SEPARATE ACCOUNT ONE OF NORTHERN LIFE INSURANCE CO, 485APOS, 1997-02-28

SEPARATE ACCOUNT ONE OF NORTHERN LIFE INSURANCE CO
485APOS, 1997-02-28

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<PAGE>

File No.33-90474
- --------------------------------------------------------------------------------
811-9002

As Filed with the Securities and Exchange Commission
February 28, 1997

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]
--------

Post-Effective Amendment No. 2 [ X ]
-------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]

Amendment No. 3 [ X ]
------

SEPARATE ACCOUNT ONE
(Exact Name of Registrant as Specified in its Charter)

NORTHERN LIFE INSURANCE COMPANY
(Name of Depositor)

1110 Third Avenue, Seattle, Washington 98101
(Address of Depositor's Principal Executive Offices) (Zip Code)

Depositor's Telephone Number, including Area Code: (206) 292-1111

Kristen K. Lindberg
Northern Life Insurance Company
1110 Third Avenue
Seattle, Washington 98101
(Name and Address of Agent for Service)

Approximate date of proposed Public Offering: As soon as
practicable after the Registration Statement becomes effective.

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

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on April 30, 1997 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[X] on April 30, 1997 pursuant to paragraph (a) of Rule 485.

If appropriate, check the following box:

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

Registrant has chosen to register an indefinite amount of securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940. The
Rule 24f-2 Notice for Registrant's most recent fiscal year was filed on or about
February 21, 1997.

<PAGE>

SEPARATE ACCOUNT ONE

Cross Reference Sheet Pursuant to Rule 495(a)

Form N-4
Item Number Part A Heading in Prospectus
- ----------- ----------------------------

1. Cover Page
2. Definitions
3. Summary
4. Condensed Financial Information
5. The Company; The Variable Account; Investments of the Variable
Account
6. Charges Made by the Company
7. The Contracts
8. Annuity Provisions
9. The Contracts
10. The Contracts
11. The Contracts
12. Federal Tax Status
13. Legal Proceedings
14. Statement of Additional Information Table of Contents

Part B Heading in Statement of Additional Information
-----------------------------------------------------

15. Cover Page
16. Table of Contents
17. Introduction
18. Not Applicable
19 Distribution of the Contracts
20. Distribution of the Contracts
21. Calculation of Yields and Total Returns
22. Annuity Provisions (In Prospectus)
23. Financial Statements

Part C Headings
---------------

24 Financial Statements and Exhibits
25. Directors and Officers of the Depositor
26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
27. Number of Contract Owners
28. Indemnification
29. Principal Underwriter
30. Location of Accounts and Records
31. Not Applicable
32. Undertakings
<PAGE>

P R O S P E C T U S
April 30, 1996
<PAGE>

SEPARATE ACCOUNT ONE
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
NORTHERN LIFE INSURANCE COMPANY
1110 THIRD AVENUE, SEATTLE, WASHINGTON 98101
TELEPHONE: (206) 292-1111

The Individual Deferred Variable/Fixed Annuity Contracts described in this
Prospectus ("Contracts") are offered by Northern Life Insurance Company (the
"Company") for use in connection with retirement plans qualifying for special
tax treatment under Sections 401(a), 403(b), 408 and 457 of the Internal Revenue
Code of 1986, as amended (the "Code"). In addition, one of the Contracts
described in this Prospectus is offered on a non-qualified basis.

This Prospectus offers two series of flexible premium annuity Contracts
which differ in the amount of Purchase Payments required, when Purchase Payments
can be made and certain charges imposed under the Contracts.

The Contracts provide for accumulation of Contract Value and payment of
annuity benefits on a variable or fixed basis, or a combination variable and
fixed basis. Annuity Payouts under the Contracts are deferred until a selected
later date.

Purchase Payments may be allocated to one or more of the available
Sub-Accounts of Separate Account One (the "Variable Account"), a separate
account of the Company and/or to one or both Fixed Account options, Fixed
Account A and Fixed Account B, which are part of the general account of the
Company. The Fixed Account options may not be available in all states.

Additional information about the Contracts, the Company and the
Variable Account is contained in a Statement of Additional Information
dated April 30, 1997, which has been filed with the Securities and
Exchange Commission ("SEC") and is available upon request without charge by
writing to Northern Life Insurance Company, P.O. Box 12530, Seattle,
Washington 98111 or by accessing the SEC's internet web site
(http://www.sec.gov). The Statement of Additional Information is
incorporated by reference in this Prospectus. The Table of Contents
for the Statement of Additional Information may be found on page 32 of this
Prospectus.

THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE CONTRACTS
THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE INVESTING AND SHOULD BE
RETAINED FOR FUTURE REFERENCE.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ACCOMPANYING
FUND PROSPECTUSES AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.

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

SHARES OF THE FUNDS AND INTERESTS IN THE CONTRACTS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, A BANK, AND THE SHARES AND
INTERESTS ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.

THE DATE OF THIS PROSPECTUS IS APRIL 30, 1997.

15504 5-97
<PAGE>
TABLE OF CONTENTS

Definitions .................................................................. 3
Summary Of Contract Expenses ................................................. 5
Summary ...................................................................... 7
Purpose of Contracts ....................................................... 7
Series of Contracts ........................................................ 7
Investment Alternatives .................................................... 8
Purchasing a Contract ...................................................... 8
Withdrawals ................................................................ 8
Withdrawal Charge .......................................................... 8
Other Charges .............................................................. 8
Reallocations .............................................................. 8
Fixed and Variable Annuity Payouts ......................................... 8
Revocation ................................................................. 9
Condensed Financial Information .............................................. 9
Performance Information ..................................................... 10
The Company ................................................................. 12
The Variable Account ........................................................ 12
Investments Of The Variable Account ......................................... 12
Reinvestment .............................................................. 14
Addition, Deletion or Substitution of Fund
Shares ................................................................... 15
Charges Made By The Company ................................................. 15
Withdrawal Charge (Contingent
Deferred Sales Charge) ................................................... 15
Partial Waiver of Withdrawal Charge ....................................... 16
Annual Contract Charge .................................................... 17
Mortality Risk Charge ..................................................... 17
Expense Risk Charge ....................................................... 17
Administrative Charge ..................................................... 17
Sufficiency of Charges .................................................... 17
Premium and Other Taxes ................................................... 18
Reduction of Charges ...................................................... 18
Expenses of the Funds ..................................................... 18
Administration .............................................................. 18
The Contracts ............................................................... 18
Contract Application and Purchase Payments ................................ 18
Revocation ................................................................ 19
Allocation of Purchase Payments ........................................... 19
Accumulation Unit Value ................................................... 19
Net Investment Factor ..................................................... 19
Death Benefit Before the Start Date ....................................... 20
Payment of Death Benefit Before the Start
Date ..................................................................... 20
Death Benefit After Start Date ............................................ 20
Withdrawal (Redemption) ................................................... 20
Systematic Withdrawals .................................................... 21
Loans Available from Certain Qualified
Contracts ................................................................ 21
Reallocations ............................................................. 22
Written Reallocations ................................................... 22
Telephone Reallocations ................................................. 22
Automatic Reallocations ................................................. 23
Dollar Cost Averaging Reallocations ..................................... 23
Reallocations from the Fixed Accounts ................................... 23
Assignments ............................................................... 24
Contract Owner and Beneficiaries .......................................... 24
Contract Inquiries ........................................................ 24
Annuity Provisions .......................................................... 24
Start Date ................................................................ 24
Annuity Payout Selection .................................................. 25
Forms of Annuity Payouts .................................................. 25
Frequency and Amount of Annuity Payouts ................................... 25
Annuity Payouts ........................................................... 25
Sub-Account Annuity Unit Value ............................................ 26
Assumed Investment Rate ................................................... 26
Partial Annuitization ....................................................... 26
Federal Tax Status .......................................................... 26
Introduction .............................................................. 26
Tax Status of the Contract ................................................ 27
Taxation of Annuities ..................................................... 27
Possible Changes in Taxation .............................................. 29
Transfers, Assignments or Exchanges of a Contract ......................... 29
Withholding ............................................................... 29
Multiple Contracts ........................................................ 29
Taxation of Qualified Plans ............................................... 29
Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans .............. 30
Individual Retirement Annuities ........................................... 30
Tax Sheltered Annuities ................................................... 30
Deferred Compensation Plans ............................................... 30
Possible Charge for the Company's Taxes ................................... 30
Other Tax Consequences .................................................... 30
Voting of Fund Shares ....................................................... 30
Distribution Of The Contracts ............................................... 31
Reports To Contract Owners .................................................. 31
Legal Proceedings ........................................................... 31
Financial Statements And Experts ............................................ 31
Further Information ......................................................... 31
Statement of Additional Information Table of
Contents ................................................................... 32
Appendix A ................................................................. A-1
Fund Prospectuses

Northstar Variable Trust (Northstar):

Northstar Income and Growth Fund ................................. Northstar-1
Northstar Multi-Sector Bond Fund ................................. Northstar-1
Northstar Growth Fund ............................................ Northstar-1
Fidelity's Variable Insurance Products Fund (VIPF):
Money Market Portfolio ................................................. VIP-1
Growth Portfolio ....................................................... VIP-1
Equity-Income Portfolio ................................................ VIP-1
Overseas Portfolio ..................................................... VIP-1
Fidelity's Variable Insurance Products Fund II (VIPF II):
Asset Manager Portfolio .............................................. VIPII-1
Asset Manager: Growth Portfolio ...................................... VIPII-1
Index 500 Portfolio .................................................. VIPII-1
Contrafund Portfolio ................................................. VIPII-1
The Alger American Fund:
Alger American Small Capitalization Portfolio ........................ Alger-1
Alger American Growth Portfolio ...................................... Alger-1
Alger American MidCap Growth
Portfolio ........................................................... Alger-1
Alger American Leveraged AllCap
Portfolio ........................................................... Alger-1

2
<PAGE>
DEFINITIONS

ACCUMULATION UNIT - A unit of measure used to determine the Variable Account
Contract Value.

ALGER - The Alger American Fund.

ANNUITANT - The person whose life determines the annuity payouts payable at the
Start Date under a Contract.

ANNUITY PAYOUT DATE - Unless otherwise agreed to by the Company, the first
business day of any calendar month in which a Fixed or Variable Annuity
Payout is made under a Contract.

ANNUITY UNIT - A unit of measure used to determine the amount of a Variable
Annuity Payout after the first Variable Annuity Payout.

BENEFICIARY - The person(s) named by the Contract Owner to receive the Death
Benefit upon the death of the Contract Owner or Annuitant, if applicable,
before the Start Date and to receive the balance of annuity payouts, if any,
under the annuity payout(s) in effect at the Annuitant's death.

CODE - The Internal Revenue Code of 1986, as amended.

CONTINGENT BENEFICIARY - The person(s) named to become the Beneficiary if the
Beneficiary dies.

CONTRACT ANNIVERSARY - The same day and month as the Issue Date each year.

CONTRACT EARNINGS - For a Transfer Series Contract, the Contract Value on any
Valuation Date, plus the aggregate Purchase Payments withdrawn up to that
date, minus the aggregate Purchase Payments made up to that date.

CONTRACT OWNER - The person who controls all the rights and privileges under a
Contract.

CONTRACT VALUE - The sum of the Variable Account Contract Value, plus the sum of
the Fixed Account A and Fixed Account B Contract Values.

CONTRACT YEAR - Each twelve-month period starting with the Issue Date and each
Contract Anniversary thereafter.

DEATH BENEFIT - The amount payable, if any, upon the death of the Contract Owner
of a qualified Contract or the Annuitant or Contract Owner in the case of a
non-qualified Contract, before the Start Date.

DEATH BENEFIT VALUATION DATE - The Valuation Date next following the date the
Company receives proof of death and an appropriate written request for
payment of the Death Benefit from the Beneficiary.

FIXED ACCOUNT A - Part of the general account of the Company, which consists of
all assets of the Company, other than those assets allocated to separate
accounts of the Company.

FIXED ACCOUNT A CONTRACT VALUE - An amount equal to the sum of Purchase Payments
allocated to Fixed Account A, increased by reallocations made to Fixed
Account A (including amounts reallocated to the Loan Account) and interest
credited to Fixed Account A, less reallocations out of Fixed Account A,
withdrawals from Fixed Account A (including amounts applied to purchase
annuity payouts, withdrawal charges and applicable premium taxes) and
deductions for the Annual Contract Charge.

FIXED ACCOUNT B - Part of the general account of the Company, which consists of
all assets of the Company, other than those assets allocated to separate
accounts of the Company.

FIXED ACCOUNT B CONTRACT VALUE - An amount equal to the sum of Purchase Payments
allocated to Fixed Account B, increased by reallocations made to Fixed
Account B and interest credited to Fixed Account B, less reallocations out of
Fixed Account B, withdrawals from Fixed Account B (including amounts applied
to purchase annuity payouts, withdrawal charges and applicable premium taxes)
and deductions for the Annual Contract Charge.

FIXED ANNUITY PAYOUT - A series of periodic payments to the Payee which do not
vary in amount, are guaranteed as to principal and interest, and are paid
from the general account of the Company.

FUND - Any open-end management investment company (or portfolio thereof) or unit
investment trust (or series thereof) in which a Sub-Account invests as
described herein.

ISSUE DATE - The date on which the Contract is issued as shown on the Contract
data page.

3
<PAGE>
LOAN ACCOUNT - The portion of Contract Value segregated within Fixed Account A
which is designated as security for a loan under the Contract.

NORTHSTAR - Northstar Variable Trust.

OUTSTANDING LOAN BALANCE - The aggregate value of all existing loans, plus any
accumulated loan interest, less any loan repayments.

PAYEE - The person to whom the Company will make Annuity Payouts.

PURCHASE PAYMENT - A payment made to the Company under a Contract which, if
permitted under a Contract includes periodic, single lump sum, rollover and
transfer payments.

QUALIFIED PLAN - A retirement plan under Sections 401(a), 403(b), 408 or 457 of
the Code.

SEC - The Securities and Exchange Commission.

SPECIFIED CONTRACT ANNIVERSARY - Each sixth Contract Anniversary.

START DATE - The date on which all of the Contract Value is used to purchase a
Fixed and/or Variable Annuity Payout.

SUB-ACCOUNT - A subdivision of the Variable Account available under a Contract
which invests in shares of a specific Fund.

SUB-ACCOUNT CONTRACT VALUE - For any Sub-Account, an amount equal to the number
of accumulation units of that Sub-Account under a Contract when the
Sub-Account Contract Value is computed, multiplied by the accumulation unit
value for that Sub-Account.

WITHDRAWAL VALUE - The Contract Value less any applicable Withdrawal Charge, any
Outstanding Loan Balance and in the case of a full withdrawal, less the
Annual Contract Charge.

VALUATION DATE - Each day on which the New York Stock Exchange is open for
business except for a day that a Sub-Account's corresponding Fund
does not value its shares. The New York Stock Exchange is currently
closed on weekends and on the following holidays: New Year's Day; President's
Day; Good Friday; Memorial Day; July Fourth; Labor Day; Veteran's Day;
Thanksgiving Day; and Christmas Day.

VALUATION PERIOD - The period of time between a Valuation Date and the next
Valuation Date.

VARIABLE ACCOUNT - Separate Account One, which is a separate investment account
of the Company.

VARIABLE ACCOUNT CONTRACT VALUE - The sum of all Sub-Account Contract Values
under a Contract.

VARIABLE ANNUITY PAYOUT - A series of periodic payments to the Payee which will
vary in amount based on the investment performance of the Sub-Accounts
selected under a Contract.

VIPF - Variable Insurance Products Fund.

VIPF II - Variable Insurance Products Fund II.

4
<PAGE>
SUMMARY OF CONTRACT EXPENSES

<TABLE>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Charge Imposed on Purchases............................................................. None
Maximum Withdrawal Charge Transfer Series (a)................................................. 6%
Maximum Withdrawal Charge Flex Series (a)..................................................... 8%
Reallocation Charge (b)....................................................................... None

ANNUAL CONTRACT CHARGE........................................................................ $30(c)

VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charges............................................................ 1.25%
Other Account Fees and Expenses (See "Administrative Charge" on page 17.)..................... .15%
Total Variable Account Annual Expenses........................................................ 1.40%
</TABLE>

ANNUAL FUND EXPENSES
(as a percentage of Fund average net assets)

<TABLE>
<CAPTION>
NORTHSTAR NORTHSTAR NORTHSTAR
INCOME AND GROWTH MULTI-SECTOR GROWTH
FUND (d) BOND FUND (d) FUND (d)
---------------------- --------------- -------------
<S> <C> <C> <C>
Management (Advisory) Fees............................... 0.75% 0.75% 0.75%
Other Expenses........................................... 0.05% 0.05% 0.05%
Total Fund Annual Expense................................ 0.80% 0.80% 0.80%
</TABLE>
<TABLE>
<CAPTION>
VIPF VIPF VIPF VIPF
MONEY MARKET GROWTH EQUITY-INCOME OVERSEAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Management (Advisory) Fees........... 0.21% 0.61% 0.51% 0.76%
Other Expenses....................... 0.09% 0.08% 0.07% 0.17%
Total Fund Annual Expense............ 0.30% 0.69%(e) 0.58%(e) 0.92%(e)

VIPF II VIPF II VIPF II VIPF II
ASSET MANAGER ASSET MANAGER: INDEX 500 CONTRAFUND
PORTFOLIO (e)(f) GROWTH PORTFOLIO(e)(f)(g) PORTFOLIO (g)(i) PORTFOLIO (e)(f)
----------------- ------------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Management (Advisory) Fees........... 0.64% 0.65% 0.13% 0.61%
Other Expenses....................... 0.10% 0.22% 0.15% 0.13%
Total Fund Annual Expense............ 0.74% 0.87% 0.28% 0.74%(e)
<CAPTION>

ALGER ALGER ALGER
AMERICAN ALGER AMERICAN AMERICAN
SMALL AMERICAN MIDCAP LEVERAGED
CAPITALIZATION GROWTH GROWTH ALLCAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO (h)
----------------- ----------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Management (Advisory) Fees........... 0.85% 0.75% 0.80% 0.85%
Other Expenses (excluding
interest)........................... 0.03% 0.04% 0.04% 0.21%
Interest Expense..................... -- -- -- 0.03%
Total Fund Annual Expense............ 0.88% 0.79% 0.84% 1.09%
</TABLE>

5
<PAGE>

PROSPECTUS DATED APRIL 30, 1997
SEPARATE ACCOUNT ONE
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
NORTHERN LIFE INSURANCE COMPANY

EXAMPLES

If a full withdrawal of the Contract Value is made at the end of the
applicable time period, the following expenses on a $1,000 investment, assuming
a 5% annual return on assets, would be paid:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------- ----------------- ----------------- -----------------
TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Northstar Income and Growth Fund.................. $79 $ 99 $122 $145 $149 $182 $280 $280
Northstar Multi-Sector Bond Fund.................. 79 99 122 145 149 182 280 280
Northstar Growth Fund............................. 79 99 122 145 149 182 280 280
VIPF Money Market Portfolio....................... 74 94 107 131 124 158 229 229
VIPF Growth Portfolio............................. 78 98 119 142 144 177 269 269
VIPF Equity-Income Portfolio...................... 77 100 115 139 138 172 258 258
VIPF Overseas Portfolio........................... 80 100 126 148 156 189 293 293
VIPF II Asset Manager Portfolio................... 78 98 120 147 146 180 274 274
VIPF II Asset Manager:
Growth Portfolio................................ 80 99 124 143 153 186 287 287
VIPF II Index 500 Portfolio....................... 74 94 106 130 123 157 227 227
VIPF II Contrafund Portfolio...................... 78 98 120 143 146 180 274 274
Alger American Small Capitalization Portfolio..... 80 100 124 147 153 186 288 288
Alger American Growth Portfolio................... 79 99 122 144 149 182 279 279
Alger American MidCap Growth Portfolio............ 79 99 123 146 151 184 284 284
Alger American Leveraged AllCap Portfolio......... 82 101 131 153 164 196 309 309
</TABLE>

