SEPARATE ACCOUNT ONE OF NORTHERN LIFE INSURANCE CO, N-4/A, 2000-03-31

SEPARATE ACCOUNT ONE OF NORTHERN LIFE INSURANCE CO
N-4/A, 2000-03-31

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<PAGE> 1

FILE NO. 333-32948

811-9002

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MARCH 30, 2000

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-4

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
POST-EFFECTIVE AMENDMENT NO. [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 [X]
AMENDMENT NO. 1 [X]
</TABLE>

SEPARATE ACCOUNT ONE
(EXACT NAME OF REGISTRANT)

NORTHERN LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)

1501 FOURTH AVENUE, SUITE 1000,
SEATTLE, WASHINGTON 98101-3620
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 292-1111
------------------------

STEWART D. GREGG
NORTHERN LIFE INSURANCE COMPANY
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55401
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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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 (date), pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] on (date), pursuant to paragraph (a) of Rule 485.

If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date of a
previously filed post-effective amendment.

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

TITLE OF SECURITIES BEING REGISTERED: VARIABLE ANNUITY CONTRACTS
ISSUED BY A REGISTERED SEPARATE ACCOUNT
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<PAGE> 2

SEPARATE ACCOUNT ONE
CROSS REFERENCE SHEET PURSUANT TO RULE 495(A)

<TABLE>
<CAPTION>
FORM N-4
ITEM NUMBER PART A HEADING IN PROSPECTUS
- ----------- ----------------------------
<C> <S>
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
</TABLE>

<TABLE>
<CAPTION>
PART B HEADING IN STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------------------------
<C> <S>
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
</TABLE>

<TABLE>
<CAPTION>
PART C HEADINGS
---------------
<C> <S>
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
</TABLE>
<PAGE> 3

APRIL 3, 2000

NORTHERN LIFE
ADVANTAGE RIA(SM) ANNUITY
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
SEPARATE ACCOUNT ONE
NORTHERN LIFE INSURANCE COMPANY

PROFILE OF OUR INDIVIDUAL FIXED AND VARIABLE ANNUITY CONTRACTS

THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT FEATURES OF THE
CONTRACTS THAT YOU SHOULD KNOW AND CONSIDER BEFORE PURCHASING A CONTRACT. THE
CONTRACTS ARE MORE FULLY DESCRIBED IN THE PROSPECTUS WHICH ACCOMPANIES THIS
PROFILE. PLEASE READ THE PROSPECTUS CAREFULLY.

1. THE ANNUITY CONTRACT: The fixed and variable annuity contracts we are
offering are contracts between you, the owner, and us, Northern Life Insurance
Company (the "Company").

We offer five series of 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, a flexible premium
individual retirement annuity contract, and a flexible premium individual
deferred annuity contract for deferred compensation plans established under
Section 457 of the Code ("Flex Series"). The Retail Series Contracts include a
flexible premium individual deferred tax sheltered annuity contract, a flexible
premium individual retirement annuity contract, and a flexible premium
individual deferred annuity contract for deferred compensation plans established
under Section 457 of the Code ("Retail Series"). The Plus Series Contracts
include a flexible premium individual deferred tax sheltered annuity contract, a
flexible premium individual retirement annuity contract, and a flexible premium
individual deferred annuity contract for deferred compensation plans established
under Section 457 of the Code ("Plus Series"). The RIA Series Contracts include
a flexible premium individual deferred tax sheltered annuity contract, a
flexible premium individual retirement annuity contract, and a flexible premium
individual deferred annuity contract for deferred compensation plans established
under Section 457 of the Code ("RIA Series"). Only the RIA Series Contracts are
offered through this Profile and the accompanying Prospectus.

The RIA Annuity is designed for sale to persons whose assets are managed by
a registered investment adviser. The Contract is not currently available to
persons who are not represented by a registered investment adviser or an
advisory affiliate.

The Company does not pay any sales commission on the sale of an RIA Series
Contract. Rather, it is expected that your sales representative will be a
registered investment adviser or affiliated with a registered investment adviser
that manages your assets, and that this person will charge a fee for providing
advice about your Contract. The Company does not set the amount of this fee, or
recommend any specific level of fee. This fee is not deducted from your
Contract, but rather is a personal contractual matter between you and your
financial adviser. The Company does not receive any portion of the advisory fee
that you pay to your adviser. The Company does not recommend or take
responsibility for the services of any personal investment adviser.

For RIA Series Contracts which are Qualified Plans, the Company will accept
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 RIA Series Contracts, the Company will accept periodic and single
sum Purchase Payments, as well as amounts transferred under Section 1035 of the
Code, which are not less than the specified Contract minimum Purchase Payment.

i
<PAGE> 4

The Contracts provide a means for selecting one or more investment funds
("Investment Funds" or "Funds") on a tax-deferred basis. The Contracts are
intended for retirement savings or other long-term investment purposes and
provide for a death benefit and guaranteed income options.

Through the Variable Account, the Contracts offer up to 32 investment
options from which you can choose up to 16 over the lifetime of the Contract.
The returns on these investment options are not guaranteed and you can possibly
lose money. Currently, there is a $25 charge for each transfer in excess of 24
transfers per Contract Year.

The RIA Series Contracts offer two Fixed Accounts. These Fixed Accounts
have an interest rate that is set periodically by the Company. The minimum rate
is the guaranteed rate. While your money is in a fixed account, the interest you
earn and your principal are guaranteed by the Company.

The Contracts have two phases: the accumulation phase and the income or
payout phase. During the accumulation phase, earnings accumulate on a
tax-deferred basis and are not taxed as income until you make a withdrawal. The
amounts accumulated during the accumulation phase will determine the amount of
annuity payments. The income phase occurs when you begin receiving regular
annuity payments from your contract on the annuity commencement date.

2. ANNUITY PAYMENTS (THE INCOME PHASE): If you want to receive regular income
from your annuity, you can choose one of three options: (1) monthly payments for
your life (assuming you are the annuitant); (2) monthly payments for your life,
but with payments continuing to the beneficiary for 10 years if you die before
the end of the selected period; and (3) monthly payments for your life and for
the life of another person (usually your spouse) selected by you. Once you begin
receiving regular annuity payments, you cannot change your payment plan.

During the income phase, you have the same investment options you had
during the accumulation phase. For RIA Series Contracts, you can choose to have
annuity payments come from Fixed Account A, the Variable Account or both. If you
choose to have any part of your annuity payments come from the Variable Account,
the dollar amount of your annuity payments may go up or down.

3. PURCHASE: The minimum amount the Company will accept as an initial purchase
payment is $25,000 for RIA Series Contracts. The Company may choose not to
accept any subsequent purchase payment for RIA Series Contracts if it is less
than $5,000. The Company may choose not to accept any subsequent purchase
payments if the additional payments, when added to the Contract Value at the
next Valuation Date, would exceed $1,000,000.

4. INVESTMENT OPTIONS: You can put your money in up to 16 of these 32 investment
options which are described in the prospectuses for the Funds. You do not have
to choose your investment options in advance, but upon participation in the
sixteenth Fund you would only be able to transfer within the 16 already utilized
and which are still available.

ii
<PAGE> 5

PORTFOLIO
<TABLE>
<CAPTION>
AIM VARIABLE INSURANCE THE ALGER FIDELITY VARIABLE INSURANCE FIDELITY VARIABLE INSURANCE
FUNDS, INC. AMERICAN FUND PRODUCTS FUND PRODUCTS FUND II
------------------------------ ----------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
AIM V.I. Dent Demographic Alger American Growth VIP Equity-Income VIP II Asset Manager:
Trends Fund Portfolio Portfolio Growth Portfolio
Alger American VIP Growth Portfolio VIP II Contrafund(R)
Leveraged AllCap VIP Money Market Portfolio
Portfolio Portfolio VIP II Index 500
Alger American MidCap Portfolio
Growth Portfolio VIP II Investment Grade
Alger American Bond Portfolio
Small Capitalization
Portfolio

<CAPTION>
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND III
---------------------------
<S> <C>
VIP III Growth
Opportunities
Portfolio
</TABLE>
<TABLE>
NEUBERGER BERMAN
ADVISERS PILGRIM VARIABLE
JANUS ASPEN SERIES MANAGEMENT TRUST OCC ACCUMULATION TRUST PRODUCTS TRUST
------------------------------ ------------------- -------------------- --------------------------
<S> <C> <C> <C> <C>
Aggressive Growth Portfolio Limited Maturity Equity Portfolio Pilgrim VP Growth
Growth Portfolio Bond Portfolio Global Equity Opportunities Portfolio
International Growth Portfolio Partners Portfolio Portfolio Pilgrim VP Growth + Value
Worldwide Growth Portfolio Socially Responsive Managed Portfolio Portfolio
Portfolio Small Cap Portfolio Pilgrim VP High Yield
Bond Portfolio
Pilgrim VP International
Value Portfolio
Pilgrim VP MagnaCap
Portfolio
Pilgrim VP Midcap
Opportunities Portfolio
Pilgrim VP Research
Enhanced Index Portfolio
Pilgrim VP SmallCap
Opportunities Portfolio

Depending upon market conditions, you can make or lose money in any of these
Funds.

5. EXPENSES: The Contract has insurance features and investment features, and
there are costs related to each.

There are investment fund annual expenses which range from 0.27% to 1.53%
of the average daily value of the investment fund depending upon the investment
option which you select.

No deduction for a sales charge is made from Purchase Payments on the date
they are received by the Company. There is no withdrawal charge for RIA Series
Contracts.

We may also assess a state premium tax charge which ranges from 0% to 3.5%
depending upon the state.

iii
<PAGE> 6

The following chart is designed to help you understand the expenses in the
Contract.

The column "Total Annual Expenses" shows the insurance charges and the
investment expenses for each investment portfolio. The Total Annual Expenses are
assessed for year 1 and year 10. There is no withdrawal charge.

<TABLE>
<CAPTION>
EXAMPLES:
TOTAL ANNUAL
EXPENSES AT
END OF:
TOTAL TOTAL -----------------
ANNUAL ANNUAL TOTAL 1 YEAR 10 YEAR
INSURANCE PORTFOLIO ANNUAL RIA RIA
INVESTMENT FUNDS CHARGES EXPENSES EXPENSES SERIES SERIES
---------------- --------- --------- -------- ------ -------
<S> <C> <C> <C> <C> <C>
AIM Variable Insurance Funds, Inc.
AIM V.I. Dent Demographic Trends Fund..................... 0.60% 1.40% 2.00% $20 $232
THE ALGER AMERICAN FUND:
Alger American Growth Portfolio........................... 0.60% 0.79% 1.39% $14 $166
Alger American Leveraged AllCap Portfolio................. 0.60% 0.93% 1.53% $16 $182
Alger American MidCap Growth Portfolio.................... 0.60% 0.85% 1.45% $15 $173
Alger American Small Capitalization Portfolio............. 0.60% 0.90% 1.50% $15 $178
FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
VIP Equity-Income Portfolio............................... 0.60% 0.56% 1.16% $12 $140
VIP Growth Portfolio...................................... 0.60% 0.65% 1.25% $13 $151
VIP Money Market Portfolio................................ 0.60% 0.27% 0.87% $ 9 $107
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II:
VIP II Asset Manager: Growth Portfolio.................... 0.60% 0.70% 1.30% $13 $156
VIP II Contrafund(R) Portfolio............................ 0.60% 0.65% 1.25% $13 $151
VIP II Index 500 Portfolio................................ 0.60% 0.28% 0.88% $ 9 $108
VIP II Investment Grade Bond Portfolio.................... 0.60% 0.54% 1.14% $12 $138
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III:
VIP III Growth Opportunities Portfolio.................... 0.60% 0.68% 1.28% $13 $154
JANUS ASPEN SERIES:
Aggressive Growth Portfolio............................... 0.60% 0.67% 1.27% $13 $153
Growth Portfolio.......................................... 0.60% 0.67% 1.27% $13 $153
International Growth Portfolio............................ 0.60% 0.76% 1.36% $14 $163
Worldwide Growth Portfolio................................ 0.60% 0.70% 1.30% $13 $156
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST:
Limited Maturity Bond Portfolio........................... 0.60% 0.76% 1.36% $14 $163
Partners Portfolio........................................ 0.60% 0.87% 1.47% $15 $175
Socially Responsive Portfolio............................. 0.60% 1.53% 2.13% $22 $245
OCC ACCUMULATION TRUST:
Equity Portfolio.......................................... 0.60% 0.91% 1.51% $15 $179
Global Equity Portfolio................................... 0.60% 1.10% 1.70% $17 $200
Managed Portfolio......................................... 0.60% 0.83% 1.43% $15 $171
Small Cap Portfolio....................................... 0.60% 0.89% 1.49% $15 $177
</TABLE>

iv
<PAGE> 7

Certain of the portfolios are subject to fee waiver or reimbursement
arrangements. The charges listed above reflect any expense reimbursement or fee
waiver. For more detailed information, see Summary of Contract Expenses in the
Prospectus for the Contract.

6. TAXES: Your earnings are not taxed until you take them out. If you withdraw
money, earnings may come out first and will be taxed as income. If you are
younger than 59 1/2 when you take money out, you may be charged a 10% federal
tax penalty on the amount treated as taxable income. Annuity payments during the
income phase may be considered partly a return of your original investment, in
which case that part of each payment is not taxable as income.

7. ACCESS TO YOUR MONEY: You can take money out at any time during the
accumulation phase. For RIA Series Contracts, there are no withdrawal charges.
You may have to pay income tax and a tax penalty on any money you take out.
Withdrawals from Contracts that are tax sheltered annuity contracts established
pursuant to Section 403(b) of the Code are subject to special restrictions on
withdrawals, as discussed in the Prospectus.

8. PERFORMANCE: The value of the Contract will vary up or down depending upon
the investment performance of the investment funds you choose. The following
chart shows total returns through December 31, 1999, for each investment fund
for the time periods shown. This chart reports performance returns only from the
date an investment fund was offered through the Variable Account by one or more
Contracts and for periods where our Contracts offered the investment fund for a
complete year. These numbers reflect the insurance charges, the contract
maintenance charge, the investment expenses and all other expenses of the
investment fund. These numbers do not reflect any withdrawal charges since there
is no withdrawal charge for RIA Series Contracts and there would be no reduction
in performance returns for RIA Series Contracts. Past performance is not a
guarantee of future results. Investment in the money market fund option is
neither insured nor guaranteed by the U.S. government and there can be no
assurance that it will be able to maintain a stable net asset value of $1 per
share.

v
<PAGE> 8

Performances of certain of the portfolios reflect a voluntary expense
limitation, as described in the prospectus. In the absence of this voluntary
limitation the total return would have been lower.

