liabilities:
Investment-type contracts......................... $357,515 $357,515 $380,641 $380,641
Funds left on deposit............................. 65,002 65,002 62,065 62,065
</TABLE>

These values do not necessarily represent the value for which the financial
instrument could be sold.

F-II- 11
<PAGE> 76
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

3. INVESTMENTS

The table below provides additional information relating to bonds and stocks
held by the Company as of December 31, 1999:

<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
--------- ------- ------- --------
<S> <C> <C> <C> <C>
U.S. Corporate................................. $292,892 $ 6,818 $ 8,603 $291,107
Mortgage-backed................................ 102,157 803 2,465 100,495
U.S. Treasury securities and obligations of
U.S. government agencies..................... 68,397 3,284 314 71,367
Foreign........................................ 15,237 15 603 14,649
Asset backed................................... 43,645 9 3,279 40,375
-------- ------- ------- --------
Total bonds.................................. $522,328 $10,929 $15,264 $517,993
-------- ------- ------- --------
Preferred stocks............................... $ 70 $ 36 $ -- $ 106
-------- ------- ------- --------
Common stocks.................................. $ 1,137 $ -- $ 752 $ 385
-------- ------- ------- --------
</TABLE>

The comparative data as of December 31, 1998 is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
--------- ------- ------ --------
<S> <C> <C> <C> <C>
U.S. Corporate................................. $294,538 $24,557 $2,729 $316,366
Mortgage-backed................................ 166,042 4,928 708 170,262
U.S. Treasury securities and obligations of
U.S. government agencies..................... 72,543 9,705 -- 82,248
Foreign........................................ 23,004 624 728 22,900
-------- ------- ------ --------
Total bonds.................................. $556,127 $39,814 $4,165 $591,776
-------- ------- ------ --------
Preferred stocks............................... $ 546 $ 252 $ -- $ 798
-------- ------- ------ --------
Common stocks.................................. $ 1,870 $ 118 $ 210 $ 1,778
-------- ------- ------ --------
</TABLE>

The amortized cost and fair value of bonds at December 31, 1999 are shown below.
Expected maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- --------
<S> <C> <C>
Due in one year or less..................................... $ 18,671 $ 18,764
Due after one year through five years....................... 148,661 149,293
Due after five years through ten years...................... 106,308 105,839
Due after ten years......................................... 102,886 103,227
Mortgage-backed securities.................................. 102,157 100,495
Asset backed................................................ 43,645 40,375
-------- --------
Total..................................................... $522,328 $517,993
======== ========
</TABLE>

At December 31, 1999, the Company had bonds with a book value of $6,870 and a
fair value of $7,818 on deposit with various State Insurance Departments.

F-II- 12
<PAGE> 77
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

3. INVESTMENTS -- (CONTINUED)
Sales of bond investments in 1999 and 1998 resulted in proceeds of $294,291 and
$112,603, respectively. Gains of $1,489 and $505 and losses of $3,316 and $50
were realized on those sales in 1999 and 1998, respectively.

The Company's bond investment portfolio is predominantly comprised of investment
grade securities. At December 31, 1999 and 1998, approximately $16,276 and
$8,865, respectively, in bonds (3.1% and 1.6%, respectively, of the total bond
portfolio) are considered "below investment grade". Securities are classified as
"below investment grade" by utilizing rating criteria established by the NAIC.
During 1999, the Company took other than temporary write downs on bonds of
$6,759.

4. RELATED PARTY TRANSACTIONS

The Company has no employees, affiliates (primarily Acacia Life and Ameritas
entities) provide technical, financial, legal, marketing and investment advisory
support to the Company under various administrative service agreements. The cost
of these services to the Company for years ended December 31, 1999 and 1998 was
$15,929 and $17,695, respectively.

The Company entered into reinsurance agreements (yearly renewable term) with
affiliates. Under these agreements, these affiliates assume life insurance risk
in excess of the Company's retention limit. These reinsurance contracts do not
relieve the Company of its obligations to its policyowners, (see footnote 5).

The assets of the defined contribution plan under Internal Revenue Code Section
401(k) for the employees of Acacia Life include an investment in a deposit
administration contract with the Company of $18,305 and $18,665 at December 31,
1999 and 1998, respectively.

5. REINSURANCE

The Company reinsures all life insurance risks over its retention limit of ten
thousand per policy under yearly renewable term insurance agreements with Acacia
Life and several other non-affiliated companies. The Company remains obligated
for amounts ceded in the event that reinsurers do not meet their obligations.
Since the reinsurance treaties are of such a nature as to pass economic risk to
the reinsurer, appropriate reductions are made from income, claims, expense and
liability items in accounting for the reinsurance ceded.

Premiums and benefits have been reduced by amounts reinsured as follows:

<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Premiums ceded:
Acacia Life............................................... $4,634 $3,971
Others.................................................... 684 630
------ ------
Total premium ceded......................................... $5,318 $4,601
====== ======
Death benefits reimbursed:
Acacia Life............................................... $3,186 $3,610
Others.................................................... 1,082 233
------ ------
Total benefits reimbursed................................... $4,268 $3,843
====== ======
Life and annuity reserves ceded:
Acacia Life............................................... $2,501 $2,108
Others.................................................... 497 392
------ ------
Total life and annuity reserves ceded....................... $2,998 $2,500
====== ======
</TABLE>

F-II- 13
<PAGE> 78

APPENDIX A

ILLUSTRATIONS OF DEATH BENEFITS AND VALUES
The following tables illustrate how the values and Death Benefits of a
Policy may change with the investment experience of the Fund. The tables show
how the values and Death Benefits of a Policy issued to an Insured of a given
age and specified underwriting risk classification who pays the given premium at
issue would vary over time if the investment return on the assets held in each
portfolio of the Funds were a uniform, gross, after-tax annual rate of 0%, 6%,
or 12%. The tables on pages A-3 through A-6 illustrate a Policy issued to a
male, age 45, under a preferred rate non-tobacco underwriting risk
classification. A standard tobacco use and non-tobacco use, and preferred
non-tobacco classification and different rates for certain specified amounts.
The values and Death Benefits would be different from those shown if the gross
annual investment rates of return averaged 0%, 6%, and 12% over a period of
years, but fluctuated above and below those averages for individual Policy
Years, or if the Insured were assigned to a different underwriting risk
classification.

The second column of the tables shows the accumulated value of the premiums
paid at 5%. The following columns show the Death Benefits and the values for
uniform hypothetical rates of return shown in these tables. The tables on pages
A-3 and A-5 are based on the current Cost of Insurance Rates, current expense
deductions and the maximum percent of premium loads. These reflect the basis on
which ANLIC currently sells its Policies. The maximum allowable Cost of
Insurance Rates under the Policy are based upon the 1980 Commissioner's Standard
Ordinary Smoker and Non-Smoker, Male and Female Mortality Tables, without smoker
distinction. ANLIC anticipates reflecting future improvements in actual
mortality experience through adjustments in the current Cost of Insurance Rates
actually applied. ANLIC also anticipates reflecting any future improvements in
expenses incurred by applying lower percent of premium charges and other expense
deductions. The Death Benefits and values shown in the tables on pages A-4 and
A-6 are based on the assumption that the maximum allowable Cost of Insurance
Rates as described above and maximum allowable expense deductions are made
throughout the life of the Policy. After the tenth Policy Year, the maximum
values may be less than illustrated in those states which require the per $1000
components of the Administrative Expense Charge to continue for the life of the
Policy.

The amounts shown for the Death Benefits, Net Cash Surrender values and
accumulation values reflect the fact that the net investment return of the
Subaccounts is lower than the gross, after-tax return of the assets held in the
Funds as a result of expenses paid by the Fund and charges levied against the
Subaccounts. The values shown take into account an average of the expenses paid
by each portfolio available for investment at an equivalent annual rate of .90%
(which is in excess of the current equivalent annual rate of .86% of the
aggregate average daily net assets of the Funds) and the daily charge by ANLIC
to each Subaccount for assuming mortality and expense risks and administrative
expenses (which is equivalent to a charge at an annual rate of 0.90% for Policy
Years 1-15 and 0.45% thereafter on pages A-3 and A-5 and at an annual rate of
1.10% for Policy Years 1-15 and .65% thereafter on pages A-4 and A-6 of the
average net assets of the Subaccounts). The investment adviser or other
affiliates of various Funds have agreed to reimburse the portfolios to the
extent that the aggregate operating expenses (certain portfolios may exclude
certain items) were in excess of an annual rate of average daily net assets.
These agreements are expected to continue in future years but may be terminated
at any time. As long as the expense limitations continue for a portfolio, if a
reimbursement occurs, it has the effect of lowering the portfolio's expense
ratio and increasing its total return. The illustrated gross annual investment
rates of return of 0%, 6%, and 12% were computed after deducting fund expenses
and correspond to approximate net annual rates of -1.80%, 4.20%, and 10.20%
respectively, for Policy Years 1-15 and -1.35%, 4.65%, and 10.65% for the Policy
Years thereafter respectively, on pages A-3 and A-5 and -2.00%, 4.00%, and
10.00% respectively, for years 1-15, and -1.65%, 4.35%, and 10.35% thereafter on
pages A-4 and A-6.

The hypothetical values shown in the tables do not reflect any charges for
federal income tax burden attributable to Separate Account I, since ANLIC is not
currently making such charges. However, such charges may be made in the future
and, in that event, the gross annual investment rate of return would have to
exceed 0 percent, 6 percent, or 12 percent by an amount sufficient to cover the
tax charges in order to produce the Death Benefits and Accumulation Values
illustrated. (See the section on Federal Tax Matters.)

EXECUTIVE SELECT
A- 1
<PAGE> 79

The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all Net Premiums are allocated to Separate Account I, and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner has not requested an increase or decrease in the initial Specified Amount,
that no partial withdrawals have been made, and that no more than fifteen
transfers have been made in any Policy Year so that no transfer charges have
been incurred. Illustrated values would be different if the proposed Insured
were female, a tobacco user, in substandard risk classification, or were another
age, or if a higher or lower premium was illustrated.

Upon request, ANLIC will provide comparable illustrations based upon the
proposed Insured's age, gender and risk class, the Specified Amount, the Death
Benefit option, and planned periodic premium schedule requested, and any
available riders requested. These illustrations may be provided to you in
printed form by your registered representative. ANLIC may also make these
illustrations available to you by electronic means, such as through our website.
In addition, upon client request, illustrations may be furnished reflecting
allocation of premiums to specified Subaccounts. Such illustrations will reflect
the expenses of the portfolio in which the Subaccount invests.

EXECUTIVE SELECT
A- 2
<PAGE> 80

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age: 45 Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A
USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES

<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT 12% HYPOTHETICAL GROSS
RETURN RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
END ACCUMULATED --------------------- --------------------- -------------------------
OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ---------- -------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,775 3,903 250,000 4,175 250,000 4,447 250,000
2 11,839 7,535 250,000 8,316 250,000 9,132 250,000
3 18,206 11,044 250,000 12,580 250,000 14,250 250,000
4 24,891 14,512 250,000 17,053 250,000 19,927 250,000
5 31,911 17,852 250,000 21,651 250,000 26,126 250,000
6 39,281 21,063 250,000 26,380 250,000 32,904 250,000
7 47,020 24,136 250,000 31,234 250,000 40,313 250,000
8 55,146 27,065 250,000 36,215 250,000 48,419 250,000
9 63,678 29,838 250,000 41,318 250,000 57,290 250,000
10 72,637 32,446 250,000 46,540 250,000 67,006 250,000
11 82,044 35,521 250,000 52,534 250,000 78,325 250,000
12 91,921 38,527 250,000 58,792 250,000 90,858 250,000
13 102,292 41,476 250,000 65,337 250,000 104,751 250,000
14 113,182 44,379 250,000 72,195 250,000 120,164 250,000
15 124,616 47,244 250,000 79,388 250,000 137,273 250,000
16 136,622 50,307 250,000 87,315 250,000 156,908 250,000
17 149,228 53,354 250,000 95,676 250,000 178,799 250,000
18 162,465 56,396 250,000 104,501 250,000 203,205 256,039
19 176,363 59,444 250,000 113,825 250,000 230,262 285,525
20 190,956 62,519 250,000 123,686 250,000 260,201 317,445
25 275,624 76,796 250,000 181,191 250,000 464,371 538,670
30 383,684 86,830 250,000 255,192 273,055 800,993 857,062
35 521,600 91,072 250,000 348,864 366,307 1,358,158 1,426,066
</TABLE>

- ---------------
1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND NET CASH
SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY ANLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

EXECUTIVE SELECT
A- 3
<PAGE> 81

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY

EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

Male Issue Age: 45 Preferred Underwriting Class

PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A

USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES

<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT ANNUAL INVESTMENT RETURN
RETURN (-2.00% NET) RETURN (4.00% NET) (10.00% NET)
ACCUMULATED --------------------- --------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ---------- -------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,775 3,894 250,000 4,166 250,000 4,438 250,000
2 11,839 7,007 250,000 7,768 250,000 8,565 250,000
3 18,206 9,976 250,000 11,440 250,000 13,035 250,000
4 24,891 12,885 250,000 15,265 250,000 17,968 250,000
5 31,911 15,644 250,000 19,155 250,000 23,312 250,000
6 39,281 18,251 250,000 23,111 250,000 29,112 250,000
7 47,020 20,690 250,000 27,118 250,000 35,400 250,000
8 55,146 22,950 250,000 31,169 250,000 42,223 250,000
9 63,678 25,017 250,000 35,252 250,000 49,629 250,000
10 72,637 26,874 250,000 39,353 250,000 57,673 250,000
11 82,044 29,051 250,000 44,021 250,000 67,000 250,000
12 91,921 30,993 250,000 48,725 250,000 77,185 250,000
13 102,292 32,699 250,000 53,465 250,000 88,338 250,000
14 113,182 34,158 250,000 58,242 250,000 100,582 250,000
15 124,616 35,359 250,000 63,052 250,000 114,061 250,000
16 136,622 36,454 250,000 68,186 250,000 129,468 250,000
17 149,228 37,244 250,000 73,372 250,000 146,591 250,000
18 162,465 37,691 250,000 78,592 250,000 165,678 250,000
19 176,363 37,748 250,000 83,832 250,000 187,025 250,000
20 190,956 37,371 250,000 89,076 250,000 210,976 257,391
25 275,624 27,344 250,000 115,270 250,000 371,638 431,100
30 383,684 * * 140,736 250,000 629,974 674,072
35 521,600 * * 163,641 250,000 1,051,039 1,103,591
</TABLE>

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

* In the absence of an additional premium, the policy would lapse.

1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 4
<PAGE> 82

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY

EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

Male Issue Age: 45 Preferred Underwriting Class

PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B

USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES

<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
ACCUMULATED ------------------------- ------------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,490 12,044 261,630 12,798 262,384 13,552 263,138
2 29,705 23,286 273,079 25,524 275,317 27,854 277,647
3 45,680 34,251 284,251 38,719 288,719 43,559 293,559
4 62,454 45,145 295,145 52,606 302,606 61,013 311,013
5 80,066 55,757 305,757 66,987 316,987 80,156 330,156
6 98,560 66,087 316,087 81,878 331,878 101,155 351,155
7 117,978 76,124 326,124 97,285 347,285 124,182 374,182
8 138,367 85,863 335,863 113,217 363,217 149,434 399,434
9 159,775 95,292 345,292 129,679 379,679 177,116 427,116
10 182,254 104,397 354,397 146,674 396,674 207,461 457,461
11 205,856 113,827 363,827 164,888 414,888 241,421 491,421
12 230,639 123,046 373,046 183,823 433,823 278,801 528,801
13 256,661 132,069 382,069 203,524 453,524 319,963 569,963
14 283,984 140,913 390,913 224,035 474,035 365,306 615,306
15 312,673 149,588 399,588 245,398 495,398 415,265 665,265
16 342,797 158,830 408,830 268,813 518,813 472,240 722,240
17 374,427 167,951 417,951 293,320 543,320 535,287 785,287
18 407,638 176,965 426,965 318,985 568,985 605,068 855,068
19 442,510 185,891 435,891 345,877 595,877 682,317 932,317
20 479,126 194,758 444,758 374,083 624,083 767,859 1,017,859
25 691,566 236,182 486,182 534,855 784,855 1,352,027 1,602,027
30 962,699 269,165 519,165 730,101 980,101 2,313,609 2,563,609
35 1,308,741 291,151 541,151 965,102 1,215,102 3,897,507 4,147,507
</TABLE>

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

1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 5
<PAGE> 83

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age: 45 Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B
USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES

<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT 12% HYPOTHETICAL GROSS
RETURN RETURN ANNUAL INVESTMENT RETURN
(-2.00% NET) (4.00% NET) (10.00% NET)
ACCUMULATED --------------------- --------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,490 12,019 261,605 12,798 262,384 13,527 263,113
2 29,705 22,538 272,331 24,818 274,611 27,040 276,833
3 45,680 32,745 282,745 37,250 287,250 41,821 291,821
4 62,454 42,846 292,846 50,314 300,314 58,197 308,197
5 80,066 52,630 302,630 63,806 313,806 76,088 326,088
6 98,560 62,096 312,096 77,738 327,738 95,637 345,637
7 117,978 71,227 321,227 92,105 342,105 116,987 366,987
8 138,367 80,012 330,012 106,908 356,908 140,299 390,299
9 159,775 88,438 338,438 122,142 372,142 165,746 415,746
10 182,254 96,486 346,486 137,800 387,800 193,516 443,516
11 205,856 104,683 354,683 154,436 404,436 224,395 474,395
12 230,639 112,473 362,473 171,520 421,520 258,103 508,103
13 256,661 119,853 369,853 189,061 439,061 294,913 544,913
14 283,984 126,816 376,816 207,058 457,058 335,119 585,119
15 312,673 133,348 383,348 225,512 475,512 379,037 629,037
16 342,797 140,077 390,077 245,473 495,473 428,763 678,763
17 374,427 146,342 396,342 265,992 515,992 483,304 733,304
18 407,638 152,103 402,103 287,045 537,045 543,117 793,117
19 442,510 157,313 407,313 308,602 558,602 608,695 858,695
20 479,126 161,930 411,930 330,633 580,633 680,587 930,587
25 691,566 174,928 424,928 447,078 697,078 1,158,690 1,408,690
30 962,699 165,778 415,778 568,953 818,953 1,917,412 2,167,412
35 1,308,741 122,415 372,415 681,770 931,770 3,120,176 3,370,176
</TABLE>

- ---------------
1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 6
<PAGE> 84

APPENDIX B

AUTOMATIC REBALANCING, MODEL ASSET ALLOCATION, DOLLAR COST AVERAGING AND
EARNINGS SWEEP PROGRAMS

To assist the Owner in making a premium allocation decision among
Subaccounts, ANLIC offers automatic transfer programs. These programs are
designed to meet individual needs of the Owner and are not guaranteed to improve
performance of the Policy.

The Owner may elect the Automatic Rebalancing Program which will adjust
values in the Subaccounts to align with a specific percentage of total value in
the Variable Account. By placing a written allocation election form on file with
ANLIC, the Owner may have amounts automatically transferred from the Subaccounts
on either a quarterly, semi-annual or annual basis. The Owner chooses the
percentages to be used under the Automatic Rebalancing Program.

Model Asset Allocation is offered through The Advisors Group, Inc. (TAG) in
conjunction with the services of Ibbotson Associates who were among the first to
develop the modern science of asset allocation. TAG representatives offer a
service created by Ibbotson Associates to match the Owner's risk tolerance and
investment objectives with a model Subaccount percentage allocation formula. To
use this service, the Owner first completes a questionnaire about risk tolerance
and Policy performance objectives. The TAG representative uses the completed
responses to match the Owner's needs to one of ten different model percentage
allocation formulas designed by Ibbotson. The Owner may then elect to follow the
recommended percentage allocation formula, or select a different formula.

Ibbotson Associates provides a valuable service to an Owner who seeks to
follow the science of asset allocation. Some research studies have shown that
the asset allocation decision is the single largest determinant of Portfolio
performance. Asset allocation combines the concepts of asset-liability
management, mean-variance optimization, simulation and economic forecasting. Its
objectives are to match asset classes and strategies to achieve better returns,
to reduce volatility and to attain specific goals such as avoidance of interest
rate or market risk.

As an alternative, ANLIC also offers the Owner the option to elect the
Dollar Cost Averaging Program. Dollar cost averaging is a long term investment
method that uses periodic premium allocations from the Money Market Subaccount
to other Subaccounts. Under the theory of dollar cost averaging, the Owner may
pursue a strategy of regular and systematic purchases to take advantage of
market value fluctuations. More Subaccount accumulation units will be purchased
when Subaccount unit values are low and fewer units will be purchased when unit
values are high. There is no guarantee that the Dollar Cost Averaging Program
will protect against market loss or improve performance of the Policy.

The Dollar Cost Averaging Program provides a valuable service to an Owner
who is able to sustain a long term transfer schedule and who seeks to avoid the
volatility often associated with equity investments.

The Earnings Sweep Program allows an Owner to systematically reallocate
interest earnings from the Fixed Account to one or more of the Subaccounts on a
monthly, quarterly, semi-annual, or annual basis to meet your investment
allocation percentages.

EXECUTIVE SELECT
B- 1
<PAGE> 85

APPENDIX C

[THE ACACIA GROUP LOGO]

EMPLOYEE BENEFIT PLAN
INFORMATION STATEMENT

The purpose of this statement is to inform you as an independent Fiduciary
of the Employee Benefit Plan, of the Sales Representative's relationship to and
compensation from Acacia National Life Insurance Company (ANLIC), as well as to
describe certain fees and charges under the Executive Select Policy being
purchased from the Sales Representative.

The Sales Representative is appointed with ANLIC as its Sales
Representative and is a Securities Registered Representative. In this position,
the Sales Representative is employed to procure and submit to ANLIC applications
for contracts, including applications for Executive Select.

COMMISSIONS, FEES AND CHARGES

The following commissions, fees and charges apply to Executive Select
(Policy):

SALES COMMISSION: ANLIC pays commission to the broker-dealers, which in
turn pay commissions to the registered representative who sells this Policy. The
commission may equal an amount up to 30% of premium in the first Policy Year and
up to 12% of premium in renewal years. Broker-dealers may also receive a service
fee up to an annualized rate of .50% of the Accumulation Value beginning in the
sixth Policy Year. Compensation arrangements may vary among broker-dealers. In
addition, ANLIC may also pay override payments, expense allowances, bonuses,
wholesaler fees, and training allowances. Registered representatives who meet
certain production standards may receive additional compensation. From time to
time, additional sales incentives may be provided to broker-dealers.

COST OF INSURANCE: A monthly charge for the Policy and any riders. The Cost
of Insurance Rates are shown on the Policy Schedule.

MONTHLY PER POLICY CHARGE: ANLIC will make a per Policy charge of $15.00
per month (maximum $15.00) during the first Policy Year and $7.00 per month
(maximum $12.00) thereafter. This charge is guaranteed not to increase above the
maximum.

MONTHLY PER $1000 CHARGE FOR ADMINISTRATIVE EXPENSES: The first ten Policy
Years, there is a monthly charge per $1000 of initial Specified Amount. In
addition, there is a monthly charge per $1000 of each increase in Specified
Amount for ten years from the date of increase. The per $1000 rates for both the
initial Specified Amount and each increase vary by Issue Age, gender, and risk
class. (See the Policy Schedule for rates.)

DAILY ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE: ANLIC makes a daily charge
of the value of the average daily net assets of the Account under the policies
equal to an annual rate of 0.15% (maximum 0.15%). This charge is subtracted when
determining the daily accumulation unit value. This charge is guaranteed not to
increase above the maximum and is designed to reimburse ANLIC for administrative
expenses of issuing, servicing and maintaining the policies. ANLIC does not
expect to make a profit on this fee.

MORTALITY AND EXPENSE RISK CHARGE: ANLIC imposes a charge to compensate it
for bearing certain mortality and expense risks under the policies. ANLIC makes
a daily charge of the value of the average daily net assets of the Account under
the policies equal to an annual rate of 0.75% (maximum 0.95%) in Policy Years
1-15 and 0.30% (maximum 0.50%) thereafter. This charge is subtracted when
determining the daily accumulation unit value.

EXECUTIVE SELECT

C- 1

<PAGE> 86

ANLIC guarantees that this charge will never increase above the maximum. If
this charge is insufficient to cover assumed risks, the loss will fall on ANLIC.
Conversely, if the charge proves more than sufficient, any excess will be added
to ANLIC's surplus. No mortality and expense risk charge is imposed on the Fixed
Account.