If the Contract is annuitized at the end of the applicable time period or if
it is not surrendered, the following expenses on a $1,000 investment assuming a
5% annual return would be paid:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------- ----------------- ----------------- -----------------
TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX TRANSFER FLEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Northstar Income and Growth Fund.................. $25 $25 $ 77 $ 77 $131 $131 $280 $280
Northstar Multi-Sector Bond Fund.................. 25 25 77 77 131 131 260 280
Northstar Growth Fund............................. 25 25 77 77 131 131 280 280
VIPF Money Market Portfolio....................... 20 20 62 62 106 106 229 229
VIPF Growth Portfolio............................. 24 24 74 74 126 126 269 269
VIPF Equity-Income Portfolio...................... 23 23 70 70 120 120 258 258
VIPF Overseas Portfolio........................... 26 26 81 81 138 138 293 293
VIPF II Asset Manager Portfolio................... 24 24 75 75 128 128 274 274
VIPF II Asset Manager:
Growth Portfolio................................ 26 26 79 79 135 135 287 287
VIPF II Index 500 Portfolio....................... 20 20 61 61 105 105 227 227
VIPF II Contrafund Portfolio...................... 24 24 75 75 128 128 274 274
Alger American Small Capitalization Portfolio..... 26 26 79 79 135 135 288 288
Alger American Growth Portfolio................... 25 25 77 77 131 131 279 279
Alger American MidCap Growth Portfolio............ 25 25 78 78 133 133 284 284
Alger American Leveraged AllCap Portfolio......... 28 28 86 86 146 146 309 309
</TABLE>

(a) The Withdrawal Charge for the Transfer Series Contracts applies to each
Purchase Payment. It decreases from 6% in the year a Purchase Payment is
received by the Company to 0% beginning the sixth year after a Purchase
Payment was received by the Company. For the Flex Series Contracts, the
Withdrawal Charge is based on Contract

6
<PAGE>

Years. It decreases from 8% in the first three Contract Years to 0% after
the tenth Contract Year. Under certain situations amounts may be withdrawn
free of any Withdrawal Charge or the Withdrawal Charge may be reduced or
waived. For more information on the Withdrawal Charge, see "Withdrawal
Charge (Contingent Deferred Sales Charge)" on page 15. The Company reserves
the right to charge a partial withdrawal processing fee not to exceed the
lesser of 2% of the partial withdrawal amount or $25. For more information
on the processing fee, see "Withdrawal Charge (Contingent Deferred Sales
Charge)" on page 15.

(b) The Company currently does not assess a charge on reallocations between
Sub-Accounts or to or from the Fixed Accounts, although the Company
reserves the right to assess a charge not to exceed $25 per each
reallocation.

(d) The investment adviser to the Northstar Variable Trust has agreed to
reimburse the three Northstar Funds for any expenses in excess of 0.80%
of each Fund's average daily net assets. In the absence of the investment
adviser's expense reimbursements, the actual expenses that would have
been paid by each Fund during its fiscal year ending December 31, 1995 would
have been: Income and Growth Fund - 1.40%; Multi-Sector Bond Fund - 1.68%;
and Growth Fund - 1.70%.

(e) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest
earned on uninvested cash balances was used to reduce custodian and
transfer agent expenses. Including these reductions, the total operating
expenses presented in the future would have been .67 for Growth Portfolio,
.56 for Equity-Income Portfolio, .92 for Overseas Portfolio, .73 for
Asset Manager Portfolio, .85 for Asset Manager Growth Portfolio and
.71 for Contra Fund Portfolio.

(f) A portion of the brokerage commissions paid by the Asset Manager Portfolio,
Asset Manager: Growth Portfolio and Contrafund Portfolio was used to reduce
each Portfolio's expenses. Without this reduction total operating expenses
would have been: Asset Manager Portfolio - 0.81%; Asset Manager: Growth
Portfolio - 1.13%; and Contrafund Portfolio - 0.73%.

(g) Expenses of Asset Manager: Growth Portfolio and Index 500 Portfolio were
voluntarily reduced by the Fund's investment adviser. Absent reimbursement,
management fees, expenses, and total expenses would have been: Asset
Manager: Growth Portfolio - 0.71%, 0.42% and 1.13%, respectively; Index 500
Portfolio - 0.28%, 0.19% and 0.47%, respectively.

(h) Expenses of American Leveraged AllCap Portfolio were voluntarily reduced by
the Fund's investment adviser. Absent reimbursement, expenses and total
expenses would have been 3.07% and 3.92%, respectively.

(i) FMR agreed to reimburse a portion of Index 500's portfolio expenses during
the period. Without this reimbursement, the fund's management fee, other
expenses and total expenses would have been .28%, .15%, and .43%
respectively on an annualized basis.

The examples shown in the table above should not be considered
representations of past or future expenses. Actual expenses may be more or less
than those shown. THE 5% ANNUAL RETURN ASSUMED IS HYPOTHETICAL AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE
GREATER OR LESS THAN THE ASSUMED RATE.

The purpose of this table is to assist a Contract Owner in understanding the
various costs and expenses that a Contract Owner will bear either directly or
indirectly. The table reflects the anticipated expenses of the Variable Account
as well as the actual expenses of the Funds. The $30 Annual Contract Charge is
reflected as an annual percentage charge in this table based on an anticipated
average Contract Value of $10,000.

In addition to the costs and expenses shown in this table, state premium
taxes may also be applicable. For more information on state premium taxes, see
page 18, "Premium and Other Taxes".

SUMMARY

PURPOSE OF CONTRACTS

The Contracts are designed to provide individuals with retirement benefits
through the accumulation of Purchase Payments on a fixed or variable basis, and
by applying such accumulations to provide Fixed, Variable, or combination Fixed
and Variable Annuity Payouts. The purpose of variable accumulation and Variable
Annuity Payouts is to provide returns to Contract Owners which offset or exceed
the effects of inflation. There is, however, no assurance that this purpose will
be achieved.

SERIES OF CONTRACTS

This Prospectus describes two series of individual deferred variable/fixed
annuity Contracts. Transfer Series Contracts include an individual deferred tax
sheltered annuity contract, an individual deferred retirement annuity contract
and an individual deferred annuity contract ("Transfer Series"). The Flex Series
Contracts include a flexible premium individual deferred tax sheltered annuity
contract and a flexible premium individual retirement annuity contract ("Flex
Series"). For Transfer Series Contracts and Flex Series Contracts which are
Qualified Plans, the Company will accept periodic, single sum, rollover and
transfer Purchase Payments as permitted by the Code which are not less than the
specific contract minimum Purchase Payment. For the non-qualified Transfer
Series Contract, the Company will accept periodic and single sum Purchase
Payments, as well as amounts transferred under Section 1035 of the Code, which
are

7
<PAGE>

not less than the specified Contract minimum Purchase Payment. The Transfer
Series and Flex Series Contracts differ in terms of the amount of Purchase
Payments required, when Purchase Payments can be made and certain charges. (See
"Contract Application and Purchase Payments" on page 18, and "Charges Made by
the Company" on page 15.)

INVESTMENT ALTERNATIVES

Purchase Payments may be allocated to one or more of the available
Sub-Accounts of the Variable Account and in most jurisdictions to Fixed Account
A and/or Fixed Account B. Purchase Payments allocated to one or more Sub-
Accounts will be invested in shares of one or more of the Funds at net asset
value. The Variable Account Contract Value and the amount of Variable Annuity
Payouts will vary, primarily based on the investment performance of the Funds
whose shares are held in the Sub-Accounts selected. (See "Investments of the
Variable Account" on page 10.) Amounts in Fixed Account A and Fixed Account B
earn various rates of interest, with the minimum being the guaranteed rate.

PURCHASING A CONTRACT

Individuals who want to purchase a Contract must complete an application and
provide an initial Purchase Payment which will be sent to the Company's Home
Office. The minimum and maximum amount of Purchase Payments vary depending on
the type and series of Contract purchased. (See "Contract Application and
Purchase Payments" on page 18.)

WITHDRAWALS

The Contract Owner may, subject to applicable law, make a total or partial
withdrawal at any time prior to the Start Date by giving a written request to
the Company. (See "Withdrawal (Redemption)" on page 20, and "Taxation of
Annuities" on page 27.)

WITHDRAWAL CHARGE

No deduction for a sales charge is made from Purchase Payments. A Withdrawal
Charge (Contingent Deferred Sales Charge) may, however, apply to full or partial
withdrawals, with certain exceptions. The maximum Withdrawal Charge on a full or
partial withdrawal under a Transfer Series Contract is 6% of the amount
withdrawn. The maximum Withdrawal Charge on a full or partial withdrawal under a
Flex Series Contract is 8% of the amount withdrawn. The Company may decrease or
eliminate the Withdrawal Charge applicable to Contracts sold in certain
circumstances if it estimates that its sales expenses will be lower. (See
"Withdrawal Charge (Contingent Deferred Sales Charge)" on page 15.)

OTHER CHARGES

On each Contract Anniversary before the Start Date (and upon full withdrawal
of the Contract Value on a date other than a Contract Anniversary) the Company
will deduct from the Contract Value an Annual Contract Charge of $30 if on that
date the Contract Value does not exceed $25,000. The Annual Contract Charge is
to reimburse the Company for administrative expenses relating to the issue and
maintenance of the Contracts. The Company may decrease or eliminate the
Annual Contract Charge applicable to a particular Contract sold in certain
circumstances if it estimates that its administrative expenses will be lower.
(See "Annual Contract Charge" on page 17.)

The Company also deducts a Mortality Risk Charge, an Expense Risk Charge and
an Administrative Charge, equal to an annual rate of 1.40% of the daily net
assets of the available Sub-Accounts of the Variable Account. (See "Mortality
Risk Charge", "Expense Risk Charge" and "Administrative Charge" on page 17.)
Additionally, in certain states a deduction for premium tax is made. (See
"Premium and Other Taxes" on page 18.)

A daily charge, based on a percentage of average daily net assets, is paid
by each Fund to its investment adviser for investment management. These charges,
and other Fund charges and expenses, are more fully described in the
prospectuses for the Funds and are summarized in the Summary of Contract
Expenses on page 5. All of these charges and expenses are borne indirectly by
Contract Owners.

REALLOCATIONS

The Contract Owner may reallocate Contract Value among the Sub-Accounts, and
from one or more Sub-Accounts to the Fixed Accounts. Reallocations may also be
made from the Fixed Accounts subject to certain limitations. After Annuity
Payouts begin, Annuity Unit Values may be reallocated among the Sub-Accounts,
but no reallocations may be made to or from the Fixed Accounts. The Company
reserves the right to impose a charge of up to $25 for each reallocation and to
limit the amount and number of reallocations that may be made. (See
"Reallocations" on page 22.)

FIXED AND VARIABLE ANNUITY PAYOUTS

At the Contract Owner's option, the Annuitant may receive Fixed Annuity
Payouts, Variable Annuity Payouts or a combination of Fixed and Variable Annuity
Payouts.

8
<PAGE>
REVOCATION

The Contract Owner may return the Contract within ten days after it was
delivered to the Contract Owner. In such cases the Company will refund the
Contract Value. However, if required by applicable law, the Company will refund
all Purchase Payments it has received under the Contract. (See "Revocation" on
page 19.)

CONDENSED FINANCIAL INFORMATION

To be filed as a post-effective amendment.

<PAGE>

PERFORMANCE INFORMATION

From time to time, the Company may advertise or include in sales literature
yields, effective yields, and total returns for the available Sub-Accounts.
THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND DO NOT INDICATE OR PROJECT
FUTURE PERFORMANCE. Each Sub-Account may, from time to time, advertise or
include in sales literature performance relative to certain performance rankings
and indices compiled by independent organizations. More detailed information as
to the calculation of performance information, and comparisons with unmanaged
market indices appears in the Statement of Additional Information.

Yields, effective yields and total returns for the Sub-Accounts are based on
the investment performance of the corresponding portfolios of the Funds. The
performance, in part, reflects the Funds' expenses. See the Prospectuses for the
Funds.

The yield of the Sub-Account investing in the VIPF Money Market Portfolio
refers to the annualized income generated by an investment in the Sub-Account
over a specified seven-day period. The yield is calculated by assuming

10
<PAGE>
that the income generated for that seven-day period is generated each seven-day
period over a 52-week period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
by an investment in the Sub-Account is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment.

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

The total return of a Sub-Account refers to return quotations assuming an
investment under a Contract has been held in the Sub-Account for various periods
of time including, but not limited to, a period measured from the date the
Sub-Account commenced operations. Average annual total return refers to total
return quotations that are annualized based on an average return over various
periods of time.

The average annual total return quotations represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a Contract to the redemption value of the investment as of the last day of
each of the periods for which total return quotations are provided. Average
annual total return information shows the average percentage change in the value
of an investment in the Sub-Account from the beginning date of the measuring
period to the end of that period. This version of average annual total return
reflects all historical investment results, less all charges and deductions
applied against the Sub-Account (including any Withdrawal Charge that would
apply if a Contract Owner terminated the Contract at the end of each period
indicated, but excluding any deductions for premium taxes).

When a Sub-Account has been in operation for one, five, and ten years,
respectively, the average annual total return for these periods will be
provided. For periods prior to the date the Sub-Account commenced operations,
performance information for Contracts funded by the Sub-Accounts will be
calculated based on the performance of the Funds' Portfolios and the assumption
that the Sub-Accounts were in existence for the same periods as those indicated
for the Funds' Portfolios, with the level of Contract Charges that were in
effect at the inception of the Sub-Accounts for the Contracts.

Average total return information may be presented, computed on the same
basis as described above, except deductions will not include the Withdrawal
Charge. In addition, the Company may from time to time disclose average annual
total return in non-standard formats and cumulative total return for Contracts
funded by the Sub-Accounts.

The Company may, from time to time, also disclose yields and total returns
for the Portfolios of the Funds, including such disclosure for periods prior to
the dates the Sub-Accounts commenced operations.

For additional information regarding the calculation of other performance
data, please refer to the Statement of Additional Information.

In advertising and sales literature, the performance of each Sub-Account may
be compared to the performance of other variable annuity issuers in general or
to the performance of particular types of variable annuities investing in mutual
funds, or investment series of mutual funds with investment objectives similar
to each of the Sub-Accounts. Lipper Analytical Services, Inc. ("Lipper"),
Morningstar, Inc. ("Morningstar") and the Variable Annuity Research Data Service
("VARDS") are independent services which monitor and rank the performance of
variable annuity issuers in each of the major categories of investment
objectives on an industry-wide basis.

Lipper's and Morningstar's rankings include variable life insurance issuers
as well as variable annuity issuers. VARDS rankings compare only variable
annuity issuers. The performance analyses prepared by Lipper, Morningstar and
VARDS each rank such issuers on the basis of total return, assuming reinvestment
of distributions, but do not take sales charges, redemption fees, or certain
expense deductions at the separate account level into consideration. In
addition, VARDS prepares risk adjusted rankings, which consider the effects of
market risk on total return performance. This type of ranking provides data as
to which funds provide the highest total return within various categories of
funds defined by the degree of risk inherent in their investment objectives.

Advertising and sales literature may also compare the performance of each
Sub-Account to the Standard & Poor's Composite Index of 500 Common Stocks, a
widely used measure of stock performance. This unmanaged index assumes the
reinvestment of dividends but does not reflect any "deduction" for the expense
of operating or managing an investment portfolio. Other independent ranking
services and indices may also be used as a source of performance comparison.

11
<PAGE>

The Company may also report other information including the effect of
tax-deferred compounding on a Sub-Account's investment returns, or returns in
general, which may be illustrated by tables, graphs, or charts. The Company may
also illustrate the accumulation of Contract Value and payment of annuity
benefits on a variable or fixed basis, or a combination variable and fixed
basis, based on hypothetical rates of return, and compare those illustrations to
mutual fund hypothetical illustrations, using charts, tables, and graphs,
including software programs utilizing such charts, tables, and graphs. All
income and capital gains derived from Sub-Account investments are reinvested and
can lead to substantial long-term accumulation of assets, provided that the
underlying portfolio's investment experience is positive.

THE COMPANY

The Company, organized in 1906, is a stock life insurance company
incorporated under the laws of the State of Washington. The Company is an
indirect, wholly-owned subsidiary of ReliaStar Financial Corp., formerly known
as The NWNL Companies, Inc., a publicly-traded holding company incorporated
under the laws of the State of Delaware, whose subsidiaries specialize in the
life insurance business. The Company offers individual and group annuity
contracts. The Company is admitted to do business in the District of Columbia
and all states except New York. Its Home Office is at 1110 Third Avenue,
Seattle, Washington 98101.

THE VARIABLE ACCOUNT

The Variable Account is a separate account of the Company established under
the insurance laws of the State of Washington on March 22, 1994. The Variable
Account is registered with the SEC as a unit investment trust under the
Investment Company Act of 1940, as amended ("1940 Act"). Such registration does
not involve supervision by the SEC of the management or investment policies or
practices of the Variable Account, the Company or the Funds. The Company has
complete ownership and control of the assets in the Variable Account, but these
assets are held separately from the Company's other assets and are not part of
the Company's general account.

The portion of the assets of the Variable Account equal to its reserves and
other Contract liabilities will not be chargeable with liabilities arising out
of any other business of the Company. The income, gains and losses, realized or
unrealized, from assets allocated to the Variable Account will be credited to or
charged against the Variable Account, without regard to the other income, gains,
or losses of the Company.

Purchase Payments allocated to the Variable Account are allocated to one or
more Sub-Accounts selected by the Contract Owner. Each Sub-Account invests in
shares of a specific Fund, and the future Variable Account Contract Value will
depend, primarily, on the investment performance of the Funds whose shares are
held in the Sub-Accounts.

INVESTMENTS OF THE VARIABLE ACCOUNT

When a Contract is applied for, the Contract Owner may elect to have
Purchase Payments allocated to one or more of the available Sub-Accounts, each
of which invests in shares of one of the Funds at net asset value. The Contract
Owner may change a Purchase Payment allocation for future Purchase Payments and
may reallocate all or part of any Sub-Account Contract Value to another
Sub-Account that invests in shares of another Fund.

Northstar Investment Management Corporation is the investment adviser for
the three Northstar Funds offered through the Contracts. Fidelity Management &
Research Company is the investment adviser for the four portfolios of VIPF and
the four portfolios of VIPF II offered through the Contracts. Fred Alger
Management, Inc. is the investment adviser for the four portfolios of the Alger
American Fund offered through the contracts. The investment advisers are paid
fees for their services by the Funds they manage. The Funds currently offered,
together with their investment objectives, are briefly described below. More
detailed information concerning the investment objectives, policies and
restrictions pertaining to the Funds and the expenses, investment advisory
services and charges and risks attendant to investing in the Funds and other
aspects of their operations can be found in the current prospectuses for the
Funds which accompany this Prospectus and the current Statement of Additional
Information for each Fund. THE FUND PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE
ANY DECISION IS MADE CONCERNING THE ALLOCATION OF PURCHASE PAYMENTS OR
REALLOCATIONS AMONG THE SUB-ACCOUNTS.