<TABLE>
<CAPTION>
CALENDAR YEAR
-------------
1999
-------------
<S> <C>
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Dent Demographic Trends Fund..................... N/A
THE ALGER AMERICAN FUND
Alger American Growth Portfolio........................... 32.94%
Alger American Leveraged AllCap Portfolio................. 77.00%
Alger American MidCap Growth Portfolio.................... 31.06%
Alger American Small Capitalization Portfolio............. 42.56%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
VIP Equity-Income Portfolio............................... 5.69%
VIP Growth Portfolio...................................... 36.61%
VIP Money Market Portfolio................................ 4.55%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
VIP II Asset Manager: Growth Portfolio.................... 14.57%
VIP II Contrafund(R) Portfolio............................ 28.51%
VIP II Index 500 Portfolio................................ 19.79%
VIP II Investment Grade Bond Portfolio.................... (1.64)%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
VIP III Growth Opportunities Portfolio.................... 3.65%
JANUS ASPEN SERIES
Aggressive Growth Portfolio............................... 124.06%
Growth Portfolio.......................................... 43.12%
International Growth Portfolio............................ 81.19%
Worldwide Growth Portfolio................................ 63.47%
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio........................... 0.87%
Partners Portfolio........................................ 6.73%
Socially Responsive Portfolio............................. N/A
OCC ACCUMULATION TRUST
Equity Portfolio.......................................... 1.93%
Global Equity Portfolio................................... 25.77%
Managed Portfolio......................................... 4.37%
Small Cap Portfolio....................................... (2.42)%
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Growth Opportunities Portfolio................. N/A
Pilgrim VP Growth + Value Portfolio....................... 93.82%
Pilgrim VP High Yield Bond Portfolio...................... (3.80)%
Pilgrim VP International Value Portfolio.................. 49.28%
Pilgrim VP MagnaCap Portfolio............................. N/A
Pilgrim VP MidCap Opportunities Portfolio................. N/A
Pilgrim VP Research Enhanced Index Portfolio.............. 5.19%
Pilgrim VP SmallCap Opportunities Portfolio............... 139.60%
</TABLE>

9. DEATH BENEFIT: If you die prior to the income phase, the person you have
chosen as your beneficiary will receive a death benefit. For RIA Series
Contracts, this death benefit will be the greater of: 1) the money you've put in
reduced by any money you've taken out, any Outstanding Loan Balance and
previously deducted Annual Contract Charges; or 2) the current value of your
Contract less the Outstanding Loan Balance.

vi
<PAGE> 9

10. OTHER INFORMATION

FREE LOOK. If you cancel the Contract within 10 days after receiving it (or
whatever period is required in your state), we will return the Contract Value
without assessing a withdrawal charge. The Contract Value may be more or less
than your original payment, unless otherwise required by applicable law.

For RIA Series Contracts, if you reside in a state requiring the return of
purchase payments made for any cancellation during a free look period, the
amount of your initial payments will be allocated to the money market option
during the free look period in your state plus five calendar days. If you cancel
your Contract we will return your payments made or the Contract Value, whichever
is larger. If you keep your Contract, we will then allocate your initial
payments plus Contract Earnings to the appropriate Fund(s) you have chosen.

NO PROBATE. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate.

WHO SHOULD PURCHASE THE CONTRACT? This Contract is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or other
long-term purposes. The tax-deferred feature is most attractive to people in
high federal and state tax brackets. You should not buy this Contract if you are
looking for a short-term investment or if you cannot take the risk of getting
back less money than you put in. ADDITIONAL FEATURES. This Contract has
additional Features you might be interested in. These include:

- If the Contract you purchase is issued for use with a Qualified Plan
pursuant to Section 403(b) of the Code, loans from the Contract may be
available. These loans are subject to certain restrictions.

- You can arrange to have money automatically sent to you each month while
your Contract is still in the accumulation phase. Of course, you'll have
to pay taxes on money you receive. We call this feature Systematic
Withdrawal.

- You can arrange to have a regular amount of money automatically
transferred to investment portfolios each month to provide for regular
level investments over time. We call this feature Dollar Cost Averaging.

- The Company will automatically readjust the money in your Contract
between investment portfolios periodically to keep the blend you select.
We call this feature Automatic Reallocation.

These features are not available in all states and may not be suitable for your
particular situation.

11. INQUIRIES

If you need more information, please contact us at:

Northern Life Insurance Company
P.O. Box 5050
Minot, North Dakota 58702-5050
1-877-884-5050

or the distributor of the Contracts, our affiliated Company,

Washington Square Securities, Inc.
20 Washington Avenue South
Minneapolis, Minnesota 55401
1-800-621-3750

or your registered representative.

vii
<PAGE> 10

NORTHERN LIFE
ADVANTAGE RIA(SM) ANNUITY
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
SEPARATE ACCOUNT ONE
NORTHERN LIFE INSURANCE COMPANY
1501 FOURTH AVENUE, SUITE 1000, SEATTLE, WASHINGTON 98101-3620
TELEPHONE: (206) 292-1111

Northern Life Insurance Company (the "Company") offers five series of
flexible premium Individual Deferred Variable/Fixed Annuity Contracts
("Contracts"). The five Series of Contracts offered by the Company (the "Flex
Series", the "Transfer Series", the "Retail Series", the "Plus Series" and the
"RIA Series") differ in the amount of Purchase Payments required, when Purchase
Payments can be made and certain charges imposed under the Contracts. The
Contracts are for use in connection with retirement plans qualifying for special
tax treatment under the Internal Revenue Code. (See "Federal Tax Status.") In
addition, the Transfer Series Contracts, the Retail Series Contracts, the Plus
Series Contracts and the RIA Series Contracts are offered on a non-qualified
basis.

This Prospectus describes and offers only the RIA Series Contracts, also
known as the Northern Life Advantage RIA(SM) Annuity. The RIA Annuity is
designed for sale to persons whose assets are managed by a registered investment
adviser. No sales charge is assessed upon sale or surrender of a contract;
however, an advisory fee may be assessed by the contract holder's adviser.

The RIA Series 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.

Subject to certain restrictions, you can allocate premiums to:

- for the RIA Series Contracts, two separate Fixed Accounts (Fixed Account
A and Fixed Account C), which are accounts that provide a minimum
specified rate of interest; and

- Sub-Accounts of Separate Account One (the "Variable Account"), a variable
account allowing you to invest in certain portfolios of the following
Funds (the "Investment Funds"):

AIM Variable Insurance Funds, Inc.
The Alger American Fund
Fidelity Variable Insurance Products Fund (VIP)
Fidelity Variable Insurance Products Fund II (VIP II)
Fidelity Variable Insurance Products Fund III (VIP III)
Janus Aspen Series
Neuberger Berman Advisers Management Trust
OCC Accumulation Trust
Pilgrim Variable Products Trust

The Variable Account, your account value and the amount of any variable
annuity payments that you receive will vary, primarily based on the investment
performance of the Investment Funds you select. (For more information about
investing in the Investment Funds, see "Investments of the Variable Account".)
The Fixed Accounts are part of the general account of the Company. Information
about the Fixed Accounts is contained in Appendix A.

Additional information about the Contracts, the Company, and the Variable
Account is contained in a Statement of Additional Information dated April 3,
2000, 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 5050, Minot, North Dakota 58702-5050, by calling
(877) 884-5050, 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 35 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.

These insurance and investment products:

- ARE NOT BANK DEPOSITS OR GUARANTEED BY A BANK

- ARE NOT INSURED OR GUARANTEED BY THE FDIC, THE FEDERAL RESERVE BOARD OR
ANY OTHER GOVERNMENT AGENCY

- ARE AFFECTED BY MARKET FLUCTUATIONS AND INVOLVE INVESTMENT RISK,
INCLUDING POSSIBLE LOSS OF PRINCIPAL

- 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.

This prospectus is accompanied by the current prospectuses for the investment
funds offered by AIM Variable Insurance Funds, Inc., The Alger American Fund,
Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance Products
Fund II, Fidelity Variable Insurance Products Fund III, Janus Aspen Series,
Neuberger Berman Advisers Management Trust, OCC Accumulation Trust, and Pilgrim
Variable Products Trust.

THE DATE OF THIS PROSPECTUS IS APRIL 3, 2000
<PAGE> 11

TABLE OF CONTENTS

<TABLE>
<S> <C>
Definitions................................................. 4
Summary of Contract Expenses................................ 6
The Company................................................. 11
The Variable Account........................................ 11
Investments of the Variable Account......................... 11
Reinvestment.............................................. 15
Addition, Deletion or Substitution of Fund Shares......... 15
Charges Made by the Company................................. 16
Withdrawal Charge (Contingent Deferred Sales Charge)...... 16
Annual Contract Charge.................................... 16
Mortality Risk Charge..................................... 16
Expense Risk Charge....................................... 16
Administrative Charge..................................... 17
Product Asset Credit...................................... 17
Sufficiency of Charges.................................... 17
Premium and Other Taxes................................... 17
Reduction of Charges...................................... 17
Expenses of the Funds..................................... 18
Administration.............................................. 18
The Contracts............................................... 18
Contract Application and Purchase Payments................ 18
Revocation................................................ 18
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.......... 22
Reallocations............................................. 22
Written Reallocations.................................. 23
Telephone Reallocations................................ 23
Automatic Reallocations................................ 23
Dollar Cost Averaging Reallocations.................... 24
Reallocations From the Fixed Accounts.................. 24
Assignments............................................... 25
Contract Owner and Beneficiaries.......................... 25
Contract Inquiries........................................ 25
</TABLE>

2
<PAGE> 12

<TABLE>
<S> <C>
Annuity Provisions......................................................................................... 25
Start Date............................................................................................... 25
Annuity Payout Selection................................................................................. 26
Forms of Annuity Payouts................................................................................. 26
Frequency and Amount of Annuity Payouts.................................................................. 27
Annuity Payouts.......................................................................................... 27
Sub-Account Annuity Unit Value........................................................................... 27
Assumed Investment Rate.................................................................................. 27
Partial Annuitization.................................................................................... 28
Federal Tax Status......................................................................................... 28
Introduction............................................................................................. 28
Tax Status of the Contract............................................................................... 28
Taxation of Annuities.................................................................................... 29
Penalty Tax on Certain Distributions..................................................................... 30
Transfers, Assignments or Exchanges of a Contract........................................................ 31
Withholding.............................................................................................. 31
Multiple Contracts....................................................................................... 31
Taxation of Qualified Plans.............................................................................. 31
Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans............................................. 32
Individual Retirement Annuities.......................................................................... 32
Tax Sheltered Annuities.................................................................................. 32
Section 457 Plans........................................................................................ 32
Possible Charge for the Company's Taxes.................................................................. 33
Other Tax Consequences................................................................................... 33
Possible Changes in Taxation............................................................................. 33
Voting of Fund Shares...................................................................................... 33
Distribution of the Contracts.............................................................................. 34
Reports to Contract Owners................................................................................. 34
Legal Proceedings.......................................................................................... 34
Experts.................................................................................................... 34
Further Information........................................................................................ 34
Separate Account One Statement of Additional Information Table of Contents................................. 35
Appendices................................................................................................. A-1
</TABLE>

3
<PAGE> 13

DEFINITIONS

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

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.

COMPANY. Northern Life Insurance Company, a stock life insurance company
incorporated under the laws of the State of Washington.

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

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

CONTRACT EARNINGS. 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, Fixed Account B, and Fixed Account C 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 before the Start Date
of the Contract Owner of a qualified Contract or the Annuitant or Contract
Owner in the case of a non-qualified Contract.

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 C. 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 C CONTRACT VALUE. An amount equal to the sum of Purchase Payments
allocated to Fixed Account C, increased by interest credited to Fixed
Account C, less reallocations from Fixed Account C (including 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.

INITIAL PURCHASE PAYMENT TRANSFER DATE. The Initial Purchase Payment Transfer
Date is the date that is five calendar days after the applicable state free
look period, and is generally 16 days after the Contract Date. This may
vary by state.

4
<PAGE> 14

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

LOAN ACCOUNT. The portion, if any, of Contract Value segregated within Fixed
Account A which is designated as security for a loan under the Contract.

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

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

PRODUCT ASSET CREDIT. The Product Asset Credit is applicable to RIA Series
Contracts only. It is equal to an annual rate of .80% of the average daily
Variable Account Contract Value. This credit is applied monthly and is
added to the Sub-Accounts of the Variable Account.

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, 408A 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; Rev. Dr. Martin
Luther King, Jr. Day; President's Day; Good Friday; Memorial Day; July
Fourth; Labor 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.

5
<PAGE> 15

SUMMARY OF CONTRACT EXPENSES

<TABLE>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Charge Imposed on Purchases........................... None
Maximum Withdrawal Charge (a)............................... None
Reallocation Charge (b)..................................... None
ANNUAL CONTRACT CHARGE (C).................................. None
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
RIA SERIES CONTRACTS
Total Variable Account Annual Expenses (d).................. 0.60%
</TABLE>

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
"Premium and Other Taxes."

ANNUAL INVESTMENT FUND EXPENSES AFTER REIMBURSEMENTS (G)(H)(J)(K)(L)*

(as a percentage of Fund average net assets)

<TABLE>
<CAPTION>
TOTAL
INVESTMENT
MANAGEMENT FUND
(ADVISORY) ANNUAL
FEES OTHER EXPENSES EXPENSE
---------- -------------- ----------
<S> <C> <C> <C>
AIM V.I. Dent Demographic Trends Fund (e)................ 0.85% 0.55% 1.40%
Alger American Growth Portfolio (e)...................... 0.75% 0.04% 0.79%
Alger American Leveraged AllCap Portfolio (e)............ 0.85% 0.08% 0.93%
Alger American MidCap Growth Portfolio (e)............... 0.80% 0.05% 0.85%
Alger American Small Capitalization Portfolio (e)........ 0.85% 0.05% 0.90%
Fidelity VIP Equity-Income Portfolio (d)(g).............. 0.48% 0.08% 0.56%
Fidelity VIP Growth Portfolio (d)(g)..................... 0.58% 0.07% 0.65%
Fidelity VIP Money Market Portfolio (e).................. 0.18% 0.09% 0.27%
Fidelity VIP II Asset Manager: Growth Portfolio(R)
(e)(g)................................................. 0.58% 0.12% 0.70%
Fidelity VIP II Contrafund Portfolio (e)(g).............. 0.58% 0.07% 0.65%
Fidelity VIP II Index 500 Portfolio (e)(g)............... 0.24% 0.04% 0.28%
Fidelity VIP II Investment Grade Bond Portfolio (e)...... 0.43% 0.11% 0.54%
Fidelity VIP III Growth Opportunities Portfolio (e)(g)... 0.58% 0.10% 0.68%
Janus Aspen Aggressive Growth Portfolio (e)(h)........... 0.65% 0.02% 0.67%
Janus Aspen Growth Portfolio (e)(h)...................... 0.65% 0.02% 0.67%
Janus Aspen International Growth Portfolio (e)(h)........ 0.65% 0.11% 0.76%
Janus Aspen Worldwide Growth Portfolio (e)(h)............ 0.65% 0.05% 0.70%
Neuberger Berman Advisers Management Trust Limited
Maturity Bond Portfolio (e)(i)......................... 0.65% 0.11% 0.76%
Neuberger Berman Advisers Management Trust Partners
Portfolio (e)(i)....................................... 0.80% 0.07% 0.87%
Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio (e)(i)(j)......................... 0.85% 0.68% 1.53%
OCC Accumulation Trust Equity Portfolio (e)(k)........... 0.80% 0.11% 0.91%
OCC Accumulation Trust Global Equity Portfolio (e)(k).... 0.80% 0.30% 1.10%
OCC Accumulation Trust Managed Portfolio (e)(k).......... 0.77% 0.06% 0.83%
OCC Accumulation Trust Small Cap Portfolio (e)(k)........ 0.80% 0.09% 0.89%
Pilgrim VP Growth Opportunities Portfolio (f)(l)......... 0.75% 0.15% 0.90%
Pilgrim VP Growth + Value Portfolio (l).................. 0.75% 0.05% 0.80%
</TABLE>

6
<PAGE> 16

<TABLE>
<CAPTION>
TOTAL
INVESTMENT
MANAGEMENT FUND
(ADVISORY) ANNUAL
FEES OTHER EXPENSES EXPENSE
---------- -------------- ----------
<S> <C> <C> <C>
Pilgrim VP High Yield Bond Portfolio (l)................. 0.75% 0.05% 0.80%
Pilgrim VP International Value Portfolio (l)............. 1.00% 0.00% 1.00%
Pilgrim VP MagnaCap Portfolio (f)(l)..................... 0.75% 0.15% 0.90%
Pilgrim VP MidCap Opportunities Portfolio (f)(l)......... 0.75% 0.15% 0.90%
Pilgrim VP Research Enhanced Index Portfolio (l)......... 0.75% 0.15% 0.90%
Pilgrim VP SmallCap Opportunities Portfolio (l).......... 0.75% 0.15% 0.90%
</TABLE>

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

* The fees and expense information regarding the Funds was provided by the
Funds. Except for the Pilgrim Variable Products Trust, neither the Funds nor
their advisers are affiliated with the Company.