PARTIAL AND FULL WITHDRAWALS: Partial withdrawals may be made, subject to
certain restrictions. The Death Benefit will be reduced by the amount of the
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). You may Surrender the Policy at
any time for its Net Cash Surrender Value. There is no surrender charge.

PERCENT OF PREMIUM CHARGE: ANLIC will deduct a percent of premium charge
upon receipt of a premium payment. Currently, this charge is 3.0% of the premium
paid (maximum 5.0%).

FUND INVESTMENT ADVISORY FEES AND EXPENSES: At the direction of the Policy
Owner, Separate Account I purchases shares of Funds which are available for
investment under this Policy. The net assets of Separate Account I will reflect
the value of the Fund shares and therefore, investment advisory fees and other
expenses of the Funds. A complete description of these fees and expenses is
contained in the Funds' prospectuses.

EXECUTIVE SELECT

C- 2

<PAGE> 87

INCORPORATION BY REFERENCE

The Registrant, Separate Account I, purchases or will purchase units from
the portfolios of these Funds at the direction of its Policy Owners. The
prospectuses of these Funds will be distributed with this prospectus and are
hereby incorporated by reference. The prospectuses incorporated by reference are
as follows:

The Alger American Fund
SEC File No. 33-21722

Calvert Variable Series, Inc.
SEC File No. 2-80154

Deutsche Asset Management VIT Funds

SEC File No. 333-00479

Variable Insurance Products Fund
SEC File No. 2-75010

Variable Insurance Products Fund II
SEC File No. 33-20773

Franklin Templeton Variable Insurance Products Trust
SEC File No. 33-23493

Neuberger Berman Advisers Management Trust
SEC File No. 2-88566

Oppenheimer Variable Account Funds
SEC File No. 2-931-77

Van Eck Worldwide Insurance Trust
SEC File No. 33-13019

<PAGE> 88

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.

Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:

Acacia National Life Insurance Company represents that the fees and charges
deducted under the contract, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by the insurance company.

RULE 484 UNDERTAKING

ANLIC'S By-laws provide as follows:

In the event any action, suit or proceeding is brought against a present or
former Director, elected officer, appointed officer or other employee because of
any action taken by such person as a Director, officer or other employee of the
Company or which he omitted to take as a Director, officer or employee of the
Company, the Company shall reimburse or indemnify him for all loss reasonably
incurred by him in connection with such action to the fullest extent permitted
by sec.13.1-696 through sec.13.1-704 of the Code of Virginia, as is now or
hereafter amended, except in relation to matters as to which such person shall
have been finally adjudged to be liable by reason of having been guilty of gross
negligence or willful misconduct in the performance of duties as such Director,
officer or employee. In case any such suit, action or proceeding shall result in
a settlement prior to final judgment and if, in the judgment of the Board of
Directors, such person in taking the action or failing to take the action
complained of was not grossly negligent or guilty of wilful misconduct in the
performance of his duty, the Company shall reimburse or indemnify him for the
amount of such settlement and for all expenses reasonably incurred in connection
with such action and its settlement. This right of indemnification shall not be
exclusive of any other rights to which such person may be entitled.

REPRESENTATION PURSUANT TO RULE 6E-3(T)

This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.

<PAGE> 89

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following Papers and Documents:

The facing sheet.

The prospectus consisting of 83 pages.

The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) Russell J. Wiltgen
(b) Robert-John H. Sands
(c) Deloitte & Touche LLP
(d)PricewaterhouseCoopers LLP
The Following Exhibits:

1. The Following exhibits correspond to those required by paragraph IX A of the
instructions as to exhibits in Form N-8B-2.
(A)(1) Board Resolution Establishing Separate Account I(1)
(A)(2) Not applicable
(A)(3)(a) Underwriting Agreement between The Advisors Group, Inc. and Acacia
National Life Insurance Company(2)
(A)(3)(b) Form of Selling Agreement(3)
(A)(3)(c) Commission Schedule.
(A)(4) Not Applicable
(A)(5)(a) Policy.
(A)(5)(b) Policy Riders.
(A)(6) Certificate of Organization of Acacia National Life Insurance Company(4)
(A)(6) Bylaws of Acacia National Life Insurance Company(4)
(A)(7) Not applicable
(A)(8)(a) Participation Agreement Alger American Fund (1)
(A)(8)(b) Participation Agreement Calvert Variable Series, Inc.(1)
(A)(8)(c) Participation Agreement Deutsche Asset Management VIT Funds.(5)
(A)(8)(d) Form of Participation Agreement Variable Insurance Product Fund.
(A)(8)(e) Form of Participation Agreement Variable Insurance Product Fund II
(A)(8)(f) Participation Agreement Franklin Templeton Variable Insurance
Products Trust(5)
(A)(8)(g) Participation Agreement Neuberger Berman Advisers Management Trust(1)
(A)(8)(h) Participation Agreement Oppenheimer Variable Account Funds(4)

(A)(8)(i) Participation Agreement Van Eck Worldwide Insurance Trust(1)

(A)(9) Not Applicable
(A)(10) Application for Policy

2. (a)(b) Opinion and Consent of Robert-John H. Sands Senior Vice President and
General Counsel
3. No financial statements will be omitted from the final Prospectus pursuant to
Instruction 1(b) or
(c) or Part I.
4. Not applicable.
5. Not applicable.
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
7. (a) Consent of Deloitte & Touche LLP
7. (b) Consent of PricewaterhouseCoopers LLP
8. Not applicable.

1 Incorporated by reference to the Pre-Effective Amendment No. 3 to the
Registration Statement on Form S-6 for Acacia National Variable Life Insurance
Separate Account I (File No. 33-90208), filed on October 11, 1995.

2 Incorporated by reference to the initial Registration Statement for
Acacia National Variable Annuity Separate Account II on Form N-4
(File No 333 -03963), filed August 26, 1996.

3 Incorporated by reference to the initial Registration Statement on
Form S-6 for Acacia National Variable Life Insurance Separate Account I
(File No. 33-90208), filed on March 10, 1995.

4 Incorporated by reference to the Post-Effective Amendment No. 3 to
the Registration Statement on Form S-6 for Acacia National Variable Life
Insurance Separate Account I (File No. 33-90208), filed on May 1, 1997.

5 Incorporated by reference to the Post-Effective Amendment No. 1 to
the Registration Statement on Form S-6 for Acacia National Variable Life
Insurance Separate Account I (File No. 333-81057), filed on February 25, 2000.

<PAGE> 90

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Acacia National Variable Life Insurance Separate Account I, certifies that it
has duly caused this Pre-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized in the City of
Bethesda, County of Montgomery, State of Maryland on this 20th day of April,
2000.

ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE ACCOUNT I, Registrant

ACACIA NATIONAL LIFE INSURANCE COMPANY, Depositor

Attest: /s/ Robert-John H. Sands By: /s/ Charles T. Nason
------------------------- ---------------------
Secretary Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Acacia
National Life Insurance Company on the dates indicated.

SIGNATURE TITLE DATE

<S> <C> <C>
/s/ Charles T. Nason Chairman of the Board April 20, 2000
- -------------------------
Charles T. Nason and Chief Executive Officer

/s/ Robert W. Clyde President and Chief April 20, 2000
- -------------------------
Robert W. Clyde Operating Officer

/s/ Robert-John H. Sands Senior Vice President, April 20, 2000
- -------------------------
Robert-John H. Sands General Counsel & Corporate
Secretary

/s/ Haluk Ariturk Senior Vice President, April 20, 2000
- -------------------------
Haluk Ariturk Product Management and
Administration

/s/ JoAnn M. Martin Senior Vice President, April 20, 2000
- -------------------------
JoAnn M. Martin Chief Financial Officer

/s/ Reno J. Martini Director April 20, 2000
- -------------------------
Reno J. Martini
</TABLE>

<PAGE> 91

<TABLE>

<S> <C> <C>
/S/ Brian J. Owens Senior Vice President, April 20, 2000
- --------------------------
Brian J. Owens Career Distribution

/S/ Janet L. Schmidt Senior Vice President, April 20, 2000
- --------------------------
Janet L. Schmidt Human Resources

/S/ Barry C. Ritter Senior Vice President April 20, 2000
- --------------------------
Barry C. Ritter and Chief Information Officer

/S/ Richard W. Vautravers Senior Vice President April 20, 2000
- --------------------------
Richard W. Vautravers and Corporate Actuary
</TABLE>

<PAGE> 92

EXHIBIT INDEX

EXHIBIT

1. (3)(c) Commission Schedule
1. (5)(a) Policy
1. (5)(b) Policy Riders
1. (8)(d) Form of Participation Agreement Variable Insurance Products Fund
1. (8)(e) Form of Participation Agreement Variable Insurance Products Fund II
1. (10) Application for Policy
2. (a)(b) Opinion and Consent of Robert-John H. Sands
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
7. (a) Consent of Deloitte & Touche LLP
7. (b) Consent of PricewaterhouseCoopers LLP

<PAGE> 1
ACACIA NATIONAL - EXECUTIVE SELECT (Registration No. 333-95593)

EXHIBIT 1. (3) (C)
COMMISSION SCHEDULE

Broker/Dealer, for its efforts in soliciting sales of the policy described as
Policy Form #8020 (Variable Universal Life), shall receive commission as stated
below:

<TABLE>
<CAPTION>
Policy Year Premiums up to First Premiums above First Premiums in Excess Annual Service Fee *
Target Premium Target Premium but of Second Target (Paid Annually on
below Second Target Premium Accumulation Value)
Premium
<S> <C> <C> <C> <C>
1 29% 3% 0.5% 0%
2-5 10% 3% 0.5% 0%
6-15 0% 0% 0% .25%
16+ 0% 0% 0% .15%
</TABLE>

*Writing Representative only
The annual service fee is based on the policy accumulation value, unimpaired by
reduced rate loans, at the beginning of the policy year.

<PAGE> 1
EXHIBIT 1.(5)(a)
Policy

INSURED 1

POLICY NUMBER 3

POLICY TYPE FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE

Flexible Premium Variable Life Insurance Policy.
Death benefit proceeds payable at death of Insured.
Flexible premiums payable during lifetime of Insured.
Some benefits reflect investment results. Non-participating.

THIS POLICY'S ACCUMULATION VALUE IN THE SEPARATE ACCOUNT IS BASED ON
THE INVESTMENT EXPERIENCE OF THAT ACCOUNT AND MAY INCREASE OR
DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE SECTION
7.

THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY BE FIXED OR
MAY VARY UNDER THE CONDITIONS DESCRIBED IN SECTIONS 9 AND 10.

Acacia National Life Insurance Company agrees to pay the death benefit
proceeds of this policy to the Beneficiary on receipt of satisfactory proof
of death of the Insured while this policy is in force.

/s/ Robert W. Clyde /s/ Robert-John H. Sands
President Secretary

"NOTICE OF TEN-DAY RIGHT TO EXAMINE POLICY"

You are urged to read this policy carefully. If, after examination, you are
dissatisfied with it for any reason, you may return it to the selling agent
or to Acacia National Life Insurance Company at our Service Center, P.O.
Box 82579, Lincoln, Nebraska 68501-2579, for a refund within (a) ten (10)
days from the date of delivery of the policy, (b) ten (10) days after
mailing or delivery of a cancellation notice, or (c) forty-five (45) days
after Part I of the application is signed, whichever is later. If allowed
by state law, the amount of the refund will equal the sum of all charges
deducted from premiums paid, plus the net premiums allocated to the Fixed
Account and to the Separate Account adjusted by investment gains and
losses. Otherwise, the amount of the refund will equal the gross premiums
paid less partial withdrawals.

Please read and carefully check the copy of the application attached to
this policy. This application is a part of your policy, and this policy was
issued on the basis that the answers to all questions and the information
shown on this application are true and complete. If any information shown
on it is not true and complete, to the best of your knowledge, or if any
past medical history has been omitted, please notify Acacia National Life
Insurance Company, a Virginia domiciled life insurance company, within ten
days from the date of delivery of the policy to you.

[ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO]

FORM 8020

<PAGE> 2

POLICY SCHEDULE

INSURED: John D Specimen POLICY NUMBER: 2109008020

INITIAL SPECIFIED POLICY DATE: July 1, 2000
AMOUNT OF INSURANCE: $500,000

*PLANNED ANNUAL
ISSUE AGE - GENDER: 35 Male PERIODIC PREMIUM: $20,020.00

OWNER: John D Specimen

INITIAL DEATH BENEFIT OPTION: B

MINIMUM INITIAL PREMIUM $1,225.00

RATING CLASS: REGULAR ISSUE, PREFERRED, NO TOBACCO USE

LOANS:
The maximum loan interest rate is 6.0%. The interest credited on any loaned
part of the values will be no less than 3.5%.

MODES OF PAYMENT FOR PLANNED PERIODIC PREMIUMS:

Annual Semi-Annual Quarterly Monthly
$20,020.00 $10,010.00 $5,005.00 $1,668.33

* This reflects the planned premium and mode you selected at issue. For
further information, see policy Section 3. PREMIUM PAYMENTS.

8020 1-PS

<PAGE> 3

SCHEDULE OF BENEFITS

INSURED: John D Specimen POLICY NUMBER: 2109008020

INITIAL
SPECIFIED AMOUNT MATURITY OR
BENEFIT OF INSURANCE EXPIRATION DATE*
- ------- ------------ ----------------

Flexible Premium Variable Life $500,000 Death of Insured
Form 8020**

* NOTE: It is possible that coverage may not continue to the date of death of
the Insured if premium payments are not sufficient.

** Form number corresponds to form number in the lower left hand corner of
each benefit description.

8020 1.1-SB

<PAGE> 4

SCHEDULE OF BENEFITS
(Continued)

INSURED: John D Specimen POLICY NUMBER: 2109008020

INITIAL
SPECIFIED AMOUNT ANNUAL MATURITY OR
BENEFIT OF INSURANCE PREMIUM * EXPIRATION YEAR
- ------- ------------ --------- ---------------

(This page is used to show any riders that are a part of the policy)

* For any rider, this is the annual first year rider cost of insurance.
(NOTE: These amounts shown are not additional premiums due but are the
amounts deducted from the accumulation value.) See each rider for further
information.

** Form number corresponds to form number in the lower left hand corner of
each benefit description.

8020 1.2-SB

<PAGE> 5

LIST OF SUBACCOUNTS AND PORTFOLIOS

Each subaccount of the Acacia National Life Insurance Company (ANLIC) Separate
Account I invests in a specific portfolio of the following:

INITIAL
ADVISOR/ ALLOCATION OF
SUBADVISOR FUND PORTFOLIO NET PREMIUMS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Calvert Asset Calvert Social Money Market 0%
Management Balanced 50%
Company, Inc. Small Cap Growth 0%
Mid Cap Growth 0%
International Equity 0%
- ---------------------------------------------------------------------------------------------------------------------------

Bankers Trust Company Deutsche VIT Equity 500 Index 0%
Small Cap Index 0%
EAFE Equity Index 0%
- ---------------------------------------------------------------------------------------------------------------------------

Neuberger Berman Neuberger Berman Funds Limited Maturity Bond 0%
Management Inc. Growth 0%
Partners 0%
- ---------------------------------------------------------------------------------------------------------------------------

Oppenheimer Funds, Inc. Oppenheimer Funds High Income Fund/VA 0%
Capital Appreciation Fund/VA 0%
Aggressive Growth Fund/VA 0%
Main Street Growth & Income Fund/VA 0%
Strategic Bond Fund/VA 0%
- ---------------------------------------------------------------------------------------------------------------------------

Templeton Investment Franklin Templeton Funds International Securities 0%
Counsel, Inc. Asset Strategy 0%
- ---------------------------------------------------------------------------------------------------------------------------

Van Eck Associates Corporation
Corporation Van Eck Worldwide Hard Assets 0%
- ---------------------------------------------------------------------------------------------------------------------------

Fred Alger Alger American Fund Growth 50%
Management, Inc. MidCap Growth 0%
Small Capitalization 0%
- ---------------------------------------------------------------------------------------------------------------------------

Fidelity Management Fidelity Funds Equity-Income: Service Class 2 0%
and Research Company High Income: Service Class 2 0%
Contrafund: Service Class 2 0%

Net premiums may also be allocated to the ANLIC Fixed Account.

INITIAL
ALLOCATION OF
NET PREMIUMS
ANLIC Fixed Account 0%
</TABLE>

8020 1-LSP

<PAGE> 6

SCHEDULE OF MAXIMUM CHARGES

ADMINISTRATIVE EXPENSE CHARGE:

The administrative expense charge is made up of three charges.

Per Policy Expense Charge:
The maximum Per Policy Expense Charge is:
In Policy Year Charge
-------------- ------
Year 1 $180 annually ($15 per month)
Years 2+ $144 annually ($12 per month)

Specified Amount Charge:
The annual Specified Amount Charge is $2.76 per $1000 of
Specified Amount for Policy Years 1-10 and $0.00 for
Policy Years 11 and later.

Increase Charge:
Refer to the Schedule of Administrative Expense Charges for
Increases.

ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE:
The maximum asset-based administrative expense charge is 0.15% annually
(0.000409% daily).

MORTALITY AND EXPENSE RISK CHARGE:
The maximum mortality and expense risk charge is:

In Policy Year Charge
-------------- ------
Years 1-15 0.95% annually (0.002596% daily)
Years 16+ 0.50% annually (0.001366% daily)

PERCENT OF PREMIUM CHARGE:
The maximum percent of premium charge is 5% of premiums received.

TRANSFER CHARGE:
The first 15 transfers between Subaccounts and/or the Fixed Account per
policy year are free. Thereafter, there may be a $10 charge for each
transfer.

PARTIAL WITHDRAWAL CHARGE:
The maximum charge for each partial withdrawal is the lesser of $50 or 2%
of the amount withdrawn.

8020 1-SMC

<PAGE> 7

SCHEDULE OF MAXIMUM ANNUAL
COST OF INSURANCE RATES*

INSURED: John D Specimen POLICY NUMBER: 2109008020

ISSUE AGE - GENDER: 35 Male POLICY DATE: July 1, 2000

<TABLE>
<CAPTION>
POLICY YEAR RATE PER $1,000 POLICY YEAR RATE PER $1,000
BEGINNING OF AMOUNT BEGINNING OF AMOUNT
JULY 1 AT RISK JULY 1 AT RISK
----------- --------------- ----------- ---------------
<S> <C> <C> <C>
2000 $1.77 2033 $33.19
2001 $2.24 2034 $36.17
2002 $2.40 2035 $39.51
2003 $2.58 2036 $43.30
2004 $2.79 2037 $47.65
2005 $3.02 2038 $52.64
2006 $3.29 2039 $58.19
2007 $3.56 2040 $64.19
2008 $3.87 2041 $70.53
2009 $4.19 2042 $77.12
2010 $4.55 2043 $83.90
2011 $4.92 2044 $91.05
2012 $5.32 2045 $98.84
2013 $5.74 2046 $107.48
2014 $6.21 2047 $117.25
2015 $6.71 2048 $128.26
2016 $7.30 2049 $140.25
2017 $7.96 2050 $152.95
2018 $8.71 2051 $166.09
2019 $9.56 2052 $179.55
2020 $10.47 2053 $193.27
2021 $11.46 2054 $207.29
2022 $12.49 2055 $221.77
2023 $13.59 2056 $236.98
2024 $14.77 2057 $253.45
2025 $16.08 2058 $272.11
2026 $17.54 2059 $295.90
2027 $19.19 2060 $329.96
2028 $21.06 2061 $384.55
2029 $23.14 2062 $480.20
2030 $25.42 2063 $657.98
2031 $27.85 2064 $1,000.00
2032 $30.44

</TABLE>

* The rates shown are annual rates per $1000 of amount at risk. To calculate
the monthly rate, the annual rate is divided by 12 and rounded to the
nearest five decimal places. These rates apply to the basic policy and do
not include the cost for riders. The rates shown have been adjusted if
this policy was issued with a tabular and/or flat rating as shown in these
schedule pages.

8020 1-COI

<PAGE> 8

SCHEDULE OF ADMINISTRATIVE EXPENSE CHARGES
FOR INCREASES

The additional administrative expense charge imposed under this policy for each
requested increase in specified amount will be based on the table shown below.

The additional administrative expense charge lasts for ten years from the time
of the increase. The rate per $1000 of increased specified amount is based on
the gender, tobacco usage and the attained age of the Insured at the time of the
increase. See Section 10.5 of this policy for further information.

<TABLE>
<CAPTION>
MALE RATES
- --------------------------------------------------------------------------------------------
ATTAINED NON-TOBACCO TOBACCO ATTAINED NON-TOBACCO TOBACCO
AGE USE USE AGE USE USE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
18 2.16 2.76 52 2.76 4.80
19 2.16 2.88 53 2.88 4.92
20 2.28 3.00 54 2.88 5.16
21 2.28 3.12 55 3.00 5.28
22 2.40 3.12 56 3.12 5.40
23 2.40 3.24 57 3.24 5.64
24 2.52 3.36 58 3.24 5.76
25 2.64 3.48 59 3.36 5.88
26 2.64 3.48 60 3.48 6.12
27 2.64 3.48 61 3.60 6.24
28 2.64 3.48 62 3.72 6.48
29 2.64 3.60 63 3.84 6.72
30 2.76 3.60 64 3.96 6.84
31 2.76 3.60 65 4.08 7.08
32 2.76 3.60 66 4.20 7.32
33 2.76 3.60 67 4.44 7.44
34 2.76 3.60 68 4.80 7.68
35 2.76 3.60 69 5.04 7.92
36 2.76 3.60 70 5.28 8.16
37 2.76 3.72 71 5.52 8.52
38 2.64 3.72 72 5.88 8.76
39 2.64 3.72 73 6.24 9.00
40 2.64 3.72 74 6.60 9.36
41 2.52 3.84 75 6.96 9.72
42 2.52 3.84 76 7.68 10.80
43 2.40 3.84 77 8.64 11.88
44 2.28 3.84 78 9.48 12.96
45 2.16 3.84 79 10.44 14.28
46 2.28 3.96 80 11.40 15.48
47 2.40 4.08 81 12.60 16.92
48 2.40 4.32 82 13.68 18.48
49 2.52 4.44 83 15.00 20.04
50 2.64 4.56 84 16.32 21.84
51 2.64 4.68 85 17.76 23.64
- --------------------------------------------------------------------------------------------
</TABLE>

8020 1-SAECI

<PAGE> 9

This page left intentionally blank.

<PAGE> 10

TABLE OF CONTENTS

POLICY SCHEDULE PAGES

SECTION 1. DEFINITIONS......................................5

SECTION 2. GENERAL PROVISIONS...............................7
2.1 Meaning of In Force..............................7
2.2 When This Policy Terminates......................7
2.3 The Policy and its Parts.........................7
2.4 Representations and Contestability...............7
2.5 Misstatement of Age or Gender....................8
2.6 Suicide..........................................8
2.7 The Owner........................................8
2.8 The Beneficiary..................................8
2.9 Changing the Beneficiary.........................8
2.10 Assigning the Policy.............................9
2.11 Non-Participating................................9

SECTION 3. PREMIUM PAYMENTS.................................9
3.1 Minimum Initial Premium..........................9
3.2 Planned Periodic Premiums........................9
3.3 Unscheduled Premiums.............................9
3.4 Premium Limits...................................9
3.5 Where to Pay Premiums............................9
3.6 Net Premium.....................................10
3.7 Percent of Premium Charge.......................10
3.8 Allocation of Net Premiums......................10

SECTION 4. GRACE PERIOD AND REINSTATEMENT 10
4.1 Grace Period....................................10
4.2 Continuation of Insurance.......................10
4.3 Reinstating the Policy..........................11

SECTION 5. SEPARATE ACCOUNT................................11
5.1 The Account.....................................11
5.2 The Subaccounts.................................11
5.3 Valuation of Assets.............................12
5.4 Transfer Among Subaccounts......................12
5.5 The Funds.......................................12
5.6 Portfolio Changes...............................12

SECTION 6. THE FIXED ACCOUNT...............................13
6.1 The Fixed Account...............................13
6.2 Transfers Among the Fixed Account
and the Subaccounts.............................13

8020 3

<PAGE> 11

SECTION 7. ACCUMULATION VALUE..............................13
7.1 How Accumulation Value of the Policy
is Determined...................................13
7.2 Accumulation Value of the Subaccounts...........14
7.3 Net Asset Value.................................14
7.4 Subaccount Unit Value...........................14
7.5 Accumulation Value of the Fixed Account.........15
7.6 Interest Credits................................15
7.7 Administrative Expense Charge...................16
7.8 Cost of Insurance...............................16
7.9 Cost of Insurance Rates.........................16
7.10 Monthly Deduction...............................17
7.11 Annual Report...................................17
7.12 Illustrative Reports............................17

SECTION 8. POLICY SURRENDER
AND PARTIAL WITHDRAWAL..........................17
8.1 Surrender of the Policy.........................17
8.2 Net Cash Surrender Value........................18
8.3 Partial Withdrawal..............................18
8.4 Postponement of Payments........................18

SECTION 9. DEATH BENEFIT...................................19
9.1 Death Benefit Proceeds..........................19
9.2 Interest on Proceeds............................19
9.3 Death Benefit...................................19
9.4 Postponement of Payment.........................20

SECTION 10. POLICY CHANGES..................................20
10.1 Change in Death Benefit Options.................20
10.2 Change in the Specified Amount..................21
10.3 Decreasing the Specified Amount.................21
10.4 Increasing the Specified Amount.................21
10.5 Administrative Expense Charges for Increases....22

SECTION 11. LOAN BENEFITS...................................22
11.1 Making a Policy Loan............................22
11.2 Loan Interest...................................22
11.3 Reduced Loan Interest Rate......................22
11.4 Other Borrowing Rules...........................22
11.5 Repaying a Policy Debt..........................23

SECTION 12. PAYMENT OPTIONS.................................23
12.1 Payment Option Rules............................23
12.2 Description of Options..........................24

SECTION 13. NOTES ON OUR COMPUTATIONS.......................24
13.1 Basis of Computations...........................24
13.2 Methods of Computing Values.....................24

TABLES OF SETTLEMENT OPTIONS....................................25

8020 4

<PAGE> 12

SECTION 1. DEFINITIONS

"ACCUMULATION VALUE" means the total amount of value held in your accounts at
any time. It is equal to the total of the accumulation value held in the
Separate Account, the Fixed Account, and the accumulation value held in the
general account which secures outstanding policy debt.