12
<PAGE>

NORTHSTAR VARIABLE TRUST (NORTHSTAR)

Northstar is a mutual fund offering multiple investment portfolios, of which
the following three portfolios are offered under the Contracts:

NORTHSTAR INCOME AND GROWTH FUND is a diversified portfolio with
an investment objective of seeking current income balanced with the
objective of achieving capital appreciation. The Fund seeks to achieve its
objective through investments in common and preferred stocks, convertible
securities, investment grade debt securities of corporate and government
issues, selected for their prospects of producing income and growth of
capital. Wilson/Bennett Capital Management, Inc. is the sub-advisor to the
common stock portfolio of the Northstar Income and Growth Fund.

NORTHSTAR MULTI-SECTOR BOND FUND is a diversified portfolio with an
investment objective of maximizing current income consistent with the
preservation of capital. The Fund will seek to achieve its objective by
investment in a number of sectors of the fixed income securities markets.

NORTHSTAR GROWTH FUND is a diversified portfolio with an investment
objective of long-term capital growth primarily through investments in equity
securities diversified over industries and companies which are believed to
provide above average potential for capital appreciation. Navellier Fund
Management, Inc. serves as sub-adviser to the Fund and is responsible for
the day-to-day investment management of the Fund, subject to the supervision of
the investment adviser and the Trustees of the Fund. All fees and expenses of
the subadvisory arrangement are borne by the investment adviser.

VARIABLE INSURANCE PRODUCTS FUND (VIPF)

VIPF is a mutual fund offering five investment portfolios, of which the
following four portfolios are offered under the Contracts:

MONEY MARKET PORTFOLIO seeks to obtain as high a level of current income as
is consistent with preserving capital and providing liquidity. The Portfolio
will invest only in high-quality U.S. dollar denominated money market
instruments of domestic and foreign issuers. An investment in the Portfolio is
not insured or guaranteed by the U.S. Government, and there can be no assurance
that the Portfolio will maintain a stable net asset value per share of $1.00.

GROWTH PORTFOLIO seeks to achieve capital appreciation. The Portfolio
normally purchases common stocks, although its investments are not restricted to
any one type of security. Capital appreciation may also be found in other types
of securities, including bonds and preferred stocks.

EQUITY-INCOME PORTFOLIO seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities the Portfolio
will also consider the potential for capital appreciation. The Portfolio's goal
is to achieve a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's Composite Index of 500 Stocks.

OVERSEAS PORTFOLIO seeks long-term growth of capital primarily through
investments in foreign securities. Overseas Portfolio provides a means for
investors to diversify their own portfolios by participating in companies and
economies outside of the United States.

VARIABLE INSURANCE PRODUCTS FUND II (VIPF II)

VIPF II is a mutual fund offering five investment portfolios, of which the
following four portfolios are offered under the Contracts:

ASSET MANAGER PORTFOLIO seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks, bonds and
short-term, fixed-income, instruments.

ASSET MANAGER: GROWTH PORTFOLIO seeks to maximize long-term total return
with less risk than a pure stock investment. The Portfolio seeks maximum total
return by allocating its assets among stocks offering the greatest growth
potential for long-term goals; bonds which provide balance and income to offset
the volatility of stocks; and short term instruments adding liquidity and
stability to the overall mix.

INDEX 500 PORTFOLIO seeks to provide investment results that correspond to
the total return (i.e., the combination of capital changes and income) of common
stocks publicly traded in the United States. In seeking this objective, the
Portfolio attempts to duplicate the composition and total return of the Standard
& Poor's Composite Index of 500 Stocks while keeping transaction costs and other
expenses low.

13
<PAGE>
CONTRAFUND PORTFOLIO seeks capital appreciation by investing in companies
believed to be undervalued due to an overly pessimistic appraisal by the public.
The portfolio usually invests primarily in common stock and securities
convertible into common stock, but it has the flexibility to invest in any type
of security that may produce capital appreciation.

THE ALGER AMERICAN FUND

The Alger American Fund is a mutual fund offering six investment portfolios,
of which the following four portfolios are offered under the Contract.

ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO seeks to obtain long-term
capital appreciation. Except during temporary defensive periods, the Portfolio
invests at least 65% of its total assets in equity securities of companies that,
at the time of purchase of the securities, have total market capitalization
within the range of companies included in the Russell 2000 Growth Index, updated
quarterly. The Russell 2000 Growth Index is designed to track the performance of
small capitalization companies. As of March 31, 1996, the range of market
capitalization of these companies was $20 million to $3.0 billion. The Portfolio
may invest up to 35% of its total assets in equity securities of companies that,
at the time of purchase, have total market capitalization outside the range of
companies included in the Russell 2000 Growth Index and in excess of that amount
(up to 100% of its assets) during temporary defensive periods.

ALGER AMERICAN GROWTH PORTFOLIO seeks to obtain long-term capital
appreciation. The Portfolio will invest its assets in companies whose securities
are traded on domestic stock exchanges or in the over-the-counter market. The
Portfolio will invest at least 65% of its total assets in the securities of
companies that have a total market capitalization of $1 billion or greater.

ALGER AMERICAN MIDCAP GROWTH PORTFOLIO seeks long-term capital appreciation.
Except during temporary defensive periods, the Portfolio invests at least 65% of
its total assets in equity securities of companies that, at the time of purchase
of the securities, have total market capitalization within the range of
companies included in the S&P MidCap 400 Index, updated quarterly. The S&P
MidCap 400 Index is designed to track the performance of medium capitalization
companies. As of March 31, 1996, the range of market capitalization of these
companies was $153 million to $8.9 billion. The Portfolio may invest up to 35%
of its total assets in equity securities of companies that, at the time of
purchase, have total market capitalization outside the range of companies
included in the S&P MidCap 400 Index and in excess of that amount (up to 100% of
its assets) during temporary defensive periods.

ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO seeks long-term capital
appreciation. The Portfolio may purchase put and call options and sell (write)
covered call and put options on securities and securities indexes to increase
gain and to hedge against the risk of unfavorable price movements, and may enter
into futures contracts on securities indexes and purchase and sell call and put
options on these futures contracts. The Portfolio may also borrow money for the
purchase of additional securities. The Portfolio may borrow only from banks and
may not borrow in excess of one third of the market value of its assets, less
liabilities other than such borrowing. The Portfolio will invest 85% of its net
assets in equity securities of companies of any size.

THERE IS NO ASSURANCE THAT THE STATED OBJECTIVES AND POLICIES OF ANY OF THE
FUNDS WILL BE ACHIEVED.

The Company reserves the right, subject to compliance with applicable law,
to offer additional funds.

The Funds are available to registered separate accounts of insurance
companies, other than the Company, offering variable annuity Contracts and
variable life insurance policies. The Company currently does not foresee any
disadvantages to Contract Owners resulting from the Funds selling shares to fund
products other than the Contracts. However, there is a possibility that a
material conflict may arise between Contract Owners whose Contract Values are
allocated to the Variable Account and the Contract Owners of variable life
insurance policies and variable annuity Contracts issued by the Company or by
such other companies whose assets are allocated to one or more other separate
accounts investing in any one of the Funds. In the event of a material conflict
the Company will take any necessary steps, including removing the Variable
Account's investment in the Fund, to resolve the matter. The Board of Directors
or Trustees of each Fund will monitor events in order to identify any material
conflicts that possibly may arise and determine what action, if any, should be
taken in response to those events or conflicts. See each individual Fund
prospectus for more information.

REINVESTMENT

The Funds described above have as a policy the distribution of income
dividends and capital gains. However, under the Contracts described in this
Prospectus there is an automatic reinvestment of such distributions.

14
<PAGE>
ADDITION, DELETION OR SUBSTITUTION OF FUND SHARES

The Company reserves the following rights:

- The Company may add to, delete from or substitute shares that
may be purchased for or held in the Variable Account. If the
shares of a Fund are no longer available for investment or if
in the Company's judgment further investment in a Fund should
become inappropriate in view of the purposes of the Variable
Account, the Company may redeem the shares, if any, of that
portfolio and substitute shares of another registered open-end
management investment company.

- The Company may establish additional Sub-Accounts, each of
which would invest in shares of a new portfolio of a Fund or in
shares of another investment company having a specified
investment objective. The Company may, in its sole discretion,
establish new Sub-Accounts or eliminate one or more
Sub-Accounts if marketing, tax considerations or investment
conditions warrant. Any new Sub-Accounts may be made available
to existing Contract Owners on a basis to be determined by the
Company.

- The Company may, if it deems it to be in the best interests of
Contract Owners and Annuitants:
(a) manage the Variable Account as a management investment
company under the 1940 Act;
(b) deregister the Variable Account under the 1940 Act if
registration is no longer required;
(c) combine the Variable Account with other separate account(s)
of the Company; or
(d) reallocate assets of the Variable Account to another
Separate Account.

- Make any changes required by the 1940 Act.

- Restrict or eliminate any voting privileges of Contract Owners
or other persons who have voting privileges as to the Variable
Account.

- In the event any of the foregoing changes or substitutions are
made, the Company may endorse the Contracts to reflect the
change or substitution.

The Company's reservation of rights is expressly subject to the following
when required:

- Applicable Federal and state laws and regulations.

- Notice to Contract Owners

- Approval of the SEC and/or state insurance authorities.

CHARGES MADE BY THE COMPANY

WITHDRAWAL CHARGE (CONTINGENT DEFERRED SALES CHARGE)

No deduction for a sales charge is made from Purchase Payments. However, if
part or all of the Purchase Payments made under a Transfer Series Contract, or
part or all of Contract Value under a Flex Series Contract, are withdrawn, a
Withdrawal Charge (Contingent Deferred Sales Charge) may be made by the Company.

Withdrawal Charges are deducted from the amount being withdrawn and are
considered a part of the withdrawal.

The Withdrawal Charge is intended to reimburse the Company for expenses
relating to the sale of the Contracts, including commissions to sales personnel,
costs of sales material and other promotional activities and sales
administration costs.

TRANSFER SERIES CONTRACT - For purposes of determining Withdrawal Charges,
withdrawals will be taken first from Purchase Payments on a first-in, first-out
basis, then from Contract Earnings as of the Valuation Date next following the
date of the Company's receipt of the withdrawal request.

15
<PAGE>
The Withdrawal Charge for full or partial withdrawal is determined by
multiplying the amount of each Purchase Payment withdrawn that is not eligible
for a free withdrawal, by the applicable Withdrawal Charge percentage as set
forth in the following table:

<TABLE>
<CAPTION>
WITHDRAWAL CHARGE PERCENTAGE TABLE
- ---------------------------------------------------------
CONTRACT YEAR OF WITHDRAWAL CHARGE AS A
WITHDRAWAL MINUS CONTRACT PERCENTAGE OF EACH PURCHASE
YEAR OF PURCHASE PAYMENT PAYMENT
- -------------------------- -----------------------------
<S> <C>
0 6%
1 6
2 5
3 5
4 4
5 2
6 and later 0
</TABLE>

FLEX SERIES CONTRACTS - If a Flex Series Contract is withdrawn in full or in
part before the eleventh Contract Year, the Company may deduct a Withdrawal
Charge from the Contract Value. The Withdrawal Charge is determined by
multiplying the Contract Value subject to the charge by the applicable
Withdrawal Charge percentage as set forth in the following table:

<TABLE>
<CAPTION>
CONTRACT YEAR WITHDRAWAL CHARGE
- -------------------------- -----------------------------
<S> <C>
1 8%
2 8
3 8
4 7
5 6
6 5
7 4
8 3
9 2
10 1
11+ 0
</TABLE>

PARTIAL WAIVER OF WITHDRAWAL CHARGE

During any 12-month period after the Issue Date, the Contract Owner may
withdraw a portion of the Contract Value without a Withdrawal Charge. The
12-month period begins with the Contract Owner's first withdrawal. For the first
withdrawal, the amount available without a Withdrawal Charge will be determined
on the date of the requested withdrawal and will be the greater of:

1. 10% of the Contract Value less any Outstanding Loan Balance; or

2. For Transfer Series Contracts, the Purchase Payments remaining which are
no longer subject to a Withdrawal Charge, and for Flex Series Contracts,
the Contract Value no longer subject to a Withdrawal Charge.

We call this amount the "Free Surrender Amount".

If the first withdrawal equals the Free Surrender Amount, other withdrawals
during the 12-month period are subject to the Withdrawal Charge. If the first
withdrawal exceeds the Free Surrender Amount, the excess is subject to the
Withdrawal Charge, as are all other Withdrawals requested during the 12-month
period.

If the first withdrawal is less than the Free Surrender Amount, the Company
will keep track of the unused portion of the Free Surrender Amount for the
12-month period. The unused portion of the Free Surrender Amount may be applied
against no more than three (3) additional withdrawals during the 12-month
period.

The unused portion of the Free Surrender Amount available for withdrawal
will be computed by the Company on the date of any withdrawal request made after
the first withdrawal in the 12-month period and will be based upon:

10% X [(Greater of A or B)-C]-D

Where:

A=Contract Value on the date of the first withdrawal in the 12-month period;

16
<PAGE>
B=Contract Value on the date of the withdrawal request;

C=Outstanding Loan Balance on the date of the withdrawal request;

D=Any prior withdrawals made during the same 12-month period.

GENERAL INFORMATION - The Withdrawal Charges described above will be waived
in the event of the death of the Contract Owner or in the case of a
non-qualified Contract, the death of the Annuitant. In addition, for Contracts
qualified under Section 403(b) of the Code only, Withdrawal Charges may be
waived under certain circumstances.

The Company reserves the right to charge a partial withdrawal processing fee
not to exceed the lesser of 2% of the amount withdrawn or $25.

Withdrawals may be subject to a 10% federal penalty tax if made by the
Contract Owner before age 59 1/2. (See "Taxation of Annuities" on page 27.)

Contracts purchased as "tax sheltered annuities", and Contracts purchased
under state optional retirement programs are subject to certain withdrawal
restrictions. (See "Withdrawal (Redemption)" on page 20.)

ANNUAL CONTRACT CHARGE

On each Contract Anniversary prior to the Start Date, the Company deducts
an Annual Contract Charge of $30 from the Contract Value to reimburse
it for administrative expenses relating to the Contract, the Variable
Account and the Sub-Accounts. The Company will not increase the Annual
Contract Charge. The Company currently does not charge a fee where the
Contract Value exceeds $25,000, however, the Company reserves the right to
impose a charge in the future on Contracts on which the fee is currently
waived. For all Contract Values, in any Contract Year when a full
withdrawal of Contract Value is made on other than the Contract Anniversary,
the Annual Contract Charge will be deducted at the time of such withdrawal.

MORTALITY RISK CHARGE

The Variable Annuity Payouts made to Annuitants will vary in accordance with
the investment performance of the Sub-Account selected by the Contract Owner.
However, they will not be affected by the mortality experience (death rate) of
persons receiving Variable Annuity Payouts. The Company assumes this "mortality
risk" and has guaranteed the annuity rates incorporated in the Contract, which
cannot be changed.

To compensate the Company for assuming this mortality risk and the mortality
risk that Beneficiaries of Annuitants dying before the Start Date may receive
amounts in excess of the then current Contract Value, the Company deducts a
Mortality Risk Charge from the Variable Account Contract Value. (See "Death
Benefit Before Start Date" on page 20.) This deduction is made daily in an
amount that is equal to an annual rate of .85% of the daily Contract Values
under the Variable Account. The Company may not increase the rate charged for
the Mortality Risk Charge under any Contract.

EXPENSE RISK CHARGE

The Company will not increase charges for administrative expenses regardless
of its actual expenses. To compensate the Company for assuming this expense
risk, the Company deducts an Expense Risk Charge from the Variable Account
Contract Value. This deduction is made daily in an amount that is equal to an
annual rate of .40% of the daily Variable Account Contract Values. The Company
may not increase the rate of the Expense Risk Charge under any Contract.

ADMINISTRATIVE CHARGE

The Company deducts a daily Administrative Charge from the Variable Account
Contract Value in an amount equal to an annual rate of .15% of the daily
Variable Account Contract Values. This charge is deducted to reimburse the
Company for the cost of providing administrative services under the Contracts
and the Variable Account. The Company may not increase the rate of the
Administrative Charge under any Contract. Although there is not necessarily a
relationship between the amount of the Administrative Charge imposed on a given
Contract and the amount of expenses that may be attributable to that
Contract.

SUFFICIENCY OF CHARGES

If the amount of the Withdrawal Charge assessed in connection with the
Contracts is not enough to cover all distribution expenses incurred in
connection therewith, the loss will be borne by the Company. Any excess
distribution expenses borne by the Company will be paid out of its general
account which may include, among other things, proceeds derived from the
Mortality Risk Charge and the Expense Risk Charge deducted from the Variable
Account.

The Company does not currently believe that the Withdrawal Charges imposed
will cover the expected costs of distributing the Contracts.

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If the amount derived from the Mortality Risk Charge and the Expense Risk
Charge is not sufficient to cover the actual cost of the mortality and expense
risks assumed by the Company, the Company will bear the shortfall. Conversely,
if the charges prove more than sufficient, the excess will be profit to the
Company and will be available for any proper corporate purpose including, among
other things, payment of distribution expenses.

PREMIUM AND OTHER TAXES

Various states and other governmental entities levy a premium tax, currently
ranging up to 3.50%, on annuity Contracts issued by insurance companies. If a
Contract Owner lives in a jurisdiction that levies such a tax, the Company will
pay the taxes when due and reserves the right to deduct the amount of the tax
either from Purchase Payments as they are received or from the Contract Value
immediately before Contract Value is applied to an Annuity Payout as permitted
or required by applicable law.

The current range of premium tax rates is a guide only and should not be
relied on to determine actual premium taxes on any Purchase Payment or Contract
because the taxes are subject to change from time to time by legislative and
other governmental action. The timing of tax levies also varies from one taxing
authority to another. Consequently, in many cases the Contract Owner will not be
able to accurately determine the premium tax applicable to the Contract by
reference to the range of tax rates described above. The Company reserves the
right to deduct charges for any other tax or economic burden resulting from the
application of the tax laws that it determines to be applicable to the Contract.

REDUCTION OF CHARGES

The Withdrawal and Contract Charges described above (except the Mortality
Risk Charge) may be reduced or eliminated for Contracts issued in circumstances
where the Company estimates that it will incur lower distribution or
administrative expenses or perform fewer sales or administrative services than
those originally contemplated in establishing the level of those charges. Lower
distribution and administrative expenses may be the result of economics
associated with (a) the use of mass enrollment procedures, (b) the performance
of administrative or enrollment functions by an employer, (c) the use by an
employer of automated techniques in submitting Purchase Payments or information
related to Purchase Payments on behalf of its employees, or (d) any other
circumstances which reduce distribution or administrative expenses. The exact
amount of Withdrawal and Contract Charges applicable to a particular Contract
will be stated in that Contract.

EXPENSES OF THE FUNDS

There are investment advisory fees, direct operating expenses and investment
related expenses of the Funds that are reflected in each Fund's daily share
price. These fees and expenses are described in the accompanying prospectuses
for the Funds.