7
<PAGE> 17

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>
VARIABLE ACCOUNT
ANNUAL EXPENSES
----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RIA RIA RIA RIA
SERIES SERIES SERIES SERIES
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM V.I. Dent Demographic Trends Fund....................... $20 $63 $107 $232
Alger American Growth Portfolio............................. 14 44 76 166
Alger American Leveraged AllCap Portfolio................... 16 48 83 182
Alger American MidCap Growth Portfolio...................... 15 46 79 173
Alger American Small Capitalization Portfolio............... 15 47 82 178
Fidelity VIP Equity-Income Portfolio........................ 12 37 64 140
Fidelity VIP Growth Portfolio............................... 13 40 69 151
Fidelity VIP Money Market Portfolio......................... 9 28 48 107
Fidelity VIP II Asset Manager: Growth Portfolio............. 13 41 71 156
Fidelity VIP II Contrafund(K) Portfolio..................... 13 40 69 151
Fidelity VIP II Index 500 Portfolio......................... 9 28 49 108
Fidelity VIP II Investment Grade Bond Portfolio............. 12 36 63 138
Fidelity VIP III Growth Opportunities Portfolio............. 13 41 70 154
Janus Aspen Aggressive Growth Portfolio..................... 13 40 70 153
Janus Aspen Growth Portfolio................................ 13 40 70 153
Janus Aspen International Growth Portfolio.................. 14 43 74 163
Janus Aspen Worldwide Growth Portfolio...................... 13 41 71 156
Neuberger Berman Advisers Management Trust Limited Maturity
Bond Portfolio............................................ 14 43 74 163
Neuberger Berman Advisers Management Trust Partners
Portfolio................................................. 15 46 80 175
Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio...................................... 22 67 114 245
OCC Accumulation Trust Equity Portfolio..................... 15 48 82 179
OCC Accumulation Trust Global Equity Portfolio.............. 17 53 92 200
OCC Accumulation Trust Managed Portfolio.................... 15 45 78 171
OCC Accumulation Trust Small Cap Portfolio.................. 15 47 81 177
Pilgrim VP Growth Opportunities Portfolio................... 15 47 82 178
Pilgrim VP Growth + Value Portfolio......................... 14 44 76 167
Pilgrim VP High Yield Bond Portfolio........................ 14 44 76 167
Pilgrim VP International Value Portfolio.................... 16 50 87 189
Pilgrim VP MagnaCap Portfolio............................... 15 47 82 178
Pilgrim VP MidCap Opportunities Portfolio................... 15 47 82 178
Pilgrim VP Research Enhanced Index Portfolio................ 15 47 82 178
Pilgrim VP SmallCap Opportunities Portfolio................. 15 47 82 178
</TABLE>

8
<PAGE> 18

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

<TABLE>
<CAPTION>
VARIABLE ACCOUNT
ANNUAL EXPENSES
----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RIA RIA RIA RIA
SERIES SERIES SERIES SERIES
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM V.I. Dent Demographic Trends Fund....................... $20 $63 $107 $232
Alger American Growth Portfolio............................. 14 44 76 166
Alger American Leveraged AllCap Portfolio................... 16 48 83 182
Alger American MidCap Growth Portfolio...................... 15 46 79 173
Alger American Small Capitalization Portfolio............... 15 47 82 178
Fidelity VIP Equity-Income Portfolio........................ 12 37 64 140
Fidelity VIP Growth Portfolio............................... 13 40 69 151
Fidelity VIP Money Market Portfolio......................... 9 28 48 107
Fidelity VIP II Asset Manager:
Growth Portfolio.......................................... 13 41 71 156
Fidelity VIP II Contrafund(R) Portfolio..................... 13 40 69 151
Fidelity VIP II Index 500 Portfolio......................... 9 28 49 108
Fidelity VIP II Investment Grade Bond Portfolio............. 12 36 63 138
Fidelity VIP III Growth Opportunities Portfolio............. 13 41 70 154
Janus Aspen Aggressive Growth Portfolio..................... 13 40 70 153
Janus Aspen Growth Portfolio................................ 13 40 70 153
Janus Aspen International Growth Portfolio.................. 14 43 74 163
Janus Aspen Worldwide Growth Portfolio...................... 13 41 71 156
Neuberger Berman Advisers Management Trust Limited Maturity
Bond Portfolio............................................ 14 43 74 163
Neuberger Berman Advisers Management Trust Partners
Portfolio................................................. 15 46 80 175
Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio...................................... 22 67 114 245
OCC Accumulation Trust Equity Portfolio..................... 15 48 82 179
OCC Accumulation Trust Global Equity Portfolio.............. 17 53 92 200
OCC Accumulation Trust Managed Portfolio.................... 15 45 78 171
OCC Accumulation Trust Small Cap Portfolio.................. 15 47 81 177
Pilgrim VP Growth Opportunities Portfolio................... 15 47 82 178
Pilgrim VP Growth + Value Portfolio......................... 14 44 76 167
Pilgrim VP High Yield Bond Portfolio........................ 14 44 76 167
Pilgrim VP International Value Portfolio.................... 16 50 87 189
Pilgrim VP MagnaCap Portfolio............................... 15 47 82 178
Pilgrim VP MidCap Opportunities Portfolio................... 15 47 82 178
Pilgrim VP Research Enhanced Index Portfolio................ 15 47 82 178
Pilgrim VP SmallCap Opportunities Portfolio................. 15 47 82 178
</TABLE>

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

(a) There is no Withdrawal Charge for RIA Series Contracts. 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)."

(b) The Company assesses a $25 charge on reallocations between Sub-Accounts or
to or from the Fixed Accounts after 24 reallocations per Contract Year. The
Company reserves the right to assess a $25 charge on any transfer or to
limit the number of transfers.

(d) Total Variable Account Contract Expenses are an Expense Charge of 0.40%, a
Mortality Charge of 0.85%, and an Administrative Charge of 0.15%, for a
total of 1.40%.

There is a Product Asset Credit, credited to Contract Value every month. The
Product Asset Credit is equal to an annual rate of .80% of the average daily
Variable Account Contract Value. This credit is applied monthly and is added
to the Sub-Accounts of the Variable Account. The net effect of the Product
Asset Credit as applied monthly is that total actual Variable Account
Expenses are .60% rather than 1.40%.

9
<PAGE> 19

(e) The Company or its affiliates may receive compensation from an affiliate or
affiliates of certain of the Funds based upon an annual percentage of the
average net assets held in that Fund by the Company and by certain of the
Company's insurance company affiliates. These amounts are intended to
compensate the Company or the Company's affiliates for administrative,
recordkeeping, and in some cases, distribution, and other services provided
by the Company and its affiliates to Funds and/or the Funds' affiliates.
Payments of such amounts by an affiliate or affiliates of the Funds do not
increase the fees paid by the Funds or their shareholders. The percentage
paid may vary from one fund company to another.

(f) This portfolio had not commenced operations as of December 31, 1999, and
therefore these expenses are estimated.

(g) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds',
or FMR on behalf of certain funds', custodian, credits realized as a result
of uninvested cash balances were used to reduce a portion of each applicable
fund's expenses. Without these reductions, the total operating expenses
presented in the table would have been .57% for Equity-Income Portfolio,
.66% for Growth Portfolio, .67% for Contrafund Portfolio, .71% for Asset
Manager: Growth Portfolio, and .69% for Growth Opportunities Portfolio.

FMR agreed to reimburse a portion of Index 500 Portfolio's expenses during
the period. Without this reimbursement, the Portfolios' management fee,
other expenses and total expenses would have been .24%, .10%, and .34%,
respectively.

(h) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for the
Portfolios. All expenses are shown without the effect of expense offset
arrangements.

(i) Neuberger Berman Advisers Management Trust is comprised of separate
Portfolios, the following of which are available as funding options under
the contract: Limited Maturity Bond Portfolio, Partners Portfolio and
Socially Responsive Portfolio ("Portfolio series"). Unlike the other funding
options available under the contract, each of the Portfolio series invests
all of its net investable assets in AMT Limited Maturity Bond Investments,
AMT Partners Investments and AMT Socially Responsive Investments,
respectively, of Advisers Managers Trust ("Investment series"). The
Investment series in turn, invest directly in securities. For a more
complete discussion of this structure, please see the prospectus for
Neuberger Berman Advisers Management Trust Limited Maturity Bond Portfolio,
Partners Portfolio and Socially Responsive Portfolio. Please note that the
figures reported under "Management Fees" and "Other Expenses" include the
aggregate of (i) the management fees paid by the Investment series, (ii) the
administration fees paid by the Portfolio series, and (iii) all other
expenses in the aggregate for the Investment series and Portfolio series,
respectively.

(j) Neuberger Berman Management Inc. ("NBMI") has undertaken to reimburse the
Socially Responsive Portfolio for certain operating expenses, including the
compensation of NBMI and excluding taxes, interest, extraordinary expenses,
brokerage commissions and transactions costs, that exceed in the aggregate,
1.50% of the average daily net asset value of the Socially Responsive
Portfolio through May 1, 2001. There can be no assurance that this policy
will be continued. See "Expense Limitation" in the Socially Responsive
Portfolio prospectus for further information.

(k) The Management Fees reflect effective management fees after taking into
effect any waiver. Other Expenses are shown net of expense offsets afforded
the Portfolios. Total Investment Fund Annual Expenses for the Equity, Small
Cap and Managed Portfolios are contractually limited by OpCap Advisors so
that their respective annualized operating expenses (net of any expense
offsets) do not exceed 1.00% of average daily net assets. Total Investment
Fund Annual Expenses for the Global Equity Portfolio are limited to 1.25% of
average daily net assets (net of expense offsets).

(l) The investment adviser to the Pilgrim Variable Products Trust has agreed to
reimburse the Growth + Value Portfolio and High Yield Bond Portfolio for any
expenses in excess of 0.80% of each Portfolio's average daily net assets. It
also has agreed to reimburse the Growth Opportunities Portfolio, MagnaCap
Portfolio, MidCap Portfolio, Research Enhanced Index Portfolio, and SmallCap
Opportunities Portfolio for expenses in excess of 0.90%, and the
International Value Portfolio for expenses in excess of 1.00%. In the
absence of these expense reimbursements, the Total Investment Fund Annual
Expenses that would have been paid by each Portfolio during its fiscal year
ended December 31, 1999 would have been: Growth Opportunities Portfolio:
1.09%; Growth + Value Portfolio: 0.97%; High Yield Bond Portfolio: 1.11%;
International Value Portfolio: 1.52%; MagnaCap Portfolio: 1.09%; MidCap
Opportunities Portfolio: 1.09%; Research Enhanced Index Portfolio: 1.26%;
and SmallCap Opportunities Portfolio: 1.09%. Expense reimbursements are
voluntary. There is no assurance of ongoing reimbursement.

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.

10
<PAGE> 20

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., a
publicly-traded holding company incorporated under the laws of the State of
Delaware, whose subsidiaries specialize in the life insurance and related
financial services businesses. 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 1501 Fourth Avenue, Suite
1000, Seattle, Washington 98101-3620. Its Administrative Office is at P.O. Box
5050, Minot, North Dakota 58702-5050.

The Company is a charter member of the Insurance Marketplace Standards
Association ("IMSA"). Companies that belong to IMSA subscribe to a rigorous set
of standards that cover the various aspects of sales and service for
individually sold life insurance and annuities. IMSA members have adopted
policies and procedures that demonstrate a commitment to honesty, fairness and
integrity in all customer contacts involving sales and service of individual
life insurance and annuity products.

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 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.

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.

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 at net asset value. 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.
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. The Contract Owner may also, subject to the limits
discussed below, 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.

There are currently 32 Sub-Accounts, each of which invests in shares of one
of the Funds. The Company reserves the right, subject to compliance with
applicable law, to offer additional Sub-Accounts, each of which could invest in
a new fund with a specified investment objective.

A Contract Owner is limited to participating in a maximum of 16
Sub-Accounts over the lifetime of the Contract. The Contract Owner would not be
required to select the Sub-Accounts in advance, but upon reaching participation
in 16 Sub-Accounts since issue of the Contract, the Contract Owner would only be
able to transfer within the 16 Sub-Accounts already selected and which are still
available under the Variable Account. For example, assume a Contract Owner
selects six Sub-Accounts. Later, the Contract Owner transfers out of all of the
six initial selections and chooses ten different Sub-Accounts, none of which are
the

11
<PAGE> 21

same as the original six selections. The Contract Owner has now used the maximum
selection of 16 Sub-Accounts. The Contract Owner may still allocate Purchase
Payments or transfer Contract Values among any of the 16 Sub-Accounts that were
previously selected. However, the Contract Owner may not allocate funds to the
remaining Sub-Accounts at any time. A Contract Owner may transfer partial or
complete Contract Values from the Variable Account to Fixed Account A for RIA
Series Contracts, at any time.

12
<PAGE> 22

The Funds currently offered are described below.