"ATTAINED AGE" means the issue age of the Insured plus the number of complete
policy years that this policy has been in force.

"BENEFICIARY" means the person to whom the death benefit proceeds are payable
upon the death of the Insured. The beneficiary is named by the Owner in the
application. If changed, the beneficiary is as shown in the latest change filed
and recorded with us. If no beneficiary survives the Insured, the Owner or the
Owner's estate will be the beneficiary. The interest of any beneficiary is
subject to that of any assignee.

"DEATH BENEFIT" means the amount of insurance coverage provided under the
selected death benefit option of this policy.

"DEATH BENEFIT PROCEEDS" means the proceeds payable to the beneficiary upon
receipt by us of the satisfactory proof of the death of the Insured while this
policy is in force. It is equal to: (1) the death benefit; plus (2) any
additional life insurance proceeds provided by any riders; minus (3) any
outstanding policy debt; minus (4) any overdue monthly deductions, including the
deduction for the month of death.

"INSURED" means the person upon whose life this policy is issued.

"ISSUE AGE" means the age at the Insured's nearest birthday on the policy date.

"ISSUE DATE" means the date that all financial, contractual, and administrative
requirements have been completed and processed. The issue date will be shown in
a confirmation notice sent to you.

"MAXIMUM AVAILABLE LOAN AMOUNT" is equal to the net cash surrender value at the
time of the loan less the monthly deductions remaining for the balance of the
policy year, less interest on the policy debt including the requested loan to
the next policy anniversary date.

"MONTHLY ACTIVITY DATE" means the same date in each succeeding month as the
policy date except that whenever the monthly activity date falls on a date other
than a valuation date, the monthly activity date will be deemed the next
valuation date.

"MONTHLY DEDUCTIONS" means the deductions taken from the accumulation value on
the monthly activity date. These deductions are equal to: 1) the current cost of
insurance for the basic policy plus the cost for any riders; and 2) the
administrative expense charge.

"NET CASH SURRENDER VALUE" means the accumulation value on any valuation date
less any outstanding policy debt and less any overdue monthly deductions.

"NET PREMIUM" means the premium paid less the percent of premium charge.

8020 5

<PAGE> 13

"OUTSTANDING POLICY DEBT" means the sum of all unpaid policy loans and accrued
interest on policy loans.

"OWNER" means the Owner of this policy, as designated in the application or as
subsequently changed. If a policy has been absolutely assigned, the assignee is
the Owner. A collateral assignee is not the Owner. See Section 2.7 for the
rights and privileges of the Owner.

"PERCENT OF PREMIUM CHARGE" is an amount deducted from each premium received to
cover certain expenses. This charge is a percentage of the premium. The
applicable percentage can be found in the schedule pages.

If you surrender this policy in the first two policy years, we will refund a
portion of the percent of premium charge deducted in the first policy year. For
surrenders in the first policy year, 100% of the first year percent of premium
charge will be refunded. For surrenders in the second policy year, 50% of the
first year percent of premium charge will be refunded. There is no refund after
the second policy anniversary.

"PLANNED PERIODIC PREMIUM" means a selected scheduled premium of a level amount
at a fixed interval. The initial planned periodic premium you selected is shown
in the schedule pages. See Section 3.2 of this policy.

"POLICY DATE" means the effective date for all coverage provided in the
application. The policy date is used to determine policy anniversary dates,
policy years and monthly activity dates. Policy anniversaries are measured from
the policy date. The policy date and the issue date will be the same unless: (1)
an earlier policy date is specifically requested; or (2) additional premiums or
application amendments are required at the time of delivery, in which case the
policy date will be earlier.

"POLICY YEAR" means the period from one policy anniversary date until the next
policy anniversary date.

"SEC" means the Securities and Exchange Commission.

"SATISFACTORY PROOF OF DEATH" means all of the following must be submitted:

a. Certified copy of the death certificate.

b. A Notice of Death Claim.

c. This policy.

d. Any other information that we may reasonably require to establish the
validity of the claim.

"SPECIFIED AMOUNT" means the minimum death benefit under the policy while this
policy remains in force. The initial specified amount is shown in the schedule
pages. Adjustments and changes to the specified amount can occur as discussed in
Section 10.

"SURRENDER" means this policy may be terminated by you during the Insured's life
for its net cash surrender value. See Section 8 of this policy.

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"VALUATION DATE" is any day on which the New York Stock Exchange is open for
trading.

"YOU" AND "YOUR" refer to the Owner of this policy. The Insured may or may not
be the Owner.

"WE", "US" AND "OUR" refer to Acacia National Life Insurance Company. Our
Administrative Office is at P.O. Box 82579, Lincoln, Nebraska 68501-2579.

SECTION 2. GENERAL PROVISIONS

2.1 MEANING OF IN FORCE

This policy will remain in force as long as on each monthly activity date the
net cash surrender value is sufficient to cover monthly deductions.

2.2 WHEN THIS POLICY TERMINATES

This policy will terminate on the earliest of:

a. Any monthly activity date when the net cash surrender value is insufficient
to cover monthly deductions and the grace period ends without sufficient
premium being paid.

b. The Insured dies.

c. You request the coverage be terminated and you return this policy.

2.3 THE POLICY AND ITS PARTS

This policy is a legal contract between you and us. It is issued in return for
the application and payment of the minimum initial premium as described in
Section 3.1. This policy, the application, any supplemental applications,
riders, endorsements, and amendments are the entire contract. No change in this
policy will be valid unless it is in writing, attached to this policy, and
approved by either the president or secretary of the company. No agent may
change this policy or waive any of its provisions.

2.4 REPRESENTATIONS AND CONTESTABILITY

We rely on statements made in the application. In the absence of fraud, they are
considered representations and not warranties. We can contest this policy for
any material misrepresentation of fact. The misrepresentation must have been
made in the application attached to this policy when issued or in a supplemental
application made a part of this policy when a change in coverage or
reinstatement went into effect.

We cannot contest this policy after it has been in force during the Insured's
life for two years from the policy date. Nor can we contest any increased
benefits later than two years after the effective date of the increased benefits
during the Insured's life. Any increase or reinstatement will be contestable,
within the two year period, only with regard to statements made in the
supplemental application. This provision does not apply to riders with their own
contestability provision.

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2.5 MISSTATEMENT OF AGE OR GENDER

If the age or gender of the Insured or any person insured by rider has been
misstated on the application, the death benefit and any additional benefits
provided will be those which would have been purchased by the most recent
deduction for the cost of insurance and the cost of any additional benefits at
the Insured's correct age or gender.

2.6 SUICIDE

If the Insured commits suicide while sane or insane, within two years from the
policy date, we will limit the proceeds. The limited amount will equal all
premiums paid for this policy, less the sum of: (1) outstanding policy debt; (2)
partial withdrawals; and (3) and the cost for riders.

If the Insured commits suicide, while sane or insane, within two years from the
effective date of any increase in the specified amount, we will limit the
proceeds payable with respect to the increase. The proceeds thus limited will
equal the total cost of insurance applicable to the increase. This provision
does not apply to riders with their own suicide provision.

2.7 THE OWNER

While the Insured is living you have all the benefits, rights and privileges
under this policy. These include naming a successor-owner, changing the
beneficiary, assigning this policy, enjoying all policy benefits, and exercising
all policy options.

If you are not the Insured, you should name a successor-owner who will become
the Owner if you die before the Insured. If you die before the Insured and there
is no successor-owner, ownership will pass to your estate.

2.8 THE BENEFICIARY

You can name primary and contingent beneficiaries. Your original beneficiary
choice is shown in the attached application.

Unless a payment plan is chosen, the proceeds payable at the Insured's death
will be paid in a lump sum to the primary beneficiary. If the primary
beneficiary dies before the Insured, the proceeds will be paid to the contingent
beneficiary. If no beneficiary survives the Insured, the proceeds will be paid
to your estate.

2.9 CHANGING THE BENEFICIARY

You may change the beneficiary during the Insured's lifetime. We do not limit
the number of changes that may be made. To make the change, we must receive a
completed Change of Beneficiary form and any other forms required by our
Administrative Office. The change will take effect as of the date we record it
at our Administrative Office, even if the Insured dies before we do so. Each
change will be subject to any payment we made or any other action we took before
the change is recorded.

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2.10 ASSIGNING THE POLICY

You may assign this policy. For an assignment to bind us, we must receive a
signed copy in our Administrative Office. We are not responsible for the
validity of any assignment.

An assignment is subject to any policy debt. Policy debt is discussed in Section
11.

2.11 NON-PARTICIPATING

This policy is non-participating. In other words, no dividends will be paid
under this policy.

SECTION 3. PREMIUM PAYMENTS

3.1 MINIMUM INITIAL PREMIUM

The minimum initial premium for the policy is the minimum amount of premium
necessary to be paid on or before the date the policy is delivered. The minimum
initial premium for the policy is shown in the schedule pages. Payment of the
minimum initial premium will not necessarily keep the policy in force beyond the
first policy month.

3.2 PLANNED PERIODIC PREMIUM

This is a flexible premium policy. You may choose to pay planned periodic
premiums. However, planned periodic premiums are not required. The amount and
frequency of the planned periodic premiums you selected when this policy was
issued is shown in the schedule pages. You may change the frequency of the
planned periodic premiums or the amount by sending a written request to our
Administrative Office. We reserve the right to limit the amount and frequency of
the planned periodic premiums you choose to pay.

3.3 UNSCHEDULED PREMIUMS

Any premium we receive under this policy in an amount different from the planned
periodic premium will be considered an unscheduled premium. Unscheduled premiums
can be made at any time while this policy is in force, subject to the premium
limits provision below.

3.4 PREMIUM LIMITS

We reserve the right to limit the amount and frequency of premium payments. We
will not accept that portion of a premium payment which affects the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended. This excess amount will be returned to you.

3.5 WHERE TO PAY PREMIUMS

Each premium after the first one is payable at our Administrative Office. Upon
request, a receipt signed by our Secretary or an Assistant Secretary will be
given for any premium payment.

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3.6 NET PREMIUM

Before the premiums paid are allocated to the Subaccounts and/or Fixed Account,
a percent of premium charge is deducted. The amount of premium then allocated is
called the net premium.

3.7 PERCENT OF PREMIUM CHARGE

The percent of premium charge is deducted from each premium payment received.
The maximum percent of premium charge is shown in the schedule pages. We have
the option of charging a current percent of premium charge, which can be less
than the maximum.

3.8 ALLOCATION OF NET PREMIUMS

Unless otherwise required by state law, the initial net premium will be
allocated on the issue date to the Subaccounts and/or the Fixed Account as you
have selected on the application. When state or other applicable law or
regulation requires return of at least your premium payments should you return
this policy pursuant to the "Notice of Ten-Day Right to Examine Policy"
provision shown on the policy cover, the initial net premium will be allocated
on the issue date to a money market Subaccount, unless you have allocated 100%
to the Fixed Account. Then, on the 13th day after the issue date, the
accumulation value will be reallocated to the Subaccounts and/or the Fixed
Account as you have selected on the application. If you have allocated 100% to
the Fixed Account, the accumulation value is immediately allocated to the Fixed
Account on the issue date. Any additional premium received will be allocated in
accordance with your instructions. You may change the allocation of later net
premiums without charge. The allocation will apply to future net premiums after
we receive the change. The Subaccounts and the Fixed Account are discussed in
Sections 5 and 6.

SECTION 4. GRACE PERIOD
AND REINSTATEMENT

4.1 GRACE PERIOD

This policy will begin a 61 day grace period when the net cash surrender value
on any monthly activity date is not sufficient to cover monthly deductions.

The 61 day grace period will begin on the day we mail a notice of the premium
necessary to keep this policy in force. We will mail this notice to you at your
last known address and to any assignee of record. If sufficient premium is not
paid by the end of the grace period, this policy will terminate without value.

If the Insured dies during the grace period, the overdue monthly deductions will
be deducted from the death proceeds.

4.2 CONTINUATION OF INSURANCE

Insurance coverage under this policy and any benefits provided by any rider(s)
will be continued through the grace period.

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4.3 REINSTATING THE POLICY

If the Insured is living and application is made within three years from the
beginning of any grace period, this policy can be considered for reinstatement
if it terminated because a grace period ended without sufficient premium being
paid.

To apply for reinstatement, you must send evidence satisfactory to us that the
Insured is insurable. The effective date of the reinstatement will be the first
monthly activity date on or next following the date the application for
reinstatement is approved.

To reinstate the policy, you will have to pay a premium equal to the greater of:

a. a premium sufficient to bring the net cash surrender value to an amount
above zero; or

b. three times the current month's monthly deductions.

We will accept a premium larger than the applicable amount described above.

This policy cannot be reinstated if it has been surrendered for its net cash
surrender value. Any policy debt will be reinstated.

SECTION 5. SEPARATE ACCOUNT

5.1 THE ACCOUNT

The word Account, where we use it in this policy without qualification, means
the Acacia National Life Insurance Company Separate Account I. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of Virginia. We own the assets of the
Account and keep them separate from the assets of our general account.

The Account is used only to fund the variable benefits provided under this
policy and any other variable life policies supported by the Account.

The assets of the Account will be available to cover the liabilities of our
general account only to the extent that the assets of the Account exceed the
liabilities of the Account arising under the variable life policies supported by
the Account.

5.2 THE SUBACCOUNTS

The Account has several Subaccounts. We list those available on the policy date
in the schedule pages. The available Subaccounts may change after the policy
date. Any changes will be disclosed by the prospectus. You determine, using
whole percentages, how the net premium will be allocated among the Subaccounts.
You may choose to allocate nothing to a particular Subaccount. The allocations
to the Subaccounts along with allocations to the Fixed Account must total 100%.
The assets of each Subaccount will be used to buy shares in a corresponding
portfolio of the funding vehicles designated in the schedule pages. See Section
5.5. Income and realized and unrealized gains or losses from the assets of each
Subaccount are credited to or charged against that Subaccount without regard to
income, gains or losses in the other Subaccounts, our general account or any
other separate accounts.

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5.3 VALUATION OF ASSETS

The value of the assets of each Subaccount will be determined at the end of each
valuation date.

5.4 TRANSFER AMONG SUBACCOUNTS

You may transfer amounts among Subaccounts as often as you wish in a policy
year. The transfer will take effect on the later of the date designated in the
request or on the valuation date following receipt of the written request at our
Administrative Office.

Each transfer must be for a minimum of $250 or the balance in the Subaccount, if
less. The first 15 transfers per policy year will be allowed free of charge. For
any transfer in excess of 15 in a policy year, a $10 transfer charge may be
deducted from the accumulation value. The minimum amount which can remain in a
Subaccount and/or in the Fixed Account as a result of a transfer is $100. Any
amount below this minimum must be included in the amount transferred.

Transfers may be subject to additional restrictions by the Funds.

5.5 THE FUNDS

The word Funds, where we use it in this policy without qualification, means the
funding vehicles designated in the schedule pages. The available Funds may
change. Any changes will be disclosed in the prospectus. The Funds are
registered with the SEC under the Investment Company Act of 1940 as diversified
open-end management investment companies. The Funds bear their own expenses. The
Funds have several portfolios; there is a portfolio that corresponds to each of
the Subaccounts. We list those available on the policy date in the schedule
pages.

5.6 PORTFOLIO CHANGES

A portfolio of the Funds might, in our judgment, become unsuitable for
investment by a Subaccount. This might happen because of a change in investment
policy, because of a change in laws or regulations, because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the Funds, or to invest in
another fund. We would first notify and receive approval from the SEC and the
Virginia Insurance Department. This approval process is on file with the
insurance commissioner of the state where this policy is delivered. Any
portfolio changes will be disclosed in the prospectus. If the SEC requires that
such action receive approval from a majority of the policyholders in the
Account, then you will be notified of your right to vote. You will be notified
of any material change in the investment policy of any portfolio in which you
have an interest. If you are dissatisfied with any change, you always have the
option to transfer all or a portion of your accumulation value to the Fixed
Account (See Section 6.2) or to one of the other available Subaccounts (See
Section 5.4).

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SECTION 6. THE FIXED ACCOUNT

6.1 THE FIXED ACCOUNT

Net premiums allocated to and transfers to the Fixed Account under this policy
become part of the general account assets of Acacia National Life Insurance
Company which support annuity and insurance obligations. The Fixed Account
includes all of Acacia National Life Insurance Company's assets, except those
assets segregated in separate accounts. Acacia National Life Insurance Company
maintains the sole discretion to invest the assets of the Fixed Account, subject
to applicable law.

You determine, using whole percentages, how much of the premium will be
allocated to the Fixed Account. You may choose to allocate nothing to the Fixed
Account. The allocations to the Fixed Account along with allocations to the
Subaccounts must total 100%.

6.2 TRANSFERS AMONG THE FIXED ACCOUNT AND THE SUBACCOUNTS

You may transfer amounts into the Fixed Account from the Subaccounts at any time
during the policy year.

You may make one transfer per policy year out of the Fixed Account to any of the
other Subaccounts. This transfer may only occur during the 30 day period
following each policy anniversary.

The allowable transfer amount out of the Fixed Account is limited to the
greatest of:

a. 25% of the accumulation value in the Fixed Account; or

b. any Fixed Account transfer which occurred during the prior 13 months; or

c. $1,000.

SECTION 7. ACCUMULATION VALUE

7.1 HOW ACCUMULATION VALUE OF THE POLICY IS DETERMINED

The accumulation value of this policy on the issue date is:

a. The net premiums received by us on or before the issue date; minus

b. Any monthly deductions due on or before the issue date.

The accumulation value of this policy on a valuation date is equal to the total
of the values in each Subaccount and the Fixed Account, plus the accumulation
value impaired by policy debt which is held in the general account, plus any net
premium received on that valuation date but not yet allocated.

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7.2 ACCUMULATION VALUE OF THE SUBACCOUNTS

To compute the accumulation value held in the Subaccounts on any valuation date,
we multiply each Subaccount's unit value (defined in Section 7.4 below) by the
number of Subaccount units allocated to this policy.

The number of Subaccount units will increase when:

a. Net premiums are credited to that Subaccount.

b. Transfers from other Subaccounts or the Fixed Account are credited to that
Subaccount.

c. Policy debt (principal or interest) is repaid and allocated to the
Subaccount, or interest is credited from the amount held in the general
account to secure the policy debt.

The number of Subaccount units will decrease when:

a. A policy loan is taken from that Subaccount.

b. A partial withdrawal is taken from that Subaccount.

c. A portion of the monthly deduction is taken from that Subaccount.

d. A transfer is made from that Subaccount to other Subaccounts or the Fixed
Account.

e. Policy loan interest not paid when due is taken from that Subaccount.

f. A portion of any transfer charge is taken from that Subaccount.

Each transaction above will increase or decrease the number of Subaccount units
allocated to this policy by an amount equal to the dollar value of the
transaction divided by the current unit value on the valuation date for that
transaction.

7.3 NET ASSET VALUE

The net asset value of the shares of each portfolio of the Fund is determined
once daily as of the close of business of the New York Stock Exchange on days
when the Exchange is open for business. The net asset value is determined by
adding the values of all securities and other assets of the portfolio,
subtracting liabilities and expenses and dividing by the number of outstanding
shares of the portfolio. Expenses, including the investment advisory fee, are
accrued daily.

7.4 SUBACCOUNT UNIT VALUE

For each Subaccount, the value of an accumulation unit (unit value) was set when
the Subaccount was established. The unit value of each Subaccount reflects the
investment performance of that Subaccount. The unit value may increase or
decrease from one valuation date to the next.

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The unit value of each Subaccount on any valuation date shall be calculated as
follows:

a. The per share net asset value of the corresponding Fund portfolio on the
valuation date times the number of shares held by the Subaccount, before
the purchase or redemption of any shares on that date; minus

b. A daily charge for administrative expenses, called the asset-based
administrative expense charge, shown in the schedule pages; minus

c. A daily charge for mortality and expense risk shown in the schedule pages;
minus

d. Any taxes payable by the Separate Account; divided by

e. The total number of units held in the Subaccount on the valuation date
before the purchase or redemption of any units on that date.

When transactions are made, the actual dollar amounts are converted to
accumulation units. The number of accumulation units for a transaction is found
by dividing the dollar amount of the transaction by the current unit value.

7.5 ACCUMULATION VALUE OF THE FIXED ACCOUNT

The accumulation value of the Fixed Account on a valuation date is equal to:

a. The net premiums credited to the Fixed Account; plus

b. Any transfers from the Subaccounts credited to the Fixed Account; plus

c. Any policy debt (principal or interest) repaid and allocated to the Fixed
Account, or interest credited from the amount held in the general account
to secure the policy debt; minus

d. Any policy loans taken from the Fixed Account; minus

e. Any partial withdrawals (and charges) taken from the Fixed Account; minus

f. The portions of the monthly deductions taken from the Fixed Account; minus

g. Any transfers made from the Fixed Account; minus

h. The portions of any transfer charges taken from the Fixed Account; minus

i. Any policy loan interest not paid when due taken from the Fixed Account;
plus

j. Interest credits.

7.6 INTEREST CREDITS

We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 3.5%. We may, at our
discretion, credit a higher current rate of interest.

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7.7 ADMINISTRATIVE EXPENSE CHARGE

On each monthly activity date, one-twelfth of an annual charge called the
administrative expense charge will be deducted from the accumulation value. The
maximum administrative expense charge is shown in the schedule pages.
We have the option of charging a current administrative expense charge, which
can be less than the maximum. Any current administrative expense charge will
apply to all policies having the same specified amount, policy year and policy
month as this policy and whose Insured is the same issue age, gender and risk
class as the Insured covered by this policy. The actual charges will be shown on
your annual report.

7.8 COST OF INSURANCE

The cost of insurance will be calculated each month. It is the cost of insurance
for the basic policy (including any increases in the specified amount) plus the
cost for any riders. The cost for this policy is equal to:

a. the death benefit on the monthly activity date, discounted at the
guaranteed rate of interest for the Fixed Account for one month;

b. less the accumulation value on the monthly activity date, after all monthly
deductions have been taken except for the cost of insurance;

c. the above result divided by $1,000;

d. multiplied by the monthly cost per $1,000 of insurance (as described below
in the Cost of Insurance Rates section).

The charge made during the policy year will be shown on the annual report.

7.9 COST OF INSURANCE RATES

For the initial specified amount, the cost of insurance rates will not exceed
those shown on the SCHEDULE OF MAXIMUM ANNUAL COST OF INSURANCE RATES in the
schedule pages. To calculate the monthly rates, divide by 12 and round to the
nearest five decimal places.

The maximum rates shown in the schedule pages have been adjusted for any table
rating and/or flat extra rating.