ADMINISTRATION

The Company has primary responsibility for all administration of the
Contracts and the Variable Account. The Company's Administrative Service Center
is located at the Home Office of the Company, P.O. Box 12530, Seattle,
Washington 98111-4530, and its telephone number is 1-800-426-7050.

The administrative services provided include, but are not limited to:
issuance of the Contracts; maintenance of Contract Owner records; Contract Owner
services; calculation of Accumulation Unit Values; and preparation of Contract
Owner reports.

THE CONTRACTS

CONTRACT APPLICATION AND PURCHASE PAYMENTS

Individuals who want to purchase a Contract must complete an application and
provide an initial Purchase Payment which will be sent to the Company's Home
Office. The initial Purchase Payment will be credited within two business days
after receipt at the Company's Home Office if accompanied by a complete
application. The Company may retain Purchase Payments for up to five business
days while attempting to complete an incomplete application. If an incomplete
application cannot be completed within five days of its receipt, the applicant
will be notified of the reasons for the delay and any Purchase Payments received
will be returned immediately unless the applicant specifically consents to have
the Company retain them pending completion of the application.

For Transfer Series Contracts and Flex Series Contracts which are Qualified
Plans, the Company will accept periodic, single sum, rollover and transfer
Purchase Payments as permitted by the Code. For the non-qualified Transfer
Series Contract, the Company will accept periodic and single sum Purchase
Payments, as well as amounts transferred

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under Section 1035 of the Code. The minimum initial Purchase Payment the Company
will accept under a Transfer Series Contract is $15,000 and subsequent payments
may not be less than $5,000. The minimum amount of the initial and subsequent
Purchase Payments the Company will accept under a Flex Series Contract is $50.

The Company may choose not to accept any subsequent Purchase Payment under
the Transfer Series Contracts and Flex Series Contracts if the Purchase Payment,
together with the Contract Value at the next Valuation Date, exceeds $1,000,000.
Any Purchase Payment not accepted by the Company will be refunded. The Company
reserves the right to accept smaller or larger initial and subsequent Purchase
Payments in connection with special circumstances, including, but not limited to
sales through group or sponsored arrangements.

REVOCATION

The Contract Owner may revoke a Contract by sending the Contract and written
notice of revocation to the Company, P.O. Box 12530, Seattle, Washington
98111-4530, or to the agent from whom a Contract was purchased, no later than
the 10th day after the Contract Owner's receipt of the Contract. As soon as the
Company receives the Contract, it will be deemed void. The Company will refund
the Contract Value as of the next Valuation Date after receipt of the Contract
and written notice of revocation. If required by applicable law, the Company
will refund all Purchase Payments it has received under the Contract.

The liability of the Variable Account under this provision is limited to the
Contract Value in each Sub-Account on the date of revocation. Any additional
amounts refunded to the Contract Owner will be paid by the Company.

ALLOCATION OF PURCHASE PAYMENTS

The Contract Owner may allocate Purchase Payments among Sub-Accounts, Fixed
Account A and/or Fixed Account B. (See Appendix A.)

Upon allocation to Sub-Accounts of the Variable Account, a Purchase Payment
is converted into Accumulation Units of the Sub-Account, by dividing the amount
of the Purchase Payment allocated to the Sub-Account by the value of an
Accumulation Unit for the Sub-Account.

ACCUMULATION UNIT VALUE

Each Accumulation Unit of a Sub-Account was initially valued at $10 when the
first Fund shares were purchased. Thereafter the value of each Accumulation Unit
will vary up or down according to a Net Investment Factor, described below.

Dividend and capital gain distributions from a Fund will be automatically
reinvested in additional shares of such Fund and allocated to the appropriate
Sub-Account. The number of Accumulation Units does not increase because of the
additional shares, but the Accumulation Unit value may increase.

NET INVESTMENT FACTOR

The Net Investment Factor is an index number which reflects charges under
the Contract and the investment performance during a Valuation Period of the
Fund whose shares are held in the particular Sub-Account. If the Net Investment
Factor is greater than one, the Accumulation Unit or Annuity Unit value has
increased. If the Net Investment Factor is less than one, Accumulation Unit or
Annuity Unit value has decreased. The Net Investment Factor for a Sub-Account is
determined by dividing (1) by (2) then subtracting (3) from the result, where:

(1) Is the net result of:

(a) The net asset value per share of the Fund shares held in the
Sub-Account, determined at the end of the current Valuation Period;

(b) PLUS the per share amount of any dividend or capital gain
distributions made on the Fund shares held in the Sub-Account
during the current Valuation Period;

(c) PLUS a per share credit or MINUS a per share charge for any taxes
reserved for which the Company determines to have resulted from the
operations of the Sub-Account and to be applicable to a Contract.

(2) Is the net result of:

(a) The net asset value per share of the Fund shares held in the
Sub-Account, determined at the end of the last prior Valuation
Period;

(b) PLUS a per share credit or MINUS a per share charge for any taxes
reserved for the last prior Valuation Period which the Company
determines to have resulted from the investment operations of the
Sub-Account and to be applicable to the Contract.

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<PAGE>
(3) Is a daily factor representing the Mortality Risk Charge, the Expense
Risk Charge and the Administrative Charge adjusted for the number of
days in the period, which is equal to, on an annual basis, 1.40% of the
daily net asset value of the Sub-Account.

DEATH BENEFIT BEFORE THE START DATE

Before the Start Date, the Beneficiary will be entitled to receive the Death
Benefit described below. The Death Benefit will be:

(1) If the Contract owner dies before the first day of the month following
the Contract owner's 80th birthday, or in the case of a non-qualified
Contract, the Annuitant dies one month before the Annuitant's 80th
birthday, then as of the Death Benefit Valuation Date, the greatest of:

(a) The Contract Value less any Outstanding Loan Balance;

(b) The sum of the Purchase Payments received by the Company under the
Contract, less any withdrawals, amounts used to purchase annuity
payouts, any Outstanding Loan Balance, and the amount of previously
deducted Annual Contract Charges; or

(c) The Contract Value on the Specified Contract Anniversary
immediately preceding the Contract Owner's or the Annuitant's
death, whichever is applicable, plus any Purchase Payments since
that Anniversary, less any withdrawals or amounts used to purchase
annuity payouts since that Anniversary, less the amount of any
previously deducted Annual Contract Charges since that Anniversary
and less the Outstanding Loan Balance.

(2) If the Contract Owner, or in the case of a non-qualified Contract, the
Annuitant, dies after the first day of the month following the Contract
Owner's or Annuitant's 80th birthday, the Contract Value less the
Outstanding Loan Balance as of the Death Benefit Valuation Date.

(3) If the Contract Owner of a non-qualified Contract dies, the Withdrawal
Value as of the Death Benefit Valuation Date.

PAYMENT OF DEATH BENEFIT BEFORE THE START DATE

The Beneficiary may elect to have any portion of the Death Benefit:

(1) Paid in a single sum;

(2) Applied to any of the annuity payouts (in no event may annuity payouts
to a Beneficiary extend beyond the Beneficiary's life expectancy or any
period certain greater than the Beneficiary's life expectancy); or

(3) Paid by another distribution method acceptable to the Company.

The timing and manner of payment must satisfy certain requirements under the
Code. In general, the Death Benefit must either be applied to an annuity payout
within one year of the Contract Owner's or Annuitant's death, or the entire
Contract Value must be distributed within five years of the Contract Owner's or
Annuitant's date of death. An exception to this provision applies if the
Beneficiary is the surviving spouse, in which case the Beneficiary may continue
the Contract as the Contract Owner and generally may exercise all rights to the
Contract. (See "Federal Tax Status" on page 26.)

If the Beneficiary requests payment of the Death Benefit in a single sum, it
will be paid to the Beneficiary within seven days after the Death Benefit
Valuation Date. An annuity payout selection or request for another form of
distribution method must be in writing and received by the Company within a time
period permitted under the Code, or the Death Benefit as of the Death Benefit
Valuation Date will be paid in a single sum to the Beneficiary and the Contract
will be cancelled.

DEATH BENEFIT AFTER START DATE

If the Annuitant dies after the Start Date, remaining annuity payouts, if
any, will be as stated in the form of annuity payout in effect.

WITHDRAWAL (REDEMPTION)

If permitted by law or any applicable Qualified Plan, the Contract Owner may
withdraw all or part of the Withdrawal Value of the Contract by sending a
properly completed withdrawal request to the Company. (See "Federal Tax Status"
on page 26.) The Contract Owner may request withdrawal of either (a) a gross
amount, in which case the applicable Withdrawal Charge and taxes will be
deducted from the gross amount requested, or (b) a specific amount after
deduction of the applicable Withdrawal Charge and taxes. If a full withdrawal
occurs on a date other than the

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Contract Anniversary, a deduction will be made for the Annual Contract Charge in
addition to the deduction made on the previous Contract Anniversary. (See
"Withdrawal Charge (Contingent Deferred Sales Charge)" on page 15, and "Annual
Contract Charge" on page 17.) Partial withdrawals may be made in amounts not
less than $1,000 and no partial withdrawal may cause the Contract Value to fall
below the greater of (a) $1,000, or (b) the Outstanding Loan Balance divided by
85%. The Company will not honor requests that do not meet these requirements.

A withdrawal will be processed on the next Valuation Date after a properly
completed withdrawal request is received by the Company and payment will be made
within seven days after such Valuation Date. Unless otherwise agreed to by the
Company, a partial withdrawal will be taken proportionately from the Fixed
Accounts and Sub-Accounts on a basis that reflects their proportionate
percentage of the Withdrawal Value.

The Company reserves the right to assess a processing fee not to exceed the
lesser of 2% of the partial withdrawal amount or $25. No processing fee will be
charged in connection with full withdrawals.

The Company may cancel the Contract when: (a) the entire Withdrawal Value is
withdrawn on or before the Start Date or (b) the Outstanding Loan Balance is
equal to or greater than the Contract Value less applicable Withdrawal Charges.

If a Contract is purchased as a "tax-sheltered annuity" under Code Section
403(b), it is subject to certain restrictions on withdrawals imposed by Section
403(b)(11) of the Code. (See "Tax-Sheltered Annuities" on page 30.) Section 403
(b)(11) of the Code restricts the distribution under Section 403(b) annuity
contracts of: (i) contributions made pursuant to a salary reduction agreement in
years beginning after December 31, 1988; (ii) earnings on those contributions;
and (iii) earnings in such years on amounts held as of the first year beginning
before January 1, 1989. Distributions of the foregoing amounts may only occur
upon the death of the employee, attainment of age 59 1/2, separation from
service, disability or hardship. In addition, income attributable to salary
reduction contributions may not be distributed in the case of hardship. Similar
restrictions may apply on distributions from Contracts used in connection with
state optional retirement programs.

Withdrawal payments may be taxable. For tax purposes such payments shall be
deemed to be from earnings until cumulative withdrawal payments equal all
accumulated earnings and thereafter from Purchase Payments received by the
Company. Consideration should be given to the tax implications of a withdrawal
prior to making a withdrawal request, including a withdrawal in connection with
a Qualified Plan.

SYSTEMATIC WITHDRAWALS

A Systematic Withdrawal is an automatic form of partial withdrawal. (See
"Withdrawal (Redemption)" on page 20.) The Contract Owner may elect to take
Systematic Withdrawals by withdrawing a specified dollar amount or percentage of
the Contract Value on a monthly, quarterly, semi-annual or annual basis.
Withdrawal Charges are not waived on Systematic Withdrawals. (See "Withdrawal
Charge (Contingent Deferred Sales Charge)" on page 15.) Systematic Withdrawals
may be discontinued by the Contract Owner at any time by notifying the Company
in writing.

The Company reserves the right to modify or discontinue offering Systematic
Withdrawals, however, any such modification or discontinuation will not affect
any Systematic Withdrawal programs already commenced. While the Company does not
currently charge a processing fee for partial withdrawals under this program, it
reserves the right to charge a processing fee not to exceed the lesser of 2% of
each Systematic Withdrawal payment or $25.

Systematic Withdrawals may be included in the Contract Owner's gross income
in the year in which the Systematic Withdrawal occurs. Systematic Withdrawals
occurring before the Contract Owner reaches age 59 1/2 may also be subject to a
10% Federal tax penalty. The Contract Owner should consult with his or her tax
adviser before requesting any Systematic Withdrawal. (See "FEDERAL TAX STATUS -
Taxation of Annuities" on page 27.)

Contract Owners interested in participating in the Systematic Withdrawal
program may obtain a separate application form and full information concerning
the program and its restrictions from their registered representative.

LOANS AVAILABLE FROM CERTAIN QUALIFIED CONTRACTS

Loans may be available from Contracts issued for use with Qualified Plans
qualified under Section 403(b) of the Code, provided that the loans are
permitted by the Contract Owner's Qualified Plan. A loan generally will not be
treated as a taxable distribution provided that the term is no longer than five
years (except for certain home loans) and the loan amount does not exceed
certain limits discussed below. Loans are subject to the limitations, interest
rates, and repayment procedures set forth in the loan document and Contract. The
loan must be repaid, in substantially equal payments, by the earlier of five
years from the date of approval of the loan or the Start Date, or if used to
purchase a primary residence of the Contract Owner, the earlier of 20 years or
the Start Date.

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<PAGE>
Under the Code, the maximum amount that may be borrowed, including loans
from other Qualified Plans of the employer, generally may not exceed the lesser
of $50,000 or 50% of the current value of an employee's interest in the Plans.
For Plans other than Plans subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), up to $10,000 may be borrowed even if it is
more than 50% of the value of the employee's accrued benefit under the Qualified
Plans. The $50,000 dollar limit is reduced by the highest loan balances owed
during the prior one-year period. The Company allows loan amounts (minimum
$1,000) that do not exceed the Withdrawal Value less an amount representing
annual loan interest, provided such amount does not exceed the maximum loan
amount set by law.

Upon the Company's receipt of a properly completed loan document, an amount
equal to the loan will be reallocated from the Contract Value, on a pro rata
basis, to the Loan Account, which is part of Fixed Account A. The Contract Value
reallocated to the Loan Account will be used to secure the loan. Amounts
reallocated from the Sub-Accounts to the Loan Account will be valued on the next
Valuation Date following the Company's receipt of the loan document. Amounts
transferred from the Sub-Accounts to the Loan Account will result in a reduction
of Variable Account Contract Value and will not participate in the investment
experience of any Sub-Account. A loan document can be obtained by writing to the
Company at P.O. Box 12530, Seattle, Washington 98111-4530.

The amounts reallocated to the Loan Account may earn an interest rate less
than that credited to other amounts allocated to Fixed Account A, but it will
never earn less than the guaranteed rate of three percent (3%). The annual
interest rate assessed by the Company on the loan will not exceed 8% in arrears
and will never be less than 5.5% in arrears.

If any loan repayment due under a loan is not paid within 90 days of the
scheduled payment date, the Company will declare the Outstanding Loan Balance
immediately due and payable without notice to the Contract Owner. Unless
prohibited by law, the Outstanding Loan Balance, along with any applicable
Withdrawal Charges will be withdrawn from the Loan Account. Such forfeiture of
Contract Value is a taxable event, and may be subject to a 10% penalty tax for
early withdrawal or adversely affect the treatment of the Contract under Section
403(b) of the Code. (See "Tax Sheltered Annuities" on page 30.)

The Company reserves the right to charge a loan service fee not to exceed
$25 for each loan and to limit loans in the first Contract Year and after the
Contract Owner reaches age 70 1/2.

The foregoing discussion of Contract loans is general and does not address
the tax consequences resulting from all situations in which a person may receive
a Contract loan. A competent tax adviser should be consulted before obtaining a
Contract loan.

REALLOCATIONS

Prior to the Start Date, the Contract Owner may transfer Variable Account
Contract Value among and between the Sub-Accounts and may transfer Fixed Account
Contract Value to various Sub-Accounts. Likewise, Variable Contract Value may be
transferred from a Sub-Account to either Fixed Account A or Fixed Account B.
Transfers of Variable Contract Values from one Sub-Account to another involve
the exchange of accumulation units of one Sub-Account for another on a
dollar-equivalent basis. Subject to certain limitations, Fixed Account Contract
Value may be transferred from either Fixed Account to the other Fixed Account or
to a Sub-Account. (See "Reallocations from the Fixed Accounts", on page 23.)
Currently, there are four methods by which a Contract Owner may make the
transfers described above ("Reallocations"): in writing, by telephone, Automatic
Reallocations and by Dollar Cost Averaging.

WRITTEN REALLOCATIONS - The Contract Owner may request a reallocation in
writing. All or part of a Sub-Account's value may be reallocated to other
Sub-Accounts or to the Fixed Accounts. The reallocations will be made by the
Company on the first Valuation Date after the request for such a reallocation is
received by the Company. Currently, there is no charge for such a reallocation.
The Company reserves the right, however, to charge a reallocation fee not to
exceed $25 per reallocation and to limit the amount and number of reallocations
made by the Contract Owner. After the Start Date, an Annuitant who has selected
Variable Annuity Payouts may request reallocation of Annuity Unit values in the
same manner and subject to the same requirements as for a reallocation of
Accumulation Unit values. However no reallocations of Annuity Unit values may be
made to or from the Fixed Accounts after the Start Date.

The conditions applicable to written reallocations also apply to telephone
reallocations, Automatic Reallocations and Dollar Cost Averaging Reallocations.

TELEPHONE REALLOCATIONS - Telephone reallocations are available when the
Contract Owner completes a telephone reallocation form and a personal
identification number has been assigned. If the Contract Owner elects to
complete the telephone reallocation form, the Contract Owner thereby agrees that
the Company will not be liable for any loss, liability, cost or expense when the
Company acts in accordance with the telephone reallocation instructions which
are received and recorded on voice recording equipment. If a telephone
reallocation, processed after the Contract Owner

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has completed the telephone reallocation form is later determined not to have
been made by the Contract Owner or was made without the Contract Owner's
authorization, and a loss results from such unauthorized reallocation, the
Contract Owner bears the risk of this loss. The Company will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine.
In the event the Company does not employ such procedures, the Company may be
liable for any losses due to unauthorized or fraudulent instructions. Such
procedures may include, among others, requiring forms of personal identification
prior to acting upon telephone instructions, providing written confirmation of
such instructions and/or tape recording telephone instructions.

AUTOMATIC REALLOCATIONS - The Contract Owner may elect to have the Company
automatically reallocate Contract Value on each quarterly anniversary of the
Issue Date or other date as permitted by Company practice to maintain a certain
percentage of Contract Value in particular Sub-Accounts. The Contract Value
allocated to each Sub-Account, as selected by the Contract Owner, will grow or
decline in value at different rates during the quarter. Automatic reallocation
is intended to reallocate Contract Value from those Sub-Accounts that have
increased in value to those Sub-Accounts that have declined in value or
increased at a slower rate. This investment method does not guarantee profits
nor does it assure that a Contract Owner will avoid losses.

To elect automatic reallocations, the Contract Value must be at least
$10,000 and an automatic reallocation application in proper form must be
received at the Home Office of the Company. An automatic reallocation
application can be obtained by writing to the Company's Home Office at P.O. Box
12530, Seattle, Washington 98111-4530. The Contract Owner must indicate on the
application the applicable Sub-Accounts and the percentage of Contract Value to
be maintained on a quarterly basis in each Sub-Account. All Contract Value in a
selected Sub-Account will be available for the automatic reallocations.

Automatic reallocation of Contract Value will occur on each quarterly
anniversary of the Issue Date or other date as permitted by Company practice,
which the Company received the automatic reallocation application in proper
form. The amounts reallocated will be credited at the Accumulation Unit value as
of the end of the Valuation Dates on which the reallocations are made.