INVESTMENT FUNDS

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GROWTH
ADVISER/ MONEY FIXED &
FUND GROUP FUND SUBADVISER MARKET INCOME INCOME INTERNATIONAL
<C> <C> <C> <S> <C> <C> <C>

- ----------------------------------------------------------------------------------------------------------------------
AIM Variable AIM V.I. Dent A I M Advisors,
Insurance Demographic Trends Inc./H.S. Dent
Funds, Inc. Fund Advisors, Inc.
Houston, TX
- ----------------------------------------------------------------------------------------------------------------------
The Alger Alger American Growth Fred Alger
American Fund Portfolio Management, Inc.
---------------------------------------------------------------------------------------------------
Alger American Fred Alger
New York, N.Y. Leveraged AllCap Management, Inc.
Portfolio
---------------------------------------------------------------------------------------------------
Alger American MidCap Fred Alger
Growth Portfolio Management, Inc.
---------------------------------------------------------------------------------------------------
Alger American Small Fred Alger
Capitalization Management, Inc.
Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Fidelity Management
Investments(R) Portfolio & Research Company
Boston, Mass. X
---------------------------------------------------------------------------------------------------
VIP Growth Portfolio Fidelity Management
& Research Company
---------------------------------------------------------------------------------------------------
X
VIP Money Market Fidelity Management
Portfolio & Research Company
---------------------------------------------------------------------------------------------------
VIP II Asset Manager: Fidelity Management
Growth Portfolio & Research Company
---------------------------------------------------------------------------------------------------
VIP II Contrafund(R) Fidelity Management
Portfolio & Research Company
---------------------------------------------------------------------------------------------------
X
VIP II Index 500 Fidelity Management
Portfolio & Research Company
---------------------------------------------------------------------------------------------------
X
VIP II Investment Fidelity Management
Grade Bond Portfolio & Research Company
---------------------------------------------------------------------------------------------------
Fidelity VIP III Growth Fidelity Management
Investments(R) Opportunities & Research Company
is a Portfolio
registered
trademark of
FMR Corp.
- ----------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Janus Capital
Aggressive Growth Corporation
Denver, Colo. Portfolio
---------------------------------------------------------------------------------------------------
Aspen Series Growth Janus Capital
Portfolio Corporation
---------------------------------------------------------------------------------------------------
X
Aspen Series Janus Capital
International Growth Corporation
Portfolio
---------------------------------------------------------------------------------------------------
X
Aspen Series Worldwide Janus Capital
Growth Portfolio Corporation
- ----------------------------------------------------------------------------------------------------------------------

<CAPTION>
- -------------- -----------------------------------------------------------------------------------

AGGRESSIVE PRIMARY
FUND GROUP BALANCED GROWTH GROWTH OBJECTIVES INVESTMENTS
<C> <C> <C> <C> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------
AIM Variable Long-term growth Securities of
Insurance of capital companies that are
Funds, Inc. likely to benefit
from changing
Houston, TX X demographic,
economic and
lifestyle trends
- -------------- -----------------------------------------------------------------------------------
The Alger Long-term capital Equity securities
American Fund X appreciation of large companies
-----------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Long-term capital Equity securities
New York, N.Y. X appreciation of companies of any
size
-----------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
X
Long-term capital Equity securities
appreciation within the range of
S&P(R) MidCap 400
Index
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Equity securities
appreciation within the range of
Russell(R) 2000
Growth or S&P(R)
SmallCap 600
Indexes
- -------------- -----------------------------------------------------------------------------------
Fidelity Reasonable Income-producing
Investments(R) income; also equity securities
considers and debt
Boston, Mass. potential for obligations
capital
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Common stocks
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
High level of U.S. dollar-
current income denominated money
consistent with market securities
preservation of
capital and
liquidity
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Maximum total Stocks, bonds, and
return over the short-term and
long term money market
instruments
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Securities of
appreciation companies whose
value the adviser
believes is not
fully recognized by
the public
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Total return that Common stocks of
corresponds to S&P 500
that of S&P 500
Index
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
High current Investment-grade
income consistent intermediate fixed
with preservation securities
of capital
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Fidelity Capital growth Common stocks
Investments(R)
is a
registered
trademark of
FMR Corp. X
- -------------- -----------------------------------------------------------------------------------
Janus Long-term growth Nondiversified
of capital portfolio of common
Denver, Colo. X stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Diversified common
growth stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital Foreign issuers of
growth common stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital Foreign and
growth domestic common
stocks
- -------------- -----------------------------------------------------------------------------------
</TABLE>

13
<PAGE> 23

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
GROWTH
ADVISER/ MONEY FIXED &
FUND GROUP FUND SUBADVISER MARKET INCOME INCOME INTERNATIONAL
<S> <C> <C> <C> <C> <C> <C>

- -----------------------------------------------------------------------------------------------------------------------------
Neuberger Advisers Management Neuberger Berman X
Berman Trust Limited Maturity Management Inc./
Bond Portfolio Neuberger Berman,
New York, N.Y. LLC
---------------------------------------------------------------------------------------------------
Advisers Management Neuberger Berman
Trust Partners Management Inc./
Portfolio Neuberger Berman,
LLC
---------------------------------------------------------------------------------------------------
Advisers Management Neuberger Berman
Trust Socially Management Inc./
Responsive Portfolio Neuberger Berman,
LLC
- ------------------------------------------------------------------------------------------------------------------
OCC OCC Accumulation Trust OpCap Advisors
Equity Portfolio
New York, N.Y.
---------------------------------------------------------------------------------------------------
OCC Accumulation Trust OpCap Advisors X
Global Equity
Portfolio
---------------------------------------------------------------------------------------------------
OCC Accumulation Trust OpCap Advisors
Managed Portfolio
---------------------------------------------------------------------------------------------------
OCC Accumulation Trust OpCap Advisors
Small Cap Portfolio
- ------------------------------------------------------------------------------------------------------------------
Pilgrim Growth Opportunities Pilgrim
Portfolio Investments, Inc.
Phoenix, AZ
---------------------------------------------------------------------------------------------------
Growth + Value Pilgrim Advisors,
Portfolio Inc.*/Navellier
Fund Management,
Inc.
---------------------------------------------------------------------------------------------------
High Yield Bond Pilgrim Advisors, X
Portfolio Inc.*
---------------------------------------------------------------------------------------------------
International Value Pilgrim Advisors, X
Portfolio Inc.*/Brandes
Investment Partners
---------------------------------------------------------------------------------------------------
MagnaCap Portfolio Pilgrim
Investments, Inc.
---------------------------------------------------------------------------------------------------
MidCap Opportunities Pilgrim
Portfolio Investments, Inc.
---------------------------------------------------------------------------------------------------
Research Enhanced Pilgrim Advisors,
Index Portfolio Inc.*/J.P. Morgan
Investment
Management Inc.
---------------------------------------------------------------------------------------------------
SmallCap Opportunities Pilgrim Advisors,
Portfolio Inc.*
- -----------------------------------------------------------------------------------------------------------------------------

<CAPTION>
- -------------- -------------------------------------------------------------------------------------

AGGRESSIVE PRIMARY
FUND GROUP BALANCED GROWTH GROWTH OBJECTIVES INVESTMENTS
<S> <C> <C> <C> <C> <C> <C>
- -------------- -------------------------------------------------------------------------------------
Neuberger Highest available Short-to-
Berman current income intermediate term
consistent with investment-grade
New York, N.Y. liquidity and low debt securities
risk to principal;
total return is a
secondary goal
------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------
X Growth of capital Common stocks of
medium-to-large
capitalization
companies
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Long-term growth of Common stocks of
capital by medium-to-large
investing primarily capitalization
in companies that companies
meet financial and
social criteria
- --------------
OCC X Long-term capital Securities of
appreciation undervalued
New York, N.Y. companies
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
Long-term capital Global investments
appreciation in equity
securities
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Growth of capital Common stocks,
bonds and cash
equivalents
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Capital Equity securities
appreciation of companies under
$1 billion
- --------------
Pilgrim X Long-term capital Common stock of
growth large cap, mid cap,
Phoenix, AZ or small cap
companies
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Capital Equity securities
appreciation from
investing in a
diversified
portfolio of equity
securities
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
High current yield High-yield bonds
and capital
appreciation
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
Long-term capital International
appreciation equities
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Capital growth Common stocks
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Long-term capital Common stocks of
appreciation mid-sized U.S.
companies
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Long-term capital Common stocks
appreciation
--------------------------------------------------------------------------------------------------- ------------
- -------------------------------------------------------------------------
X Long-term capital Common stocks
appreciation
- -------------- -------------------------------------------------------------------------------------
</TABLE>

* Effective April 30, 2000, Pilgrim Advisors, Inc. is being merged into Pilgrim
Investments, Inc., an affiliate of Pilgrim Advisors, Inc.

14
<PAGE> 24

You should read the prospectuses of the Funds for more detailed information
and particularly, a more thorough explanation of investment objectives of the
Funds. THE FUND PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE CONCERNING THE ALLOCATION OF PURCHASE PAYMENTS OR REALLOCATIONS AMONG THE
SUB-ACCOUNTS. There is no assurance that any Fund will achieve its investment
objective(s). There is a possibility that one Fund might become liable for any
misstatement, inaccuracy or incomplete disclosure in another Fund's prospectus.

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.

ADDITION, DELETION OR SUBSTITUTION OF FUND SHARES
The Company, in its sole discretion, 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. 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. Any new Sub-Accounts may be made
available to existing Contract Owners on a basis to be determined by the
Company.

- The Company may, in its sole discretion, eliminate one or more
Sub-Accounts, or close Sub-Accounts to new premium or transfers, if
marketing, tax considerations or investment conditions warrant.

- 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, if it deems it to be in the best interests of Contract
Owners and Annuitants:

-- manage the Variable Account as a management investment company under
the 1940 Act;

-- deregister the Variable Account under the 1940 Act if registration is
no longer required;

-- combine the Variable Account with other separate account(s) of the
Company; or

-- reallocate assets of the Variable Account to another Separate Account.

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

- Make any changes required by the 1940 Act.

15
<PAGE> 25

- 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. There is no
Withdrawal Charge for withdrawals from the Contracts.

Withdrawals requested because of the death of the Annuitant will be paid to
the Beneficiary(ies) designated in the Contract, or if none, to the Annuitant's
estate. All other withdrawals requested hereunder will be paid to the Annuitant.

Total or partial withdrawals may be subject to income taxes and a 10% tax
penalty. You should consult your tax advisor before making a withdrawal.

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.")

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

ANNUAL CONTRACT CHARGE

There is no Annual Contract Charge for the Contracts.

MORTALITY RISK CHARGE
The Variable Annuity Payouts made to Annuitants will vary in accordance
with the investment performance of the Sub-Accounts 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.") 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.

16
<PAGE> 26

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. 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.

PRODUCT ASSET CREDIT

The Company applies a Product Asset Credit. The Product Asset Credit is
equal to an annual rate of .80% of the average daily Variable Account Contract
Value. This credit is applied monthly and is added to the Sub-Accounts of the
Variable Account.

SUFFICIENCY OF CHARGES

Any loss resulting from distribution expenses incurred in connection with
the offering of the Contracts 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.

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 the 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 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

- the use of mass enrollment procedures,

- the performance of administrative or enrollment functions by an employer,

- the use by an employer of automated techniques in submitting Purchase
Payments or information related to Purchase Payments on behalf of its
employees, or

- 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.

17
<PAGE> 27

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 in Minot, North Dakota, and its telephone number is 1-877-884-5050.

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 RIA Series Contracts which are Qualified Plans, the Company will accept
periodic, single sum, rollover and transfer Purchase Payments as permitted by
the Code. For non-qualified RIA Series Contracts, the Company will accept
periodic and single sum Purchase Payments, as well as amounts transferred under
Section 1035 of the Code. The minimum initial Purchase Payment the Company will
accept under the Contracts is $25,000 and subsequent payments may not be less
than $5,000.

The Company may choose not to accept any subsequent Purchase Payment under
the RIA 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.

If you are purchasing the Contract through a Tax Qualified Plan, including
IRAs and Roth IRAs, you should carefully consider the costs and benefits of the
Contract (including annuity income benefits) before purchasing the Contract,
since the tax favored arrangement itself provides for tax sheltered growth.

REVOCATION
The Contract Owner may revoke a Contract by sending the Contract and
written notice of revocation to the Company's Administrative Office in Minot,
North Dakota, 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, and the Company will
refund the Contract Value unless you reside in a state requiring return of
Purchase Payment.

For Contracts issued in states that require that we refund all Purchase
Payments upon the revocation of a Contract during the free look period, we will
credit the initial Purchase Payment and any Purchase Payments received prior to
the Initial Purchase Payment Transfer Date to the Fidelity VIP Money Market Sub-
Account. If you cancel your Contract during the free look period, the Company
will return your Purchase Payments or the Contract Value, whichever is larger.

18
<PAGE> 28

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 C. (See Appendix A.)

For RIA Series Contracts issued in states that require that we refund all
purchase payments upon the revocation of the Contract during the free look
period, on the Initial Purchase Payment Transfer Date, we will transfer the
Contract Value in the Fidelity Money Market Sub-Account to the Fixed Account and
the Sub-Accounts of the Variable Account as the Contract Owner designated on the
Contract application. After the Initial Purchase Payment Transfer Date, we
credit payments to the Fixed Account and Sub-Accounts of the Variable Account as
designated by the Contract Owner on the Contract application.

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, the 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.

19
<PAGE> 29

(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 determined as follows:

As of the Death Benefit Valuation Date, the Death Benefit will be the
greater of:

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

(b) The sum of the Purchase Payments received by the Company under the
Contract, less any proportional amount of any withdrawals, proportional amounts
used to purchase annuity payouts, and any Outstanding Loan Balance.

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.")

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 canceled.

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.")

No Withdrawal Charge will be made on full or partial withdrawals.

Partial withdrawals must be at least $1,000 and no partial withdrawal may
cause the Contract Value to fall below the greater of:

- $25,000; and

- the Outstanding Loan Balance divided by 85%.

No withdrawals are permitted from Fixed Account C.

20
<PAGE> 30

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.

No interest will accrue on amounts represented by uncashed distribution or
redemption checks.

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:

- the entire Withdrawal Value is withdrawn on or before the Start Date, or

- 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.") 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).") 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, if applicable, are not waived on Systematic Withdrawals. (See
"Withdrawal Charge (Contingent Deferred Sales Charge).") Systematic Withdrawals
may be discontinued by the Contract Owner at any time by notifying the Company
in writing. The amount of each Systematic Withdrawal must be at least $300.

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
advisor before requesting any Systematic Withdrawal. (See "Taxation of
Annuities.")

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.

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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. 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.

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. No loans are permitted from Fixed Account C. A
loan document can be obtained by writing to the Company's Administrative Office
in Minot, North Dakota.

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 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.")

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 advisor should be consulted before obtaining a
Contract loan.

REALLOCATIONS
Prior to the Start Date, the Contract Owner may transfer Variable Account
Contract Value among 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 Fixed Account A. 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 Fixed Account A to a Sub-Account.

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<PAGE> 32

Fixed Account C Contract Value may only be transferred to one or more
Sub-Accounts, and such transfers may only be made by Dollar Cost Averaging
Reallocations. Reallocations from Fixed Account C to Fixed Account A or from
Fixed Account A or the Variable Account to Fixed Account C are not permitted.

For purposes of this restriction, reallocations pursuant to Telephone
Reallocations, Automatic Reallocations and Dollar Cost Averaging Reallocations
do not constitute reallocations, and multiple reallocations on a single day
currently constitute a single reallocation. For these types of reallocations,
the Company reserves the right to charge a fee not to exceed $25 per
reallocation and to limit the number of reallocations.