Each year, the annual cost of insurance rates will be declared for the next
policy year. These rates will be based on the Insured's issue age, gender,
tobacco usage and risk class, and the policy duration. The rates will be
adjusted for any table rating and/or flat extra rating.

Any change in the current cost of insurance rates will apply to all Insureds of
the same issue age, gender, tobacco usage and risk class, and whose policies
have been in effect for the same length of time.

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7.10 MONTHLY DEDUCTION

The monthly deduction is made each policy month against the accumulation value
allocated to the Subaccounts and to the Fixed Account. Monthly deductions will
be deducted from the Subaccounts and the Fixed Account in the same proportion as
the balances held in the Subaccounts and the Fixed Account. The monthly
deduction is equal to:

a. The monthly administrative expense charge for the current policy month;
plus

b. The cost of insurance for the current policy month, including the cost for
any riders.

Refer to the SCHEDULE OF MAXIMUM ANNUAL COST OF INSURANCE RATES and the SCHEDULE
OF MAXIMUM CHARGES in the schedule pages for further details.

7.11 ANNUAL REPORT

Each year the Owner will be mailed an annual report that shows the progress of
this policy. This report will show for the last policy year:

a. premiums paid;

b. expense charges;

c. investment gains/losses; and

d. cost of insurance.

As of the date of the report, the following values will be shown:

a. accumulation value;

b. specified amount of insurance;

c. death benefit; and

d. outstanding debt, if any.

7.12 ILLUSTRATIVE REPORTS

The Owner may request a report illustrating future values of this policy under
both guaranteed and current assumptions at any time. The first report requested
in a policy year is free. If allowed by state law, a reasonable fee not to
exceed $50 may be charged for each report after the first report.

SECTION 8. POLICY SURRENDER AND
PARTIAL WITHDRAWALS

8.1 SURRENDER OF THE POLICY

This policy may be surrendered at any time during the Insured's life for its net
cash surrender value.

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8.2 NET CASH SURRENDER VALUE

The amount payable upon surrender is the accumulation value on the valuation
date we receive your written request less any outstanding policy debt. There is
no surrender charge in this policy. The net cash surrender value is payable in
one lump sum or under one of the payment options. See Section 12.

8.3 PARTIAL WITHDRAWAL

A partial withdrawal of this policy may be made for any amount of at least $500
subject to the following rules:

a. After a partial withdrawal, the net cash surrender value, not including any
percent of premium refund, must be at least the greater of $1,000 or an
amount sufficient to maintain this policy in force for the next 12 months.

b. A partial withdrawal is irrevocable.

c. The request must be made to us in writing on a form approved by us.

d. A withdrawal charge will be deducted from the amount withdrawn. The charge
will not exceed the lesser of $50 or 2% of the amount withdrawn.

Partial withdrawals will affect other policy values. The accumulation value will
be reduced by the amount of the partial withdrawal. If Death Benefit Option A is
in effect on the date of a partial withdrawal, the specified amount will be
reduced by the amount of the partial withdrawal. These reductions will also
reduce the death benefits. See Section 9.

You may tell us how to allocate the partial withdrawal among the Subaccounts
and/or the Fixed Account, provided that the minimum amount remaining in a
Subaccount and/or the Fixed Account as a result of the allocation is $100. If
you do not, or if there is not enough value in any Subaccount or in the Fixed
Account, the partial withdrawal will be allocated among the Subaccounts and the
Fixed Account in the same proportion as the balances held in each Subaccount and
the Fixed Account on the date we receive the request in our Administrative
Office.

8.4 POSTPONEMENT OF PAYMENTS

We will usually pay any amounts payable from the Subaccounts as a result of
surrender, partial withdrawal or policy loan within seven (7) days after we
receive written request in our Administrative Office on a form satisfactory to
us.
We can postpone such payments or any transfers of amounts between Subaccounts
if:

a. The New York Stock Exchange is closed other than customary weekend and
holiday closings or trading on the New York Stock Exchange is restricted as
determined by the SEC; or

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b. The SEC by order permits the postponement for the protection of
policyowners; or

c. An emergency exists as determined by the SEC, as a result of which disposal
of securities is not reasonable, practicable, or it is not reasonable or
practicable to determine the value of the net assets of the Account.

We may defer the payment of a full surrender, partial withdrawal or policy loan
from the Fixed Account for up to six months from the date we receive your
written request.

SECTION 9. DEATH BENEFIT

9.1 DEATH BENEFIT PROCEEDS

The death benefit proceeds payable to the beneficiary upon our receipt of
satisfactory proof of the death of the Insured while this policy is in force
will equal:

a. The death benefit; plus

b. Any additional life insurance proceeds provided by any rider; minus

c. Any outstanding policy debt; minus

d. Any overdue monthly deductions including the deduction for the month of
death.

9.2 INTEREST ON PROCEEDS

Death benefit proceeds that are paid in one lump sum will include interest if we
do not pay the proceeds within 30 days of receiving satisfactory proof of death.
The rate of interest will be the greater of:

a. 3% per annum.

b. the current rate of interest payable on death benefit proceeds.

c. the rate required by state law.

Interest will accrue from the date we receive satisfactory proof of death to the
date of payment of the death benefit proceeds.

9.3 DEATH BENEFIT

Subject to the provisions of this policy, the death benefit option shall be
either Option A or Option B. The initial death benefit option is shown in the
schedule pages. It may be changed as described in Section 10.1.

Option A: Basic Coverage

The death benefit will be the greater of:

a. The current specified amount; or

b. A percentage of the accumulation value on the date of death, where the
applicable percentage is determined from the table shown below.

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Option B: Basic Coverage Plus Accumulation Value

The death benefit will be the greater of:

a. The current specified amount plus the accumulation value on the date of
death; or

b. A percentage of the accumulation value on the date of death, where the
applicable percentage is determined from the table shown below.

<TABLE>
<CAPTION>
Insured's Applicable Insured's Applicable
Age * Percentage Age * Percentage
--------- ---------- --------- ----------
<S> <C> <C> <C>
40 or younger 250% 60 130%
41 243 61 128
42 236 62 126
43 229 63 124
44 222 64 122
45 215 65 120
46 209 66 119
47 203 67 118
48 197 68 117
49 191 69 116
50 185 70 115
51 178 71 113
52 171 72 111
53 164 73 109
54 157 74 107
55 150 75-90 105
56 146 91 104
57 142 92 103
58 138 93 102
59 134 94 or older 101
</TABLE>

*Insured's Age means the attained age at the beginning of the policy year.

9.4 POSTPONEMENT OF PAYMENT

We will usually pay any death benefit proceeds within seven (7) days after we
receive satisfactory proof of death.

SECTION 10. POLICY CHANGES

10.1 CHANGE IN DEATH BENEFIT OPTIONS

You may change the death benefit option which is shown on the schedule pages and
is referred to in Section 9. The death benefit option may not be changed in the
first policy year and may only be changed once per policy year thereafter. The
change will become effective on the first monthly activity date on or next
following the date we approve your requested change.

If you change from Option A to Option B, the specified amount after the change
will equal the death benefit prior to the change, less the accumulation value as
of the date of change. A change from Option B to Option A will change the
specified amount to an amount equal to the death benefit as of the date of
change.

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10.2 CHANGE IN THE SPECIFIED AMOUNT

After this policy has been in effect for one year, you can increase or decrease
the specified amount. To make a change, send a written request to our
Administrative Office. Any change will be effective on the monthly activity date
on or next following the date we approve the request, unless you specify a later
date. You may only change the specified amount once per policy year.

10.3 DECREASING THE SPECIFIED AMOUNT

A decrease in the specified amount is subject to the following conditions:

a. A decrease may not be made during the first policy year nor during the
first 12 policy months following an increase in specified amount except for
a decrease which was the result of a partial withdrawal.

b. The specified amount in effect after any decrease may not be less than
$100,000. However, once the Insured reaches attained age 100, the specified
amount in effect after any decrease may not be less than $1,000.

c. The resulting specified amount after a decrease may not affect the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended.

A decrease in the specified amount will reduce the specified amount in the
following order:

a. The specified amount provided by the most recent increase;

b. The next most recent increases successively; and

c. The initial specified amount.

10.4 INCREASING THE SPECIFIED AMOUNT

Any increase of the specified amount is subject to the following conditions:

a. An increase may not be made in the first policy year.

b. A supplemental application for the increase and satisfactory evidence of
insurability of the Insured must be received.

c. The minimum amount of any increase is $25,000.

d. An increase cannot be made if the Insured's attained age is over the
maximum issue age for the Insured's risk class.

e. At the time of the increase, the accumulation value less any outstanding
policy debt must be at least equal to 12 times the current month's monthly
deduction reflecting the increase in specified amount. If this value is not
sufficient to support these monthly deductions for at least one year beyond
the effective date of the increase, additional premiums may be required.
You will be notified of any additional premium due.

8020 21

<PAGE> 29

10.5 ADMINISTRATIVE EXPENSE CHARGE FOR INCREASES

An additional administrative expense charge will be imposed under this policy in
the event of each requested increase in specified amount. The charge is an
amount per $1000 of increased specified amount based on the gender, tobacco
usage and attained age of the Insured at the time of the increase. The
additional administrative expense charge will be determined at the time of each
increase. It will remain level for ten years and will drop to zero thereafter.

See the SCHEDULE OF ADMINISTRATIVE EXPENSE CHARGES FOR INCREASES in the schedule
pages for further information.

SECTION 11. LOAN BENEFITS

This policy has loan benefits that are described below. The amount of
outstanding loans plus accrued interest is called outstanding policy debt. Any
outstanding policy debt will be deducted from proceeds payable at the Insured's
death or on surrender.

11.1 MAKING A POLICY LOAN

To obtain a policy loan from us, this policy is the only security required. The
Maximum Available Loan Amount is equal to the net cash surrender value at the
time of the loan less the monthly deductions remaining for the balance of the
policy year, less interest on the policy debt including the requested loan to
the next policy anniversary date.

11.2 LOAN INTEREST

The maximum interest rate on any loan is 6% per year. We have the option of
charging less. Interest accrues daily and becomes a part of the policy debt.
Interest payments are due on each anniversary date. If interest is not paid when
due, it will be added to the policy debt and will bear interest at the rate
charged on the loan.

11.3 REDUCED LOAN INTEREST RATE

The loan interest rate will be reduced to a maximum of 4% for eligible loan
amounts. This reduced loan interest rate is available on and after the 10th
policy anniversary. The eligible loan amount for a reduced loan interest rate
will be equal to the accumulation value plus any previous partial withdrawals,
minus total premiums paid and minus any outstanding policy debt held at a
reduced interest rate. However, the total reduced loan amount cannot exceed the
Maximum Available Loan Amount. If a regular loan is in effect on the policy
anniversary, it will be converted to a loan with the reduced loan interest rate
up to the eligible amount. Interest on loans with a reduced interest rate will
accrue at the reduced loan rate.

11.4 OTHER BORROWING RULES

When a policy loan is made, or when interest is not paid when due, an amount
sufficient to secure the policy debt is transferred out of the Account and the
Fixed Account and into our general account. You may tell us how to allocate that
accumulation value among the Subaccounts and/or the Fixed Account provided that
the amount remaining in a Subaccount or the Fixed Account as a result of the
allocation

8020 22

<PAGE> 30

is $100. Without specific direction, the accumulation value will be allocated
among the Subaccounts and/or the Fixed Account in the same proportion that the
policy's accumulation value in each Subaccount and the Fixed Account bears to
the total accumulation value in all Subaccounts and the Fixed Account on the
date we make the loan.

Accumulation value transferred into the general account to secure policy debt
will be credited with 3.5% interest annually. The interest earned will be
allocated to the Subaccounts and/or the Fixed Account in the same manner as net
premiums.

On any monthly activity date, if the policy debt exceeds the accumulation value
less any overdue monthly deductions, you must pay the excess. We will send you a
notice of the amount you must pay. If you do not pay this amount within 61 days
after we send notice, this policy will terminate without value. We will send the
notice to you and to any assignee of record at our Administrative Office. See
Section 4.1.

Any loan transaction will permanently affect the values of this policy.

11.5 REPAYING A POLICY DEBT

You can repay a policy debt in part or in full anytime during the Insured's life
while this policy is in force. Repayment must be specifically identified as such
by you. When a loan repayment is made, accumulation value in the general account
related to that payment will be transferred into the Subaccounts and/or the
Fixed Account in the same proportion that net premiums are being allocated.

SECTION 12. PAYMENT OPTIONS

Death benefit proceeds or the net cash surrender value will be paid in one lump
sum if no option is chosen. Subject to the rules stated below, all or part of
the proceeds can be paid under a payment option. During the Insured's life, you
can choose a payment option. A beneficiary can choose a payment option if you
have not chosen one at the Insured's death. Subject to our approval, any other
payment option that we offer may be selected.

12.1 PAYMENT OPTION RULES

There are several important payment option rules:

a. An association, corporation, partnership, trust or fiduciary can only
receive a lump sum payment or a payment under Option b.

b. If this policy is assigned, any amount due to the assignee will first be
paid in one sum. The balance, if any, may be applied under any payment
option.

c. If the payments under any option come to less than $100 each, we have the
right to make payments at less frequent intervals.

d. The rate of interest payable under Options ai, aii and b is guaranteed at
3% compounded annually. Payments under Option c and d are based on the 1983
Individual Annuity Tables projected 17 years with an interest rate of 3.5%.

To choose an option, you must send a written request satisfactory to us to our
Administrative Office.

8020 23

<PAGE> 31

12.2 DESCRIPTION OF OPTIONS

Option ai

Interest Payment Option. We will hold any amount applied under this option.
Interest on the unpaid balance will be paid or credited each month at a rate
determined by us.

Option aii

Fixed Amount Payable Option. Each payment will be for an agreed fixed amount.
Payments continue until the amount we hold runs out.

Option b

Fixed Period Payment Option. Equal payments will be made for any period
selected, up to 20 years.

Option c

Lifetime Payment Option. Equal monthly payments are based on the life of a named
person. Payments will continue for the lifetime of that person. Variations
provide for guaranteed payments for a period of time or a lump sum refund.

Option d

Joint Lifetime Payment Option. Equal monthly payments are based on the lives of
two named persons. While both are living, one payment will be made each month.
When one dies, payments will continue for the lifetime of the other. Variations
provide for a reduced amount of payment during the lifetime of the surviving
person.

SECTION 13. NOTES ON OUR COMPUTATIONS

13.1 BASIS OF COMPUTATION

In our computations, we assume that the minimum values and reserves held for
benefits guaranteed in the Fixed Account will earn interest at an annual rate of
3.5%. We use mortality rates from the Commissioners 1980 Standard Ordinary
Mortality Tables without smoker distinction in computing minimum values and
reserves for this policy. The male values from these Tables are used when the
Insured is a male. The female values from these Tables are used when the Insured
is a female.

13.2 METHODS OF COMPUTING VALUES

We have filed a detailed statement of the method we use to compute policy values
and benefits with the state where this policy was delivered. All these values
and benefits are not less than those required by the laws of that state.

Reserves are calculated in accordance with the Standard Non-Forfeiture Law and
Valuation Law of the state in which this policy is delivered. In no instance
will reserves be less than the net cash surrender values.

8020 24

<PAGE> 32
TABLES OF SETTLEMENT OPTIONS

TABLE B (OPTION B) TABLE D (OPTION D)
Monthly Installments for Monthly Installments for each $1,000 of Net Proceeds
each $1,000 of Net Proceeds
MALE & MALE & MALE & MALE & MALE &
YEARS MONTHLY YEARS MONTHLY AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE
--------------------- ------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 84.47 11 8.86 40 3.56 50 3.94 60 4.60 70 5.88 80 8.76
2 42.86 12 8.24 41 3.59 51 3.99 61 4.69 71 6.07 81 9.21
3 28.99 13 7.71 42 3.62 52 4.04 62 4.78 72 6.27 82 9.71
4 22.06 14 7.26 43 3.65 53 4.10 63 4.89 73 6.50 83 10.25
5 17.91 15 6.87 44 3.69 54 4.16 64 5.00 74 6.74 84 10.81
---------------------------- ----------------------------------------------------------------------------
6 15.14 16 6.53 45 3.72 55 4.22 65 5.12 75 7.01 85 11.51
7 13.16 17 6.23 46 3.76 56 4.29 66 5.25 76 7.30
8 11.68 18 5.96 47 3.80 57 4.36 67 5.39 77 7.62
9 10.53 19 5.73 48 3.84 58 4.43 68 5.54 78 7.96
10 9.61 20 5.51 49 3.89 59 4.51 69 5.70 79 8.34
---------------------------- ----------------------------------------------------------------------------
</TABLE>

Income for payments other than monthly will be furnished by our
Administrative Office upon request.

Table D values for combinations of ages not shown and values
for 2 males or 2 females will be furnished by our
Administrative Office upon request.

TABLE C (OPTION C) Monthly Installments for each $1,000 of Net Proceeds

<TABLE>
<CAPTION>
-------------------------------------------------- -------------------------------------------------
MALE FEMALE
LIFE MONTHS CERTAIN CASH LIFE MONTHS CERTAIN CASH
AGE ONLY 60 120 180 240 REF. AGE ONLY 60 120 180 240 REF.
------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.84 3.84 3.83 3.82 3.80 3.77 40 3.64 3.64 3.63 3.63 3.62 3.60
41 3.88 3.88 3.87 3.86 3.83 3.81 41 3.67 3.67 3.66 3.66 3.65 3.63
42 3.93 3.93 3.92 3.90 3.87 3.84 42 3.70 3.70 3.70 3.69 3.68 3.66
43 3.98 3.97 3.96 3.94 3.91 3.88 43 3.74 3.74 3.73 3.73 3.71 3.70
44 4.02 4.02 4.01 3.99 3.95 3.92 44 3.78 3.78 3.77 3.76 3.75 3.73
-------------------------------------------------- ------------------------------------------------
45 4.08 4.07 4.06 4.03 3.99 3.97 45 3.82 3.82 3.81 3.80 3.78 3.77
46 4.13 4.13 4.11 4.08 4.04 4.01 46 3.86 3.86 3.85 3.84 3.82 3.80
47 4.19 4.18 4.16 4.13 4.09 4.06 47 3.90 3.90 3.89 3.88 3.86 3.84
48 4.25 4.24 4.22 4.18 4.13 4.11 48 3.95 3.95 3.94 3.93 3.90 3.88
49 4.31 4.30 4.28 4.24 4.18 4.16 49 4.00 4.00 3.99 3.97 3.95 3.93
-------------------------------------------------- ------------------------------------------------
50 4.37 4.37 4.34 4.30 4.23 4.21 50 4.05 4.05 4.04 4.02 3.99 3.97
51 4.44 4.43 4.40 4.36 4.29 4.27 51 4.10 4.10 4.09 4.07 4.04 4.02
52 4.51 4.50 4.47 4.42 4.34 4.32 52 4.16 4.16 4.15 4.12 4.09 4.07
53 4.59 4.58 4.54 4.48 4.40 4.38 53 4.22 4.22 4.20 4.18 4.14 4.12
54 4.67 4.66 4.62 4.55 4.45 4.45 54 4.29 4.28 4.26 4.23 4.19 4.17
-------------------------------------------------- ------------------------------------------------
55 4.76 4.74 4.70 4.62 4.51 4.52 55 4.35 4.35 4.33 4.30 4.24 4.23
56 4.85 4.83 4.78 4.70 4.57 4.59 56 4.42 4.42 4.40 4.36 4.30 4.29
57 4.94 4.92 4.87 4.77 4.64 4.66 57 4.50 4.49 4.47 4.43 4.36 4.35
58 5.04 5.02 4.96 4.85 4.70 4.74 58 4.58 4.57 4.54 4.50 4.42 4.42
59 5.15 5.13 5.06 4.94 4.76 4.82 59 4.67 4.66 4.62 4.57 4.48 4.48
-------------------------------------------------- ------------------------------------------------
60 5.27 5.24 5.16 5.02 4.83 4.90 60 4.76 4.74 4.71 4.65 4.55 4.56
61 5.39 5.36 5.27 5.11 4.89 4.99 61 4.85 4.84 4.80 4.73 4.62 4.63
62 5.52 5.49 5.38 5.20 4.95 5.08 62 4.95 4.94 4.89 4.81 4.68 4.71
63 5.66 5.62 5.50 5.30 5.02 5.18 63 5.06 5.05 4.99 4.90 4.75 4.80
64 5.81 5.77 5.63 5.39 5.08 5.29 64 5.18 5.16 5.10 4.99 4.82 4.89
-------------------------------------------------- ------------------------------------------------
65 5.98 5.92 5.76 5.49 5.14 5.39 65 5.30 5.28 5.21 5.08 4.89 4.98
66 6.15 6.09 5.90 5.59 5.20 5.51 66 5.44 5.41 5.33 5.18 4.96 5.08
67 6.33 6.26 6.04 5.69 5.26 5.62 67 5.58 5.55 5.45 5.28 5.03 5.19
68 6.53 6.45 6.19 5.79 5.32 5.75 68 5.73 5.70 5.59 5.39 5.10 5.30
69 6.74 6.64 6.34 5.89 5.37 5.88 69 5.90 5.86 5.73 5.50 5.17 5.42
-------------------------------------------------- ------------------------------------------------
70 6.96 6.85 6.50 5.99 5.42 6.02 70 6.07 6.03 5.87 5.61 5.24 5.54
71 7.20 7.06 6.66 6.09 5.46 6.16 71 6.26 6.21 6.03 5.72 5.30 5.67
72 7.46 7.29 6.83 6.18 5.51 6.31 72 6.47 6.40 6.19 5.83 5.36 5.81
73 7.73 7.53 7.00 6.28 5.54 6.47 73 6.69 6.62 6.36 5.94 5.42 5.96
74 8.02 7.79 7.17 6.36 5.58 6.63 74 6.94 6.84 6.54 6.05 5.47 6.11
-------------------------------------------------- ------------------------------------------------
75 8.32 8.05 7.34 6.45 5.61 6.81 75 7.20 7.08 6.72 6.16 5.51 6.28
76 8.66 8.34 7.52 6.53 5.64 6.99 76 7.48 7.34 6.91 6.27 5.56 6.45
77 9.01 8.63 7.69 6.60 5.66 7.19 77 7.78 7.61 7.10 6.37 5.59 6.64
78 9.39 8.94 7.87 6.67 5.68 7.39 78 8.11 7.90 7.30 6.46 5.63 6.83
79 9.80 9.27 8.04 6.74 5.70 7.60 79 8.47 8.21 7.50 6.55 5.65 7.03
-------------------------------------------------- ------------------------------------------------
80 10.23 9.61 8.20 6.79 5.71 7.83 80 8.85 8.54 7.70 6.63 5.68 7.25
81 10.70 9.96 8.37 6.85 5.72 8.06 81 9.27 8.89 7.90 6.71 5.70 7.48
82 11.20 10.32 8.52 6.89 5.73 8.31 82 9.72 9.26 8.09 6.78 5.71 7.72
83 11.72 10.69 8.67 6.93 5.74 8.57 83 10.21 9.64 8.28 6.84 5.73 7.98
84 12.29 11.07 8.81 6.97 5.75 8.84 84 10.74 10.05 8.46 6.89 5.74 8.25
85 12.89 11.46 8.95 7.00 5.75 9.13 85 11.32 10.47 8.63 6.94 5.74 8.53
-------------------------------------------------- ------------------------------------------------
</TABLE>

Income for payments other than monthly will be furnished by our
Administrative Office upon request.

Table C values for ages below 40 and above 85, and values for 300 and 360
months certain will be furnished by our Administrative Office upon request.

8020 25
<PAGE> 33

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<PAGE> 34

FORM 8020

<PAGE> 1

EXHIBIT 1.(5)(b)
Policy Riders
[ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO]

DISABILITY BENEFIT RIDER

BENEFITS

While the Insured is totally disabled, the disability benefit amount will be
applied as premium to the policy. The premium will be credited as of the last
monthly activity date, prior to the approval date of the claim and will be
credited annually thereafter, during continuance of total disability. In
addition, while the Insured is totally disabled, the cost of insurance for this
rider will not be deducted from the accumulation value. All other monthly
deductions will apply.

If total disability begins after the grace period, no benefits under this rider
will be paid. If any portion of a disability benefit would affect the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended, the benefit payable will be reduced by that portion
considered to be excess premium.

CONSIDERATION

This rider is issued in consideration of the application and payment of its cost
of insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.

DEFINITIONS

DISABILITY BENEFIT: For purposes of this rider, the disability benefit is an
amount shown on the schedule pages, selected by you on the application.