A Contract Owner may instruct the Company at any time to terminate automatic
reallocations by written request to the Company's Home Office. Any Contract
Value in a Sub-Account that has not been reallocated will remain in that
Sub-Account regardless of the percentage allocation unless the Contract Owner
instructs otherwise. If a Contract Owner wants to continue automatic
reallocations after they have been terminated, a new automatic reallocation
application must be completed and sent to the Company's Home Office and the
Contract Value at the time the request is made must be at least $10,000.

The Company reserves the right to discontinue, modify or suspend automatic
reallocations and it reserves the right to charge a fee not to exceed $25 per
each reallocation between Sub-Accounts or from the unencumbered portion of Fixed
Account A Contract Value. Contract Value in Fixed Account B is not eligible for
automatic reallocations.

DOLLAR COST AVERAGING REALLOCATIONS - The Contract Owner may direct the
Company to automatically transfer a fixed dollar amount or a specified
percentage of Sub-Account Contract Value or Fixed Account A Contract Value to
any one or more other Sub-Accounts or to the Fixed Accounts. No reallocations
from Fixed Account B are permitted under this service. Reallocations of this
type may be made on a monthly, quarterly, semi-annual or annual basis. This
service is intended to allow the Contract Owner to utilize "Dollar Cost
Averaging," a long term investment method which provides for regular investments
over time in a level or variable amount. The Company makes no guarantees that
dollar cost averaging will result in a profit or protect against loss. The
Contract Owner may discontinue dollar cost averaging at any time by notifying
the Company in writing.

Contract Owners interested in dollar cost averaging may obtain a separate
application form and full information concerning this service and its
restrictions from their registered representatives.

The Company reserves the right to discontinue, modify or suspend dollar cost
averaging. Although the Company currently charges no fees for reallocations made
under the dollar cost averaging program, the Company reserves the right to
charge a processing fee not to exceed $25 for each dollar cost averaging
reallocation between Sub-Accounts or from Fixed Account A.

REALLOCATIONS FROM THE FIXED ACCOUNTS - Subject to the conditions applicable
to reallocations among Sub-Accounts, reallocations of amounts from Fixed Account
A not designated to the Loan Account may be made to the Sub-Accounts or to Fixed
Account B any time before the Start Date. After the Start Date, amounts
supporting Fixed Annuity Payouts cannot be reallocated.

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Reallocations of Fixed Account B Contract Value to the Sub-Accounts or to
Fixed Account A are subject to the following conditions:

(a) Reallocations may only be made during the period starting 30 days
before and ending 30 days after the Contract Anniversary, and only one
reallocation may be made during such period;

(b) The Company must receive the reallocation request no more than 30 days
before the start of the reallocation period and not later than 10 days
before the end of the reallocation;

(c) Reallocations not in excess of the greater of 25% of Fixed Account B
Contract Value or $1,000 may be made (unless the balance after such
reallocation would be less than $1,000, in which case the full Fixed
Account B Contract Value may be reallocated); and

(d) Such reallocation must involve at least $250 of the total Fixed Account
B Contract Value (or the total Fixed Account B Contract Value, if
less).

After the Start Date, reserves supporting Fixed Annuity Payouts cannot be
reallocated.

The Company reserves the right to permit reallocations from Fixed Accounts A
and B in excess of the limits described above on a non-discriminatory basis.

ASSIGNMENTS

If the Contract is issued pursuant to or in connection with a Qualified
Plan, it may not be sold, transferred, pledged or assigned to any person or
entity other than the Company. In other circumstances, an assignment of the
Contract is permitted, but only before the Start Date, by giving the Company the
original or a certified copy of the assignment. The Company shall not be bound
by any assignment until it is actually received by the Company and shall not be
responsible for the validity of any assignment. Any payments made or actions
taken by the Company before the Company actually receives any assignment shall
not be affected by the assignment.

CONTRACT OWNER AND BENEFICIARIES

Unless someone else is named as the Contract Owner in the application for
the Contract, the applicant is the Contract Owner of the Contract and before the
Start Date may exercise all of the Contract Owner's rights under the Contract.

The Contract Owner may name a Beneficiary and a Contingent Beneficiary. In
the event a Contract Owner or the Annuitant in the case of a non-qualified
Contract, dies before the Start Date, the Beneficiary shall receive a Death
Benefit as provided in the Contract. In the event the Payee dies on or after the
date Annuity Payouts commence, the Beneficiary, if the Annuity Payout in effect
at the Contract Owner's death so provides, may continue receiving payouts or be
paid a lump sum. If the Beneficiary or Contingent Beneficiary is not living on
the date payment is due or if no Beneficiary or Contingent Beneficiary has been
named, the Payee's estate will receive the applicable proceeds.

A person named as an Annuitant, a Payee, a Beneficiary or a Contingent
Beneficiary shall not be entitled to exercise any rights relating to the
Contract or to receive any payments or settlements under the Contract or any
Annuity Payout, unless such person is living on the day due proof of death of
the Contract Owner, the Annuitant or the Beneficiary, whichever is applicable,
is received by the Company.

Unless different arrangements have been made with the Company by the
Contract Owner, if more than one Beneficiary is entitled to payments from the
Company the payments shall be in equal shares.

Before the Start Date, the Contract Owner may change the Beneficiary or the
Contingent Beneficiary by giving the Company written notice of the change, but
the change shall not be effective until actually received by the Company. Upon
receipt by the Company of a notice of change, it will be effective as of the
date it was signed but shall not affect any payments made or actions taken by
the Company before the Company received the notice, and the Company shall not be
responsible for the validity of any change.

CONTRACT INQUIRIES

Inquiries regarding a Contract may be made by writing to the Company's Home
Office, P.O. Box 12530, Seattle, Washington 98111-4530.

ANNUITY PROVISIONS

START DATE

Unless otherwise agreed to by the Company, the Start Date must be the first
business day of any calendar month. The Contract Owner may change the Start Date
by giving written notice received by the Company at least 30 days before

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the Start Date currently in effect and the new Start Date. The new Start Date
must satisfy the requirements for a Start Date. If the Contract Owner does not
select a Start Date, the Start Date will be the Contract Owner's 85th birthday.
If the Start Date selected by the Contract Owner does not occur on a Valuation
Date at least 60 days after the date on which the Contract was issued, the
Company reserves the right to adjust the Start Date to the first Valuation Date
after the Start Date selected by the Contract Owner which is at least 60 days
after the Contract issue date. For Contracts issued in connection with Qualified
Plans, the Start Date and form of payout must satisfy certain requirements under
the Code. (See "Federal Tax Status" on page 26.)

ANNUITY PAYOUT SELECTION

The Contract Owner may select a Variable Annuity Payout, a Fixed Annuity
Payout, or both, with payments starting at the Start Date selected by the
Contract Owner. The Contract Owner may change the form of Annuity Payout(s) by
giving written notice received by the Company before the Start Date. If the
Contract Owner has not selected the form of Annuity Payout(s) before the Start
Date, the Company will apply the Fixed Account Contract Value to provide Fixed
Annuity Payouts and the Variable Account Contract Value to provide Variable
Annuity Payouts, both in the form of a Life Annuity with Payments Guaranteed for
10 years (120 months) which will be automatically effective.

FORMS OF ANNUITY PAYOUTS

Variable Annuity Payouts and Fixed Annuity Payouts are available in any of
the following Annuity Forms:

LIFE ANNUITY - Unless otherwise agreed to by the Company an annuity payable
on the first business day of each calendar month during the Annuitant's life,
starting with the first payment due according to the Contract. Payments cease
with the payment made on the first business day of the calendar month in which
the Annuitant's death occurs. IT WOULD BE POSSIBLE UNDER THIS ANNUITY PAYOUT FOR
THE ANNUITANT TO RECEIVE ONLY ONE PAYMENT IF HE OR SHE DIED BEFORE THE SECOND
ANNUITY PAYMENT, ONLY TWO PAYMENTS IF HE OR SHE DIED BEFORE THE THIRD ANNUITY
PAYMENT, ETC.

LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 YEARS (120 MONTHS) - Unless
otherwise agreed to by the Company an annuity payable on the first business day
of each calendar month during the Annuitant's life, starting with the first
payment due according to the Contract. If the Annuitant receives all of the
guaranteed payments, payments will continue thereafter but cease with the
payment made on the first business day of the calendar month in which the
Annuitant's death occurs. If all of the guaranteed payments have not been made
before the Annuitant's death, the unpaid installments of the guaranteed payments
will be continued to the Beneficiary.

JOINT AND FULL SURVIVOR ANNUITY - Unless otherwise agreed to by the Company,
an annuity payable on the first business day of each month during the
Annuitant's life and the life of a named person (the "Joint Annuitant"),
starting with the first payment due according to the Contract. Payments will
continue while either the Annuitant or the Joint Annuitant is living and cease
with the payment made on the first business day of the calendar month in which
the death of the Annuitant or the Joint Annuitant, whichever lives longer,
occurs. THERE IS NO MINIMUM NUMBER OF PAYMENTS GUARANTEED UNDER THIS ANNUITY
PAYOUT. PAYMENTS CEASE UPON THE DEATH OF THE LAST SURVIVOR OF THE ANNUITANT AND
THE JOINT ANNUITANT REGARDLESS OF THE NUMBER OF PAYMENTS RECEIVED.

The Company will pay Fixed and Variable Annuity Payouts under other Annuity
Forms that may be offered by the Company. Your registered representative can
provide you with the details.

FREQUENCY AND AMOUNT OF ANNUITY PAYOUTS

Annuity Payouts will be paid as monthly installments, unless the Annuitant
and the Company agree to a different payout schedule. However, if the Contract
Value less any Outstanding Loan Balance at the Start Date is less than $5,000,
the Company may pay the difference in a single sum and the Contract will be
cancelled. Also if a monthly payout would be or become less than $100, the
Company may change the frequency of payouts to intervals that will result in
payouts of at least $100 each.

ANNUITY PAYOUTS

The amount of the first Fixed Annuity Payout is determined by applying the
Contract Value to be used for a fixed annuity at the Start Date to the annuity
table in the Contract for the Fixed Annuity Payout selected. The table shows the
minimum guaranteed amount of the initial annuity payment for each $1,000
applied. All subsequent payments shall be equal to the initial annuity payment.

The amount of the first Variable Annuity Payout is determined by applying
the Contract Value to be used for a variable annuity at the Start Date to the
annuity table in the Contract for the Annuity Payout selected. Subsequent
Variable Annuity Payouts vary in amount in accordance with the investment
performance of the applicable Sub-Account. Assuming annuity payouts are based on
the Annuity Unit Values of a single Sub-Account, the dollar amount of the first
annuity payout, determined as set forth above, is divided by the Sub-Account
Annuity Unit Value as of the Start

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Date to establish the number of Annuity Units representing each annuity payout.
This number of Annuity Units remains fixed during the annuity payout period. The
dollar amount of the second and subsequent payouts is not predetermined and may
change from month to month. The dollar amount of the second and each subsequent
annuity payout is determined by multiplying the fixed number of Annuity Units by
the Sub-Account Annuity Unit Value for the Valuation Period with respect to
which the annuity payout is due. If the monthly payout is based upon the Annuity
Unit Values of more than one Sub-Account, the foregoing procedure is repeated
for each applicable Sub-Account and the sum of the payments based on each
Sub-Account is the amount of the monthly annuity payout.

The annuity tables in the Contracts are based on the 1983 Mortality Table
and a 3% interest rate. Unisex rates will apply for Contracts issued under
Qualified Plans and sex distinct rates will apply for non-qualified Transfer
Series Contracts.

The Company guarantees that the dollar amount of each Variable Annuity
Payout after the first payout will not be affected by variations in expenses
(including those related to the Variable Account) or in mortality experience
from the mortality assumptions used to determine the first payout.

SUB-ACCOUNT ANNUITY UNIT VALUE

Each Sub-Account's Annuity Units were initially valued at $10 each at the
time Accumulation Units with respect to the Sub-Account were first converted
into Annuity Units. The Sub-Account Annuity Unit value for any subsequent
Valuation Period is determined by multiplying the Sub-Account Annuity Unit value
for the immediately preceding Valuation Period by the Net Investment Factor for
the Sub-Account for the Valuation Period for which the Sub-Account Annuity Unit
Value is being calculated, and multiplying the result by an interest factor to
neutralize the assumed investment rate of 3% per annum built into the annuity
tables contained in the Contracts. (See "Net Investment Factor" on page 19.)

ASSUMED INVESTMENT RATE

A 3% assumed investment rate is built into the annuity tables contained in
the Contracts. If the actual net investment rate on the assets of the Variable
Account is equal to the assumed investment rate, Variable Annuity Payouts will
remain level. If the actual net investment rate exceeds the assumed investment
rate, Variable Annuity Payouts will increase and conversely, if it is less, then
the payouts will decrease.

PARTIAL ANNUITIZATION

Any time before the Start Date, a Contract Owner may apply a portion of the
Contract Value to the purchase of Fixed or Variable Annuity Payouts or to a
combination of Fixed and Variable Annuity Payouts. This is called a partial
annuitization and occurs in the same manner as described above for application
of the entire Contract Value to Annuity Payouts at the Start Date except that
values as of the Valuation Date immediately following receipt by the Company of
a written request for a partial annuitization are used in place of values as of
the Start Date.

Upon the occurrence of a partial annuitization, the Contract Value applied
to purchase Annuity Payouts is considered a withdrawal from the Contract. (See
"Withdrawals (Redemptions)" on page 20 and "Taxation of Annuities" on page 27.)
The Company reserves the right to deduct the amount of any premium taxes not
already paid under a Contract.

After a partial annuitization, Annuity Payouts based on the Contract Value
applied and the annuity options selected are made in the same manner as if the
Start Date had occurred and no Contract Value remained under the Contract.
Nonetheless, as to remaining Contract Value not applied to purchase Annuity
Payouts, the Contract continues as if no partial annuitization had occurred.

FEDERAL TAX STATUS

INTRODUCTION

THIS DISCUSSION IS GENERAL AND NOT INTENDED AS TAX ADVICE. This discussion
is not intended to address the tax consequences resulting from all of the
situations in which a person may be entitled to or may receive a distribution
under a Contract. The Contracts are designed for use by individuals in
connection with retirement plans which may or may not be Qualified Plans under
the provisions of the Code. The ultimate effect of federal income taxes on the
Contract Value, on Annuity Payouts and on the economic benefit to the Contract
Owner, the Annuitant, as Payee or the Beneficiary depends upon the type of
retirement plan for which the Contract is purchased, and upon the tax and
employment status of the individual concerned. No attempt is made to consider
any applicable state or other tax laws. The discussion is based on the Company's
understanding of Federal Income Tax Laws as currently interpreted. No
representation is made regarding the likelihood of the continuation of the
present Federal Income Tax Laws or the current interpretation by the Internal
Revenue Service ("IRS").

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A Contract may be purchased on a non-qualified basis ("Non-Qualified
Contract") or purchased and used in connection with plans qualifying for
favorable tax treatment ("Qualified Contract"). A Qualified Contract is designed
for use by individuals whose Purchase Payments are comprised solely of proceeds
from and/or contributions under retirement plans which are intended to qualify
as plans entitled to special income tax treatment under Sections 401(a), 403(b),
408 or 457 of the Code. The ultimate effect of federal income taxes on the
amounts held under a Contract, or Annuity Payouts, and on the economic benefit
to the Contract Owner, the Annuitant, the Payee or the Beneficiary depends on
the type of retirement plan, on the tax and employment status of the individual
concerned, and on the Company's tax status. In addition, certain requirements
must be satisfied in purchasing a Qualified Contract with proceeds from a
Qualified Plan and receiving distributions from a Qualified Contract in order to
continue receiving favorable tax treatment. Therefore, purchasers of Qualified
Contracts should seek competent legal and tax advice regarding the suitability
of a Contract for their situation, the applicable requirements, and the tax
treatment of the rights and benefits of a Contract. The following discussion
assumes that Qualified Contracts are purchased and proceeds from and/or
contributions under retirement plans that qualify for the intended special
federal income tax treatment.

TAX STATUS OF THE CONTRACT

DIVERSIFICATION REQUIREMENTS

Section 817(h) of the Code provides that separate account investments
underlying a Contract must be "adequately diversified" in accordance with
Treasury regulations in order for the Contract to qualify as an annuity Contract
under Section 72 of the Code. The Variable Account, through each of the Funds,
intends to comply with the diversification requirements prescribed in
regulations under Section 817(h) of the Code, which affect how the assets in the
various Sub-Accounts may be invested. The Company expects that each Fund in
which the Variable Account owns shares will meet the diversification
requirements and that the Contract will be treated as an annuity Contract under
the Code.

The Treasury has also announced that the diversification regulations do not
provide guidance concerning the extent to which Contract Owners may direct their
investments to particular Sub-Accounts of the Variable Account or how
concentrated the investments of the Funds underlying the Variable Account may
be. It is possible that if additional guidance in this regard is issued, the
Contract may need to be modified to comply with such additional guidance. For
these reasons, the Company reserves the right to modify the Contracts as
necessary to attempt to prevent the Contract Owner from being considered the
owner of the assets of the Funds or otherwise to qualify the Contract for
favorable tax treatment.

REQUIRED DISTRIBUTIONS

In order to be treated as an annuity Contract for federal income tax
purposes, Section 72(s) of the Code also requires any Non-Qualified Contract to
provide that: (a) if any Contract Owner dies on or after the Start Date but
prior to the time the entire interest in the Contract has been distributed, the
remaining portion of such interest will be distributed at least as rapidly as
under the method of distribution being used as of the date of that Contract
Owner's death; and (b) if any Contract Owner dies prior to the Start Date, the
entire interest in the Contract will be distributed within five years after the
date of the Contract Owner's death. These requirements will be considered
satisfied as to any portion of the Contract Owner's interest which is payable to
or for the benefit of a "designated Beneficiary" and which is distributed over
the life of such Beneficiary or over a period not extending beyond the life
expectancy of that Beneficiary, provided that such distributions begin within
one year of that Contract Owner's death. The Contract Owner's "designated
Beneficiary" is the person designated by such Contract Owner as a Beneficiary
and to whom ownership of the Contract passes by reason of death and must be a
natural person. However, if the Contract Owner's "designated Beneficiary" is the
surviving spouse of the Contract Owner, the Contract may be continued with the
surviving spouse as the new Contract Owner. If the Contract Owner is not an
individual, any change in the primary Annuitant is treated as a change of
Contract Owner for tax purposes.

The Non-Qualified Contracts contain provisions which are intended to comply
with the requirements of Section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. The Company intends to
review such provisions and modify them if necessary to assure that they comply
with the requirements of Code Section 72(s) when clarified by regulation or
otherwise. Other rules may apply to Qualified Contracts.

TAXATION OF ANNUITIES

IN GENERAL

Section 72 of the Code governs taxation of annuities in general. The Company
believes that a Contract Owner who is a natural person generally is not taxed on
increases in the value of a Contract until distribution occurs by withdrawing
all or part of the Contract Value (e.g., partial withdrawals and complete
withdrawals) or as Annuity Payouts under the form of Annuity Payout selected.
For this purpose, the assignment, pledge, or agreement to assign or pledge any
portion

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of the Contract Value (and in the case of a Qualified Contract, any portion of
an interest in the qualified plan) generally will be treated as a distribution.
The taxable portion of a distribution (in the form of a single sum payment or
annuity) is taxable as ordinary income.