Currently, there are four methods by which a Contract Owner may make the
reallocations described above: in writing, by telephone, through Automatic
Reallocations and by Dollar Cost Averaging. Currently, there is a $25 charge for
each reallocation in excess of 24 per Contract Year. For purposes of this
restriction, Currently, reallocations pursuant to Telephone Reallocations,
Automatic Reallocations and Dollar Cost Averaging Reallocations do not
constitute reallocations, and multiple reallocations on a single day currently
constitute a single reallocation. The Company reserves the right to charge a fee
not to exceed $25 per reallocation for any reallocation and to limit the number
of reallocations.

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 any available Fixed Account other than Fixed Account C. 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.

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 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 Company's Administrative Office. An Automatic Reallocation
application can be obtained by writing to the Company's Administrative Office in
Minot, North Dakota. The Contract Owner must indicate on the application the
applicable Sub-Accounts and

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<PAGE> 33

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 Administrative
Office in Minot, North Dakota. 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 C 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 or Fixed Account C
Contract Value to any one or more other Sub-Accounts or to any available Fixed
Account other than Fixed Account C. No reallocations to Fixed Account C are
permitted under this service. Reallocations of this type from Fixed Account A
may be made on a monthly, quarterly, semi-annual or annual basis. Reallocations
from Fixed Account C may be made only on a monthly 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 or Fixed Account C.

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 any
other available Fixed Account any time before the Start Date. After the Start
Date, amounts supporting Fixed Annuity Payouts cannot be reallocated.

Reallocations of Fixed Account C Contract Values are subject to the
following conditions:

- Reallocations from Fixed Account C must begin within 30 days of deposit,
and must be substantially equal payments over a 12 month period.
Reallocation from Fixed Account C will be transferred any time before the
29th day of each month. You may direct us on which day you want the
reallocation.

- If additional Purchase Payment(s) are received for allocation to Fixed
Account C, the balance of Fixed Account C will be adjusted to reflect the
subsequent payment(s) and reallocations will be recalculated based on the
remaining 12 month period.

- You may change the Variable Sub-Account(s) receiving Fixed Account C
reallocations with written notice prior to the Reallocation Date. Only
one reallocation of Fixed Account C shall take place at any one time.

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<PAGE> 34

- If reallocations from Fixed Account C are discontinued prior to the end
of the 12 month term, the remaining balance of Fixed Account C will be
reallocated to Fixed Account A.

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

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

ASSIGNMENTS
Except for Section 457 plans, 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. With respect to Section
457 plans, for such plans maintained by tax exempt organizations, all rights and
benefits remain the exclusive property of the organization and are subject to
its general creditors. For such plans maintained by state or local governments,
however, all plan assets are maintained for the exclusive benefit of plan
participants in accordance with Section 457(g). 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 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 Annuitant'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
Administrative Office in Minot, North Dakota.

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 earliest Start Date is the first
business day of the first month after issue. If the Start Date selected

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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.
If the Contract Owner does not select a Start Date, the Start Date will be the
Contract Owner's 85th birthday. The latest Start Date is the Contract Owner's
99th birthday.

The Contract Owner may change the Start Date by giving written notice
received by the Company at least 30 days before the Start Date currently in
effect and the new Start Date. The new Start Date must satisfy the requirements
for a Start 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.")

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 not a 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.

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<PAGE> 36

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
canceled. 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 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 upon the 1983 Mortality Table
a and a 3% interest rate. Unisex rates will apply for Contracts issued under
Qualified Plans and will be derived by calculating the weighted average of 15%
male mortality and 85% female mortality. Sex-distinct rates will apply for non-
qualified 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.")

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. Conversely, if it is less, then
the payouts will decrease.

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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)" and "Taxation of Annuities.") 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. Any
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.

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"). Generally, a Qualified Contract
is designed for use where 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, 408A 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 age and tax and
employment status of the individual concerned, the type of retirement plan, 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 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.

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").

No attempt is made to consider any applicable state or other tax laws.

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,

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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 a variable account may be.
The number of underlying investment options available under a variable contract
may also be relevant in determining whether the product qualifies for the
desired tax treatment. It is possible that if additional rules, regulations or
guidance in this regard are issued, the Contract may need to be modified to
comply with such additional rules or 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 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.

Except as provided in the Code, 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.

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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 Transfer Series, Flex Series or Plus Series
Contracts because of the death of a Contract Owner or an Annuitant. For Retail
Series Contracts, amounts may be distributed from a Contract because of the
death of a Contract Owner. 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:

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

- 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);

- Attributable to the taxpayer becoming disabled;

- 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;

30
<PAGE> 40

- 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

- 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.

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. Some recipients may elect
not to have tax withheld from distributions. 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

31
<PAGE> 41

Contracts comply with applicable law. Brief descriptions follow of the various
types of Qualified Plans in connection with a Contract.

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 permits 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
Sections 408 and 408A of the Code permit eligible individuals to contribute
to an individual retirement program known as an "Individual Retirement Annuity"
or "IRA." All 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.

TRADITIONAL IRAS. Section 408 governs "traditional" IRAs. Subject to
certain income limits, contributions to a traditional IRA may be tax deductible.
Distributions from a traditional IRA, if attributable to deductible
contributions, are generally subject to income tax. Distributions must begin in
the year the contract owner reaches age 70 1/2. Distributions from certain other
types of qualified retirement plans may be "rolled over" on a tax-deferred basis
into a traditional IRA.

ROTH IRAS. Section 408A of the Code permits individuals to contribute to a
special type of IRA called a Roth IRA. The IRA must be designated as a "Roth
IRA" at the time it is established, in accordance with IRS rules. Contributions
to a Roth IRA are not deductible. If certain conditions are met, qualified
distributions from a Roth IRA are tax free. Subject to special limitations, a
distribution from a traditional IRA or another Roth IRA may be rolled over to a
Roth IRA.

Sales of a Contract for use with traditional or Roth 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 IRS 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.

SECTION 457 PLANS
Code Section 457 allows tax exempt organizations and state and local
governments to establish deferred compensation plans that allow individuals who
perform services for them as employees or independent contractors to
participate. Plans maintained by tax exempt organizations require that all
rights and benefits provided thereunder remain the property of the employer,
subject to its general creditors. Plans maintained by state and local
governments, however, must be maintained for the exclusive benefit of plan
participants. Section 457 plans are subject to rules and limits on the timing of
deferrals and amount that may be contributed. The Code also regulates when
distributions may (or must) commence. Sale of a Contract for use with Section
457 plans may be subject to special IRS requirements. The IRS has not reviewed
the Contract for qualification purposes.

32
<PAGE> 42

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.

POSSIBLE CHANGES IN TAXATION
In past years, legislation has been proposed that would have adversely
modified the Federal taxation of certain 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).

Although the likelihood of legislative changes is uncertain, there is
always the possibility that the tax treatment of the Contract 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). You should
consult a tax adviser with respect to legislative developments and their effect
on the Contract.

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.

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.

33
<PAGE> 43

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 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. 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 Company pays no commissions for the sale of the
Contracts.

REPORTS TO CONTRACT OWNERS
The Company will mail to the Contract Owner, at the last known address of
record at the Company's Administrative Office in Minot, North Dakota, 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.

To reduce expenses, only one copy of most financial reports and
prospectuses, including reports and prospectuses for the Investment Funds, will
be mailed to your household, even if you or other persons in your household have
more than one Contract issued by the Company or an affiliate. Call (877)
884-5050 if you need additional copies of financial reports, prospectuses, or
annual and semi-annual reports, or if you would like to receive one copy for
each Contract in all future mailings.

LEGAL PROCEEDINGS
The Variable Account is not a party to any pending legal proceedings. The
Company is a defendant in various lawsuits in connection with the normal conduct
of its insurance operations. Some of the claims seek to be granted class action
status and many of the claims seek both compensatory and punitive damages. In
the opinion of management, the ultimate resolution of such litigation will not
have a material adverse impact to the financial position of the Company.

EXPERTS

The annual financial statements of Separate Account One as of December 31,
1999 and for each of the two years then ended and the annual statutory basis
financial statements of Northern Life Insurance Company as of and for the years
ended December 31, 1999 and 1998, which are contained in the Statement of
Additional Information, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are included therein, and have been
so included in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing.

FURTHER INFORMATION
A Registration Statement under the Securities Act of 1933 has been filed
with the SEC, 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 SEC's principal office in Washington, D.C.,
upon payment of the fee prescribed by the SEC, 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 SEC for a complete statement of the provisions thereof.

34
<PAGE> 44

SEPARATE ACCOUNT ONE
STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

<TABLE>
<S> <C>
Introduction................................................ SAI- 2
Custody of Assets........................................... SAI- 3
Experts..................................................... SAI- 3
Distribution of the Contracts............................... SAI- 3
Calculation of Yields and Total Returns..................... SAI- 3
Company Holidays............................................ SAI-13
Financial Statements........................................ SAI-14
</TABLE>

If you would like to receive a copy of the Separate Account One Advantage
RIA(SM) Annuity Statement of Additional Information, please call 1-877-884-5050
or return this request to:

RELIASTAR SERVICE CENTER
P.O. BOX 5050
MINOT, NORTH DAKOTA 58702-5050

Your name
- --------------------------------------------------------------------------------

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

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

Please send me a copy of the Separate Account One Advantage RIA(SM) Annuity
Statement of Additional Information.

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

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.
35
<PAGE> 45

APPENDIX A

THE FIXED ACCOUNTS

Contributions and reallocations to Fixed Account A and Fixed Account C
(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. 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%. For
RIA Series Contracts, any interest rate in effect when an amount is allocated or
reallocated to the Fixed Accounts is guaranteed for that amount for at least 12
months, and subsequent interest rates for that amount will not be changed more
often than once every 12 months.

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,

A-1
<PAGE> 46

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.")

A-2
<PAGE> 47

APPENDIX B

PERFORMANCE INFORMATION AND CONDENSED FINANCIAL INFORMATION

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 VIP 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 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 VIP 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.

Total returns generally will be presented in "standardized" format. This
means, among other things, that performance will be shown from the date of
inception of the Variable Account, or, if later, the inception date of the
applicable Investment Fund. In some instances, "non-standardized" returns may be
shown from prior to the inception date of the Variable Account. Non-standardized
information will be accompanied by standardized information.

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

B-1
<PAGE> 48

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.

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.

B-2
<PAGE> 49

The following table shows, for each Sub-Account of the Variable Account,
the value of a Sub-Account Accumulation Unit as it is invested in portfolios at
the dates shown, and the total number of Sub-Account Accumulation Units
outstanding at the end of each period:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
----------- ----------- ----------- ----------- -----------
1995 1996 1997 1998 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Dent Demographic Trends Fund
(From May 1, 2000)
Beginning of period................ N/A N/A N/A N/A N/A
End of period...................... N/A N/A N/A N/A N/A
Units outstanding at end of
period.......................... N/A N/A N/A N/A N/A
THE ALGER AMERICAN FUND:
(All Sub-Accounts from October 20,
1995)
Alger American Growth Portfolio
Beginning of period................ $10.0000 $10.0072 $11.1842 $13.8684 $20.2501
End of period...................... $10.0072 $11.1842 $13.8684 $20.2501 $26.7070
Units outstanding at end of
period.......................... 7,531 162,852 402,925 958,685 2,319,442
Alger American Leveraged AllCap
Portfolio
Beginning of period................ $10.0000 $10.2636 $11.3381 $13.3809 $20.8260
End of period...................... $10.2636 $11.3381 $13.3809 $20.8260 $36.5684
Units outstanding at end of
period.......................... 3,864 130,393 260,380 491,436 1,165,393
Alger American MidCap Growth
Portfolio
Beginning of period................ $10.0000 $ 9.8937 $10.9156 $12.3791 $15.9059
End of period...................... $ 9.8937 $10.9156 $12.3791 $15.9059 $20.6802
Units outstanding at end of
period.......................... 2,208 227,029 405,580 590,794 696,730
Alger American Small Capitalization
Portfolio
Beginning of period................ $10.0000 $ 9.8255 $10.0929 $11.0864 $12.6301
End of period...................... $ 9.8255 $10.0929 $11.0864 $12.6301 $17.8621
Units outstanding at end of
period.......................... 9,498 261,902 527,947 751,967 885,257
FIDELITY VARIABLE INSURANCE PRODUCTS
FUND (VIP):
(All Sub-Accounts from October 20,
1995)
VIP Equity-Income Portfolio
Beginning of period................ $10.0000 $10.7172 $12.0764 $15.2559 $16.7931
End of period...................... $10.7172 $12.0764 $15.2559 $16.7931 $17.6078
Units outstanding at end of
period.......................... 3,922 370,036 1,040,329 1,850,470 2,145,169
VIP Growth Portfolio
Beginning of period................ $10.0000 $ 9.0237 $11.1104 $13.5286 $18.6009
End of period...................... $ 9.8237 $11.1104 $13.5286 $18.6009 $25.2203
Units outstanding at end of
period.......................... 5,112 210,258 624,734 1,117,355 2,139,958
VIP Money Market Portfolio
Beginning of period................ $10.0000 $10.0743 $10.4712 $10.8926 $11.3294
End of period...................... $10.0743 $10.4712 $10.8926 $11.3294 $11.7504
Units outstanding at end of
period.......................... N/A 104,844 446,458 605,376 1,144,601
</TABLE>

B-3
<PAGE> 50

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
----------- ----------- ----------- ----------- -----------
1995 1996 1997 1998 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FIDELITY VARIABLE INSURANCE PRODUCTS
FUND II (VIP II):
VIP II Asset Manager: Growth
Portfolio
(From October 20, 1995)
Beginning of period................ $10.0000 $10.3997 $12.2902 $15.1675 $17.5847
End of period...................... $10.3997 $12.2982 $15.1675 $17.5847 $19.9860
Units outstanding at end of
period.......................... 6,432 58,201 293,160 652,013 914,250
VIP II Contrafund(R) Portfolio
(From October 20, 1995)
Beginning of period................ $10.0000 $10.2935 $12.3119 $15.0718 $19.3181
End of period...................... $10.2935 $12.3119 $15.0718 $19.3181 $23.6700
Units outstanding at end of
period.......................... 7,417 314,103 1,124,760 2,090,469 3,267,496
VIP II Index 500 Portfolio
(From October 20, 1995)
Beginning of period................ $10.0000 $10.5862 $12.8201 $16.7757 $21.2285
End of period...................... $10.5862 $12.8201 $16.7757 $21.2285 $25.2271
Units outstanding at end of
period.......................... 702 231,904 1,310,992 3,336,587 4,831,869
VIP II Investment Grade Bond
Portfolio
(From April 30, 1999)
Beginning of period................ N/A N/A N/A N/A N/A
End of period...................... N/A N/A N/A N/A $ 9.7937
Units outstanding at end of
period.......................... N/A N/A N/A N/A 222,858
FIDELITY VARIABLE INSURANCE PRODUCTS
FUND III (VIP III):
(From January 1, 1999)
VIP III Growth Opportunities
Portfolio
Beginning of period................ N/A N/A N/A N/A N/A
End of period...................... N/A N/A N/A N/A $10.0435
Units outstanding at end of
period.......................... N/A N/A N/A N/A 337,766
JANUS ASPEN SERIES:
(All Sub-Accounts From August 8,
1997)
Aggressive Growth Portfolio
Beginning of period................ N/A N/A $10.0000 $10.8993 $14.4299
End of period...................... N/A N/A $10.8993 $14.4299 $32.0747
Units outstanding at end of
period.......................... N/A N/A 17,506 143,611 868,257
Growth Portfolio
Beginning of period................ N/A N/A $10.0000 $10.1307 $13.5522
End of period...................... N/A N/A $10.1307 $13.5522 $19.2421
Units outstanding at end of
period.......................... N/A N/A 82,286 662,697 1,788,564
International Growth Portfolio
Beginning of period................ N/A N/A $10.0000 $ 9.5720 $11.0658
End of period...................... N/A N/A $ 9.5720 $11.0658 $19.8902
Units outstanding at end of
period.......................... N/A N/A 81,884 275,637 473,654
Worldwide Growth Portfolio
Beginning of period................ N/A N/A $10.0000 $ 9.7818 $12.4357
End of period...................... N/A N/A $ 9.7818 $12.4357 $20.1668
Units outstanding at end of
period.......................... N/A N/A 295,875 2,066,481 4,030,342
</TABLE>