EFFECTIVE DATE: The effective date of all coverage under this rider shall be as
follows:

1. The policy date shall be the effective date for all coverage provided in
the original application.

2. For any rider issued after the policy date, the effective date shall be the
date shown on a supplement to the schedule pages of the policy.

3. For any insurance that has been reinstated, the effective date shall be the
monthly activity date on or next following the date we approve the
reinstatement.

EXPIRATION DATE: This date is also shown in the schedule pages of the policy. It
is the date on which this rider is no longer effective.

TOTAL DISABILITY: Total disability must begin after the effective date of this
rider as shown in the schedule pages and before the policy anniversary nearest
the Insured's 65th birthday. It must result from bodily injury which occurs or
sickness which first manifests itself while this rider is in force.

Total Disability means:

1. Total loss of the sight of both eyes. This loss must be irrecoverable; or

2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or

DBR 8901
<PAGE> 2

3. The incapacity of the Insured to engage in any substantial duties of his or
her occupation for at least six consecutive months. (Substantial duties
includes managerial or supervisory functions.)

During the first 24 months of total disability, occupation means the usual
work, employment, business or profession in which the Insured was engaged
immediately before the date of disability. This includes attendance at
school or college as a full-time student. After 24 months of total
disability an Insured who is engaged in any occupation for remuneration or
profit will not be considered totally disabled.

GENERAL PROVISIONS

NOTICE OF DISABILITY: To receive this benefit, written notice of claim must be
received at the Home Office. It must be received: (a) while the Insured is
living; (b) while the Insured is totally disabled; and (c) not later than 9
months after the Insured has become totally disabled.

If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Insured receive
any benefit under this rider for a period prior to one year before the date on
which notice was received.

PROOF OF TOTAL DISABILITY: Approval of the initial notice of claim will be
granted after we receive satisfactory written proof that the Insured is totally
disabled. Proof must be presented at the Home Office: (a) while the Insured is
living; (b) before total disability has ended or been interrupted; and (c)
within 12 months after we receive the notice of total disability. Forms approved
by us must be used.

Similar proof that the total disability is continuing may be required at
reasonable intervals. After the Insured has been totally disabled for 2 years,
we will only require proof once per year. If the Insured fails to furnish such
proof, the disability benefit will cease.

DURATION OF BENEFITS: Upon approval of your claim, we will credit the disability
benefit amount. We will start with the monthly anniversary date prior to the
date disability began. However, we will not credit any amount for a period of
more than 9 months before we receive written notice of disability unless it is
shown that notice was given as soon as reasonably possible.

We will continue to credit the disability benefit amount while the Insured is
totally disabled and the policy is in force until the rider anniversary
following the Insured's 100th birthday. However, if disability begins on or
after the rider anniversary after the Insured's 60th birthday, we will only
credit payment:

1. Until the rider anniversary following the Insured's 65th birthday; or

2. For two years; if later.

INCONTESTABILITY: While the Insured is alive, the validity of this rider cannot
be contested after it has been in force for a period of 2 years from the
effective date of this rider.

DBR 8901
<PAGE> 3

REINSTATEMENT: Coverage under this rider may be reinstated with the policy if no
more than 3 years have passed since the date of termination. Reinstatement must
occur before the expiration date of this rider. Such reinstatement may occur any
time before the policy anniversary nearest the Insured's 65th birthday. The
requirements for reinstatement are:

1. Receipt of evidence of insurability satisfactory to us.

2. Payment of the minimum cost of insurance sufficient to keep this rider in
force for 3 months.

EXCLUSIONS: The Insured will not be eligible for the disability benefit if the
total disability on which the claim is based results from:

1. Self-inflicted bodily injury while sane or insane, other than accidental
injury; or

2. War or any act of war, whether declared or not, regardless of whether the
Insured is in the armed forces.

TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:

1. On the expiration date of this rider;

2. On the monthly activity date on or next following the date we receive your
written request;

3. On surrender of this rider to us; or

4. On termination of the policy.

CHANGE OF POLICY: Once the disability benefit commences, you cannot change the
specified amount of insurance (except for any increase(s) which result from
exercising options under any Guaranteed Insurability Rider), the death benefit
option, the mode of the planned periodic premium payments, or change the policy
to another form of insurance.

NONPARTICIPATING: This rider is nonparticipating.

COST OF INSURANCE DEDUCTIONS AFTER TERMINATION OF THIS RIDER: If, after this
rider has terminated, we make a deduction from the accumulation value for the
cost of insurance for this rider, our only obligation to you under this rider
will be to return the cost of insurance deduction. No coverage is available
after the termination date of this rider.

INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider. If the policy has been issued on a gender-neutral basis, this rider
is also considered to be issued on a gender-neutral basis.

This rider has no cash or loan value.

ACACIA NATIONAL LIFE INSURANCE COMPANY

/s/ Robert-John H. Sands /s/ Robert W. Clyde
Secretary President

DBR 8901

<PAGE> 4

This page intentionally left blank.

<PAGE> 5

[ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO]

TERM COVERAGE RIDER

BENEFITS

Under the terms of this rider, we agree to pay the Rider Death Benefit to the
beneficiary upon receipt of satisfactory proof of the death of the Insured.
Death must occur while this rider is in force. Payment is subject to the
provisions of the policy and this rider.

CONSIDERATION

This rider is issued in consideration of the application and the payment of its
cost of insurance. A copy of the application is attached to the policy. The cost
of insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.

DEFINITIONS

BENEFICIARY: The term "beneficiary" in this rider means the person named as the
beneficiary under the policy.

INSURED: The term "Insured" in this rider means the person named as the Insured
under the policy.

EFFECTIVE DATE: The effective date of coverage under this rider shall be the
policy date of the policy. The effective date for reinstatement for any
insurance coverage provided by this rider is subject to the reinstatement
provisions of the policy.

EXPIRATION DATE: This date is shown in the schedule pages of the policy. It is
the date on which this rider is no longer effective.

RIDER DEATH BENEFIT: This is the amount of death benefit provided by this rider.
It is the difference between the amount of the Total Death Benefit and the death
benefit provided under the policy. The amount of Rider Death Benefit can change
daily. It may change to zero but it can never be less than zero. In other words,
this rider will remain in effect until you request its termination subject to
the provision Termination of Rider.

RIDER SPECIFIED AMOUNT OF INSURANCE: The Rider Specified Amount of Insurance is
shown in the schedule pages of the policy. You may not increase this amount.
After the first policy year, you may decrease this amount. However, you may not
decrease the Rider Specified Amount of Insurance to less than $50,000.

TOTAL DEATH BENEFIT: The Total Death Benefit depends upon which death benefit
option is in effect. If Option A is in effect, the Total Death Benefit is the
greater of (1) the Total Specified Amount of Insurance, or (2) the Accumulation
Value multiplied by the appropriate death benefit percentage (see the policy
provision on Death Benefit). If Option B is in effect, the Total Death Benefit
is the greater of (1) the Total Specified Amount of Insurance plus the
Accumulation Value, or (2) the Accumulation Value multiplied by the appropriate
death benefit percentage (see the policy provision on Death Benefit)

TCR 8901

<PAGE> 6

TOTAL SPECIFIED AMOUNT OF INSURANCE: This is the specified amount of insurance
provided under the policy plus the Rider Specified Amount of Insurance.

COST OF INSURANCE

The cost of insurance for this rider will be calculated each month. It is equal
to the Rider Death Benefit on the monthly activity date multiplied by the
monthly cost per $1000 of insurance divided by $1000. The Table of Maximum
Annual Term Coverage Rider Cost of Insurance Rates is attached. The cost of
insurance rates will not exceed the rates in this table plus an adjustment for
any increased rating shown in the schedule pages of the policy.

We have the option of charging less than the maximum rates shown in the table.
Each year, the current annual cost of insurance rate will be declared for the
next policy year. This rate will be based on the Insured's issue age, gender,
risk class and the policy duration. The rate will be adjusted for any rating
factor shown in the schedule pages of the policy.

Any change in the current cost of insurance rates will apply to all Insureds of
the same issue age, gender, and risk class and whose policies have been in
effect for the same length of time.

TERMINATION OF RIDER

This rider will automatically terminate on the earliest of these conditions:

1. On the expiration date of this rider.

2. On the monthly activity date on or next following the date we receive your
written request. However, you may not terminate this rider within the first
policy year.

3. On termination of the policy.

GENERAL PROVISIONS

AMENDMENT TO POLICY: Item b. in Section 10.3 "Decreasing the Specified Amount"
of the policy is amended. The specified amount in effect after any decrease may
not be less than $50,000. However, once the Insured reaches attained age 100,
the specified amount in effect after any decrease may not be less than $1,000.

REINSTATEMENT: This rider may be reinstated with the policy if the Insured is
living and application is made within three years from the beginning of any
grace period. Reinstatement must occur before the expiration date of this rider.
The requirements for reinstatement are:

1. Receipt of evidence satisfactory to us of insurability of the Insured.

2. Payment of the minimum cost of insurance sufficient to keep the rider in
force for three months.

SUICIDE: If the Insured commits suicide while sane or insane, within two years
from the effective date of this rider, we will limit the benefits of this rider.
The limited benefits will equal the cost of insurance paid for this rider.

TCR 8901

<PAGE> 7

INCONTESTABILITY: We cannot contest this rider after it has been in force during
the Insured's life for two years from the rider effective date or from any
reinstatement of this rider.

This rider has no cash or loan value.

CONVERSION: This rider is not convertible to a permanent policy of life
insurance.

NON-PARTICIPATING: This rider is non-participating.

ACACIA NATIONAL LIFE INSURANCE COMPANY

/s/ Robert-John H. Sands /s/ Robert W. Clyde
Secretary President

TCR 8901

<PAGE> 8

This page left intentionally blank.

<PAGE> 9

TABLE OF MAXIMUM ANNUAL TERM COVERAGE RIDER
COST OF INSURANCE RATES

<TABLE>
<CAPTION>
ATTAINED
AGE MALE RATES FEMALE RATES UNISEX RATES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
18 2.22 1.22 2.02
19 2.32 1.27 2.11
20 2.37 1.31 2.17
21 2.38 1.33 2.18
22 2.36 1.36 2.16
23 2.32 1.38 2.13
24 2.27 1.42 2.11
25 2.21 1.45 2.06
26 2.16 1.48 2.03
27 2.13 1.52 2.01
28 2.12 1.57 2.01
29 2.13 1.62 2.03
30 2.16 1.68 2.06
31 2.22 1.75 2.12
32 2.28 1.81 2.18
33 2.38 1.87 2.28
34 2.50 1.97 2.38
35 2.63 2.06 2.52
36 2.80 2.20 2.67
37 3.00 2.36 2.87
38 3.22 2.55 3.08
39 3.48 2.77 3.35
40 3.77 3.02 3.62
41 4.11 3.30 3.95
42 4.45 3.58 4.27
43 4.83 3.86 4.65
44 5.23 4.15 5.01
45 5.68 4.45 5.43
46 6.15 4.75 5.87
47 6.65 5.06 6.33
48 7.17 5.41 6.81
49 7.76 5.78 7.36
50 8.38 6.20 7.95
51 9.12 6.63 8.62
52 9.95 7.12 9.37
53 10.88 7.68 10.23
54 11.95 8.26 11.20
55 13.08 8.86 12.22
56 14.32 9.46 13.33
57 15.61 10.03 14.47
58 16.98 10.58 15.67
59 18.46 11.17 16.96
</TABLE>

(continued)

TCR 8901

<PAGE> 10

TABLE OF MAXIMUM ANNUAL TERM COVERAGE RIDER
COST OF INSURANCE RATES
(continued)

<TABLE>
<CAPTION>
ATTAINED
AGE MALE RATES FEMALE RATES UNISEX RATES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
60 20.10 11.83 18.40
61 21.92 12.66 20.00
62 23.98 13.70 21.83
63 26.32 15.02 23.95
64 28.92 16.56 26.31
65 31.77 18.23 28.88
66 34.81 20.00 31.61
67 38.05 21.78 34.51
68 41.48 23.55 37.53
69 45.21 25.45 40.82
70 49.38 27.63 44.48
71 54.12 30.28 48.68
72 59.56 33.58 53.55
73 65.80 37.63 59.16
74 72.73 42.41 65.46
75 80.23 47.80 72.30
76 88.16 53.71 79.56
77 96.40 60.05 87.12
78 104.87 66.81 94.93
79 113.81 74.18 103.21
80 123.55 82.48 112.28
81 134.35 92.00 122.42
82 146.56 103.00 133.97
83 160.32 115.66 147.06
84 175.31 129.76 161.37
85 191.18 145.12 176.72
86 207.61 161.61 192.71
87 224.43 179.15 209.36
88 241.58 197.72 226.55
89 259.11 217.42 244.42
90 277.21 238.43 263.16
91 296.22 261.08 283.13
92 316.81 286.01 305.16
93 340.13 314.38 330.05
94 369.87 349.13 361.70
95 412.45 396.65 406.11
96 480.68 469.67 476.21
97 600.25 593.71 597.11
98 822.47 819.81 821.72
99 1000.00 1000.00 1000.00
</TABLE>

TCR 8901

<PAGE> 11

[ACACIA NATIONAL LIFE INSURANCE COMPANY LOGO]

WAIVER OF MONTHLY DEDUCTIONS ON
DISABILITY

BENEFITS

While the Insured is totally disabled, the monthly deduction will not be
deducted from the accumulation value. During this time, the policy and any
rider(s) will continue to be in force.

Monthly deductions falling due before we approve a claim for benefits will
continue to be deducted from the accumulation value. However, after total
disability has continued for six (6) consecutive months and we approve the
claim, any disability benefit which otherwise could have been paid under the
provisions of this rider will be credited to the accumulation value.

If total disability begins after the grace period, no benefit under this rider
will be paid.

CONSIDERATION

This rider is issued in return for the application and payment of its cost of
insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.

COST OF INSURANCE

The calculation of the monthly cost of insurance for this rider is described in
the attached table.

DEFINITIONS

DISABILITY BENEFIT: For purposes of this rider, the disability benefit refers to
the monthly deduction on each monthly activity date for the base policy and any
riders and is equal to:

1. the current cost of insurance for the base policy and any riders;

2. the expense charges; and

3. the charges for specified amount increases, if any.

TOTAL DISABILITY: Total disability must begin after the effective date and
before the expiration date of this rider. It must result from bodily injury
which occurs or sickness which first manifests itself while this rider is in
force.

Total Disability means:

1. Total loss of the sight of both eyes. This loss must be irrecoverable; or

2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or

WDIS 8901

<PAGE> 12

3. The incapacity of the Insured to engage in any substantial duties of his or
her occupation for at least six consecutive months. (Substantial duties
includes managerial or supervisory functions.)

During the first 24 months of total disability, occupation means the usual
work, employment, business or profession in which the Insured was engaged
immediately before the date of disability. This includes attendance at
school or college as a full-time student. After 24 months of total
disability, an Insured who is engaged in any occupation for remuneration or
profit will not be considered totally disabled.

EFFECTIVE DATE: The effective date of coverage under this rider shall be as
follows:

1. The policy date shall be the effective date for all coverage provided in
the original application.

2. For any rider issued after the policy date, the effective date shall be the
date shown on a supplement to the schedule pages of the policy.

3. For any insurance that has been reinstated, the effective date shall be the
monthly activity date on or next following the date we approve the
reinstatement.

EXPIRATION DATE: This date is also shown in the schedule pages of the policy. It
is the date on which this rider is no longer effective.

GENERAL PROVISIONS

If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Insured receive
any benefit under this rider for a period beyond one year before the date on
which notice was received.

PROOF OF TOTAL DISABILITY: The disability benefit will commence once we receive
satisfactory written proof that the Insured is totally disabled. Proof must be
presented at the Home Office: (a) while the Insured is living; (b) before total
disability has ended or been interrupted; and (c) within 12 months after we
receive the notice of total disability. Forms approved by us must be used.

DURATION OF BENEFITS: We will begin to provide the disability benefit in the
policy month following the date disability began. However, we will not provide
the disability benefit for a period of more than 12 months before we receive
written notice of disability unless it is shown that notice was given as soon as
reasonably possible.

WDIS 8901

<PAGE> 13

We will continue to provide the disability benefit while the Insured is totally
disabled until the rider anniversary following the Insured's 100th birthday.
However, if disability begins on or after the rider anniversary following the
Insured's 60th birthday, we will only provide the disability benefit:

1. Until the rider anniversary following the Insured's 65th birthday, or

2. For two years, if later.

INCONTESTABILITY: While the Insured is alive, the validity of this rider cannot
be contested after it has been in force for a period of 2 years from the
effective date of this rider.

REINSTATEMENT: Coverage under this rider may be reinstated with the policy
subject to the policy reinstatement provision. Reinstatement must occur before
the expiration date of this rider. Such reinstatement may occur any time before
the policy anniversary nearest the Insured's 65th birthday. The requirements for
reinstatement are:

1. Receipt of satisfactory evidence of insurability.

2. Payment of the minimum cost of insurance sufficient to keep this rider in
force for 3 months.

EXCLUSIONS: The Insured will not be eligible for the disability benefit if the
total disability on which the claim is based results from:

1. Self-inflicted bodily injury while sane or insane, other than accidental
injury; or

2. War or any act of war, whether declared or not, regardless of whether the
Insured is in the military, naval or air service.

TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:

1. On the expiration date of this rider;

2. On the monthly activity date on or next following the date we receive your
written request;

3. On surrender of the rider to us; or

4. On termination of the policy.

TERM RIDERS: If a renewable and convertible term rider is attached to the policy
during a benefit period, the cost of insurance for that rider will be waived
until the expiration date. If the Owner elects to convert that term rider, no
benefits will be paid under this rider on the conversion policy.

WDIS 8901

<PAGE> 14

NONPARTICIPATING: This rider is nonparticipating.

INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider. If the policy has been issued
on a gender-neutral basis, this rider is also considered to be issued on a
gender-neutral basis.

ACACIA NATIONAL LIFE INSURANCE COMPANY

/s/ Robert-John H. Sands /s/ Robert W. Clyde
Secretary President

WDIS 8901
<PAGE> 15

COST OF INSURANCE TABLE

On each monthly activity date, the monthly cost of insurance for this rider is
equal to the product of A times B where:

A is a factor based on the attained age and gender of the Insured and is
shown in the table below. (Note: If this rider is issued with a special
rating, this factor will be increased based on that rating. Any special
rating will be shown in the schedule pages of the policy).

B is the monthly deduction for the policy, including any table ratings and
any riders attached to the policy except for this rider.

<TABLE>
<CAPTION>
ISSUE MALE FEMALE UNISEX ISSUE MALE FEMALE UNISEX
AGE RATES RATES RATES AGE RATES RATES RATES
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
18 0.0434 0.0554 0.0458 42 0.0708 0.0691 0.0705
19 0.0422 0.0543 0.0446 43 0.0735 0.0716 0.0731
20 0.0413 0.0530 0.0436 44 0.0765 0.0742 0.0760
21 0.0403 0.0516 0.0426 45 0.0794 0.0770 0.0789
22 0.0419 0.0526 0.0440 46 0.0825 0.0801 0.0820
23 0.0427 0.0528 0.0447 47 0.0866 0.0838 0.0860
24 0.0437 0.0523 0.0454 48 0.0915 0.0881 0.0908
25 0.0448 0.0525 0.0463 49 0.0974 0.0935 0.0966
26 0.0458 0.0521 0.0471 50 0.1054 0.1000 0.1043
27 0.0466 0.0521 0.0477 51 0.1148 0.1082 0.1135
28 0.0475 0.0518 0.0484 52 0.1266 0.1187 0.1250
29 0.0481 0.0517 0.0488 53 0.1405 0.1305 0.1385
30 0.0487 0.0514 0.0492 54 0.1579 0.1465 0.1556
31 0.0489 0.0513 0.0494 55 0.1778 0.1649 0.1752
32 0.0492 0.0512 0.0496 56 0.2034 0.1896 0.2006
33 0.0492 0.0512 0.0496 57 0.2234 0.2106 0.2208
34 0.0492 0.0506 0.0495 58 0.2460 0.2362 0.2440
35 0.0492 0.0509 0.0495 59 0.2684 0.2633 0.2674
36 0.0507 0.0524 0.0510 60 0.2684 0.2633 0.2674
37 0.0562 0.0573 0.0564 61 0.2684 0.2633 0.2674
38 0.0593 0.0600 0.0594 62 0.2684 0.2633 0.2674
39 0.0624 0.0627 0.0625 63 0.2684 0.2633 0.2674
40 0.0655 0.0652 0.0654 64 0.2684 0.2633 0.2674
41 0.0679 0.0670 0.0677
- ----------------------------------------------------------------------------------------------------------
</TABLE>

WDIS 8901

<PAGE> 16

This page left intentionally blank.

<PAGE> 1
EXHIBIT 1.(8)(d)
Form of Participation Agreement
Variable Insurance Products Fund

PARTICIPATION AGREEMENT

Among

VARIABLE INSURANCE PRODUCTS FUND,

FIDELITY DISTRIBUTORS CORPORATION

and

ACACIA NATIONAL INSURANCE COMPANY

THIS AGREEMENT, made and entered into as of the ____ day of _________,
2000 by and among ACACIA NATIONAL LIFE INSURANCE COMPANY, (hereinafter the
"Company"), a Virginia corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND, an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts (hereinafter
the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.

WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Underwriter (hereinafter "Participating Insurance
Companies"); and

WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and

WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated October 15, 1985 (File No. 812-6102), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and

1
<PAGE> 2

WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and

WHEREAS, Fidelity Management & Research Company (the "Adviser") is
duly registered as an investment adviser under the federal Investment Advisers
Act of 1940 and any applicable state securities law; and

WHEREAS, the Company has registered or will register certain variable
life insurance and/or variable annuity products identified on Exhibit A hereto
("Contracts") under the 1933 Act; and

WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid variable annuity contracts; and

WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and

WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (hereinafter the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. (hereinafter "NASD");
and

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Contracts and the Underwriter
is authorized to sell such shares to unit investment trusts such as each Account
at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:

ARTICLE I. Sale of Fund Shares

1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. For purposes of this Section 1.1, the Company
shall be the designee of the Fund for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives notice of such order by 9:00 a.m. Boston time on the next
following Business Day.

<PAGE> 3
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund calculates its net asset value pursuant to the
rules of the Securities and Exchange Commission.

1.2. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.

1.3. The Fund and the Underwriter agree that shares of the Fund will
be sold only to Participating Insurance Companies and their separate accounts.
No shares of any Portfolio will be sold to the general public.

1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.

1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.

1.6. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Company agrees that all
net amounts available under the Contracts shall be invested in the Fund, in such
other Funds advised by the Adviser as may be mutually agreed to in writing by
the parties hereto, or in the Company's general account, provided that such
amounts may also be invested in an investment company other than the Fund if (a)
such other investment company, or series thereof, has investment objectives or
policies that are substantially different from the investment objectives and
policies of all the Portfolios of the Fund; or (b) the Company gives the Fund
and the Underwriter 45 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts; or (c) such
other investment company was available as a funding vehicle for the Contracts
prior to the date of this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement (a list of such funds
appearing on Schedule C

<PAGE> 4

to this Agreement); or (d) the Fund or Underwriter consents to the use of such
other investment company.

1.7. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
For purpose of Section 2.10 and 2.11, upon receipt by the Fund of the federal
funds so wired, such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund.

1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.

1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.

1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.

ARTICLE II. Representations and Warranties

2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under the laws of its state of incorporation and that it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under such state's laws and has registered
or, prior to any issuance or sale of the Contracts, will register each Account
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts.

2.2. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Virginia and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend

<PAGE> 5

the Registration Statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund or the Underwriter.

2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

2.4. The Company represents that the Contracts are currently treated
as endowment, life insurance or annuity insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.

2.5. (a) With respect to Initial Class shares, the Fund currently does
not intend to make any payments to finance distribution expenses pursuant to
Rule 12b-1 under the 1940 Act or otherwise, although it may make such payments
in the future. The Fund has adopted a "no fee" or "defensive" Rule 12b-1 Plan
under which it makes no payments for distribution expenses. To the extent that
it decides to finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have a board of trustees, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.

(b) With respect to Service Class shares and Service Class 2
shares, the Fund has adopted Rule 12b-1 Plans under which it makes payments to
finance distribution expenses. The Fund represents and warrants that it has a
board of trustees, a majority of whom are not interested persons of the Fund,
which has formulated and approved each of its Rule 12b-1 Plans to finance
distribution expenses of the Fund and that any changes to the Fund's Rule 12b-1
Plans will be approved by a similarly constituted board of trustees.