A Contract Owner who is not a natural person generally must include in
income any increase in the excess of the net withdrawal value over the
"investment in the Contract" during the taxable year.

The following discussion generally applies to Contracts owned by natural
persons.

WITHDRAWALS

In the case of a withdrawal from a Qualified Contract, under Section 72(e)
of the Code a ratable portion of the amount received is taxable, generally based
on the ratio of the "investment in the Contract" to the participant's total
accrued benefit or balance under the retirement plan. The "investment in the
Contract" generally equals the portion, if any, of any Purchase Payments paid by
or on behalf of any individual under a Contract which was not under excluded
from the individual's gross income. For Contracts issued in connection with
Qualified Plans, the "investment in the Contract" can be zero. Special tax rules
may be available for certain distributions from Qualified Contracts.

In the case of a withdrawal (including Systematic Withdrawals) from a
Non-Qualified Contract before the Start Date, under Code Section 72(e) amounts
received are generally first treated as taxable income to the extent that the
Contract Value immediately before withdrawal exceeds the "investment in the
Contract" at that time. Any additional amount withdrawn is not taxable.

In the case of a full withdrawal under a Qualified or Non-Qualified
Contract, the amount received generally will be taxable only to the extent it
exceeds the "investment in the Contract."

A Federal penalty tax may apply to certain withdrawals from Qualified and
Non-Qualified Contracts. (See "Penalty Tax on Certain Distributions" below.)

ANNUITY PAYOUTS

Although tax consequences may vary depending on the annuity form selected
under the Contract, in general, only the portion of the Annuity Payout that
represents the amount by which the Contract Value exceeds the investment in the
Contract will be taxed; after the investment in the Contract is recovered, the
full amount of any additional Annuity Payouts is taxable. For Variable Annuity
Payouts, the taxable portion is generally determined by an equation that
establishes a specific dollar amount of each payment that is not taxed. The
dollar amount is determined by dividing the investment in the Contract by the
total number of expected periodic Annuity Payouts. However, the entire
distribution will be taxable once the recipient has recovered the dollar amount
of his or her investment in the Contract. For Fixed Annuity Payouts, in general
there is no tax on the portion of each payout which represents the same ratio
that the investment in the Contract bears to the total expected value of the
Annuity Payouts for the term of the payouts; however, the remainder of each
Annuity Payout is taxable until the recovery of the investment in the Contract,
and thereafter the full amount of each Annuity Payout is taxable.

TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be distributed from a Contract because of the death of a
Contract Owner or an Annuitant. Generally, such amounts are includible in the
income of the recipient as follows: (i) if distributed in a lump sum, they are
taxed in the same manner as a full withdrawal from the Contract; or (ii) if
distributed under a payout option, they are taxed in the same way as Annuity
Payouts.

PENALTY TAX ON CERTAIN DISTRIBUTIONS

In the case of a distribution pursuant to a Non-Qualified Contract, a
Federal penalty equal to 10% of the amount treated as taxable income may be
imposed. In general, however, there is no penalty on distributions:

1. Made on or after the taxpayer reaches age 59-1/2;

2. Made on or after the death of the holder (a holder is considered a
Contract Owner) (or if the holder is not an individual, the death of the
primary annuitant);

3. Attributable to the taxpayer becoming disabled;

4. A part of a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the taxpayer
and his or her designated beneficiary;

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5. Made under an annuity Contract that is purchased with a single premium
when the annuity starting date is no later than a year from purchase of
the annuity and substantially equal periodic payments are made, not less
frequently than annually, during the annuity period; and

6. Made under certain annuities issued in connection with structured
settlement agreements.

Other tax penalties may apply to certain distributions under a Qualified
Contract, as well as to certain contributions to, loans from, and other
circumstances, applicable to the Qualified Plan of which the Qualified Contract
is part.

POSSIBLE CHANGES IN TAXATION

In past years, legislation has been proposed that would have adversely
modified the Federal taxation of certain annuities. For example, one such
proposal would have changed the tax treatment of non-qualified annuities that
did not have "substantial life contingencies" by taxing income as it is credited
to the annuity. Although as of the date of this prospectus Congress is not
considering any legislation regarding the taxation of annuities, there is always
the possibility that tax treatment of annuities could change by legislation or
other means (such as IRS regulations, revenue rulings, judicial decisions,
etc.). Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).

TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A CONTRACT

A transfer of ownership or assignment of a Contract, the designation of an
Annuitant, Payee or other Beneficiary who is not also the Contract Owner, or the
exchange of a Contract may result in certain tax consequences to the Contract
Owner that are not discussed herein. A Contract Owner contemplating any such
transfer, assignment, or exchange of a Contract should contact a competent tax
adviser with respect to the potential tax effects of such a transaction.

WITHHOLDING

Pension and annuity distributions generally are subject to withholding for
the recipient's Federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. Effective January 1, 1993, distributions from certain qualified
plans are generally subject to mandatory withholding. Withholding for Contracts
issued to retirement plans established under Section 401 of the Code is the
responsibility of the plan trustee.

MULTIPLE CONTRACTS

Section 72(e)(11) of the Code treats all non-qualified deferred annuity
Contracts entered into after October 21, 1988 that are issued by the Company (or
its affiliates) to the same Contract Owner during any calendar year as one
annuity Contract for purposes of determining the amount includible in gross
income under Code Section 72(e). The effects of this rule are not clear;
however, it could affect the time when income is taxable and the amount that
might be subject to the 10% penalty tax described above. In addition, the
Treasury Department has specific authority to issue regulations that prevent the
avoidance of Section 72(e) through the serial purchase of annuity Contracts or
otherwise. There may also be other situations in which the Treasury may conclude
that it would be appropriate to aggregate two or more annuity Contracts
purchased by the same Contract Owner. Accordingly, a Contract Owner should
consult a competent tax adviser before purchasing more than one annuity
Contract.

TAXATION OF QUALIFIED PLANS

The Contracts are designed for use with several types of Qualified Plans.
The tax rules applicable to participants in these Qualified Plans vary according
to the type of Plan and the terms and conditions of the Plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; aggregate distributions in excess of a specified
annual amount; and in other specified circumstances. Therefore, no attempt is
made to provide more than general information about the use of the Contracts
with the various types of Qualified Plans. Contract Owners, Annuitants Payees
and Beneficiaries are cautioned that the rights of any person to any benefits
under these Qualified Plans will be subject to the terms and conditions of the
Plans themselves, regardless of the terms and conditions of the Contracts issued
in connection with the Plans. The Company shall not be bound by the terms and
conditions of such Qualified Plans to the extent such terms contradict the
Contract, unless the Company consents. Some retirement plans are subject to
distribution and other requirements that are not incorporated into the Company's
Contract administration procedures. Contract Owners, participants and
Beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the Contracts comply with applicable law.
Brief descriptions follow of the various types of Qualified Plans in connection
with a Contract.

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CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS

Code Section 401(a) permits employers to establish various types of
retirement plans for employees, and permit self-employed individuals to
establish retirement plans for themselves and their employees. These retirement
plans may permit the purchase of the Contracts to accumulate retirement savings
under the plans. Adverse tax consequences to the plan, to the participant or to
both may result if this Contract is assigned or transferred to any individual as
a means to provide benefit payments.

INDIVIDUAL RETIREMENT ANNUITIES

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA". These IRAs are subject to limits on the amount that may be contributed,
the persons who may be eligible, and on the time when distributions may
commence. Also, distributions from certain other types of qualified retirement
plans may be "rolled over" on a tax-deferred basis into an IRA. Sales of a
Contract for use with IRAs may be subject to special requirements of the IRS.
The IRS has not reviewed the Contract for qualification as an IRA, and has not
addressed in a ruling of general applicability whether a death benefit provision
such as the provision in the Contract comports with IRA qualification
requirements.

TAX SHELTERED ANNUITIES

Section 403(b) of the Code allows employees of certain Section 501(c)(3)
organizations and public schools to exclude from their gross income the Purchase
Payments paid, within certain limits, on a Contract that will provide an annuity
for the employee's retirement. Code Section 403(b)(11) restricts the
distribution under Code Section 403(b) annuity Contracts of: (i) elective
contributions made in years beginning after December 31, 1988; (ii) earnings on
those contributions; and (iii) earnings in such years on amounts held as of the
last year beginning before January 1, 1989. Distribution of those amounts may
only occur upon death of the employee, attainment of age 59 1/2, separation from
service, disability, or financial hardship. In addition, income attributable to
elective contributions may not be distributed in the case of hardship.

DEFERRED COMPENSATION PLANS

Code Section 457 provides for certain deferred compensation plans. These
plans may be offered with respect to service for state governments, local
governments, political subdivisions, agencies, instrumentalities and certain
affiliates of such entities, and tax exempt organizations. These plans are
subject to various restrictions on contributions and distributions. The plans
may permit participants to specify the form of investment for their deferred
compensation account. In general, all investments are owned by the sponsoring
employer and are subject to the claims of the general creditors of the employer.
DEPENDING ON THE TERMS OF THE PARTICULAR PLAN, THE EMPLOYER MAY BE ENTITLED TO
DRAW ON DEFERRED AMOUNTS FOR PURPOSES UNRELATED TO ITS SECTION 457 PLAN
OBLIGATIONS. In general, all amounts received under a Section 457 plan are
taxable.

POSSIBLE CHARGE FOR THE COMPANY'S TAXES

At the present time, the Company makes no charge to the Sub-Accounts for any
Federal, state, or local taxes that the Company incurs which may be attributable
to such Sub-Accounts or to the Contracts. The Company, however, reserves the
right in the future to make a charge for any such tax that it determines to be
properly attributable to the Sub-Accounts of the Contracts.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the Federal tax consequences
under these Contracts are not exhaustive, and special rules are provided with
respect to other tax situations not discussed in this Prospectus. Further, the
Federal income tax consequences discussed herein reflect the Company's
understanding of current law and the law may change. Federal estate and state
and local estate, inheritance, and other tax consequences of ownership or
receipt of distributions under a Contract depend on the individual circumstances
of each Contract Owner or recipient of the distribution. A competent tax adviser
should be consulted for further information.

VOTING OF FUND SHARES

As long as the Variable Account is registered as a unit investment trust
under the Investment Company Act of 1940 and the assets of the Variable Account
are allocated to Sub-Accounts that are invested in Fund shares, the Fund shares
held in the Sub-Accounts will be voted by the Company in accordance with the
instructions received from the person having voting interests under the
Contracts as described below. If the Company determines pursuant to applicable
law or regulation that Fund shares held in the Sub-Accounts and attributable to
the Contracts need not be voted pursuant to instructions received from persons
otherwise having the voting interests, then the Company may vote such Fund
shares held in the Sub-Accounts in its own right.

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Before Variable Annuity Payouts begin, the Contract Owner will have the
voting interest with respect to the Fund shares attributable to a Contract.
After Variable Annuity Payouts begin, the Annuitant will have the voting
interest with respect to the Fund shares attributable to the Annuity Units under
a Contract. Such voting interest will generally decrease during the Variable
Annuity Payout period.

Any Fund shares held in the Variable Account for which the Company does not
receive timely voting instructions, or which are not attributable to Contract
Owners, will be voted by the Company in proportion to the instructions received
from all Contract Owners having a voting interest in the Fund. Any Fund shares
held by the Company or any of its affiliates in general accounts will, for
voting purposes, be allocated to all separate accounts having voting interests
in the Fund in proportion to each account's voting interest in the respective
Fund and will be voted in the same manner as are the respective account's votes.

All Fund proxy material will be sent to persons having voting interests
together with appropriate forms which may be used to give voting instructions.
Persons entitled to voting interests and the number of votes which they may cast
shall be determined as of a record date, to be selected by the Fund.

Persons having voting interests under the Contracts as described above will
not, as a result thereof, have voting interests with respect to meetings of the
stockholders of the Company.

DISTRIBUTION OF THE CONTRACTS

The Contracts will be sold by licensed insurance agents in those states
where the Contracts may be lawfully sold. Such agents will be registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 who are members of the National Association of Securities Dealers, Inc.
The Contracts will be distributed by the Principal Underwriter, Washington
Square Securities, Inc., 20 Washington Avenue South, Minneapolis, Minnesota
55401, which is an affiliate of the Company. Commissions and other distribution
compensation will be paid by the Company. Generally such payments will not
exceed 7.00% of the Purchase Payments. In some cases a trail commission based on
the Contract Value may also be paid.

REPORTS TO CONTRACT OWNERS

The Company will mail to the Contract Owner, at the last known address of
record at the Home Office of the Company, an annual report after the first
Contract Year containing such information as may be required by any applicable
law or regulation and a statement showing the Contract Value. The Company will
also provide to Contract Owners immediate written confirmation of every
financial transaction made under their Contracts; however, Contract Owners who
make Purchase Payments through salary reduction arrangements with their
employers will receive quarterly confirmations of Purchase Payments made to
their Contracts.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Variable Account is a party. The
Company is a defendant in various lawsuits in connection with the normal conduct
of its operations. In the opinion of management, the ultimate resolution of such
litigation will not result in any significant liability to the Company.

FINANCIAL STATEMENTS AND EXPERTS

To be filed as a post-effective amendment.

FURTHER INFORMATION

A Registration Statement under the Securities Act of 1933 has been filed
with the Securities and Exchange Commission, with respect to the Contracts
described herein. The Prospectus does not contain all of the information set
forth in the Registration Statement and exhibits thereto, to which reference is
hereby made for further information concerning the Variable Account, the Company
and the Contracts. The information so omitted may be obtained from the
Commission's principal office in Washington, D.C., upon payment of the fee
prescribed by the Commission, or examined there without charge. Statements
contained in this Prospectus as to the provisions of the Contracts and other
legal documents are summaries, and reference is made to the documents as filed
with the Commission for a complete statement of the provisions thereof.

31
<PAGE>
SEPARATE ACCOUNT ONE
STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

Introduction...................................................................2
Custody of Assets..............................................................2
Independent Auditors...........................................................2
Distribution of the Contracts..................................................3
Calculation of Yields and Total Returns........................................3
Financial Statements..........................................................10
Company Holidays..............................................................10

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

If you would like to receive a copy of the Separate Account One Statement of
Additional Information, please call 1-800-333-6965 or return this request to:

WASHINGTON SQUARE SECURITIES, INC.
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55401
Your name ______________________________________________________________________
Address ________________________________________________________________________
City ___________________________________________ State _________________________
Zip ___________________

Please send me a copy of the Separate Account One Statement of Additional
Information.

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

32
<PAGE>
APPENDIX A
THE FIXED ACCOUNTS

CONTRIBUTIONS AND REALLOCATIONS TO FIXED ACCOUNT A AND FIXED ACCOUNT B
(COLLECTIVELY, THE "FIXED ACCOUNTS") UNDER THE CONTRACTS BECOME PART OF THE
GENERAL ACCOUNT OF THE COMPANY (THE "GENERAL ACCOUNT"), WHICH SUPPORTS INSURANCE
AND ANNUITY OBLIGATIONS. BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS,
INTERESTS IN THE FIXED ACCOUNTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("1933 ACT") NOR ARE THE FIXED ACCOUNTS REGISTERED AS INVESTMENT
COMPANIES UNDER THE INVESTMENT COMPANY ACT OF 1940 ("1940 ACT"). ACCORDINGLY,
NEITHER THE FIXED ACCOUNTS NOR ANY INTERESTS THEREIN ARE GENERALLY SUBJECT TO
THE PROVISIONS OF THE 1933 OR 1940 ACTS AND THE COMPANY HAS BEEN ADVISED THAT
THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE
DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO THE FIXED PORTION OF THE
CONTRACTS. DISCLOSURES REGARDING THE FIXED PORTION OF THE CONTRACTS AND THE
FIXED ACCOUNTS, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND
COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

The Fixed Accounts are part of the General Account, which is made up of all
of the general assets of the Company other than those allocated to any separate
account. In most jurisdictions, we offer the option of having all or a portion
of Purchase Payments allocated to the Fixed Accounts as selected by the Contract
Owner at the time of purchase or as subsequently changed. The Company will
invest the assets allocated to the Fixed Accounts in those assets chosen by the
Company and allowed by applicable law. Investment income from such Fixed
Accounts' assets will be allocated between the Company and the Contracts
participating in the Fixed Accounts, in accordance with the terms of such
Contracts.

Fixed Annuity Payouts made to Annuitants under the Contracts will not be
affected by the mortality experience (death rate) of persons receiving such
payments or of the general population. The Company assumes this "mortality risk"
by virtue of annuity rates incorporated in the Contracts which cannot be
changed. In addition, the Company guarantees that it will not increase charges
for maintenance of the Contracts regardless of its actual expenses.

Investment income from the Fixed Accounts allocated to the Company includes
compensation for mortality and expense risks borne by the Company in connection
with Fixed Account Contracts. The Company expects to derive a profit from this
compensation.

The Company may credit interest in excess of the guaranteed rate of 3%. Any
interest rate in effect when an amount is allocated or reallocated to the Fixed
Accounts is guaranteed for that amount until the end of the calendar year in
which it is received. After the end of that calendar year, the Company may
change the amount of interest credited at its discretion. All amounts in the
Fixed Accounts after the end of the calendar years referenced above are credited
with excess interest at the rate then in effect for the then current calendar
year. Such rates are established at the beginning of each calendar year and are
guaranteed for the entire calendar year. There is no specific formula for the
determination of excess interest credits. Such credits, if any, will be
determined by the Company based on many factors, including, but not limited to:
investment yield rates, taxes, Contract persistency, and other experience
factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNTS IN
EXCESS OF 3% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF THE COMPANY.
THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT
ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.

The Company is aware of no statutory limitations on the maximum amount of
interest it may credit, and the Board of Directors has set no limitations.
However, inherent in the Company's exercise of discretion in this regard is the
equitable allocation of distributable earnings and surplus among its various
Contractholders and Contract Owners and to its stockholder.

Excess interest, if any, will be credited on the Fixed Account Contract
Value. The Company guarantees that, at any time, the Fixed Account Contract
Value will not be less than the amount of Purchase Payments and transfers
allocated to the Fixed Accounts, plus interest at the rate of 3% per year,
compounded annually, plus any additional interest which the Company may, in its
discretion, credit to the Fixed Accounts, less the sum of all annual
administrative charges or Withdrawal Charges levied, any applicable premium
taxes, and less any amounts withdrawn or reallocated from the Fixed Accounts. If
the Contract Owner makes a full withdrawal, the amount available from the Fixed
Accounts will be reduced by any applicable Withdrawal Charge and Annual Contract
Charge. (See "Charges Made by the Company" on page 15).

A-1
<PAGE>
[LOGO]
Northern Life

P. O. Box 12530 - Seattle, WA 98111-4530

A RELIASTAR COMPANY

For marketing information call:
1-800-426-7050
For policy administration call:
1-800-870-0453

FORM NO. 15500 4-97

A Variable Annuity Issued by Northern Life Insurance Company

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

----------

INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
SEPARATE ACCOUNT ONE
AND
NORTHERN LIFE INSURANCE COMPANY

This Statement of Additional Information is not a Prospectus, but should be
read in conjunction with the Prospectus, dated April 30, 1997 (the "Prospectus")
relating to the Individual Deferred Variable/Fixed Annuity Contracts issued by
Separate Account One (the "Variable Account") and Northern Life Insurance
Company (the "Company"). Much of the information contained in this Statement of
Additional Information expands upon subjects discussed in the Prospectus. A
copy of the Prospectus may be obtained from Washington Square Securities, Inc.,
20 Washington Avenue South, Minneapolis, Minnesota 55401.