B-4
<PAGE> 51

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
----------- ----------- ----------- ----------- -----------
1995 1996 1997 1998 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NEUBERGER BERMAN AMT:
Limited Maturity Bond Portfolio
(From August 8, 1997)
Beginning of period................ N/A N/A $10.0000 $10.1973 $10.4971
End of period...................... N/A N/A $10.1973 $10.4971 $10.5041
Units outstanding at end of
period.......................... N/A N/A 22,029 210,709 407,142
Partners Portfolio
(From August 8, 1997)
Beginning of period................ N/A N/A $10.0000 $10.2686 $10.5521
End of period...................... N/A N/A $10.2686 $10.5521 $11.1723
Units outstanding at end of
period.......................... N/A N/A 255,773 1,582,048 1,479,974
Socially Responsive Portfolio
(From January 1, 1999)
Beginning of period................ N/A N/A N/A N/A N/A
End of period...................... N/A N/A N/A N/A $11.3827
Units outstanding at end of
period.......................... N/A N/A N/A N/A 32,883
OCC ACCUMULATION TRUST:
(All Sub-Accounts From August 8,
1997)
Equity Portfolio
Beginning of period................ N/A N/A $10.0000 $10.6410 $11.7375
End of period...................... N/A N/A $10.6410 $11.7375 $11.8684
Units outstanding at end of
period.......................... N/A N/A 45,654 227,143 281,367
Global Equity Portfolio
Beginning of period................ N/A N/A $10.0000 $ 9.4593 $10.5673
End of period...................... N/A N/A $ 9.4593 $10.5673 $13.1847
Units outstanding at end of
period.......................... N/A N/A 18,968 70,138 86,458
Managed Portfolio
Beginning of period................ N/A N/A $10.0000 $10.0801 $10.6480
End of period...................... N/A N/A $10.0801 $10.6480 $11.0246
Units outstanding at end of
period.......................... N/A N/A 274,773 1,659,488 1,595,696
Small Cap Portfolio
Beginning of period................ N/A N/A $10.0000 $10.1959 $ 9.1466
End of period...................... N/A N/A $10.1959 $ 9.1466 $ 8.8541
Units outstanding at end of
period.......................... N/A N/A 48,630 252,954 309,634
PILGRIM VARIABLE PRODUCTS TRUST:
Pilgrim VP Growth Opportunities
Portfolio
(From May 1, 2000)
Beginning of period................ N/A N/A N/A N/A N/A
End of period...................... N/A N/A N/A N/A N/A
Units outstanding at end of
period.......................... N/A N/A N/A N/A N/A
Pilgrim VP Growth + Value Portfolio
(From October 20, 1995)
Beginning of period................ $10.0000 $10.1010 $12.2601 $13.8613 $16.3103
End of period...................... $10.1010 $12.2601 $13.8613 $16.3103 $31.3606
Units outstanding at end of
period.......................... 1,068 318,138 1,118,716 1,333,885 1,501,434
</TABLE>

B-5
<PAGE> 52

- The Sub-Accounts investing in The Alger American Fund, Fidelity Variable
Insurance Products Fund, Fidelity Variable Insurance Products Fund II and
Pilgrim Variable Products Trust Growth + Value Portfolio, Research
Enhanced Index Portfolio, and Small Cap Opportunities Portfolio were not
available through the Variable Account prior to 1995.

- The Sub-Accounts investing in the Janus Aspen Series, Neuberger Berman
AMT Limited Maturity Bond Portfolio and Partners Portfolio, the Pilgrim
Variable Products Trust High Yield Bond Portfolio, the Pilgrim Variable
Products Trust International Value Portfolio and OCC Accumulation Trust
were not available through the Variable Account prior to August 8, 1997.

- The Sub-Accounts investing in the Fidelity Variable Insurance Products
Fund III and Neuberger Berman AMT Socially Responsive Portfolio were not
available through the Variable Account prior to January 1, 1999.

- The Sub-Accounts investing in the Fidelity VIP II Investment Grade Bond
Portfolio were not available through the Variable Account prior to April
30, 1999.

B-6
<PAGE> 53

- The Sub-Accounts investing in the AIM V.I. Dent Demographic Trends Fund
and the Pilgrim Variable Products Trust Growth Opportunities Portfolio,
MagnaCap Portfolio, and MidCap Opportunities Portfolio were not available
through the Variable Account prior to May 1, 2000.

- The Pilgrim Variable Products Trust Small Cap Opportunities Portfolio
(formerly the Northstar Galaxy Trust Emerging Growth Portfolio) operated
under an investment objective of seeking income balanced with capital
appreciation from inception through November 8, 1998, when the investment
objective was modified to seeking long-term capital appreciation. The
Pilgrim Variable Products Trust Research Enhanced Index Portfolio
(formerly the Northstar Galaxy Trust Multi-Sector Bond Portfolio)
operated under an investment objective of seeking current income while
preserving capital through April 29, 1999, when the investment objective
was modified to seeking long-term capital appreciation.

B-7
<PAGE> 54

STATEMENT OF ADDITIONAL INFORMATION
FOR NORTHERN LIFE
ADVANTAGE RIA(SM) ANNUITY

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

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 Prospectuses dated April 3, 2000 (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 the Company's Service Center at P.O. Box
5050, Minot, North Dakota 58702-5050, by calling 1-877-884-5050, or 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

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Introduction................................................ SAI- 2
Custody of Assets........................................... SAI- 3
Experts..................................................... SAI- 3
Distribution of the Contracts............................... SAI- 3
Calculation of Yields and Total Returns..................... SAI- 3
Company Holidays............................................ SAI-13
Financial Statements........................................ SAI-14
</TABLE>

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

The date of this Statement of Additional Information is April 3, 2000.

SAI-1
<PAGE> 55

INTRODUCTION
The Individual Deferred Variable/Fixed Annuity Contracts described in the
Prospectus (the "RIA Series Contracts") 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" in 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 any available Fixed Account which for RIA Series Contracts includes Fixed
Account A and/or Fixed Account C (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
("Funds"). The Funds currently are:

- The AIM V.I. Dent Demographic Trends Fund of the AIM Variable Insurance
Funds, Inc., which is managed by A I M Advisors, Inc. with the assistance
of H.S. Dent Advisors, Inc. as sub-adviser;

- the Alger American Growth Portfolio, Alger American Leveraged AllCap
Portfolio, Alger American MidCap Growth Portfolio and Alger American
Small Capitalization Portfolio of The Alger American Fund which are
managed by Fred Alger Management, Inc.;

- the VIP Equity-Income Portfolio, VIP Growth Portfolio, and VIP Money
Market Portfolio of the Variable Insurance Products Fund, VIP II Asset
Manager: Growth Portfolio, VIP II Contrafund(R) Portfolio, VIP II Index
500 Portfolio and VIP II Investment Grade Bond Portfolio of the Variable
Insurance Products Fund II, and VIP III Growth Opportunities Portfolio of
the Variable Insurance Products Fund III, all of which are managed by
Fidelity Management & Research Company;

- the Aggressive Growth Portfolio, Growth Portfolio, International Growth
Portfolio and Worldwide Growth Portfolio of the Janus Aspen Series which
are managed by Janus Capital Corporation;

- the Limited Maturity Bond Portfolio, Partners Portfolio and Socially
Responsive Portfolio of the Neuberger Berman Advisers Management Trust,
which are managed by Neuberger Berman Management Inc. with assistance of
Neuberger Berman, LLC as sub-adviser;

- the Equity Portfolio, Global Equity Portfolio, Managed Portfolio and
Small Cap Portfolio of the OCC Accumulation Trust which are managed by
OpCap Advisors, a subsidiary of Oppenheimer Capital.

- the Growth + Value Portfolio, High Yield Bond Portfolio, International
Value Portfolio, MidCap Opportunities Portfolio, and SmallCap
Opportunities Portfolio for the Pilgrim Variable Products Trust which are
managed by Pilgrim Advisors, Inc.; * Growth Opportunities Portfolio,
MagnaCap Portfolio and Research Enhanced Index Portfolio of the Pilgrim
Variable Products Trust which are managed by Pilgrim Investments, Inc.;
the Growth + Value Portfolio is sub-advised by Navellier Fund Management,
Inc., the International Value Portfolio is sub-advised by Brandes
Investment Partners, and the Research Enhanced Index Portfolio is
sub-advised by J.P. Morgan Investment Management Inc.

Purchase Payments allocated to any available Fixed Account, which may
include Fixed Account A or Fixed Account C, 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 any
available Fixed Accounts, which may include Fixed Account A and Fixed Account C,
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.)

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

* Effective April 30, 2000, Pilgrim Advisors, Inc. is being merged into Pilgrim
Investments, Inc., an affiliate of Pilgrim Advisors, Inc.

SAI-2
<PAGE> 56

CUSTODY OF ASSETS
The Company, whose address appears on the cover of the Prospectus,
maintains custody of the assets of the Variable Account. As Custodian, the
Company holds cash balances for the Variable Account pending investment in the
Investment Funds or distribution. The Investment Fund shares owned by the
Sub-accounts are reflected only on the records of the Funds and are not issued
in certificated form.

EXPERTS

The financial statements as of December 31, 1999 and for each of the two
years then ended of Separate Account One and the statutory basis financial
statements of Northern Life Insurance Company as of and for the two years ended
December 31, 1999 and 1998, which are included in this Statement of Additional
Information, have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their reports which are included herein, and have been so included
in reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.

DISTRIBUTION OF THE CONTRACTS
The RIA Contracts will be distributed by Washington Square Securities, Inc.
("WSSI"), the principal underwriter which is an affiliate of the Company. 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.

No fees have been paid to WSSI by the Company in connection with the RIA
Series Contracts, as they were not available prior to April 3, 2000.

The offering of the RIA Series Contracts is continuous.

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

No deduction for a sales charge is made from the Purchase Payments for the
RIA Series Contracts. The method used to determine the amount of such charges
assessed by the Company is described in the Prospectus under the heading
"Charges Made By The Company." There is no difference in the amount of any of
the charges described in the Prospectus as between RIA Series Contracts
purchased by members of the public as individuals or groups, and RIA Series
Contracts purchased by any class of individuals, such as officers, directors or
employees of the Company or of the Principal Underwriter.

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.

VIP 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 VIP 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

SAI-3
<PAGE> 57

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) Administration
Charge; and 2) the Mortality and Expense Risk Charges offset by the Product
Asset Credit. Current Yield will be calculated according to the following
formula:

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

Where:

<TABLE>
<S> <C> <C>
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.
</TABLE>

The current yield of the sub-account for the seven day period ended
December 31, 1999 was 5.67%.

The RIA Series Contracts were not available through the Sub-Account as of
December 31, 1999. Therefore, these yields are based on yields experienced by
other contracts issued through the Sub-Account.

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:

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

Where:

<TABLE>
<S> <C> <C>
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.
</TABLE>

The effective yield of the sub-account for the seven day period ended
December 31, 1999 was 5.83%.

The RIA Series Contracts were not available through the Sub-Account as of
December 31, 1999. Therefore, these yields are based on yields experienced by
other contracts issued through the Sub-Account.

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 VIP
Money Market Portfolio.

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 VIP Money Market Portfolio, the types and quality of
portfolio securities held by VIP Money Market Portfolio and the VIP 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)

SAI-4
<PAGE> 58

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 Mortality and Expense Risk Charges, offset by the
Product Asset Credit. 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:

Yield = 2 X [(((NI -- ES)/(U X UV)) + 1) 6 -- 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 Pilgrim Variable Products Trust High Yield
Bond Portfolio Sub-Account for the month ended December 31, 1999 was 9.26%.

The annualized yield for the Neuberger Berman Advisers Management Trust
Limited Maturity Bond Portfolio Sub-Account for the month ended December 31,
1999 was 5.35% for the RIA Series Contracts.

The annualized yield for the VIP II Investment Grade Bond Portfolio
Sub-Account for the month ended December 31, 1999 was 5.19%.

The RIA Series Contracts were not available through the Sub-Account as of
December 31, 1999. Therefore, these yields are based on yields experienced by
other contracts issued through the Sub-Account.

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.

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 any withdrawal charges. There
is no withdrawal charge for RIA Series Contracts.

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, excluding the money market
Sub-Account.

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.
SAI-5
<PAGE> 59

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 1.25% Mortality and Expense Risk Charges and the .15% Administration
Charge as offset by the Product Asset Credit of .80%. 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. There is no Withdrawal Charge for RIA Series
Contracts. The total return will then be calculated according to the following
formula:

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

Following are the Average Annual Total Returns for Sub-Accounts as of
December 31, 1999.