2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Virginia and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the laws of the State of Virginia to the extent required to perform this
Agreement.

2.7. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the

<PAGE> 6

Commonwealth of Massachusetts and all applicable state and federal securities
laws, including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.

2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.

2.9. The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of Massachusetts and any applicable state and federal securities laws.

2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.

2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund, and that said bond is
issued by a reputable bonding company, includes coverage for larceny and
embezzlement, and is in an amount not less than the minimal coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The Company agrees to make all reasonable efforts
to see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies.

ARTICLE III. Prospectuses and Proxy Statements; Voting

3.1. The Underwriter shall provide the Company with as many printed
copies of the Fund's current prospectus and Statement of Additional Information
as the Company may reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide camera-ready film containing the Fund's
prospectus and Statement of Additional Information, and such other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for the
Fund is amended during the year) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the Statement of Additional
Information for the Contracts printed together in one document. Alternatively,
the Company may print the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies' prospectuses and
statements of additional information. Except as provided in the following three
sentences, all expenses of printing and

<PAGE> 7

distributing Fund prospectuses and Statements of Additional Information shall be
the expense of the Company. For prospectuses and Statements of Additional
Information provided by the Company to its existing owners of Contracts in order
to update disclosure annually as required by the 1933 Act and/or the 1940 Act,
the cost of printing shall be borne by the Fund. If the Company chooses to
receive camera-ready film in lieu of receiving printed copies of the Fund's
prospectus, the Fund will reimburse the Company in an amount equal to the
product of A and B where A is the number of such prospectuses distributed to
owners of the Contracts, and B is the Fund's per unit cost of typesetting and
printing the Fund's prospectus. The same procedures shall be followed with
respect to the Fund's Statement of Additional Information.

The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.

3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter or the
Company (or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).

3.3. The Fund, at its expense, shall provide the Company with copies
of its proxy statements, reports to shareholders, and other communications
(except for prospectuses and Statements of Additional Information, which are
covered in Section 3.1) to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.

3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in a particular separate account in the same
proportion as Fund shares of such portfolio for which
instructions have been received in that separate
account,

so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.

7
<PAGE> 8

16(c) of that Act) as well as with Sections 16(a) and, if and when applicable,
16(b). Further, the Fund will act in accordance with the Securities and Exchange
Commission's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.

4.3. The Fund, Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably objects
to such use within fifteen Business Days after receipt of such material.

4.4. The Fund and the Underwriter shall not give any information or
make any representations or statements on behalf of the Company or concerning
the Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account which
are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.

4.5. The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.

<PAGE> 9

4.6. The Company will provide to the Fund at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.

ARTICLE V. Fees and Expenses

5.1. The Fund and Underwriter shall pay no fee or other compensation
to the Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund.

5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.

9
<PAGE> 10

engaged by the Fund for this purpose. The Fund and the Underwriter shall not be
responsible for the costs of any proxy solicitations other than proxies
sponsored by the Fund.

ARTICLE VI. Diversification

6.1. The Fund will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without limiting
the scope of the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.

ARTICLE VII. Potential Conflicts

7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.

7.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and

10
<PAGE> 11

reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question whether
such segregation should be implemented to a vote of all affected Contract owners
and, as appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners, life insurance contract owners, or variable contract
owners of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected contract owners the option of
making such a change; and (2), establishing a new registered management
investment company or managed separate account.

7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.

7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.

7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.

11
<PAGE> 12

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

ARTICLE VIII. Indemnification

8.1. Indemnification By The Company

8.1(a). The Company agrees to indemnify and hold harmless the Fund and
each trustee of the Board and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of, or investment in, the Fund's shares
or the Contracts and:

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement or prospectus for the Contracts or contained in
the Contracts or sales literature for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the Registration Statement or
prospectus for the Contracts or in the Contracts or sales literature
(or any amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature of the Fund not
supplied by the Company, or persons under its control) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or distribution of the Contracts or Fund Shares; or

<PAGE> 13

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment thereof
or supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such a statement or
omission was made in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company; or

(iv) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company,

as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.

8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.

<PAGE> 14

8.2. Indemnification by the Underwriter

8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of, or investment in, the
Fund's shares or the Contracts and:

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Registration Statement or prospectus or sales literature
of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Underwriter or Fund by or on
behalf of the Company for use in the Registration Statement
or prospectus for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature for
the Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund, Adviser
or Underwriter or persons under their control, with respect
to the sale or distribution of the Contracts or Fund shares;
or

(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement,
prospectus, or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Fund; or

(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a

<PAGE> 15

failure, whether unintentional or in good faith or otherwise,
to comply with the diversification requirements specified in
Article VI of this Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;

as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.

8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.

8.3. Indemnification By the Fund

<PAGE> 16

with the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
are related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement);or

(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.

8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.

8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceedings against it or any of
its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.

<PAGE> 17

ARTICLE IX. Applicable Law

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.

ARTICLE X. Termination

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or

(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
or

(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or

(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund
may fail to so qualify; or

(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements
specified in Article VI hereof; or

<PAGE> 18

Company and/or its affiliated companies has suffered a material
adverse change in its business, operations, financial condition
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or

(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter
has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity;
or

(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however any termination under this Section 10.1(h)
shall be effective forty five (45) days after the notice
specified in Section 1.6(b) was given.

10.2. Notwithstanding any termination of this Agreement, the Fund and
the Underwriter shall at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.2 shall not apply to any
terminations under Article VII and the effect of such Article VII terminations
shall be governed by Article VII of this Agreement.

10.3. The provisions of Articles II (Representations and Warranties),
VIII (Indemnification), IX (Applicable Law) and XII (Miscellaneous) shall
survive termination of this Agreement. In addition, all other applicable
provisions of this Agreement shall survive termination as long as shares of the
Fund are held on behalf of Contract owners in accordance with section 10.2,
except that the Fund and Underwriter shall have no further obligation to make
Fund shares available in Contracts issued after termination.

10.4. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise

<PAGE> 19

available under the Contracts without first giving the Fund or the Underwriter
90 days notice of its intention to do so.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.

If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

If to the Company:
Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20814
Attention: Robert-John H. Sands, Jr., General Counsel

If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

ARTICLE XII. Miscellaneous

12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.

12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.

12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

<PAGE> 20

12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

12.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.

12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.

12.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is duly licensed and
registered to perform the obligations of the Underwriter under this Agreement.
The Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company.

12.9. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of the following reports:

(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any),
as soon as practical and in any event within 90 days after
the end of each fiscal year;

(b) the Company's quarterly statements (statutory) (and GAAP,
if any), as soon as practical and in any event within 45
days after the end of each quarterly period:

(c) any financial statement, proxy statement, notice or report
of the Company sent to stockholders and/or policyholders,
as soon as practical after the delivery thereof to
stockholders;

<PAGE> 21

(d) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and
Exchange Commission or any state insurance regulator, as
soon as practical after the filing thereof;

(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or
special audit made by them of the books of the Company, as
soon as practical after the receipt thereof.

Unless otherwise notified in writing by the Underwriter, the reports indicated
in this section 12.9 may be delivered by mail to

David Vargo
Fidelity Investments
82 Devonshire St.
Mail Zone E17C
Boston, MA 02109

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative.

ACACIA NATIONAL LIFE INSURANCE COMPANY

By: _________________________
Robert W. Clyde
President

VARIABLE INSURANCE PRODUCTS FUND

By: ________________________
Robert C. Pozen
Senior Vice President

FIDELITY DISTRIBUTORS CORPORATION

By: _______________________
Kevin J. Kelly
Vice President

<PAGE> 22

Schedule A
Separate Accounts and Associated Contracts

<TABLE>
<CAPTION>
Name of Separate Account and Policy Form Numbers of Contracts
Date Established by Board of Directors Funded By Separate Account
- -------------------------------------- --------------------------
<S> <C>
Acacia National Life Insurance Company Allocator 2000 - VAR-000 (Rev. 7-95)
Variable Life Separate Account I Regent 2000 - 8065 (8/99)
("Separate Account I")
(January 31, 1995)

Acacia National Life Insurance Company Allocator 2000 Annuity - 850-000 (3/96)
Variable Annuity Separate Account II
("Separate Account II")
(January 31, 1995)
</TABLE>

<PAGE> 23

SCHEDULE B
PROXY VOTING PROCEDURE

The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.

1. The number of proxy proposals is given to the Company by the Underwriter as
early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At this
time the Underwriter will inform the Company of the Record, Mailing and
Meeting dates. This will be done verbally approximately two months before
meeting.

2. Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.

Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in the
number of Customers to Fidelity, as soon as possible, but no later than two
weeks after the Record Date.

3. The Fund's Annual Report no longer needs to be sent to each Customer by the
Company either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide the last Annual Report to the Company
pursuant to the terms of Section 3.3 of the Agreement to which this
Schedule relates.

4. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Legal Department
of the Underwriter or its affiliate ("Fidelity Legal") must approve the
Card before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the Cards
includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Fund)

(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

<PAGE> 24

5. During this time, Fidelity Legal will develop, produce, and the Fund will
pay for the Notice of Proxy and the Proxy Statement (one document). Printed
and folded notices and statements will be sent to Company for insertion
into envelopes (envelopes and return envelopes are provided and paid for by
the Insurance Company). Contents of envelope sent to Customers by Company
will include:

a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly
as possible and that their vote is important. One copy will be
supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by Fidelity Legal.

6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to Fidelity Legal.

7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.

8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.

Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by Fidelity in the past.

9. Signatures on Card checked against legal name on account registration which
was printed on the Card.

Note: For Example, If the account registration is under "Bertram C. Jones,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.

24
<PAGE> 25

10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter, a new
Card and return envelope. The mutilated or illegible Card is disregarded
and considered to be not received for purposes of vote tabulation. Any
Cards that have "kicked out" (e.g. mutilated, illegible) of the procedure
are "hand verified," i.e., examined as to why they did not complete the
system. Any questions on those Cards are usually remedied individually.

11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.

12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations stated
in terms of a percentage and the number of shares.) Fidelity Legal must
review and approve tabulation format.

13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston time.
Fidelity Legal may request an earlier deadline if required to calculate the
vote in time for the meeting.

14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.

15. The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.

16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.

25
<PAGE> 26

SCHEDULE C

Other investment companies currently available under variable annuities or
variable life insurance issued by the Company:

Alger American Fund
Deutsche Asset Management (Banker's Trust)
Calvert Group, Ltd.
Franklin Templeton International Asset Allocation
Neuberger Berman Advisors Management Trust
Oppenheimer Funds, Inc.
Van Eck Worldwide Insurance Trust

26
<PAGE> 27

SUB-LICENSE AGREEMENT

Agreement effective as of this __th of _______, 199_, by and between
Fidelity Distributors Corporation (hereinafter called "Fidelity"), a corporation
organized and existing under the laws of the Commonwealth of Massachusetts, with
a principal place of business at 82 Devonshire Street, Boston, Massachusetts,
and Acacia National Life Insurance Company (hereinafter called "Company"), a
company organized and existing under the laws of the State of Virginia, with a
principal place of business at 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
WHEREAS, FMR Corp., a Massachusetts corporation, the parent company of
Fidelity, is the owner of the trademark and the tradename "FIDELITY INVESTMENTS"
and is the owner of a trademark in a pyramid design (hereinafter, collectively
the "Fidelity Trademarks"), a copy of each of which is attached hereto as
Exhibit "A"; and
WHEREAS, FMR Corp. has granted a license to Fidelity (the "Master
License Agreement") to sub-license the Fidelity Trademarks to third parties for
their use in connection with Promotional Materials as hereinafter defined; and
WHEREAS, Company is desirous of using the Fidelity Trademarks in
connection with distribution of "sales literature and other promotional
material" with information, including the Fidelity Trademarks, printed in said
material (such material hereinafter called the Promotional Material). For the
purpose of this Agreement, "sales literature and other promotional material"
shall have the same meaning as in the certain Participation Agreement dated as
of the 1st day of May, 2000, among Fidelity, Company and Variable Insurance
Products Fund (hereinafter "Participation Agreement"); and
WHEREAS, Fidelity is desirous of having the Fidelity Trademarks used in
connection with the Promotional Material.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy whereof is hereby acknowledged,
and of the mutual promises hereinafter set forth, the parties hereby agree as
follows:
1. Fidelity hereby grants to Company a non-exclusive, non-transferable
license to use the Fidelity Trademarks in connection with the promotional
distribution of the Promotional Material and Company accepts said license,
subject to the terms and conditions set forth herein.
2. Company acknowledges that FMR Corp. is the owner of all right, title
and interest in the Fidelity Trademarks and agrees that it will do nothing
inconsistent with the ownership of the Fidelity Trademarks by FMR Corp., and
that it will not, now or hereinafter, contest any registration or application
for registration of the Fidelity Trademarks by FMR Corp., nor will it, now or
hereafter, aid anyone in contesting any registration or application for
registration of the Fidelity Trademarks by FMR Corp.

<PAGE> 28

3. Company agrees to use the Fidelity Trademarks only in the form and
manner approved by Fidelity and not to use any other trademark, service mark or
registered trademark in combination with any of the Fidelity Trademarks without
approval by Fidelity.
4. Company agrees that it will place all necessary and proper notices
and legends in order to protect the interests of FMR Corp. and Fidelity therein
pertaining to the Fidelity Trademarks on the Promotional Material including, but
not limited to, symbols indicating trademarks, service marks and registered
trademarks. Company will place such symbols and legends on the Promotional
Material as requested by Fidelity or FMR Corp. upon receipt of notice of same
from Fidelity or FMR Corp.
5. Company agrees that the nature and quality of all of the Promotional
Material distributed by Company bearing the Fidelity Trademarks shall conform to
standards set by, and be under the control of, Fidelity.
6. Company agrees to cooperate with Fidelity in facilitating Fidelity's
control of the use of the Fidelity Trademarks and of the quality of the
Promotional Material to permit reasonable inspection of samples of same by
Fidelity and to supply Fidelity with reasonable quantities of samples of the
Promotional Material upon request.
7. Company shall comply with all applicable laws and regulations and
obtain any and all licenses or other necessary permits pertaining to the
distribution of said Promotional Material.
8. Company agrees to notify Fidelity of any unauthorized use of the
Fidelity Trademarks by others promptly as it comes to the attention of Company.
Fidelity or FMR Corp. shall have the sole right and discretion to commence
actions or other proceedings for infringement, unfair competition or the like
involving the Fidelity Trademarks and Company shall cooperate in any such
proceedings if so requested by Fidelity or FMR Corp.
9. This agreement shall continue in force until terminated by Fidelity.
This agreement shall automatically terminate upon termination of the Master
License Agreement. In addition, Fidelity shall have the right to terminate this
agreement at any time upon notice to Company, with or without cause. Upon any
such termination, Company agrees to cease immediately all use of the Fidelity
Trademarks and shall destroy, at Company's expense, any and all materials in its
possession bearing the Fidelity Trademarks, and agrees that all rights in the
Fidelity Trademarks and in the goodwill connected therewith shall remain the
property of FMR Corp. Unless so terminated by Fidelity, or extended by written
agreement of the parties, this agreement shall expire on the termination of that
certain Participation Agreement.
10. Company shall indemnify Fidelity and FMR Corp. and hold each of them
harmless from and against any loss, damage, liability, cost or expense of any
nature whatsoever, including without limitation, reasonable attorneys' fees and
all court costs, arising out of use of the Fidelity Trademarks by Company.

2
<PAGE> 29

11. In consideration for the promotion and advertising of Fidelity as a
result of the distribution by Company of the Promotional Material, Company shall
not pay any monies as a royalty to Fidelity for this license.
12. This agreement is not intended in any manner to modify the terms and
conditions of the Participation Agreement. In the event of any conflict between
the terms and conditions herein and thereof, the terms and conditions of the
Participation Agreement shall control.
13. This agreement shall be interpreted according to the laws of the
Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereunto set their hands and seals, and
hereby execute this agreement, as of the date first above written.

FIDELITY DISTRIBUTORS CORPORATION

By: _____________________
Kevin J. Kelly
Vice President

ACACIA NATIONAL LIFE INSURANCE COMPANY

By: _____________________
Robert W. Clyde
President

3
<PAGE> 30

EXHIBIT A

Int. Cl.: 36

Prior U.S. Cls.: 101 and 102
Reg. No. 1,481,040
UNITED STATES PATENT AND TRADEMARK OFFICE Registered Mar. 15, 1988
- --------------------------------------------------------------------------------

SERVICE MARK
PRINCIPAL REGISTER

[FIDELITY INVESTMENTS LOGO]

<TABLE>
<S> <C>
FMR CORP. (MASSACHUSETTS CORPORATION) FIRST USE 2-22-1984; IN COMMERCE 2-22-1984.
82 DEVONSHIRE STREET
BOSTON, MA 02109, ASSIGNEE OF FIDELITY NO CLAIM IS MADE TO THE EXCLUSIVE
DISTRIBUTORS CORPORATION RIGHT TO USE "INVESTMENTS", APART FROM
(MASSACHUSETTS CORPORATION) BOSTON, THE MARK AS SHOWN.
MA 02109
SER. NO. 641,707, FILED 1-28-1987
FOR: MUTUAL FUND AND STOCK BROKERAGE
SERVICES, IN CLASS 36 (U.S. CLS. 101 AND 102) RUSS HERMAN, EXAMINING ATTORNEY
</TABLE>

<PAGE> 1
EXHIBIT 1.(8)(E)
Form of Participation Agreement
Variable Insurance Products Fund

PARTICIPATION AGREEMENT

Among

VARIABLE INSURANCE PRODUCTS FUND II,

FIDELITY DISTRIBUTORS CORPORATION

and

ACACIA NATIONAL INSURANCE COMPANY

THIS AGREEMENT, made and entered into as of the ____ day of
_________, 2000 by and among ACACIA NATIONAL LIFE INSURANCE COMPANY,
(hereinafter the "Company"), a Virginia corporation, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), and the VARIABLE INSURANCE PRODUCTS FUND II, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(hereinafter the "Underwriter"), a Massachusetts corporation.

WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and

WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance

<PAGE> 2

companies (hereinafter the "Shared Funding Exemptive Order"); and

WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and

WHEREAS, Fidelity Management & Research Company (the "Adviser")
is duly registered as an investment adviser under the federal Investment
Advisers Act of 1940 and any applicable state securities law; and

WHEREAS, the Company has registered or will register certain
variable life insurance and/or variable annuity products identified on Exhibit A
hereto ("Contracts") under the 1933 Act; and

WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the aforesaid variable annuity
contracts; and

WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and

WHEREAS, the Underwriter is registered as a broker dealer with
the Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended, (hereinafter the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and

WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid Contracts and the
Underwriter is authorized to sell such shares to unit investment trusts such as
each Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:

ARTICLE I. Sale of Fund Shares

1.1. The Underwriter agrees to sell to the Company those shares
of the Fund which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from each
Account and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such order by 9:00 a.m. Boston time on
the next following Business Day.

<PAGE> 3

"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund calculates its net asset value pursuant to the
rules of the Securities and Exchange Commission.

1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.

1.3. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.

1.4. The Fund and the Underwriter will not sell Fund shares to
any insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section 2.5 of
Article II of this Agreement is in effect to govern such sales.

1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption. For
purposes of this Section 1.5, the Company shall be the designee of the Fund for
receipt of requests for redemption from each Account and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption on the next following Business Day.

1.6. The Company agrees that purchases and redemptions of
Portfolio shares offered by the then current prospectus of the Fund shall be
made in accordance with the provisions of such prospectus. The Company agrees
that all net amounts available under the Contracts shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the Company so
informs the Fund and

<PAGE> 4

Underwriter prior to their signing this Agreement (a list of such funds
appearing on Schedule C to this Agreement); or (d) the Fund or Underwriter
consents to the use of such other investment company.

1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purpose of Section 2.10 and 2.11, upon receipt by the Fund of the
federal funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund.

1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.

1.9. The Fund shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.

ARTICLE II. Representations and Warranties

2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under the laws of its state of incorporation and that it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under such state's laws and has registered
or, prior to any issuance or sale of the Contracts, will register each Account
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts.

2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
Virginia and all applicable federal and state securities

<PAGE> 5

laws and that the Fund is and shall remain registered under the 1940 Act. The
Fund shall amend the Registration Statement for its shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Fund shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.

2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.

2.4. The Company represents that the Contracts are currently
treated as endowment, life insurance or annuity insurance contracts, under
applicable provisions of the Code and that it will make every effort to maintain
such treatment and that it will notify the Fund and the Underwriter immediately
upon having a reasonable basis for believing that the Contracts have ceased to
be so treated or that they might not be so treated in the future.

2.5. (a) With respect to Initial Class shares, the Fund
currently does not intend to make any payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act or otherwise, although it may make
such payments in the future. The Fund has adopted a "no fee" or "defensive" Rule
12b-1 Plan under which it makes no payments for distribution expenses. To the
extent that it decides to finance distribution expenses pursuant to Rule 12b-1,
the Fund undertakes to have a board of trustees, a majority of whom are not
interested persons of the Fund, formulate and approve any plan under Rule 12b-1
to finance distribution expenses.

(b) With respect to Service Class shares and Service Class
2 shares, the Fund has adopted Rule 12b-1 Plans under which it makes payments to
finance distribution expenses. The Fund represents and warrants that it has a
board of trustees, a majority of whom are not interested persons of the Fund,
which has formulated and approved each of its Rule 12b-1 Plans to finance
distribution expenses of the Fund and that any changes to the Fund's Rule 12b-1
Plans will be approved by a similarly constituted board of trustees.

2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance with
the laws of the State of Virginia and the Fund and the Underwriter represent
that their respective operations are and shall at all times remain in material
compliance with the laws of the State of Virginia to the extent required to
perform this Agreement.

2.7. The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further

<PAGE> 6

represents that it will sell and distribute the Fund shares in accordance with
the laws of the Commonwealth of Massachusetts and all applicable state and
federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.

2.8. The Fund represents that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.

2.9. The Underwriter represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of Massachusetts and any applicable state and federal securities laws.

2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.

2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, and that said bond is issued by a reputable bonding company, includes
coverage for larceny and embezzlement, and is in an amount not less than the
minimal coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The Company agrees to make
all reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Fund and the
Underwriter in the event that such coverage no longer applies.

ARTICLE III. Prospectuses and Proxy Statements; Voting

3.1. The Underwriter shall provide the Company with as many
printed copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the Company
in lieu thereof, the Fund shall provide camera-ready film containing the Fund's
prospectus and Statement of Additional Information, and such other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for the
Fund is amended during the year) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the Statement of Additional
Information for the Contracts printed together in one document. Alternatively,
the Company may print the Fund's prospectus and/or its Statement of Additional

<PAGE> 7

Information in combination with other fund companies' prospectuses and
statements of additional information. Except as provided in the following three
sentences, all expenses of printing and distributing Fund prospectuses and
Statements of Additional Information shall be the expense of the Company. For
prospectuses and Statements of Additional Information provided by the Company to
its existing owners of Contracts in order to update disclosure annually as
required by the 1933 Act and/or the 1940 Act, the cost of printing shall be
borne by the Fund. If the Company chooses to receive camera-ready film in lieu
of receiving printed copies of the Fund's prospectus, the Fund will reimburse
the Company in an amount equal to the product of A and B where A is the number
of such prospectuses distributed to owners of the Contracts, and B is the Fund's
per unit cost of typesetting and printing the Fund's prospectus. The same
procedures shall be followed with respect to the Fund's Statement of Additional
Information.

3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.

3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract owners; and
(iii) vote Fund shares for which no instructions have
been received in a particular separate account in
the same proportion as Fund shares of such
portfolio for which instructions have been received
in that separate account,

<PAGE> 8

3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate with respect
thereto.

ARTICLE IV. Sales Material and Information

4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.

4.3. The Fund, Underwriter, or its designee shall furnish, or
shall cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably objects
to such use within fifteen Business Days after receipt of such material.

4.4. The Fund and the Underwriter shall not give any information
or make any representations or statements on behalf of the Company or concerning
the Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account which
are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.

4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,

<PAGE> 9

contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.

4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.

4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited to, any
of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media),
sales literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.

ARTICLE V. Fees and Expenses

5.1. The Fund and Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the Company or
to the underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made directly
by the Fund.