Capitalized terms used in this Statement of Additional Information that are
not otherwise defined herein shall have the meanings given to them in the
Prospectus.

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

TABLE OF CONTENTS

Page
----

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Custody of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Distribution of the Contracts. . . . . . . . . . . . . . . . . . . . . . 3

Calculation of Yields and Total Returns. . . . . . . . . . . . . . . . . 3

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Company Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

---------

The date of this Statement of Additional Information is April 30, 1997.

<PAGE>
INTRODUCTION

The Individual Deferred Variable/Fixed Annuity Contracts described in the
Prospectus are flexible Purchase Payment Contracts. The Contracts are sold to
or in connection with retirement plans which may or may not qualify for special
federal tax treatment under the Internal Revenue Code. (See "Federal Tax
Status" on page 26 of the Prospectus.) Annuity Payouts under the Contracts are
deferred until a later date selected by the Contract Owner.

Purchase Payments may be allocated to one or more of the available Sub-
Accounts of the Variable Account, a separate account of the Company, and/or to
Fixed Account A and/or Fixed Account B (which are part of the general account of
the Company).

Purchase Payments allocated to one or more of the available Sub-Accounts of
the Variable Account, as selected by the Contract Owner, will be invested in
shares at net asset value of one or more of a group of investment funds (the
"Funds"). The Funds currently are the Income and Growth Fund, Multi-Sector Bond
Fund and Growth Fund of the Northstar/Variable Trust, which is managed by
Northstar Investment Management Corporation of Greenwich, Connecticut, an
affiliate of the Company; the Money Market Portfolio, Growth Portfolio, Equity-
Income Portfolio and Overseas Portfolio of the Variable Insurance Products Fund
and the Asset Manager Portfolio, Asset Manager: Growth Portfolio, Index 500
Portfolio and Contrafund Portfolio of the Variable Insurance Products Fund II,
all of which are managed by Fidelity Management & Research Company of Boston,
Massachusetts; and American Small Capitalization Portfolio, American Growth
Portfolio, American MidCap Growth Portfolio and American Leveraged AllCap
Portfolio of The Alger American Fund which are managed by Fred Alger Management,
Inc. The Variable Account Contract Value and the amount of Variable Annuity
Payouts will vary, depending on the investment performance of the Funds whose
shares are held in the Sub-Accounts selected. For more information about the
Funds, see "Investments of the Variable Account" on page 12 of the Prospectus.

Purchase Payments allocated to Fixed Account A or Fixed Account B, which
are part of the general account of the Company, will be credited with interest
at a rate not less than 3% per year. Interest credited in excess of 3%, if any,
will be determined at the sole discretion of the Company. That part of the
Contract relating to Fixed Account A and Fixed Account B is not registered under
the Securities Act of 1933 and the Fixed Accounts are not subject to the
restrictions of the Investment Company Act of 1940. (See Appendix A to the
Prospectus.)

CUSTODY OF ASSETS

The Company, whose address appears on the cover of the Prospectus,
maintains custody of the assets of the Variable Account.

INDEPENDENT AUDITORS

(To be filed as a post-effective amendment.)

<PAGE>

DISTRIBUTION OF THE CONTRACTS

For the years ended December 31, 1995 and 1996, WSSI was paid fees,
including gross concessions, by the Company in connection with distribution
of the Contracts aggregating $750 and $641,620.59, respectively.

The offering of the Contracts is continuous.

There are no special purchase plans or exchange privileges not described in
the Prospectus. (See "Reduction of Charges" at page 18 of the Prospectus.)

CALCULATION OF YIELDS AND TOTAL RETURNS

From time to time, the Company may disclose yields, total returns, and
other performance data pertaining to the Contracts for a Sub-Account. Such
performance data will be computed, or accompanied by performance data computed,
in accordance with the standards defined by the Securities and Exchange
Commission.

Because of the charges and deductions imposed under a Contract, the yield
for the Sub-Accounts will be lower than the yield for their respective
portfolios. The calculations of yields, total returns, and other performance
data do not reflect the effect of any premium tax that may be applicable to a
particular Contract. Premium taxes currently range from 0% to 3.5% of premium
based on the state in which the Contract is sold.

VIPF MONEY MARKET PORTFOLIO SUB-ACCOUNT YIELD. From time to time,
advertisements and sales literature may quote the current annualized yield of
the Money Market Sub-Account for a seven-day period in a manner which does not
take into consideration any realized or unrealized gains or losses on shares of
the VIPF Money Market Portfolio or on its portfolio securities.

The current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the seven-day period in the value
of a hypothetical account under a Contract having a balance of one Accumulation
Unit of the Money Market Sub-Account at the beginning of the period dividing
such net change in account value of the hypothetical account to determine the
base period return, and annualizing this quotient on a 365-day basis. The net
change in account value reflects: 1) net income from the Portfolio attributable
to the hypothetical account; and 2) charges and deductions imposed under the
Contract which are attributable to the hypothetical account. The charges and
deductions include the per unit charges for the hypothetical account for: 1) the
Annual Contract Charge; 2) Administration Charge; and 3) the Mortality and
Expense Risk Charges. For purposes of calculating current yields for a
Contract, an average per unit administration fee is used based on the $30 Annual

<PAGE>

Contract Charge deducted at the end of each Contract Year. Current Yield will
be calculated according to the following formula:

Current Yield = ((NCS - ES)/UV) x (365/7)

Where:

NCS = the net change in the value of the Portfolio (exclusive of
realized gains or losses on the sale of securities and unrealized
appreciation and depreciation) for the seven-day period
attributable to a hypothetical account having a balance of 1 Sub-
Account Accumulation Unit.

ES = per unit expenses attributable to the hypothetical account
for the seven-day period.

UV = The Accumulation Unit value on the first day of the seven-
day period.

The current yield of the sub-account for the seven day period ended
December 31, 1996 was -5.21%

Effective Yield. The effective yield of the Money Market Sub-Account
determined on a compounded basis for the same seven-day period may also be
quoted.

The effective yield is calculated by compounding the unannualized base
period return according to the following formula:

365/7
Effective Yield = (1 + ((NCS - ES)/UV)) -1

Where:

NCS = the net change in the value of the Portfolio (exclusive of
realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) for the seven-day
period attributable to a hypothetical account having a balance of
1 Sub-Account unit.

ES = per Accumulation Unit expenses attributable to the
hypothetical account for the seven-day period.

UV = the Accumulation Unit value for the first day of the seven-day
period.

The effective yield of the sub-account for the seven day period ended
December 31, 1996 was -5.08%.

Because of the charges and deductions imposed under the Contracts, the
yield for the Money Market Sub-Account will be lower than the yield for the VIPF
Money Market Portfolio.

<PAGE>

The current and effective yields on amounts held in the Money Market Sub-
Account normally will fluctuate on a daily basis. THEREFORE, THE DISCLOSED
YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF FUTURE
YIELDS OR RATES OF RETURN. The Money Market Sub-Account's actual yield is
affected by changes in interest rates on money market securities, average
portfolio maturity of the VIPF Money Market Portfolio, the types and quality of
portfolio securities held by VIPF Money Market Portfolio and the VIPF Money
Market Portfolio's operating expenses. Yields on amounts held in the Money
Market Sub-Account may also be presented for periods other than a seven-day
period.

OTHER SUB-ACCOUNT YIELDS. From time to time, sales literature or
advertisements may quote the current annualized yield of one or more of the Sub-
Accounts (except the Money Market Sub-Account) for a Contract for 30-day or one-
month periods. The annualized yield of a Sub-Account refers to income generated
by the Sub-Account over a specific 30-day or one-month period. Because the
yield is annualized, the yield generated by a Sub-Account during a 30-day or
one-month period is assumed to be generated each period over a 12-month period.

The yield is computed by: 1) dividing the net investment income of the Fund
attributable to the Sub-Account Accumulation Units less Sub-Account expenses for
the period; by 2) the maximum offering price per Accumulation Unit on the last
day of the period times the daily average number of units outstanding for the
period; by 3) compounding that yield for a six-month period; and by 4)
multiplying that result by 2. Expenses attributable to the Sub-Account include
the Administration Charge and the Mortality and Expense Risk Charges. The yield
calculation assumes an Annual Contract Charge of $30 per year per Contract
deducted at the end of each Contract Year. For purposes of calculating the 30-
day or one-month yield, an average Annual Contract Charge per dollar of Contract
Value in the Variable Account is used to determine the amount of the charge
attributable to the Sub-Account for the 30-day or one-month period. The 30-day
or one-month yield is calculated according to the following formula:

6
Yield =2 x [(((NI - ES)/(U x UV)) + 1) - 1]

Where:

NI = net income of the Portfolio for the 30-day or one-month
period attributable to the Sub-Account's Accumulation Units.

ES = expenses of the Sub-Account for the 30-day or one-month period.

U = the average number of Accumulation Units outstanding.

UV = the Accumulation Unit value of the close (highest) of the
last day in the 30-day or one-month period.

The annualized yield for the Northstar Multi-Sector Bond Fund Sub-Account
for the month ended December 31, 1996 was 10.66%.

Because of the charges and deductions imposed under the Contract, the yield
for the Sub-Account will be lower than the yield for the corresponding Fund.

<PAGE>

The yield on the amounts held in the Sub-Accounts normally will fluctuate
over time. THEREFORE, THE DISCLOSED YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN
INDICATION OR REPRESENTATION OF FUTURE YIELDS OR RATES OF RETURN. The Sub-
Account's actual yield is affected by the types and quality of portfolio
securities held by the Fund and its operating expenses.

Yield calculations do not take into account the Withdrawal Charges under
the Contracts. The Withdrawal Charge for Transfer Series Contracts is equal to
2% to 6% of Purchase Payments paid during the six years prior to the withdrawal
(including the year in which the withdrawal is made) on amounts withdrawn or
withdrawn under the Contract. The Withdrawal Charge for Flex Series Contracts
is equal to 1% to 8% of amounts withdrawn under the Contracts during the first
10 Contract Years.

AVERAGE ANNUAL TOTAL RETURNS. From time to time, sales literature or
advertisements may also quote average annual total returns for one or more of
the Sub-Accounts for various periods of time.

Average annual total returns represent the average annual compounded rates
of return that would equate an initial investment of $1,000 under a Contract to
the redemption value of that investment as of the last day of each of the
periods. The ending date for each period for which total return quotations are
provided will be for the most recent month-end practicable, considering the type
and media of the communication and will be stated in the communication.

Average annual total returns will be calculated using Sub-Account
Accumulation Unit values which the Company calculates on each Valuation Date
based on the performance of the Sub-Account's underlying Fund, the deductions
for the Mortality and Expense Risk Charges, the Administration Charge, and the
Annual Contract Charge. The calculation assumes that the Annual Contract Charge
is $30 per year per Contract deducted at the end of each Contract Year. For
purposes of calculating average annual total return, an average per dollar
Annual Contract Charge attributable to the hypothetical account for the period
is used. The calculation also assumes full withdrawal of the Contract at the
end of the period for the return quotation. Total returns will therefore
reflect a deduction of the Withdrawal Charge in the case of the Transfer
Series Contracts, for any period less than six years and in the case of the Flex
Series Contracts, for any period less than 11 years. The total return will then
be calculated according to the following formula:

1/N
TR = ((ERV/P) ) - 1

Where:

TR = The average annual total return net of Sub-Account recurring
charges.

ERV = the ending redeemable value (net of any applicable surrender
charge) of the hypothetical account at the end of the
period.

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

N = the number of years in the period.
<PAGE>

From time to time, sales literature or advertisements may quote average
annual total returns for periods prior to the date the Sub-Accounts commenced
operations. Such performance information for the Sub-Accounts will be
calculated based on the performance of the Funds and the assumption that the
Sub-Accounts were in existence for the same periods as those indicated for the
Funds, with the level of Contract charges currently in effect.

Such average annual total return information for the Sub-Accounts is as
follows:

For the 1-year For the 5-year
period ended period ended
Sub-Account 12/31/96 12/31/96
----------- --------- ----------
++T.S. F.S. T.S. F.S.
<S> <C> <C> <C> <C>
Northstar Income and Growth Fund
(Portfolio Inception: 5/6/94) 6.32% 3.68% N/A N/A

Northstar Multi-Sector Bond Fund
(Portfolio Inception: 5/6/94) 5.26% 2.69% N/A N/A

Northstar Growth Fund
(Portfolio Inception: 5/6/94) 15.54% 12.24% N/A N/A

VIPF Growth Portfolio
(Portfolio Inception: 10/9/86) 7.40% 4.68% 12.81% 12.00%

VIPF Equity-Income Portfolio
(Portfolio Inception: 10/9/86) 6.98% 4.29% 15.62% 14.74%

VIPF Overseas Portfolio
(Portfolio Inception: 1/28/87) 5.87% 3.26% 6.78% 6.15%

VIPF II Asset Manager Portfolio
(Portfolio Inception: 9/6/89) 7.29% 4.58% 8.90% 8.20%

VIPF II Asset Manager: Growth Portfolio
(Portfolio Inception: 1/3/95) 12.64% 9.54% N/A N/A

VIPF II Index 500 Portfolio
(Portfolio Inception: 8/27/92) 15.38% 12.08% N/A N/A

VIPF II Contrafund Portfolio
(Portfolio Inception: 1/3/95) 13.80% 10.62% N/A N/A

Alger American Small Capitalization Portfolio
(Portfolio Inception: 9/21/88) -2.95% -4.93% 8.66% 7.97%

Alger American Growth Portfolio
(Portfolio Inception: 1/9/89) 6.07% 3.44% 14.27% 13.43%

Alger American MidCap Growth Portfolio
(Portfolio Inception: 5/3/93) 4.64% 2.12% N/A N/A

Alger American Leveraged AllCap Portfolio
(Portfolio Inception: 1/25/95) 4.78% 2.24% N/A N/A

For the period from
For the 10-year date of inception of
period ended Portfolio to
12/31/96 12/31/96
-------- --------
T.S. F.S. T.S. F.S.
<S> <C> <C> <C> <C>
Northstar Income and Growth Fund
(Portfolio Inception: 5/6/94) N/A N/A 10.35% 8.68%

Northstar Multi-Sector Bond Fund
(Portfolio Inception: 5/6/94) N/A N/A 7.43% 5.90%

Northstar Growth Fund
(Portfolio Inception: 5/6/94) N/A N/A 15.71% 13.78%

VIPF Growth Portfolio
(Portfolio Inception: 10/9/86) N/A N/A 12.90% 12.90%

VIPF Equity-Income Portfolio
(Portfolio Inception: 10/9/86) N/A N/A 11.54% 11.54%

VIPF Overseas Portfolio
(Portfolio Inception: 1/28/87) N/A N/A 6.09% 6.00%

VIPF II Asset Manager Portfolio
(Portfolio Inception: 9/6/89) N/A N/A 9.84% 9.43%

VIPF II Asset Manager: Growth Portfolio
(Portfolio Inception: 1/3/95) N/A N/A 17.27% 15.17%

VIPF II Index 500 Portfolio
(Portfolio Inception: 8/27/92) N/A N/A 14.63% 13.69%

VIPF II Contrafund Portfolio
(Portfolio Inception: 1/3/95) N/A N/A 25.94% 23.36%

Alger American Small Capitalization Portfolio
(Portfolio Inception: 9/21/88) N/A N/A 18.21% 17.95%

Alger American Growth Portfolio
(Portfolio Inception: 1/9/89) N/A N/A 16.68% 16.28%

Alger American MidCap Growth Portfolio
(Portfolio Inception: 5/3/93) N/A N/A 21.31% 19.89%

Alger American Leveraged AllCap Portfolio
(Portfolio Inception: 1/25/95) N/A N/A 36.93% 33.73%

</TABLE>

++ Key: T.S. = Transfer Series Contract; F.S. = Flex Series Contract. (See
"Withdrawal Charge (Contingent Deferred Sale Charge)" on page 15 of the
Prospectus.)

<PAGE>

The Company may also disclose average annual total returns for the Funds
since their inception, including such disclosure for periods prior to the date
the Variable Account commenced operations.

Such average annual total return information for the Funds is as follows:

For the period from
For the 1-year For the 5-year For the 10-year date of inception of
period ended period ended period ended Portfolio to
Sub-Account 12/31/96 12/31/96 12/31/96 12/31/96
----------- -------- -------- -------- ---------
<S> <C> <C> <C> <C>
Northstar Income and Growth Fund
(Portfolio Inception: 5/6/94) 13.61% N/A N/A 13.67%

Northstar Multi-Sector Bond Fund
(Portfolio Inception: 5/6/94) 12.53% N/A N/A 10.76%

Northstar Growth Fund
(Portfolio Inception: 5/6/94) 22.99% N/A N/A 19.01%

VIPF Growth Portfolio
(Portfolio Inception: 10/9/86) 14.71% 15.16% N/A 14.81%

VIPF Equity-Income Portfolio
(Portfolio Inception: 10/9/86) 14.28% 17.98% N/A 13.42%

VIPF Overseas Portfolio
(Portfolio Inception: 1/28/87) 13.15% 9.15% N/A 7.89%

VIPF II Asset Manager Portfolio
(Portfolio Inception: 9/6/89) 14.60% 11.26% N/A 11.69%

VIPF II Asset Manager: Growth Portfolio
(Portfolio Inception: 1/3/95) 20.04% N/A N/A 21.58%

VIPF II Index 500 Portfolio
(Portfolio Inception: 8/27/92) 22.82% N/A N/A 17.10%

VIPF II Contrafund Portfolio
Portfolio Inception: 1/3/95) 21.22% N/A N/A 30.24%

Alger American Small Capitalization Portfolio
(Portfolio Inception: 9/21/88) 4.18% 11.02% N/A 20.21%

Alger American Growth Portfolio
(Portfolio Inception: 1/9/89) 13.35% 16.63% N/A 18.65%

Alger American MidCap Growth Portfolio
(Portfolio Inception: 5/3/93) 11.90% N/A N/A 24.10%

Alger American Leveraged AllCap Portfolio
(Portfolio Inception: 1/25/95) 12.04% N/A N/A 41.35%
</TABLE>

<PAGE>

OTHER TOTAL RETURNS. From time to time, sales literature or advertisements
may quote average annual total returns that do not reflect the Withdrawal
Charge. These returns are calculated in exactly the same way as average annual
total returns described above, except that the ending redeemable value of the
hypothetical account for the period is replaced with an ending value for the
period that does not take into account any charges on amounts withdrawn.
Because the Withdrawal Charge will not be reflected in those quotations, there
is no differentiation between the Transfer Series Contracts and the Flex Series
Contracts. Such information is as follows:

Northstar Multi-Sector Bond Fund
(Portfolio Inception: 5/6/94) 10.66% N/A N/A 8.92%

Northstar Growth Fund
(Portfolio Inception: 5/6/94) 20.94% N/A N/A 17.03%

VIPF Growth Portfolio
(Portfolio Inception: 10/9/86) 12.80% 13.25% N/A 12.90%

VIPF Equity-Income Portfolio
(Portfolio Inception: 10/9/86) 12.38% 16.02% N/A 11.54%

VIPF Overseas Portfolio
(Portfolio Inception: 1/28/87) 11.27% 7.33% N/A 6.09%

VIPF II Asset Manager Portfolio
(Portfolio Inception: 9/6/89) 12.69% 9.41% N/A 9.84%

VIPF II Asset Manager: Growth Portfolio
(Portfolio Inception: 1/3/95) 18.04% N/A N/A 19.56%

VIPF II Index 500 Portfolio
(Portfolio Inception: 8/27/92) 20.78% N/A N/A 15.15%

VIPF II Contrafund Portfolio
(Portfolio Inception: 1/3/95) 19.20% N/A N/A 28.07%

Alger American Small Capitalization Portfolio
(Portfolio Inception: 9/21/88) 2.45% 9.17% N/A 18.21%

Alger American Growth Portfolio
(Portfolio Inception: 1/9/89) 11.47% 14.69% N/A 16.68%

Alger American MidCap Growth Portfolio
(Portfolio Inception: 5/3/93) 10.04% N/A N/A 22.04%

Alger American Leveraged AllCap Portfolio
(Portfolio Inception: 1/25/95) 10.18% N/A N/A 38.99%

</TABLE>

<PAGE>

The Company may disclose Cumulative Total Returns in conjunction with the
standard formats described above. The Cumulative Total Returns will be
calculated using the following formula:

CTR = ERV/P - 1

Where:

CTR = the Cumulative Total Return net of Sub-Account
recurring charges for the period.