<TABLE>
<CAPTION>
FOR THE 1-YEAR FOR THE PERIOD FROM
PERIOD ENDED DATE OF INCEPTION OF
12/31/99 SUB-ACCOUNT TO 12/31/99
-------------- -----------------------
RIA.S. RIA.S.
-------------- -----------------------
<S> <C> <C>
AIM V.I. Dent Demographic Trends Fund..................... N/A N/A
(Sub-Account Inception: 5/1/00)
Alger American Growth Portfolio........................... 32.94% 27.48%
(Sub-Account Inception: 10/20/95)
Alger American Leveraged AllCap Portfolio................. 77.00% 37.42%
(Sub-Account Inception: 10/20/95)
Alger American MidCap Growth Portfolio.................... 31.06% 19.92%
(Sub-Account Inception: 10/20/95)
Alger American Small Capitalization Portfolio............. 42.56% 15.80%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Equity-Income Portfolio...................... 5.69% 15.40%
(Sub-Account Inception: 10/20/95)
Fidelity VIP Growth Portfolio............................. 36.61% 25.75%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Asset Manager: Growth Portfolio........... 14.57% 18.95%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Contrafund(R) Portfolio................... 23.51% 23.85%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Index 500 Portfolio....................... 19.79% 25.75%
(Sub-Account Inception: 10/20/95)
Fidelity VIP II Investment Grade Bond Portfolio........... N/A N/A
(Sub-Account Inception: 4/30/99)
Fidelity VIP III Growth Opportunities Portfolio........... N/A N/A
(Sub-Account Inception: 1/1/99)
Janus Aspen Aggressive Growth Portfolio................... 124.06% 63.92%
(Sub-Account Inception: 8/8/97)
Janus Aspen Growth Portfolio.............................. 43.12% 32.46%
(Sub-Account Inception: 8/8/97)
Janus Aspen International Growth Portfolio................ 81.19% 34.30%
(Sub-Account Inception: 8/8/97)
</TABLE>

SAI-6
<PAGE> 60

<TABLE>
<CAPTION>
FOR THE 1-YEAR FOR THE PERIOD FROM
PERIOD ENDED DATE OF INCEPTION OF
12/31/99 SUB-ACCOUNT TO 12/31/99
-------------- -----------------------
RIA.S. RIA.S.
-------------- -----------------------
<S> <C> <C>
Janus Aspen Worldwide Growth Portfolio.................... 63.47% 35.08%
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Limited
Maturity Bond Portfolio................................. 0.87% 2.90%
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Partners
Portfolio............................................... 6.73% 5.58%
(Sub-Account Inception: 8/8/97)
Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio(d)................................. N/A N/A
(Sub-Account Inception: 1/1/99)
OCC Accumulation Trust Equity Portfolio(c)................ 1.93% 8.28%
(Sub-Account Inception: 8/8/97)
OCC Accumulation Trust Global Equity Portfolio............ 25.77% 13.13%
(Sub-Account Inception: 8/8/97)
OCC Accumulation Trust Managed Portfolio(c)............... 4.37% 4.99%
(Sub-Account Inception: 8/8/97)
OCC Accumulation Trust Small Cap Portfolio(c)............. (2.42)% (4.18)%
(Sub-Account Inception: 8/8/97)
Pilgrim VP Growth Opportunities Portfolio................. N/A N/A
(Sub-Account Inception: 5/1/00)
Pilgrim VP Growth + Value Portfolio....................... 93.82% 32.47%
(Sub-Account Inception: 10/20/95)
Pilgrim VP High Yield Bond Portfolio...................... (1.91)% (0.75)%
(Sub-Account Inception: 8/8/97)
Pilgrim VP International Value Portfolio.................. 49.28% 26.40%
(Sub-Account Inception: 8/8/97)
Pilgrim VP MagnaCap Portfolio............................. N/A N/A
(Sub-Account Inception: 5/1/00)
Pilgrim VP MidCap Portfolio............................... N/A N/A
(Sub-Account Inception: 5/1/00)
Pilgrim VP Research Enhanced Index Portfolio(b)........... 5.19% 6.51%
(Sub-Account Inception: 10/20/95)
Pilgrim VP SmallCap Opportunities
Portfolio(a)............................................ 139.60% 37.38%
(Sub-Account Inception: 10/20/95)
</TABLE>

RIA.S. = RIA Series Contract.

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. RIA Series Contracts have no
withdrawal charges.

SAI-7
<PAGE> 61

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

<TABLE>
<CAPTION>
FOR THE 1-YEAR FOR THE 5-YEAR FOR THE 10-YEAR FOR THE PERIOD FROM
PERIOD ENDED PERIOD ENDED PERIOD ENDED DATE OF INCEPTION OF
12/31/99 12/31/99 12/31/99 PORTFOLIO TO 12/31/99
-------------- -------------- --------------- ---------------------
SUB-ACCOUNT RIA.S. RIA.S. RIA.S. RIA.S.
----------- -------------- -------------- --------------- ---------------------
<S> <C> <C> <C> <C>
AIM V.I. Dent Demographic Trends Fund.... N/A N/A N/A N/A
(Portfolio Inception: 12/29/99)
Alger American Growth Portfolio.......... 32.94% 30.16% 22.16% 22.31%
(Portfolio Inception: 1/9/89)
Alger American Leveraged AllCap
Portfolio.............................. 77.00% N/A N/A 45.58%
(Portfolio Inception: 1/25/95)
Alger American MidCap Growth Portfolio... 31.06% 25.38% N/A 23.97%
(Portfolio Inception: 5/3/93)
Alger American Small Capitalization
Portfolio.............................. 42.56% 21.91% 17.51% 20.14%
(Portfolio Inception: 9/21/88)
Fidelity VIP Equity-Income Portfolio..... 5.69% 17.90% 13.80% 13.10%
(Portfolio Inception: 10/9/86)
Fidelity VIP Growth Portfolio............ 36.61% 28.96% 19.22% 18.05%
(Portfolio Inception: 10/9/86)
Fidelity VIP II Asset Manager: Growth
Portfolio.............................. 14.57% N/A N/A 19.45%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Contrafund(R)
Portfolio.............................. 23.51% N/A N/A 26.97%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio...... 19.79% 27.40% N/A 20.36%
(Portfolio Inception: 8/27/92)
Fidelity VIP II Investment Grade Bond
Portfolio.............................. (1.64)% 6.65% 6.54% 6.82%
(Portfolio Inception: 12/5/88)
Fidelity VIP III Growth Opportunities
Portfolio.............................. 3.65% N/A N/A 20.79%
(Portfolio Inception: 1/3/95)
Janus Aspen Aggressive Growth
Portfolio.............................. 124.06% 35.41% N/A 33.60%
(Portfolio Inception: 9/13/93)
Janus Aspen Growth Portfolio............. 43.12% 29.11% N/A 23.53%
(Portfolio Inception: 9/13/93)
Janus Aspen International Growth
Portfolio.............................. 81.19% 32.46% N/A 27.40%
(Portfolio Inception: 5/2/94)
Janus Aspen Worldwide Growth Portfolio... 63.47% 32.80% N/A 28.93%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management
Trust.................................. 0.87% 4.89% 5.22% 6.83%
Limited Maturity Bond Portfolio
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management
Trust.................................. 6.73% 20.30% N/A 16.78%
Partners Portfolio
(Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management
Trust.................................. N/A N/A N/A N/A
Socially Responsive Portfolio
(Portfolio Inception: 2/18/99)
OCC Accumulation Trust Equity
Portfolio(c)........................... 1.93% 19.28% 14.78% 14.97%
(Portfolio Inception: 8/1/88)
OCC Accumulation Trust Global Equity
Portfolio.............................. 25.77% N/A N/A 17.37%
(Portfolio Inception: 3/1/95)
</TABLE>

SAI-8
<PAGE> 62

- ------------------------
++ Key: RIA.S. = RIA Series Contract.

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:

SAI-9
<PAGE> 63

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM DATE OF
FOR THE 1-YEAR FOR THE 5-YEAR FOR THE 10-YEAR INCEPTION OF
PERIOD ENDED PERIOD ENDED PERIOD ENDED PORTFOLIO TO
PORTFOLIO 12/31/99 12/31/99 12/31/99 12/31/99
--------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Fidelity VIP II Contrafund(R) Portfolio..... 24.25% N/A N/A 27.73%
(Portfolio Inception: 1/3/95)
Fidelity VIP II Index 500 Portfolio......... 20.51% 28.16% N/A 21.07%
(Portfolio Inception: 8/27/92)
Fidelity VIP II Investment Grade Bond
Portfolio................................. (1.05)% 7.30% 7.19% 7.46%
(Portfolio Inception: 12/5/88)
Fidelity VIP III Growth Opportunities
Portfolio................................. 4.27% N/A N/A 21.51%
(Portfolio Inception: 1/3/95)
Janus Aspen Aggressive Growth Portfolio..... 125.40% 36.23% N/A 34.40%
(Portfolio Inception: 9/13/93)
Janus Aspen Growth Portfolio................ 43.98% 29.89% N/A 24.27%
(Portfolio Inception: 9/13/93)
Janus Aspen International Growth
Portfolio................................. 82.27% 33.25% N/A 28.17%
(Portfolio Inception: 5/2/94)
Janus Aspen Worldwide Growth Portfolio...... 64.45% 33.60% N/A 29.69%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management Trust
Limited Maturity Bond Portfolio........... 1.48% 5.52% 5.86% 7.47%
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management Trust
Partners Portfolio........................ 7.37% 21.03% N/A 17.47%
(Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management Trust
Socially Responsive Portfolio............. N/A N/A N/A N/A
(Portfolio Inception: 2/18/99)
OCC Accumulation Trust Equity
Portfolio(c).............................. 2.54% 20.12% 15.53% 15.71%
(Portfolio Inception: 8/1/88)
OCC Accumulation Trust Global Equity
Portfolio................................. 26.53% N/A N/A 18.17%
(Portfolio Inception: 3/1/95)
OCC Accumulation Trust Managed
Portfolio(c).............................. 5.00% 19.80% 16.65% 17.74%
(Portfolio Inception: 8/1/88)
OCC Accumulation Trust Small Cap
Portfolio(c).............................. (1.83)% 8.35% 11.12% 11.48%
(Portfolio Inception: 8/1/88)
Pilgrim VP Growth Opportunities Portfolio... N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
Pilgrim VP Growth + Value Portfolio......... 94.98% 32.56% N/A 29.07%
(Portfolio Inception: 5/6/94)
Pilgrim VP High Yield Bond Portfolio........ (3.22)% 8.63% N/A 7.47%
(Portfolio Inception: 5/6/94)
Pilgrim VP International Value Portfolio.... 50.18% N/A N/A 27.15%
(Since Inception 8/8/97)
Pilgrim VP MagnaCap Portfolio............... N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
Pilgrim VP MidCap Opportunities Portfolio... N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
</TABLE>

SAI-10
<PAGE> 64

The Average Annual Total Returns listed below are calculated based on the
assumption that the Sub-Accounts were in existence for the same periods as those
indicated for the funds:

SAI-11
<PAGE> 65

<TABLE>
<CAPTION>
FOR THE 1-YEAR FOR THE 5-YEAR FOR THE 10-YEAR FOR THE PERIOD FROM
PERIOD ENDED PERIOD ENDED PERIOD ENDED DATE OF INCEPTION OF
12/31/99 12/31/99 12/31/99 PORTFOLIO TO 12/31/99
-------------- -------------- --------------- ---------------------
SUB-ACCOUNT RIA.S. RIA.S. RIA.S. RIA.S.
----------- -------------- -------------- --------------- ---------------------
<S> <C> <C> <C> <C>
Janus Aspen International Growth
Portfolio.......................... 81.19% 32.46% N/A 27.40%
(Portfolio Inception: 5/2/94)
Janus Aspen Worldwide Growth
Portfolio.......................... 63.47% 32.80% N/A 28.93%
(Portfolio Inception: 9/13/93)
Neuberger Berman Advisers Management
Trust Limited Maturity Bond
Portfolio.......................... 0.87% 4.89% 5.22% 6.83%
(Portfolio Inception: 9/10/84)
Neuberger Berman Advisers Management
Trust Partners Portfolio........... 6.73% 20.30% N/A 16.78%
(Portfolio Inception: 3/22/94)
Neuberger Berman Advisers Management
Trust Socially Responsive
Portfolio.......................... N/A N/A N/A N/A
(Portfolio Inception: 2/18/99)
OCC Accumulation Trust Equity
Portfolio (c)...................... 1.93% 19.28% 14.78% 14.97%
(Portfolio Inception: 8/1/88)
OCC Accumulation Trust Global Equity
Portfolio.......................... 25.77% N/A N/A 17.37%
(Portfolio Inception: 3/1/95)
OCC Accumulation Trust Managed
Portfolio (c)...................... 4.37% 18.99% 15.91% 16.99%
(Portfolio Inception: 8/1/88)
OCC Accumulation Trust Small Cap
Portfolio (c)...................... (2.42)% 7.70% 10.45% 10.81%
(Portfolio Inception: 8/1/88)
Pilgrim VP Growth Opportunities
Portfolio.......................... N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
Pilgrim VP Growth + Value
Portfolio.......................... 93.82% 31.77% N/A 28.30%
(Portfolio Inception: 5/6/94)
Pilgrim VP High Yield Bond
Portfolio.......................... (3.80)% 7.62% N/A 6.51%
(Portfolio Inception: 5/6/94)
Pilgrim VP International Value
Portfolio.......................... 49.28% N/A N/A 26.40%
(Portfolio Inception: 8/8/97)
Pilgrim VP MagnaCap Portfolio........ N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
Pilgrim VP MidCap Opportunities
Portfolio.......................... N/A N/A N/A N/A
(Portfolio Inception: 4/30/00)
</TABLE>

SAI-12
<PAGE> 66

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

(a) The Pilgrim VP SmallCap Opportunities Portfolio (formerly the Northstar
Galaxy Trust Emerging Growth Portfolio) operated under an investment objective
of seeking income balanced with capital appreciation from inception through
November 8, 1998, when the investment objective was modified to seeking
long-term capital appreciation.

(b) The Pilgrim VP Research Enhanced Index Portfolio (formerly the Northstar
Galaxy Trust Multi-Sector Bond Portfolio) operated under an investment objective
of seeking current income while preserving capital through April 29, 1999, when
the investment objective was modified to seeking long-term capital appreciation.

(c) On September 16, 1994, an investment company then called Quest for Value
Accumulation Trust (the "Old Trust") was effectively divided into two investment
funds, the Old Trust and the present OCC Accumulation Trust (the "Trust") at
which time the Trust commenced operations. The total net assets for the Equity,
Managed, and Small Cap Portfolios immediately after the transaction were
$86,789,755, $682,601,380, and $139,812,573, respectively, with respect to the
Old Trust and for the Equity, Managed, and Small Cap Portfolios, $3,764,598,
$51,345,102, and $8,129,274, respectively with respect to the Trust. For the
period prior to September 14, 1994, the performance figures for the Equity,
Managed, and Small Cap Portfolios of the Trust reflect the performance of the
Equity, Managed, and Small Cap Portfolios of the Old Trust.

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:

<TABLE>
<S> <C>
CTR = ERV/P - 1
Where:
=the Cumulative Total Return net of Sub-Account recurring
CTR charges for the period.
=the ending redeemable value of the hypothetical investment
ERV at the end of the period.
P =a hypothetical single payment of $1,000.
</TABLE>

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.

COMPANY HOLIDAYS
The Company is closed on the following holidays: New Year's Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
(and the day following Thanksgiving Day), Christmas Day, and New Year's Eve.
Holidays that fall on a Saturday will be recognized on the previous Friday.
Holidays that fall on a Sunday will be recognized on the following Monday.

SAI-13
<PAGE> 67

FINANCIAL STATEMENTS

Although the financial statements are audited, the period they cover is not
necessarily indicative of the longer term performance of the assets held in the
Separate Account One.

The financial statements for the Company as of and for the years ended
December 31, 1999 and 1998 have been prepared on the basis of statutory
accounting principles ("STAT") rather than generally accepted accounting
principles ("GAAP"). The financial statements of the Company, which are included
in this Statement of Additional Information, should be considered only as
bearing on the ability of the Company to meet its obligations under the
Contracts. They should not be considered as bearing on the investment
performance of the assets held in the Separate Account One.