<PAGE> 10

5.3. The Company shall bear the expenses of distributing the
Fund's prospectus and reports to owners of Contracts issued by the Company. The
Fund shall bear the costs of soliciting Fund proxies from Contract owners,
including the costs of mailing proxy materials and tabulating proxy voting
instructions, not to exceed the costs charged by any service provider engaged by
the Fund for this purpose. The Fund and the Underwriter shall not be responsible
for the costs of any proxy solicitations other than proxies sponsored by the
Fund.

ARTICLE VI. Diversification

6.1. The Fund will at all times invest money from the Contracts
in such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without limiting
the scope of the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.

ARTICLE VII. Potential Conflicts

7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.

7.2. The Company will report any potential or existing conflicts
of which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.

7.3. If it is determined by a majority of the Board, or a
majority of its disinterested

<PAGE> 11

trustees, that a material irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the disinterested
trustees), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1), withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.

7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Underwriter
and Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.

<PAGE> 12

withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination, provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.

ARTICLE VIII. Indemnification

8.1. Indemnification By The Company

8.1(a). The Company agrees to indemnify and hold harmless the
Fund and each trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of, or investment in, the
Fund's shares or the Contracts and:

(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
the Registration Statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by
or on behalf of the Fund for use in the Registration Statement
or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or

<PAGE> 13

(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature of the Fund not supplied by the Company, or persons
under its control) or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of
the Contracts or Fund Shares; or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Fund by
or on behalf of the Company; or

(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company,

as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.

8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or duties
under this Agreement or to the Fund, whichever is applicable.

8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company

<PAGE> 14

will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund Shares or the Contracts or the
operation of the Fund.

8.2. Indemnification by the Underwriter

8.2(a). The Underwriter agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of, or investment in, the
Fund's shares or the Contracts and:

(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Registration Statement or
prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission
or such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Underwriter or Fund by or on behalf
of the Company for use in the Registration Statement
or prospectus for the Fund or in sales literature
(or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or
Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of
the Contracts or Fund shares; or

<PAGE> 15

to be stated therein or necessary to make the
statement or statements therein not misleading, if
such statement or omission was made in reliance upon
and in conformity with information furnished to the
Company by or on behalf of the Fund; or

(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise,
to comply with the diversification requirements
specified in Article VI of this Agreement); or

(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter;

as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to each Company or the Account, whichever is applicable.

8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.2(d). The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in

<PAGE> 16

connection with the issuance or sale of the Contracts or the operation of each
Account.

8.3. Indemnification By the Fund

8.3(a). The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Fund) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful misconduct of the Board
or any member thereof, are related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure to
comply with the diversification requirements
specified in Article VI of this Agreement);or

(ii) arise out of or result from any material breach of
any representation and/or warranty made by the Fund
in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.

<PAGE> 17

fees and expenses of any additional counsel retained by it, and the Fund will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.3(d). The Company and the Underwriter agree promptly to notify
the Fund of the commencement of any litigation or proceedings against it or any
of its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.

ARTICLE IX. Applicable Law

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.

ARTICLE X. Termination

10.1. This Agreement shall continue in full force and effect until
the first to occur of:

(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or

(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio based
upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts; or

(c) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event any of the Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares
as the underlying investment media of the Contracts issued
or to be issued by the Company; or

<PAGE> 18

any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify;
or

(e) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio fails to meet the
diversification requirements specified in Article VI
hereof; or

(f) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of
the Fund or the Underwriter respectively, shall determine,
in their sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or

(g) termination by the Company by written notice to the Fund
and the Underwriter, if the Company shall determine, in
its sole judgment exercised in good faith, that either the
Fund or the Underwriter has suffered a material adverse
change in its business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or

(h) termination by the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and
the Underwriter the written notice specified in Section
1.6(b) hereof and at the time such notice was given there
was no notice of termination outstanding under any other
provision of this Agreement; provided, however any
termination under this Section 10.1(h) shall be effective
forty five (45) days after the notice specified in Section
1.6(b) was given.

10.2. Notwithstanding any termination of this Agreement, the
Fund and the Underwriter shall at the option of the Company, continue to make
available additional shares of the Fund pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Fund, redeem investments in the Fund
and/or invest in the Fund upon the making of additional purchase payments under
the Existing Contracts. The parties agree that this Section 10.2 shall not apply
to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.

10.3. The provisions of Articles II (Representations and
Warranties), VIII (Indemnification), IX (Applicable Law) and XII (Miscellaneous)
shall survive termination of this Agreement. In addition, all other applicable
provisions of this Agreement shall survive termination as long as shares of the
Fund are held on behalf of Contract owners in accordance with section 10.2,
except that the Fund and Underwriter shall have no further obligation to make
Fund shares available in Contracts issued after termination.

<PAGE> 19

10.4. The Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.

If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

If to the Company:
Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20814
Attention: Robert-John H. Sands, Jr., General Counsel

If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

ARTICLE XII. Miscellaneous

12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts

<PAGE> 20

and all information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain without the
express written consent of the affected party.

12.3 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.

12.4 This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.

12.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.

12.6 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.

12.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.

12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent of
all parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is duly licensed and
registered to perform the obligations of the Underwriter under this Agreement.
The Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company.

12.9. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee copies of the following reports:

(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report
(prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical
and in any

<PAGE> 21

event within 90 days after the end of each fiscal
year;

(b) the Company's quarterly statements (statutory)
(and GAAP, if any), as soon as practical and in
any event within 45 days after the end of each
quarterly period:

(c) any financial statement, proxy statement, notice
or report of the Company sent to stockholders
and/or policyholders, as soon as practical after
the delivery thereof to stockholders;

(d) any registration statement (without exhibits) and
financial reports of the Company filed with the
Securities and Exchange Commission or any state
insurance regulator, as soon as practical after
the filing thereof;

(e) any other report submitted to the Company by
independent accountants in connection with any
annual, interim or special audit made by them of
the books of the Company, as soon as practical
after the receipt thereof.

Unless otherwise notified in writing by the Underwriter, the reports indicated
in this section 12.9 may be delivered by mail to

David Vargo
Fidelity Investments
82 Devonshire St.
Mail Zone E17C
Boston, MA 02109

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative.

ACACIA NATIONAL LIFE INSURANCE COMPANY

By: /s/ Robert W. Clyde
-------------------------
Robert W. Clyde
President

VARIABLE INSURANCE PRODUCTS FUND II

By: /s/ Robert C. Pozen
-------------------------
Robert C. Pozen
Senior Vice President

<PAGE> 22

FIDELITY DISTRIBUTORS CORPORATION

By: /s/ Kevin J. Kelly
-------------------------
Kevin J. Kelly
Vice President

<PAGE> 23

Schedule A
Separate Accounts and Associated Contracts

Acacia National Life Insurance Company Allocator 2000 Annuity - 850-000 (3/96)
Variable Annuity Separate Account II
("Separate Account II")
(January 31, 1995)
</TABLE>

<PAGE> 24

SCHEDULE B
PROXY VOTING PROCEDURE

1. The number of proxy proposals is given to the Company by the Underwriter
as early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At
this time the Underwriter will inform the Company of the Record, Mailing
and Meeting dates. This will be done verbally approximately two months
before meeting.

2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.

Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.

3. The Fund's Annual Report no longer needs to be sent to each Customer by
the Company either before or together with the Customers' receipt of a
proxy statement. Underwriter will provide the last Annual Report to the
Company pursuant to the terms of Section 3.3 of the Agreement to which
this Schedule relates.

4. The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Legal
Department of the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately 2-4 business
days for printing information on the Cards. Information commonly found
on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed by the
Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

<PAGE> 25

5. During this time, Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one document).
Printed and folded notices and statements will be sent to Company for
insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of envelope sent to
Customers by Company will include:

a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed
to the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.

6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness
and completeness. Copy of this approval sent to Fidelity Legal.

8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process used.
An often used procedure is to sort Cards on arrival by proposal into
vote categories of all yes, no, or mixed replies, and to begin data
entry.

Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.

9. Signatures on Card checked against legal name on account registration
which was printed on the Card.

Note: For Example, If the account registration is under "Bertram C.
Jones, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.
<PAGE> 26

10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as to why they did
not complete the system. Any questions on those Cards are usually
remedied individually.

12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) Fidelity
Legal must review and approve tabulation format.

13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.

15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.

16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.

<PAGE> 27

SCHEDULE C

Other investment companies currently available under variable annuities or
variable life insurance issued by the Company:

<PAGE> 1
EXHIBIT 1.(10)

Application for Policy

ACACIA NATIONAL LIFE INSURANCE COMPANY (ANLIC) 1010-V
7315 WISCONSIN AVENUE
BETHESDA, MD 20814
APPLICATION FOR VARIABLE
UNIVERSAL LIFE Please print clearly in black ink.

<TABLE>
<S><C>
[ ]NEW POLICY [ ] INCREASE / ADDITION TO POLICY #
--------------------------
[ ]PRELIMINARY APPLICATION [ ] If increasing existing policy, enter NEW insurance
[ ]CONVERSION amount only $
[ ] POLICY# ----------------------
--------------------------------------
CONTINUE THE BALANCE? [ ] YES [ ] NO [ ] Use policy funds, no change to planned period premium
[ ]RATE REDUCTION OF POLICY# [ ] Increase planned periodic premium to $
------------------------ ---------------
If increase in premium, complete Section 10 Premium
Amount

================================================================================================================================
PART 1
- --------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: EXECUTIVE SELECT
- --------------------------------------------------------------------------------------------------------------------------------

1. INSURED

Name of Insured Sex Date of Birth / / Birthplace
-------------------- ---- ---------- ------------------
(State)

Former Name (if applicable) Social Security Number
-------------------------------------- ------------------------------------

Address
--------------------------------------------------------------------------------------------------------------------
PO Box/Address City State Zip

Occupation Employer
-----------------------------------------------------------------------------------------------------------------

Telephone - Home Best Time To Call: A.M. P.M.
------------------------------------------------- ------- ------

Telephone - Business Best Time To Call: A.M. P.M.
------------------------------------------------- ------- ------

- --------------------------------------------------------------------------------------------------------------------------------
2. EMPLOYMENT DATA

Yes No
a. Has the insured been actively at work on a full time basis at least 30 hours
per week for the past 90 days? (If No explain) [ ] [ ]

b. Has the insured ever requested or received disability benefits in the past
ten years? [ ] [ ]

- --------------------------------------------------------------------------------------------------------------------------------
3. TOBACCO USE

Yes No
a. Has the insured smoked one or more cigarettes in the past twelve months? [ ] [ ]

b. Has the insured used any form of tobacco or nicotine substitute in the past
twelve months? [ ] [ ]

(If yes, please indicate the type and frequency)
--------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
4. OWNER

Full Name (Address)
---------------------------------------------- ------------------------------------------------------

Date of Birth/Trust Date / /
---------

Relationship to Insured (or all Trustees Names)
---------------------------------------------------------------------------------

Social Security#/TIN# / /
-----------------------

Phone Number ( ) Contact Person
----- ------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
5. BENEFICIARY IF LEFT BLANK, THE BENEFICIARY WILL BE THE OWNER; OR THE ESTATE OF THE INSURED IF THE OWNER IS NOT THEN ALIVE
PAID EQUALLY TO THE SURVIVOR OR SURVIVORS.

Primary Relationship to Insured
------------------------------------------------------------------- ------------------------------

Contingent Relationship to Insured
----------------------------------------------------------------- ------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
6. DEATH BENEFIT

Amount of Insurance $
------------------

DEATH BENEFIT OPTION (select one only) OPTIONAL RIDERS:
--------------------

[ ] Option A (death benefit is the amount of [ ] Disability Benefit $ or [ ] Waiver of Monthly Deduction
insurance) ---------

[ ] Option B (death benefit is the amount of [ ] Term Coverage Rider $
insurance plus the accumulation value) -----------

- --------------------------------------------------------------------------------------------------------------------------------
7. PREMIUM MODE Please select one.

[ ] Annual [ ] Semi-Annual [ ] Quarterly [ ] Monthly Bank Withdrawal [ ] Monthly Billing

[ ] Non-Billing [ ] Invoice Billed [ ] Payroll Deduction (Additional form required) [ ] Single $

- --------------------------------------------------------------------------------------------------------------------------------
8. PREMIUM AMOUNT

Planned Annual Premium $ Planned Modal Premium $
--------------- ------------------

(*)Initial Premium (paid with application) $ (leave receipt with payor).
------------

(*)All premium checks must be made payable to ANLIC. Do not make check payable to the agent or leave the payee blank.

- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Page 1 of 7 Pages

<PAGE> 2
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------------------
9. INSURANCE INFORMATION
List all life insurance existing on Insured. If None, check box. [ ] None Yes No
Will the insurance now being applied for discontinue, reduce, change or replace [ ] [ ]
any life insurance or annuity in this or any other company? (If yes, attach
Replacement Notice if required by State Law.) (Specify policy number(s) below)

------------ --------------------- ---------------- ------------- -----------------------------------
YEAR Will This Policy Be Replaced?
COMPANY POLICY NUMBER AMOUNT ISSUED Yes No As a 1035?
------------ --------------------- ---------------- ------------- -----------------------------------

[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------
[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------
[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------
[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------
[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------
[ ] [ ] [ ]
------------ --------------------- ---------------- ------------- -----------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
10. SPECIAL INSTRUCTIONS

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

- --------------------------------------------------------------------------------------------------------------------------------
11. ENDORSEMENTS/CORRECTIONS Home Office Use Only.

No change in the amount, age at issue, classification, plan of insurance or benefits shall be effective unless
agreed to in writing by me. This space will not be used in MD, PA, WV or any other state if not allowed by statute
or Insurance Department Regulations.

- --------------------------------------------------------------------------------------------------------------------------------
12. [ ] GUARANTEED ISSUE [ ] SIMPLIFIED ISSUE [ ] REGULAR ISSUE (FULL UNDERWRITING)
(Proceed to question 14) (Complete questions 13 & 14 for Simplified and Regular Issue)

- --------------------------------------------------------------------------------------------------------------------------------
13. OTHER INFORMATION
Yes No
a. Have you participated in any vehicle racing, parachuting, hang gliding,
scuba diving, mountain climbing or rodeos within the past 2 years or is any
such activity contemplated? (If yes, complete Avocation Form) [ ] [ ]
b. Have you, within the past 5 years, consulted a physician for any reason or
had any diagnostic tests? [ ] [ ]
c. Have you, within the past 5 years, been treated by a person licensed as a
medical physician for or had indication of:
1. Cancer, tumor, liver, kidney, lung or nervous disorder? [ ] [ ]
2. Chest pain, high blood pressure, heart disease or other circulatory
disorder, diabetes or stroke? [ ] [ ]
d. Have you ever used narcotics, barbiturates, amphetamines, cocaine, LSD,
marijuana or hallucinogenic drugs? [ ] [ ]
e. Have you ever received counseling or treatment, or been a member of any
support group for the use of alcohol or drugs? [ ] [ ]
f. Has any company declined, postponed, modified, cancelled or refused to
renew, reinstate or issue insurance? [ ] [ ]
g. Is any other life insurance application now pending or contemplated with
any other company? [ ] [ ]
h. Have you been charged with a driving violation or had your license
suspended or had a restriction placed on your license within the past 3
years? (If yes, provide:) Driver's license number State of Issue [ ] [ ]
---------------- -------
i. Do you anticipate travel or residence in a foreign country in the near
future? (If so, where and for how long?) [ ] [ ]
j. Have you within the past 3 years been prescribed medication by a physician
or practitioner? [ ] [ ]
k. Insured:
Exact Height ft. in. Exact Weight lbs. [ ] Gained [ ] Lost pounds in the past year
------ ------ ------ ------
Advise reason for change
--------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
14. GIVE COMPLETE DETAILS OF ANY "YES" ANSWERS TO QUESTIONS IN SECTION 13.

- ------------- ------------------------------------------------- ------------- --------------------------------------------------
Question # Full details of disease, injury, activity, etc. Date Names and addresses of Physicians and hospitals
(if applicable)
- ------------- ------------------------------------------------- ------------- --------------------------------------------------

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

- ------------- ------------------------------------------------- ------------- --------------------------------------------------
</TABLE>

Page 2 of 7 Pages

<PAGE> 3

<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------------------
15. SUITABILITY INFORMATION

I, as of the (corporation, partnership, trust, etc., hereinafter "Institutional
----------------- -------------------
Customer"), hereby certify that Institutional Customer or its designated agent (corporate officer, owner, trustee, etc.)
have adequate investment experience and education to evaluate the investment risk of this investment on a basis
independent from that of the information provided to us by the Registered Representative selling this policy to
Institutional Customer. In the event Institutional Customer at any time believes that it does not have the ability to
analyze the risk of this investment it agrees to obtain the services of such consultants and/or other market
professionals as can provide the information necessary to make this decision independent of the soliciting Registered
Representative.

---------------------------------------------
Signature of Institutional Customer

---------------------------------------------
Supervisory Principal's Signature

- --------------------------------------------------------------------------------------------------------------------------------
16. ALLOCATION
Choose either a. or b. Acacia allows you to choose either the (A) MODEL ASSET ALLOCATION PROGRAM and its options or
(B) OWNER DIRECTED ASSET ALLOCATION PROGRAM and its options.

a. I want to participate in the MODEL ASSET ALLOCATION PROGRAM (Quarterly rebalancing is automatic.)

[ ] Yes If yes, please select ONE Portfolio A-J.
Portfolio A Conservative (WITH International) [ ]
Portfolio B Conservative-Moderate (WITH International) [ ]
Portfolio C Moderate (WITH International) [ ]
Portfolio D Moderate-Aggressive (WITH International) [ ]
Portfolio E Aggressive (WITH International) [ ]
Portfolio F Conservative (WITHOUT International) [ ]
Portfolio G Conservative-Moderate (WITHOUT International) [ ]
Portfolio H Moderate (WITHOUT International) [ ]
Portfolio I Moderate-Aggressive (WITHOUT International) [ ]
Portfolio J Aggressive (WITHOUT International) [ ]
Other
------------------------------------------------

b. I want to participate in the OWNER DIRECTED ASSET ALLOCATION PROGRAM.
[ ] Yes If yes, select using whole percentages only. Must total 100%
CALVERT SOCIAL OPPENHEIMER ALGER AMERICAN
Money Market % High Income Fund/VA % Growth %
---- ---- ----
Balanced % Capital Appreciation Fund/VA % MidCap Growth %
---- ---- ----
Small CapGrowth % Aggressive Growth Fund/VA % Small Capitalization %
---- ---- ----
Mid Cap Growth % Main Street Growth & Income Fund/VA %
---- ----
International Equity % Strategic Bond Fund/VA %
---- ---- FIDELITY
Equity-Income(*) %
----
DEUTSCHE VIT FRANKLIN TEMPLETON High Income(*) %
----
Equity 500 Index % Asset Strategy % Contrafund(*) %
---- ---- ----
Small Cap Index % International Securities %
---- ----
EAFE Equity Index % ACACIA NATIONAL
----
VAN ECK General/Fixed Account %
----
NEUBERGER BERMAN Worldwide Hard Assets %
----
Limited Maturity Bond % (*)Service Class 2
----
Growth %
----
Partners % TOTAL 100 %
----

[ ] CHECK HERE FOR PORTFOLIO REBALANCING. I elect Portfolio Rebalancing (Automatic Rebalancing). Please rebalance
the values of my subaccounts to maintain the specific allocations chosen above. The first rebalancing should occur
every: [ ] 3 months, [ ] 6 months, [ ] or 1 year (check one) beginning on (date) or [ ] 3 months, [ ] 6 months, [ ]
1 year (check one) after issue date.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Page 3 of 7 Pages

<PAGE> 4

<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------------------
17. DOLLAR COST AVERAGING Transfers totalling less than $100 are not permitted. Note: If this option is chosen, there
must be sufficient allocation to the Money Market in the Allocation Section on the application. This option will
stay in effect until the fund is depleted or until I cancel this option in writing or with an authorized telephone
instruction.

Transfer $ per month from the [ ] Money Market or from the [ ] Acacia National General Account (36 months minimum).
-----

CALVERT SOCIAL OPPENHEIMER ALGER AMERICAN
Money Market % High Income Fund/VA % Growth %
---- ---- ----
Balanced % Capital Appreciation Fund/VA % MidCap Growth %
---- ---- ----
Small CapGrowth % Aggressive Growth Fund/VA % Small Capitalization %
---- ---- ----
Mid Cap Growth % Main Street Growth & Income Fund/VA %
---- ----
International Equity % Strategic Bond Fund/VA % FIDELITY
---- ----
Equity-Income(*) %
----
DEUTSCHE VIT FRANKLIN TEMPLETON High Income(*) %
----
Equity 500 Index % Asset Strategy % Contrafund(*) %
---- ---- ----
Small Cap Index % International Securities %
---- ----
EAFE Equity Index % ACACIA NATIONAL
----
VAN ECK General/Fixed Account %
----
NEUBERGER BERMAN Worldwide Hard Assets %
----
Limited Maturity Bond % (*)Service Class 2
----
Growth %
----
Partners % Total 100 %
----

- --------------------------------------------------------------------------------------------------------------------------------
18. EARNINGS SWEEP (Interest Sweep) Please calculate the gain on all subaccounts every [ ] 3 months, [ ] 6 months, [ ] 1 year
(check one) and deposit those gains in the subaccounts listed below:
CALVERT SOCIAL OPPENHEIMER ALGER AMERICAN
Money Market % High Income Fund/VA % Growth %
---- ---- ----
Balanced % Capital Appreciation Fund/VA % MidCap Growth %
---- ---- ----
Small CapGrowth % Aggressive Growth Fund/VA % Small Capitalization %
---- ---- ----
Mid Cap Growth % Main Street Growth & Income Fund/VA %
---- ----
International Equity % Strategic Bond Fund/VA % FIDELITY
---- ----
Equity-Income(*) %
----
DEUTSCHE VIT FRANKLIN TEMPLETON High Income(*) %
----
Equity 500 Index % Asset Strategy % Contrafund(*) %
---- ---- ----
Small Cap Index % International Securities %
---- ----
EAFE Equity Index % ACACIA NATIONAL
----
VAN ECK General/Fixed Account %
----
NEUBERGER BERMAN Worldwide Hard Assets %
----
Limited Maturity Bond % (*)Service Class 2
----
Growth %
----
Partners % Total 100 %
----

The first sweep of earnings should occur on (date) or every [ ] 3 months, [ ] 6 months, [ ] 1 year (check one)
after issue date ------------------
(Not available with Dollar Cost Averaging)

- --------------------------------------------------------------------------------------------------------------------------------
19. CONSENT FOR ELECTRONIC DELIVERY
By initializing here the owner consents to receive the Acacia National Annual Prospectus dated May 1st of the
------
Prospectus year and all subsequent prospectus amendments thereto, electronically in lieu of paper version. I would
like to receive delivery: [ ] On diskette or [ ] Via Email - My email address is
----------------------

- --------------------------------------------------------------------------------------------------------------------------------
20. AUTOMATIC BANK DRAFT Please attach voided check. Note: If voided check is NOT attached and a personal check
accompanies this application, the account referenced on the check will be used to establish this plan unless
otherwise notified. Minimum withdrawal amount is $15.00.

Please withdraw $ from my bank account as shown below on the (day) of each month and
----------- ----------
invest as shown in Section 16. Note: Start date may be adjusted to occur on or before the policy date.

-------------------------------------------------------------------------------------------------------------------------
Name of Depositor/Account Name

-------------------------------------------------------------------------------------------------------------------------
Account Number Bank Phone Number

-------------------------------------------------------------------------------------------------------------------------
Name of Bank, Branch and Bank Address

This authorization can be terminated upon 30 days written notice by the depositor or ANLIC to the other party.
ANLICmay terminate this authorization if any debit entry is not honored.

X
-------------------------------------------------------------------------------------------------------------------------
Authorized Signature for above account

- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Page 4 of 7 Pages

<PAGE> 5

<TABLE>
<S><C>
21. TELEPHONE AUTHORIZATION Unless waived, I the Owner and Agent/Registered Representative will have automatic telephone
transfer and authorization.

/ / I elect NOT to have telephone transfer authorization. / / I elect NOT to have my Registered Representative have transfer
authorization.
</TABLE>

I hereby authorize and direct ANLIC to make allowable transfers of funds or
reallocation of net premiums among available subaccounts or to complete
other financial transactions as may be allowed by ANLIC at the time of
request, based upon instructions received by telephone from a) myself, as
Owner, b) my Agent/Registered Representative in Section 29 below; and c)
the person(s) named below. ANLIC will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine. ANLIC will employ reasonable procedures, including requiring the
policy number to be stated, tape recording all instructions, and mailing
written confirmations. If ANLIC does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, ANLIC may
be liable for any losses due to unauthorized or fraudulent instructions.