ERV = the ending redeemable value of the hypothetical
investment at the end of the period.

P = a hypothetical single payment of $1,000.

EFFECT OF THE ANNUAL CONTRACT CHARGE ON PERFORMANCE DATA. The Contract
provides for a $30 Annual Contract Charge to be deducted annually at the end of
each Contract Year, from the Sub-Accounts and the Fixed Accounts based on the
proportion that the value of each such account bears to the total Contract
Value. For purposes of reflecting the Annual Contract Charge in yield and total
return quotations, the annual charge is converted into a per-dollar of per-day
charge based on the Annual Contract Charges collected from the average total
assets of the Variable Account and the Fixed Accounts during the calendar year.

FINANCIAL STATEMENTS

(To be filed as a post-effective amendment.)

COMPANY HOLIDAYS

The Company is closed on the following holidays: New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Holidays that
fall on a

<PAGE>

Saturday will be recognized on the previous Friday. Holidays that fall on a
Sunday will be recognized on the following Monday.
<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

Part A: None

Part B:
(To be filed as a post-effective amendment.)

(b) Exhibits:

1. Resolution of the Executive Committee of the Board of Directors of
Northern Life Insurance Company ("Depositor") authorizing the
establishment of Separate Account One ("Registrant"). (Filed with
registration statement on Form N-4 on March 20, 1995.)

2. Not Applicable.

3. (a) Form of Distribution and Administrative Services Agreement
between Washington Square Securities, Inc. and Depositor. (Filed
with registration statement on Form N-4 on March 20, 1995.)

(b) Form of selling group (or distribution) agreement between
Washington Square Securities, Inc. and selling group members.
(Filed with registration statement on Form N-4 on March 20,
1995.)

4. (a) Individual Deferred Tax Sheltered Annuity Contract (Transfer
Series). (Filed with registration statement on Form N-4 on March
20, 1995.)

(b) Individual Deferred Annuity Contract (Transfer Series) for use
with non-qualified plans. (Filed with registration statement on
Form N-4 on March 20, 1995.)

C-1
<PAGE>

(c) Individual Deferred Retirement Annuity Contract (Transfer
Series). (Filed with registration statement on Form N-4 on March
20, 1995.)

(d) Flexible Premium Individual Deferred Tax-Sheltered Annuity
Contract. (Filed with registration statement on Form N-4 on
March 20, 1995.)

(e) Flexible Premium Individual Deferred Retirement Annuity Contract.
(Filed with registration statement on Form N-4 on March 20,
1995.)

(f) ERISA Endorsement. (Filed with Securities Act of 1933 Post-
Effective Amendment No. 1)

5. Contract Application Form. (Filed with registration statement on Form
N-4 on March 20, 1995.)

6. (a) Articles of Incorporation of Depositor. (Filed with registration
statement on Form N-4 on March 20, 1995.)

(b) Bylaws of Depositor. (Filed with registration statement on Form
N-4 on March 20, 1995.)

7. Not Applicable.

8. (a) Participation Agreement with Fidelity's Variable Insurance
Products Fund and Fidelity Distributors Corporation. (Filed with
registration statement on Form N-4 on March 20, 1995.)

(b) Participation Agreement with Fidelity's Variable Insurance
Products Fund II and Fidelity Distributors Corporation. (Filed
with registration statement on Form N-4 on March 20, 1995.)

(c) Participation Agreement with The Alger American Fund and Fred
Alger and Company. (Filed with Securities Act of 1933 Pre-
Effective Amendment No. 1.)

9. Consent and Opinion of Kristen K. Lindberg as to the legality of the
securities being registered.

10. Consent of Independent Auditors. (To be filed by post-effective
amendment.)

11. No financial statements are omitted from Item 23.

12. Not Applicable.

13. Schedule of computation of performance data. (To be filed by post-
effective amendment.)

14. Financial Data Schedule. (To be filed by post-effective amendment.)

15. Powers of Attorney for Michael J. Dubes, John H. Flittie, Wayne R.
Huneke, Craig R. Rodby, Robert C. Salipante, John G. Turner and Steven
W. Wishart. (Filed with registration statement on Form N-4 on March
20, 1995.) Power of Attorney for

C-2
<PAGE>

Richard R. Crowl. (Filed with Securities Act of 1933 Post-Effective
Amendment No. 1.)

C-3
<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

DIRECTORS

Name and Principal
Principal Business Address Positions and Offices with Depositor
- -------------------------- ------------------------------------

Michael J. Dubes Director; President and Chief Executive
P.O. Box 12530 Officer.
Seattle, Washington 98111

Richard R. Crowl Director; Senior Vice President, General
20 Washington Avenue South Counsel and Assistant Secretary.
Minneapolis, Minnesota 55401

John H. Flittie Director; Vice Chairman.
20 Washington Avenue South
Minneapolis, Minnesota 55401

C-4
<PAGE>

Wayne R. Huneke Director; Assistant Treasurer.
20 Washington Avenue South
Minneapolis, Minnesota 55401

Kenneth U. Kuk Director; Assistant Treasurer.
20 Washington Avenue South
Minneapolis, Minnesota 55401

Robert C. Salipante Director.
20 Washington Avenue South
Minneapolis, Minnesota 55401

John G. Turner Director; Chairman.
20 Washington Avenue South
Minneapolis, Minnesota 55401

Steven W. Wishart Director; Assistant Treasurer.
20 Washington Avenue South
Minneapolis, Minnesota 55401

C-5
<PAGE>

EXECUTIVE OFFICERS

Name Positions and Offices with Depositor
----- ------------------------------------

Michael J. Dubes President and Chief Executive Officer
James R. Miller Executive Vice President and Chief Operating
Officer
Richard R. Crowl Senior Vice President, General Counsel and
Assistant Secretary
Paul R. Beeghly Vice President
Garth A. Bernard Vice President and Chief Actuary
Richard Contreras Vice President, Marketing
Douglas R. Kaufman Vice President, Chief Financial Officer and
Treasurer
Jerome A. Mills Vice President, Advance Marketing
Eric M. Onderdonk Vice President and Chief Information Officer
Brad J. Corbin Vice President
Elizabeth R. Bennett Vice President and Medical Director

The principal business address of each of the foregoing executive officers is
1110 Third Avenue, Seattle, Washington 98101, with the exception of Mr. Crowl
and Ms. Bennett whose principal business address is 20 Washington Avenue South,
Minneapolis, Minnesota 55401.

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

Registrant is a separate account of Depositor. Depositor is an indirect,
wholly-owned subsidiary of ReliaStar Financial Corp., formerly known as The NWNL
Companies, Inc., a Delaware Corporation.

The following chart identifies the subsidiaries of ReliaStar Financial
Corp. and their relationship to one another, all of which, except where
indicated, are either directly or indirectly wholly-owned by ReliaStar Financial
Corp. except for directors qualifying shares.

C-6
<PAGE>

Owner and State of
Company Percentage Incorporation
-------- ---------- ------------
<S> <C> <C>
ReliaStar Financial Corp. Delaware
ReliaStar Life Insurance Company ("RLIC") RLR-100% Minnesota
Northern Life Insurance Company ("NLIC") RLIC-100% Washington
Norlic, Inc. NLIC-100% Washington
Nova, Inc. NLIC-100% Washington
ReliaStar United Services Life Insurance Company ("RUSL") RLIC-100% Virginia
ReliaStar Bankers Security Life Insurance Company ("RBSL") RUSL-100% New York
North Atlantic Life Agency, Inc. RBSL-100% New York
Delaware Administrators, Inc. RUSL-100% Ohio
USL Services, Inc. RUSL-100% Virginia
NWNL Benefits Corporation ("NBC") RLIC-100% Minnesota
NWNL Health Management Corp. NBC-100% Minnesota
Select Care Health Network, Inc. NBC-50% California
ReliaStar Mortgage Corporation ("RMC") RLIC-100% Iowa
James Mortgage Company RMC-100% Iowa
Washington Square Advisers, Inc. RLR-100% Minnesota
ReliaStar Investment Research, Inc. RLR-100% Minnesota
Washington Square Securities, Inc. RLR-100% Minnesota
ReliaStar Financial Marketing Corporation RLR-100% Delaware
NWNL Northstar, Inc. ("NNI") RLR-80% Delaware
Northstar Investment Management Corp. NNI-80% Delaware
NWNL Northstar Distributors, Inc. NNI-80% Minnesota
Northstar Administrators Corporation NNI-80% Delaware
Bankers Centennial Management Corp. RLR-100% Virginia
IB Holdings, Inc. ("IB") RLR-100% Virginia
International Risks, Inc. IB-100% Delaware
Northeaster Corporation IB-100% Connecticut
The New Providence Insurance Company, Limited IB-100% Cayman Islands
IB Resolution, Inc. IB-100% Virginia
Successful Money Management Seminars, Inc. ("SMMS") RLR-100% Oregon
Successful Money Management Software, Inc. SMMS-100% Oregon

Owner and State of
Company Percentage Incorporation
------- ---------- ------------
<S> <C> <C> <C>
PrimeVest Financial Services, Inc.("PVF") RLR-100% Minnesota
PrimeVest Mortgage, Inc. PVF-100% Minnesota
PrimeVest Insurance Agency of Alabama, Inc. PVF-100% Alabama
PrimeVest Insurance Agency of New Mexico, Inc. PVF-100% New Mexico
PrimeVest Insurance Agency of Oklahoma, Inc. Kevin Kluesner-100% Oklahoma
PrimeVest Insurance Agency of Texas, Inc. Kevin Kluesner-100% Texas
PrimeVest Insurance Agency of Ohio, Inc. Class A Robert Chapman-100% Ohio
Class B PVF-100%
Branson Insurance Agency, Inc. PVF-100% Massachusetts
Granite Investment Services, Inc. PVF-100% Minnesota
</TABLE>

C-7
<PAGE>

ITEM 27. NUMBER OF CONTRACT OWNERS

As of January 31, 1997, there were 3801 owners of the Contracts, 3531 of
which were owners of qualified Contracts.

ITEM 28. INDEMNIFICATION

Reference is hereby made to Article VII, Section 6 of Depositor's Bylaws,
filed as an Exhibit to the registration statement filed on Form N-4 on March 20,
1995. The Bylaws of Depositor mandate indemnification by Depositor of its
directors, officers and certain others, and permit indemnification of directors,
officers, employees and agents of Washington Square Securities, Inc. ("WSSI")
under certain conditions. Section 4.01 of the Bylaws of WSSI mandates
indemnification by WSSI of its directors and officers under certain conditions.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Depositor or WSSI, pursuant to the foregoing provisions or otherwise, Depositor
and WSSI have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Depositor of expenses
incurred or paid by a director or officer or controlling person of Depositor or
WSSI in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person of Depositor or WSSI in connection
with the securities being registered, Depositor or WSSI, as the case may be,
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether or not such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.

An insurance company blanket bond is maintained providing $25,000,000
coverage for Depositor and the General Distributor, subject to a $500,000
deductible.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) WSSI, an affiliate of the Company, is the principal underwriter of the
Contracts. WSSI also acts as the principal underwriter for variable annuity
Contracts issued by ReliaStar Life Insurance Company ("ReliaStar Life"), an
affiliate of the Depositor, through the ReliaStar Life Select Variable Account
and variable life insurance policies issued by ReliaStar Life through the
Select*Life Variable Account. Both of these variable accounts are separate
accounts of ReliaStar Life and are registered as unit investment trusts under
the Investment Company Act of 1940. WSSI also distributes, but is not the
principal underwriter of, variable annuity Contracts issued by ReliaStar Life
through the MFS/ReliaStar Variable Account and the Northstar/ReliaStar Variable
Account, each of which is a separate account of and is registered as a unit
investment trust under the Investment Company Act of 1940.

C-8
<PAGE>

(b) The directors and officers of WSSI are as follows:

DIRECTORS

Name Principal Occupation
----- --------------------

John H. Flittie Vice Chairman, President and Chief Operating
Officer of ReliaStar Financial Corp. and
ReliaStar Life Insurance Company
Roger W. Arnold Vice President, Individual Sales of ReliaStar
Life Insurance Company
Michael J. Dubes President and Chief Executive Officer of
Depositor
Robert C. Salipante Senior Vice President
of Personal Financial Services of ReliaStar
Financial Corp.
Steven W. Wishart Senior Vice President and Chief Investment
Officer of ReliaStar
Financial Corp. and ReliaStar Life Insurance
Company

EXECUTIVE OFFICERS

Name Positions and Offices with WSSI
---- -------------------------------

John H. Flittie Chairman
Michael R. Fanning President and Chief Operating Officer
Robert B. Saginaw Vice President
Susan M. Bergen Secretary
David Braun Assistant Vice President
David P. Wilken Treasurer
Julie A. Cooney Assistant Treasurer
Daniel S. Kuntz Assistant Treasurer
David Cox Assistant Secretary
Allen L. Kidd Assistant Secretary
Loralee A. Renelt Assistant Secretary

The principal business address of each of the foregoing executive officers
is 20 Washington Avenue South, Minneapolis, Minnesota 55401.

(c) For the year ended December 31, 1996 WSSI received $641,620.59 in
fees, including gross concessions, in connection with distribution
of the Contracts.

ITEMS 30. LOCATION OF ACCOUNTS AND RECORDS

The accounts and records of Registrant are located at the offices of
Depositor at 1110 Third Avenue, Seattle, Washington 98101.

ITEM 31. MANAGEMENT SERVICES

C-9
<PAGE>

Not applicable.

C-10
<PAGE>

ITEM 32. UNDERTAKINGS

Registrant will file a post-effective amendment to this Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in this Registration Statement are never more than 16 months old for
so long as payments under the Contracts may be accepted.

Registrant will include either (1) as part of any application to purchase a
Contract offered by the Prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information.

Registrant will deliver any Statement of Additional Information and any
financial statements required to be made available under this form promptly upon
written or oral request.

The Company and the Variable Account rely on a no-action letter issued by
the Division of Investment Management to the American Council of Life Insurance
on November 28, 1988 and represent that the conditions enumerated therein have
been or will be complied with.

The fees and charges deducted under the Advantage series variable annuity
contracts, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by the
Company.

With regard to restricted distributions to plan participants in accordance
with the requirements of IRC Section 403(b)(11), the Registrant, in respect to a
no-action letter issued by the Division of Investment Management (No. IP-6-88,
November 28, 1988), undertakes to:

(a) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement,
including the prospectus, used in connection with the offer of the
contract;

(b) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in
connection with the offer of the contract;

(c) Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed
by Section 403(b)(11) to the attention of the potential participants;

(d) Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed
statement acknowledging the participant's understanding of (1) the
restrictions on redemption imposed by Section 403(b)(11), and (2) the
investment alternatives available under the employer's Section 403(b)
arrangement, to which the participant may elect to transfer his
contract value;

(e) The Registrant represents that this said no-action letter is being
relied upon and that the provisions of paragraphs (a) - (d) above have
been complied with.

C-11
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant has caused this Amendment to the Registration Statement to be
signed on its behalf, in the City of Seattle and State of Washington, on this
28th day of February 1997.

SEPARATE ACCOUNT ONE
(Registrant)

By NORTHERN LIFE INSURANCE COMPANY
(Depositor)

By /s/ Michael J. Dubes
----------------------------------------
Michael J. Dubes
President and Chief Executive Officer

As required by the Securities Act of 1933 and the Investment Company Act of
1940, Depositor has caused the Registration Statement to be signed on its
behalf, in the City of Seattle and State of Washington, on this 28th day of
February, 1997.

NORTHERN LIFE INSURANCE COMPANY

By /s/ Michael J. Dubes
----------------------------------------
Michael J. Dubes
President and Chief Executive Officer

As required by the Securities Act of 1933, the Registration Statement has been
signed on this 28th day of February, 1997 by the following directors and
officers of Depositor in the capacities indicated:

/s/Michael J. Dubes President and Chief Executive Officer
- ---------------------------
Michael J. Dubes

/s/James R. Miller Executive Vice President and Chief Operating
- --------------------------- Officer
James R. Miller

/s/Douglas R. Kaufman Vice President, Chief Financial Officer, Treasurer
- --------------------------- and Comptroller
Douglas R. Kaufman

Richard R. Crowl Wayne R. Huneke
Michael J. Dubes Kenneth U. Kuk John G. Turner
John H. Flittie Robert C. Salipante Steven W. Wishart

A majority of the Board of Directors.

James E. Nelson, by signing his name hereto, does hereby sign this document on
behalf of each of the above-named directors of Northern Life Insurance Company
pursuant to powers of attorney duly executed by such persons.

/s/James E. Nelson
---------------------------------
James E. Nelson, Attorney-in-Fact
<PAGE>

EXHIBIT INDEX

(b) Exhibits:

9. Consent and Opinion of Kristen K. Lindberg as to the legality of the
securities being registered.

<PAGE>

February 28, 1997

Northern Life Insurance Company
1110 Third Avenue
Seattle, WA 98101

Madam/Sir:

In connection with the proposed registration under the Securities Act of 1933,
as amended, of individual variable annuity contracts (the "Contracts") and
interest in Separate Account One (the "Separate Account"), I have examined
documents relating to the establishment of the Separate Account by the Board of
Directors of Northern Life Insurance Company (the "Company") as a separate
account for assets applicable to variable annuity contracts, pursuant to RCW
48.18A.010 et seq., as amended , and the Registration Statement, on Form N-4, as
amended by Post-Effective Amendment No. 2 thereto, File Number 33-90474 (the
"Registration Statement"), and I have examined such other documents and have
reviewed such matters of law as I deemed necessary for this opinion, and I
advise you that in my opinion:

1. The Separate Account is a separate account of the Company duly created
and validly existing pursuant to the laws of the State of Washington.

2. The contracts, when issued in accordance with the Prospectus
constituting a part of the Registration Statement and upon compliance with
applicable local law, will be legal and binding obligations of the Company in
accordance with their respective terms.

3. The portion of the assets held in the Separate Account equal to
reserves and other contract liabilities with respect to the Separate Account are
not chargeable with liabilities arising out of any other business the Company
may conduct.

I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Legal Opinions" in the
Prospectus constituting a part of the Registration Statement and to the
references to me wherever appearing therein.

Very truly yours,

/s/ Kristen Lindberg

Kristen Lindberg
Associate Counsel