Name per (c) above: __________________________________________________
SS# __________________________________________________________________

Address: _____________________________________________________________

I understand: a) all telephone transactions will be recorded; and b) this
authorization will continue in force until the earlier of 1)revocation by
the Owner is received in written form or by telephone by ANLIC; or 2) ANLIC
discontinues this privilege.

22. RELEASE OF POLICY INFORMATION Authorization Agreement to release policy
information to designated individual. Policy information is automatically
sent to the policyowner, registered representative and Broker/Dealer.

As policyowner, I hereby authorize and direct the Company to send one copy
of policy information relating to the above policy to the following
designated individual.

Name _____________________________ SSN or TIN ____________________________

Address __________________________________________________________________

I understand that, as policyowner, I will continue to receive the originals
of such policy information. The designated individual is not authorized to
withdraw monies from or make any other policy changes or to act in any way
on my behalf in regard to the above policy(ies). I also understand that
monitoring policy activity is my responsibility.

TERMINATION OF AUTHORIZATION: This Authorization will continue to be in
force until the earlier of (1) written notice is received from the owner
revoking this authorization or (2) the Company terminates this agreement by
written notice to owner.

INDEMNIFICATION: Regarding the policy information released to the
individual designated above, I agree to indemnity and hold harmless the
Company, their affiliates, and their directors, officers, employees, and
agents from and against all claims, actions, costs and liabilities,
including attorney's fees, arising out of or relating to this Authorization
Agreement.

23. DISCLOSURES

I hereby acknowledge receipt of the current prospectus, and any
supplements, for this policy including any required disclosure if the
policy applied for will be in a qualified or ERISA covered non-qualified
plan. Date of Prospectus is ____________________.

/ / Check here if you wish to receive a copy of the Statement of
Additional Information

Page 5 of 7 Pages
<PAGE> 6
24. AGREEMENTS

I AGREE AS FOLLOWS:

a. NOTE FOR ARKANSAS, KENTUCKY AND OHIO RESIDENTS: Any person who, with
intent to defraud or knowing that he is facilitating a fraud against
an insurer, submits an application or files a claim containing a false
or deceptive statement is guilty of insurance fraud.

b. NOTE FOR COLORADO RESIDENTS: It is unlawful to knowingly provide
false, incomplete, or misleading facts or information to an insurance
company for the purpose of defrauding or attempting to defraud the
company. Penalties may include imprisonment, fines, denial of
insurance, and civil damages. Any insurance company or agent of an
insurance company who knowingly provides false, incomplete, or
misleading facts or information to a policy holder or claimant for the
purpose of defrauding or attempting to defraud the policy holder or
claimant with regard to a settlement or award payable from insurance
proceeds shall be reported to the Colorado Division of Insurance
within the Department of Regulatory Agencies.

c. NOTE FOR D.C. RESIDENTS: It is a crime to provide false or misleading
information to an insurer for the purpose of defrauding the insurer or
any other person. Penalties include imprisonment and/or fines. In
addition, an insurer may deny insurance benefits if false information
materially related to a claim was provided by the applicant.

d. NOTE FOR LOUISIANA RESIDENTS: Any person who, with intent to defraud
or knowing that he is facilitating a fraud against an insurer, submits
an application or files a claim containing a false or deceptive
statement may be guilty of insurance fraud.

e. NOTE FOR NEW JERSEY RESIDENTS: Any person who includes any false or
misleading information on an application for an insurance policy is
subject to criminal and civil penalties.

f. NOTE FOR NEW MEXICO RESIDENTS: Any person who knowingly presents a
false or fraudulent claim for payment of a loss or benefit or
knowingly presents false information in an application for insurance
is guilty of a crime and may be subject to civil fines and criminal
penalties.

g. NOTE FOR PENNSYLVANIA RESIDENTS: Any person who knowingly and with
intent to defraud any insurance company or other person files an
application for insurance or statement of claim containing any
materially false information or conceals for the purpose of misleading
information concerning any fact material thereto commits a fraudulent
insurance act, which is a crime and subjects such person to criminal
and civil penalties.

h. NOTE FOR VIRGINIA RESIDENTS: Any person who, with intent to defraud or
knowing that he is facilitating a fraud against an insurer, submits an
application or files a claim containing a false or deceptive statement
may have violated state law.

i. Any policy including any endorsements issued as a result of this
application will, with this application and any supplemental
applications, be the entire insurance contract.

j. No agent, broker or medical examiner can: 1) waive the answers to any
questions in this application; 2) make or change any insurance
contract; or 3) waive any rights or rules of ANLIC.

k. EXCEPT AS SPECIFIED OTHERWISE IN A RECEIPT PROVIDED UPON A PAYMENT OF
PREMIUM AT THE TIME OF APPLICATION, INSURANCE WILL NOT BE EFFECTIVE
UNTIL ALL OF THE FOLLOWING ARE MET: A) THE POLICY ISSUED BY ANLIC IS
DELIVERED TO AND ACCEPTED BY THE APPLICANT; AND B) THE FIRST FULL
PREMIUM IS PAID.

l. ANLIC may change this application by an appropriate notation in the
space marked "Endorsements/Corrections": 1) to correct apparent errors
or omissions; and 2) to conform it with any policy rider that may be
issued. No change will be made in the following without the
applicant's written consent: 1) amount of insurance; 2) plan of
insurance; 3) classification of risks; or 4) benefits. Acceptance of
any policy issued under this application ratifies any amendments.

m. I understand that: 1) the policy I am applying for is variable and
uses a Separate Account; 2) the death benefit and policy values are
not guaranteed by ANLIC or any other insurance company. They are not
guaranteed by the U.S government or any state government. They are not
federally insured by the FDIC, the Federal Reserve Board or any other
federal or state agency; 3) I bear all risk for those funds in the
Separate Account; 4) THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY
VARY WITH INVESTMENT EXPERIENCE, LOANS AND OTHER SPECIFIED CONDITIONS;
5) POLICY VALUES NOT IN THE FIXED ACCOUNT WILL INCREASE OR DECREASE IN
ACCORDANCE WITH THE EXPERIENCE OF THE SELECTED INVESTMENT OPTIONS OF
THE SEPARATE ACCOUNT; 6) the amount of the benefit payable on
surrender is not guaranteed, but is dependent on the then surrender
value; 7) illustrations of benefits, including the death benefit, are
available upon request; and 8) this policy meets my investment
objectives and anticipated financial needs.

Page 6 of 7 Pages
<PAGE> 7

25. AUTHORIZATION This authorization or a photocopy of it, shall remain valid
for use by Acacia National Life Insurance Company ("ANLIC") for two (2)
years from the date below. I authorize any licensed physician, medical
practitioner, hospital, clinic or other medically related facility,
insurance company, agency conducting Investigative Consumer Reports or any
information service or financial institution, family member, or associate
to release to ANLIC or any person or entity acting on its behalf, any
personal information which is on file and relates to my health or mental
condition, general character, driving records, use of alcohol and drugs,
and hobbies of a hazardous nature. I understand that any information
obtained will be used to determine my eligibility for insurance.

In addition, I authorize the Medical Information Bureau (MIB) to release to
ANLIC or its reinsurers, any personal information which is on file and
relates to me.

I also agree that I have received and read the Notice of ANLIC's Insurance
Information Practices, MIB and Investigative Consumer Reports. I also
understand that my authorized representative and I can receive a copy of
this authorization if we so desire.

NOTE FOR NEW JERSEY AND VIRGINIA RESIDENTS: I authorize ANLIC to obtain an
Investigative Consumer Report. An Investigative Consumer Report commonly
includes information regarding the consumer's character, general
reputation, personal characteristics and mode of living. It also includes
verification of residence, marital status and occupation. I understand that
I may request a copy of the report upon its completion and that I may ask
to be interviewed in conjunction with the preparation of the report by
contacting ANLIC.

NOTE FOR NEW JERSEY AND WEST VIRGINIA RESIDENTS: I also understand that
none of the information collected concerning my sexual orientation will be
used to determine my eligibility for insurance.

NOTE FOR VERMONT RESIDENTS: I do not authorize ANLIC to obtain or forward
any test result to any non-affiliated company. ANLIC will not release any
information relating to previously administered tests for HIV antibodies,
T-cell counts, AIDS or ARC. AIDS means Acquired Immune Deficiency Syndrome.
ARC means AIDS Related Complex.

26. SUBSTITUTE W-9 CERTIFICATION

I certify under penalty of perjury that: 1) the number shown on this form
is my correct taxpayer identification number (or I am waiting for a number
to be issued to me); and 2) I am not subject to backup withholding because:
a) I am exempt from backup withholding; or b) I have not been notified by
the Internal Revenue Service that I am subject to backup withholding as a
result of a failure to report all interest or dividends; or c) the IRS has
notified me that I am no longer subject to backup withholding.

You must cross out item 2 if you have been notified by the IRS that you are
currently subject to backup withholding because of underreporting interest
or dividends on your tax return.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION
OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.

27. SIGNATURES

I represent to the best of my knowledge and belief that all statements and
answers to this application are complete and true.

<TABLE>
<S><C>
Dated at____________________________________________ On this Date _________________________________
City State
X _____________________________ X ________________________________________________________________
Signature of Insured Signature of Owner (if corporation or trust please show full name)

X________________________________________________________________________
Signature(s) and Title or Officer or Trustee(s)
</TABLE>

28. AGENT'S/REGISTERED REPRESENTATIVE'S STATEMENT

Do you have any knowledge or reason to believe that replacement of existing
life insurance or annuity coverage may be involved?
/ / Yes / / No

I certify that: 1) the information provided by the Owner has been
accurately recorded; 2) a current prospectus and all supplements were
delivered; and 3) I have reasonable grounds to recommend the purchase of
the policy as suitable for the Owner.

X _________________________________________________________________________
Signature of Agent/Registered Representative
___________________________________________________________________________
Print Name Here ANLIC Agent Code Agency or Broker/Dealer

Page 7 of 7 Pages
<PAGE> 8
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------------------
29. MEDICALS Should be arranged by Agent/Registered Representative.

Indicate requirements being arranged per ANLIC published rules:
Resting Stress
Examination Urine Blood EKG EKG Inspection MVR
Insured [ ] [ ] [ ] [ ] [ ] [ ] [ ]

Give name of examiner
--------------------------------------------------------------------------------
Did you see Insured on the application date? [ ] Yes [ ] No
Are you applying for preferred rates? [ ] Yes [ ] No

- --------------------------------------------------------------------------------------------------------------------------------
30. POLICY DELIVERY If not completed, policy will be mailed to Representative.

Send to: [ ] Owner [ ] Agent/Registered Representative

AGENT/REGISTERED REPRESENTATIVE REMARKS AND SPECIAL INSTRUCTIONS:

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

Third Party Administrator:
------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
31.QUESTIONS??

If ANLIC has questions concerning this application, whom should we call at your office?

at ( )
--------------------------------------------------------------------------------------------- --------------------------
Name (Please Print)
FAX: ( )
------------------------

If you have questions completing this application or any other supporting documentation, please call: 1-888-837-6791.

- --------------------------------------------------------------------------------------------------------------------------------
32.MAIL APPLICATION TO:

Acacia National Life Insurance Company OVERNIGHT DELIVERIES:
P.O. Box 82579 Acacia National Life Insurance Company
Lincoln, NE 68501-2579 5900 "O" Street
FAX#: 402-467-6153 Lincoln, NE 68510
Mail original to above address
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
REGISTERED REPRESENTATIVE REPORT

<TABLE>
<S><C>
1. Purpose of Insurance:
[ ] Buy/Sell [ ] Key Person [ ] Other [ ] Deferred Compensation (pure deferral)
[ ] Estate [ ] Split Dollar [ ] SERP (Supplemental Executive Retirement Plan)
-----------

2. Business Type:
[ ] Sole Proprietorship [ ] Special Corporation [ ] Partnership [ ] Corporation

3. Fair Market Value of Business: $
----------------

4. Is there information not given elsewhere which might affect the insurability of any person(s) intended for coverage?
[ ] Yes [ ] No
Explain Yes Answer
------------------------------------------------------------------------------------

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

5. How long have you known Proposed:
Insured?
---------------------------------------------------------------------------

Applicant?
-------------------------------------------------------------------------

6. Are you related to Proposed Insured or Applicant? [ ] Yes [ ] No

7. Existing TAG Account? #
-------------------------------------------------------------

8. Is this personal business (self or immediate family) for Registered Representative(s) receiving credit? [ ] Yes [ ] No

9. Credit business to:

- ----------------------------- -------------------------- ------------------------------------ -------
AGENCY# REGISTERED REPRESENTATIVE %
- ----------------------------- -------------------------- ------------------------------------ -------
AGENT OF RECORD:
- ----------------------------- -------------------------- ------------------------------------ -------
ADDITIONAL AGENT(S):
- ----------------------------- -------------------------- ------------------------------------ -------

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

Broker Dealer or Name Code:
--------------------------------------------------------------

Registered Representative's Signature
----------------------------------------------------
</TABLE>

<PAGE> 10
**** IMPORTANT ****

THIS NOTICE MUST BE DETACHED AND LEFT WITH YOUR CLIENT IN ALL CASES.

NOTICE OF ACACIA NATIONAL LIFE INSURANCE
COMPANY'S (ANLIC) INSURANCE INFORMATION PRACTICES

To issue an insurance policy, we need to obtain information about you and any
other persons proposed for insurance. Some of that information will come from
you and some will come from other sources. That information and any subsequent
information collected by us may in certain circumstances be disclosed to third
parties without your specific authorization.

All insured persons have a right of access and correction with respect to the
information collected about himself or herself except information which relates
to a claim, or civil or criminal proceeding.

If you wish to have a more detailed explanation of our information practices,
please contact: ANLIC, Underwriting Department, P.O. Box 82579, Lincoln, NE
68501-2579.

In an effort to provide better service and products to you, ANLIC may use
information given by you to develop marketing data. Your name will not be
associated with this data in any way. If you do not want us to use information
obtained from you for these purposes, please contact us within ten (10) days. We
need to know within 10 days because once the information is separated from your
application, we will be unable to personally identify the information with you
or your application. The address at which to contact us is: ANLIC, P.O. Box
82579, Lincoln, NE 68501-2579.

Two of our sources of information about you are MIB, Inc. (Medical Information
Bureau) and Investigative Consumer Reports. The following paragraphs describe
these sources.

MIB, INC. (MEDICAL INFORMATION BUREAU)

Information regarding the Insured's insurability will be treated as
confidential. We or our reinsurers may, however, make a brief report thereon to
MIB, Inc., a non-profit membership organization of life insurance companies
which operates an information exchange on behalf of its members. If any of the
Insured(s) apply to another Bureau member company for life or health insurance
coverage, or a claim for benefits is submitted to such a company, the Bureau,
upon request, will supply such company with the information it may have in its
file.

Upon receipt of a request from any Insured (or the Parent or Guardian, if
juvenile), the Bureau will arrange disclosure of any information it may have in
the Insured's file. If there is a question as to the accuracy of information in
the Bureau's file, the Bureau may be contacted to seek a correction in
accordance with the procedures set forth in the federal Fair Credit Reporting
Act. The address of the Bureau's information office is P.O. Box 105, Essex
Station, Boston, MA 02112, telephone number (617) 426-3660.

We or our reinsurers may also release information in our file to other life
insurance companies to whom the Insured may apply for life or health insurance
or to whom a claim for benefits may be submitted.

INVESTIGATIVE CONSUMER REPORTS

Depending on the size of policy applied for, we may request that an
investigative consumer reports about the Insured be given to us. It will be
conducted by a national organization skilled in obtaining information about
people.

The kind of information we may be seeking includes such facts as residence
verification, marital status, occupation, general reputation, personal
characteristics and mode of living. It will be obtained through personal
interviews with the Insured's friends, neighbors, associates and other
acquaintances. Inquiries will not be directed toward determining the Insured's
sexual orientation. Also, no adverse underwriting decision will be made because
a report shows that an Insured has demonstrated AIDS-related concerns or has
sought AIDS-related counseling. AIDS test results received at anonymous
counseling and testing sites are confidential and need not be disclosed. Any
AIDS testing is limited to FDA-licensed blood tests and the diagnosis of AIDS
must be made by a member of the medical profession.

An Insured may ask to be interviewed in connection with the preparation of the
report by contacting us within 5 working days of applying for the insurance
requested. He or she may call us collect at the following number and ask for the
Underwriting Department: (402) 467-1122.

ADVERSE UNDERWRITING DECISION

After review of the application submitted on the Insureds, if the policy cannot
be issued as applied for, we will provide the specific reasons for this decision
upon written request from the applicant. Send your written request to the
Underwriting Department at the address above.

MEDICAL AUTHORIZATION

The medical authorization on the application, or a photocopy of it, shall remain
valid for use by ANLIC for the duration of any claim for benefits.

<PAGE> 11
CONDITIONAL RECEIPT

1. NO COVERAGE WILL BECOME EFFECTIVE PURSUANT TO THIS CONDITIONAL RECEIPT
UNLESS AND UNTIL ALL OF THE FOLLOWING CONDITIONS HAVE BEEN SATISFIED
COMPLETELY AND EXACTLY:
a) The amount of payment received with this application must be equal to
the full initial modal premium for the amount and plan of life
insurance applied for and effective at the time of delivery of the
policy.
b) All medical examinations, tests and related data required by the
Company must be completed and received at its Service Center in
Lincoln, Nebraska within sixty (60) days from the completion of this
application.
c) As of the effective date below, each person proposed for insurance in
this application must be insurable in accordance with Company rules,
limits, and standards for the plan and the amount applied for without
any modifications either as to plan, amount, riders and/.or the rate
of premium paid.
d) As of the effective date, the state of health and all factors
affecting the insurability of each person proposed for insurance must
be as stated in this application.

2. IF THE CONDITIONS OF PARAGRAPH 1 ARE SATISFIED ON THE EFFECTIVE DATE,
INSURANCE COVERAGE WILL BE PROVIDED PURSUANT TO THIS CONDITIONAL RECEIPT ON
THE SAME TERMS AND CONDITIONS AS THE POLICY APPLIED FOR AND IN USE ON THE
EFFECTIVE DATE. HOWEVER, THE AMOUNT OF SUCH INSURANCE WILL BE IN AN AMOUNT
NOT TO EXCEED THAT SPECIFIED IN PARAGRAPH 3. "EFFECTIVE DATE" AS USED
HEREIN IS THE LATEST OF:
a) The date of the application, Part 1; or
b) The date of the completion by Insureds of all medical examinations or
tests required by the Company; or
c) The date, if any, specifically requested in the application.

3. THE MAXIMUM TOTAL AMOUNT OF INSURANCE WHICH WILL BE PAYABLE PURSUANT TO ALL
CONDITIONAL RECEIPTS RECEIVED BY THE APPLICANT AS A RESULT OF PENDING
APPLICATIONS WITH THE COMPANY AND AFFILIATED COMPANIES IS LIMITED TO THE
SMALLER OF:
a) The total amount of insurance applied for with the Company and
affiliated Companies; or
b) $250,000 minus the total amount of insurance in force with the Company
and affiliated Companies, but not less than zero.

As used above, total amount of insurance includes any amounts payable under
any Accidental Death Benefit provision.

If one or more of the conditions in paragraph 1 on any insured have not
been satisfied completely and exactly, there shall be no liability on the
part of the Company pursuant to this Conditional Receipt except to return
the applicable premium paid for coverage on that insured.

4. ANY INSURANCE IN EFFECT PURSUANT TO THIS CONDITIONAL RECEIPT WILL END AT
THE EARLIEST OF:
a) The date notice is mailed that the application is not accepted; or
b) At the end of sixty (60) days from the date of this Conditional
Receipt; or
c) The date on which coverage under the policy applied for becomes
effective.

Note: Condition 4 (b) does not apply to Connecticut residents.

NO AGENT OR ANY OTHER PERSONS IS AUTHORIZED BY THE COMPANY TO WAIVE OR
MODIFY ANY OF THE PROVISIONS OF THIS CONDITIONAL RECEIPT.

ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE INSURANCE COMPANY. DO NOT
MAKE CHECKS PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.

Received the sum of $ __________________ from ________________________________
in connection with the application for life insurance bearing the same date as
this Conditional Receipt.

Dated at __________________________________ this ______ date of
______________________, 20 ____.

--------------------------------------------
Signature of Agent/Registered Representative

I acknowledge possession of this receipt. I certify that I have read it and the
terms in the Application. I also certify that the Agent/Registered
Representative has explained the provisions in paragraph 3, other terms of this
Conditional Receipt and the terms in the Application to me and that I understand
and accept them.

--------------------------------------------
Signature of Owner

<PAGE> 1

EXHIBIT 2.(a)(b)

Opinion and Consent of Robert-John H. Sands

April 27, 2000

Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814

Gentlemen:

With reference to the Pre-Effective Amendment No. 1 to Registration No.
333-95593 on Form S-6 filed by Acacia National Variable Life Insurance Company
and Acacia National Variable Life Insurance Separate Account I with the
Securities and Exchange Commission covering flexible premium life insurance
policies, I have examined such documents and such laws as I considered necessary
and appropriate, and on the basis of such examination, it is my opinion that:

1. Acacia National Variable Life Insurance Company is duly organized and
validly existing under the laws of the Commonwealth of Virginia and has
been duly authorized to issue individual flexible premium variable life
policies by the Bureau of Insurance, State Corporation Commission of
the Commonwealth of Virginia.

2. Acacia National Variable Life Insurance Separate Account I is a duly
authorized and existing separate account established pursuant to the
provisions of Virginia, ss. 38.2-3113.

3. The flexible premium variable universal life policies, when issued as
contemplated by said Form S-6 Registration Statement, will constitute
legal, validly issued and binding obligations of Acacia National Life
Insurance Company.

I hereby consent to the filing of this opinion as an exhibit to the
Pre-Effective Amendment No. 1 to said Form S-6 Registration Statement and to the
use of my name under the caption "Legal Matters" in the Prospectus contained in
the Registration Statement.

Sincerely,

/s/ Robert-John H. Sands
Robert-John H. Sands
Senior Vice President, Corporate Secretary and General Counsel

<PAGE> 1

EXHIBIT INDEX 6.(a)(b)

Opinion and Consent of Russell J. Wiltgen

April 25, 2000

Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20814

Gentlemen:

This opinion is furnished in connection with the registration by Acacia National
Life Insurance Company, of a flexible premium variable universal life insurance
policy ("Contract") under the Securities Act of 1933. The prospectus included in
Pre-Effective Amendment No. 1 to Registration Statement No. 333-95593 on Form
S-6 describes the Contract. The form of Contract was prepared under my direction
and I am familiar with the Registration Statement and Exhibits thereto. This
contract was developed and filed under Securities and Exchange Commission Rule
6E-3(T), as interpreted at this time by the SEC staff. In my opinion:

The illustrations of death benefits and accumulation values included in the
section entitled "Illustrations of Death Benefits and Accumulation Values" in
the Appendices of the prospectus, based on the assumptions stated in the
illustrations, are consistent with the provisions of the Contract. The rate
structure of the Contract has not been designed so as to make the
relationship between premiums and benefits, as shown in the illustrations,
appear more favorable to prospective purchasers of the Contract for a male
age 45, than to prospective purchasers of the Contract for other ages or for
females.

I hereby consent to the use of this opinion as an exhibit to the Pre-Effective
Amendment No. 1 to the Registration Statement and to the reference to my name
under the heading "Experts" in the prospectus.

Sincerely,

/s/ Russell J. Wiltgen
Russell J. Wiltgen
Vice President - Individual Product Management

<PAGE> 1
EXHIBIT 7.(a)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-95593 of Acacia National Variable Life Insurance Separate
Account I of our reports dated April 7, 2000, on the statutory basis financial
statements of Acacia National Life Insurance Company and the financial
statements of the subaccounts of Acacia National Variable Life Insurance
Separate Account I appearing in the Prospectus, which is a part of such
Registration Statement, and to the reference to us under the heading "Experts"
in such Prospectus.

/s/ Deloitte & Touche LLP

Lincoln, Nebraska
April 21, 2000

<PAGE> 1
(PRICEWATERHOUSECOOPERS LOGO)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-6
(Registration No. 333-95593) of our report dated March 31, 1999, on the
financial statements (statutory basis) of Acacia National Life Insurance
Company and our report dated April 30, 1999 on the financial statements of
Acacia National Variable Life Insurance Separate Account I, which appear in
such Registration Statement. We also consent to the reference to us under the
caption "Experts".

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Washington, D.C.
April 21, 2000