SAI-14
<PAGE> 68

NORTHERN LIFE SEPARATE ACCOUNT ONE

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Independent Auditors' Report................................ F-2
Statement of Assets and Liabilities as of December 31,
1999...................................................... F-3
Statements of Operations and Changes in Contract Owners'
Equity for the years ended December 31, 1999 and 1998..... F-4
Notes to Financial Statements............................... F-12
</TABLE>

F-1
<PAGE> 69

INDEPENDENT AUDITORS' REPORT

Board of Directors
Northern Life Insurance Company:

We have audited the accompanying statement of assets and liabilities of Northern
Life Separate Account One as of December 31, 1999 and the related statements of
operations and changes in contract owners' equity (including the individual
sub-accounts which comprise the Account) for the years ended December 31, 1999
and 1998. These financial statements are the responsibility of the management of
Northern Life Insurance Company. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
sub-accounts constituting the Northern Life Separate Account One as of December
31, 1999 and the results of its operations and changes in its contract owners'
equity for the years ended December 31, 1999 and 1998, in conformity with
generally accepted accounting principles.

Deloitte & Touche LLP

Minneapolis, Minnesota
February 18, 2000

F-2
<PAGE> 70

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT SHARES)

ASSETS:

Investments in mutual funds at market value:

<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
---------- ------- ------------
<S> <C> <C> <C>
Fidelity's Variable Insurance Products Fund (VIP):
VIP Equity-Income Portfolio -- IC Shares.............. 1,470,888 $35,924 $ 37,817
VIP Growth Portfolio -- IC Shares..................... 983,762 40,338 54,038
VIP Money Market Portfolio -- IC Shares............... 13,464,709 13,465 13,465
VIP Overseas Portfolio -- IC Shares................... 106,276 2,088 2,916
Fidelity's Variable Insurance Products Fund II (VIP II):
VIP II Asset Manager Portfolio -- IC Shares........... 395,093 6,744 7,376
VIP II Asset Manager Growth Portfolio -- IC Shares.... 995,360 16,057 18,295
VIP II Contrafund Portfolio -- IC Shares.............. 2,656,558 57,927 77,439
VIP II Index 500 Portfolio -- IC Shares............... 729,014 97,524 122,044
VIP II Investment Grade Bond Portfolio -- IC Shares... 179,693 2,173 2,185
Fidelity's Variable Insurance Products Fund III (VIP III):
VIP III Growth Opportunities Portfolio -- IC Shares... 146,713 3,335 3,397
The Alger American Fund:
Alger American Small Capitalization Portfolio......... 287,089 11,957 15,833
Alger American Growth Portfolio....................... 963,387 50,701 62,023
Alger American MidCap Growth Portfolio................ 447,626 11,398 14,427
Alger American Leveraged AllCap Portfolio............. 736,108 31,228 42,672
Janus Aspen Series:
Aggressive Growth Portfolio........................... 467,170 18,032 27,885
Growth Portfolio...................................... 1,024,017 25,405 34,458
International Growth Portfolio........................ 243,951 5,986 9,434
Worldwide Growth Portfolio............................ 1,704,419 51,331 81,386
Neuberger Berman Advisers Management Trust:
AMT Limited Maturity Bond Portfolio................... 323,389 4,321 4,282
AMT Partners Portfolio................................ 842,913 15,867 16,555
AMT Socially Responsive Portfolio..................... 32,472 361 375
Northstar Galaxy Trust:
Northstar Emerging Growth Portfolio................... 719,057 17,125 21,025
Northstar Growth + Value Portfolio.................... 1,569,515 35,307 47,148
Northstar International Value Portfolio............... 569,627 6,867 8,413
Northstar Research Enhanced Index Portfolio........... 4,159,384 19,357 20,755
Northstar High Yield Bond Portfolio................... 1,867,994 8,888 8,032
OCC Accumulation Trust:
Equity Portfolio...................................... 89,010 3,340 3,343
Global Equity Portfolio............................... 68,919 1,216 1,141
Managed Portfolio..................................... 403,498 17,285 17,613
Small Cap Portfolio................................... 121,881 2,805 2,745
--------
Total Assets........................................ $778,517
========
LIABILITIES AND CONTRACT OWNERS' EQUITY:
Due to Northern Life Insurance Company for contract
charges............................................... $966
Contract Owners' Equity.................................. 777,551
--------
Total Liabilities and Contract Owners' Equity....... $778,517
========
</TABLE>

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

F-3
<PAGE> 71

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
FIDELITY'S VIP FIDELITY'S VIP
EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO
TOTAL ALL FUNDS IC SHARES IC SHARES
------------------------------- ----------------------------- -----------------------------
1999 1998 1999 1998 1999 1998
-------------- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income... $ 4,615 $ 2,612 $ 477 $ 238 $ 39 $ 46
Reinvested capital gains..... 26,485 9,242 1,055 846 2,462 1,195
Administrative expenses...... (8,070) (3,584) (546) (371) (525) (217)
-------------- -------------- ------------- ------------- ------------- -------------
Net investment income
(loss) and capital
gains:................. 23,030 8,270 986 713 1,976 1,024
-------------- -------------- ------------- ------------- ------------- -------------
Realized and unrealized gains
(losses):
Net realized gains (losses)
on redemptions of fund
shares..................... 21,434 4,490 1,022 649 137 449
Increase (decrease) in
unrealized appreciation of
investments................ 119,658 34,101 (616) 711 9,571 3,182
-------------- -------------- ------------- ------------- ------------- -------------
Net realized and unrealized
gains (losses)........... 141,092 38,591 406 1,360 9,708 3,631
-------------- -------------- ------------- ------------- ------------- -------------
Additions (reductions) from
operations............... 164,122 46,861 1,392 2,073 11,684 4,655
-------------- -------------- ------------- ------------- ------------- -------------
Contract Owners' transactions:
Net premium payments......... 251,841 186,757 10,158 14,758 19,320 7,114
Surrenders................... (18,113) (5,900) (1,052) (526) (922) (299)
Policy loans................. (4,201) (1,837) (296) (163) (324) (139)
Transfers between
sub-accounts and/or fixed
account.................... 15,278 10,128 (3,428) (795) 3,506 1,025
Death benefits............... (1,359) (500) (87) (147) (94) (19)
Loan collateral interest..... 96 31 10 4 7 3
-------------- -------------- ------------- ------------- ------------- -------------
Additions (reductions)
for Contract Owners'
transactions........... 243,542 188,679 5,305 13,131 21,493 7,685
-------------- -------------- ------------- ------------- ------------- -------------
Net additions
(reductions) for the
year................... 407,664 235,540 6,697 15,204 33,177 12,340
Contract Owners' Equity,
beginning of the year........ 369,887 134,347 31,075 15,871 20,793 8,453
-------------- -------------- ------------- ------------- ------------- -------------
Contract Owners' Equity, end
of the year.................. $ 777,551 $ 369,887 $ 37,772 $ 31,075 $ 53,970 $ 20,793
============== ============== ============= ============= ============= =============
Units Outstanding, beginning
of the year.................. 23,758,775.232 9,878,013.401 1,850,470.195 1,040,329.208 1,117,354.994 624,733.968
Units Outstanding, end of the
year......................... 37,039,197.267 23,758,775.232 2,145,169.205 1,850,470.195 2,139,958.138 1,117,354.994
Net Asset Value per Unit:..... -- -- $ 17.607847 $ 16.793113 $ 25.220278 $ 18.608901

<CAPTION>
FIDELITY'S VIP
MONEY MARKET PORTFOLIO
IC SHARES
---------------------------
1999 1998
------------- -----------
<S> <C> <C>
Net investment income (loss):
Reinvested dividend income... $ 467 $ 269
Reinvested capital gains..... -- --
Administrative expenses...... (137) (73)
------------- -----------
Net investment income
(loss) and capital
gains:................. 330 196
------------- -----------
Realized and unrealized gains
(losses):
Net realized gains (losses)
on redemptions of fund
shares..................... -- --
Increase (decrease) in
unrealized appreciation of
investments................ -- --
------------- -----------
Net realized and unrealized
gains (losses)........... -- --
------------- -----------
Additions (reductions) from
operations............... 330 196
------------- -----------
Contract Owners' transactions:
Net premium payments......... 8,579 4,697
Surrenders................... (1,067) (256)
Policy loans................. (116) (25)
Transfers between
sub-accounts and/or fixed
account.................... (1,140) (2,617)
Death benefits............... -- --
Loan collateral interest..... 5 1
------------- -----------
Additions (reductions)
for Contract Owners'
transactions........... 6,261 1,800
------------- -----------
Net additions
(reductions) for the
year................... 6,591 1,996
Contract Owners' Equity,
beginning of the year........ 6,859 4,863
------------- -----------
Contract Owners' Equity, end
of the year.................. $ 13,450 $ 6,859
============= ===========
Units Outstanding, beginning
of the year.................. 605,376.014 446,457.715
Units Outstanding, end of the
year......................... 1,144,601.494 605,376.014
Net Asset Value per Unit:..... $ 11.750389 $ 11.329355
</TABLE>

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

F-4
<PAGE> 72

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
FIDELITY'S VIP II FIDELITY'S VIP II
FIDELITY'S VIP ASSET MANAGER ASSET MANAGER
OVERSEAS PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
IC SHARES IC SHARES IC SHARES
------------------------- ------------------------- -------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income............. $ 76 $ 76 $ 284 $ 102 $ 294 $ 101
Reinvested capital gains............... 122 223 360 306 487 472
Administrative expenses................ (54) (73) (118) (73) (230) (115)
----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss) and
capital gains:................... 144 226 526 335 551 458
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares........... 266 36 145 11 119 296
Increase (decrease) in unrealized
appreciation of investments.......... 626 167 41 367 1,327 460
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains
(losses)......................... 892 203 186 378 1,446 756
----------- ----------- ----------- ----------- ----------- -----------
Additions (reductions) from
operations....................... 1,036 429 712 713 1,997 1,214
----------- ----------- ----------- ----------- ----------- -----------
Contract Owners' transactions:
Net premium payments................... 346 1,561 1,347 4,346 5,922 6,444
Surrenders............................. (162) (162) (239) (108) (457) (183)
Policy loans........................... (61) (28) (25) (26) (121) (56)
Transfers between sub-accounts and/or
fixed account........................ (3,103) (642) (2,700) 495 (453) (401)
Death benefits......................... (72) -- (36) (42) (84) --
Loan collateral interest............... -- 1 -- 1 3 1
----------- ----------- ----------- ----------- ----------- -----------
Additions (reductions) for Contract
Owners' transactions............. (3,052) 730 (1,653) 4,666 4,810 5,805
----------- ----------- ----------- ----------- ----------- -----------
Net additions (reductions) for the
year............................. (2,016) 1,159 (941) 5,379 6,807 7,019
Contract Owners' Equity, beginning of
the year............................... 4,929 3,770 8,308 2,929 11,465 4,446
----------- ----------- ----------- ----------- ----------- -----------
Contract Owners' Equity, end of the
year................................... $ 2,913 $ 4,929 $ 7,367 $ 8,308 $ 18,272 $ 11,465
=========== =========== =========== =========== =========== ===========
Units Outstanding, beginning of the
year................................... 349,988.575 297,559.671 520,820.052 208,314.653 652,013.324 293,160.469
Units Outstanding, end of the year...... 147,049.893 349,988.575 421,587.004 520,820.052 914,249.993 652,013.324
Net Asset Value per Unit:............... $ 19.805532 $ 14.081780 $ 17.475061 $ 15.952014 $ 19.985948 $ 17.584679

FIDELITY'S VIP II
CONTRAFUND PORTFOLIO
IC SHARES
-----------------------------
1999 1998
------------- -------------
<S> <C> <C>
Net investment income (loss):
Reinvested dividend income............. $ 207 $ 126
Reinvested capital gains............... 1,518 926
Administrative expenses................ (868) (415)
------------- -------------
Net investment income (loss) and
capital gains:................... 857 637
------------- -------------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares........... 710 255
Increase (decrease) in unrealized
appreciation of investments.......... 11,022 6,432
------------- -------------
Net realized and unrealized gains
(losses)......................... 11,732 6,687
------------- -------------
Additions (reductions) from
operations....................... 12,589 7,324
------------- -------------
Contract Owners' transactions:
Net premium payments................... 26,445 16,445
Surrenders............................. (1,937) (739)
Policy loans........................... (431) (263)
Transfers between sub-accounts and/or
fixed account........................ 348 674
Death benefits......................... (68) (13)
Loan collateral interest............... 12 4
------------- -------------
Additions (reductions) for Contract
Owners' transactions............. 24,369 16,108
------------- -------------
Net additions (reductions) for the
year............................. 36,958 23,432
Contract Owners' Equity, beginning of
the year............................... 40,384 16,952
------------- -------------
Contract Owners' Equity, end of the
year................................... $ 77,342 $ 40,384
============= =============
Units Outstanding, beginning of the
year................................... 2,090,469.402 1,124,760.300
Units Outstanding, end of the year...... 3,267,495.545 2,090,469.402
Net Asset Value per Unit:............... $ 23.670021 $ 19.318070
</TABLE>

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

F-5
<PAGE> 73

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
FIDELITY'S VIP III
FIDELITY'S VIP II GROWTH
FIDELITY'S VIP II INVESTMENT GRADE OPPORTUNITIES ALGER AMERICAN
INDEX 500 PORTFOLIO BOND PORTFOLIO PORTFOLIO SMALL CAPITALIZATION
IC SHARES IC SHARES IC SHARES PORTFOLIO
----------------------------- ------------------ ------------------ --------------------------
1999 1998 1999 1998 1999 1998 1999 1998
------------- ------------- ----------- ---- ----------- ---- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income
(loss):
Reinvested dividend
income.................. $ 732 $ 286 $ -- $-- $ -- $-- $ -- $ --
Reinvested capital
gains................... 497 662 -- -- 0 -- 1,268 941
Administrative expenses... (1,490) (658) (13) -- (28) -- (172) (118)
------------- ------------- ----------- -- ----------- -- ------------ -----------
Net investment income
(loss) and capital
gains: ............... (261) 290 (13) -- (28) -- 1,096 823
------------- ------------- ----------- -- ----------- -- ------------ -----------
Realized and unrealized
gains (losses):
Net realized gains
(losses) on redemptions
of fund shares.......... 4,252 450 (7) -- 25 -- 112 27
Increase (decrease) in
unrealized appreciation
of investments.......... 12,940 9,831 12 -- 62 -- 3,233 259
------------- ------------- ----------- -- ----------- -- ------------ -----------
Net realized and
unrealized gains
(losses).............. 17,192 10,281 5 -- 87 -- 3,345 286
------------- ------------- ----------- -- ----------- -- ------------ -----------
Additions (reductions)
from operations....... 16,931 10,571 (8) -- 59 -- 4,441 1,109
------------- ------------- ----------- -- ----------- -- ------------ -----------
Contract Owners'
transactions:
Net premium payments...... 46,516 36,377 760 -- 2,212 -- 3,489 3,266
Surrenders................ (2,934) (951) (24) -- (61) -- (451) (108)
Policy loans.............. (912) (417) (1) -- (28) -- (110) (51)
Transfers between
sub-accounts and/or
fixed account........... (8,341) 3,296 1,456 -- 1,210 -- (1,052) (572)
Death benefits............ (219) (45) -- -- -- -- (5) --
Loan collateral
interest................ 21 6 -- -- -- -- 3 1
------------- ------------- ----------- -- ----------- -- ------------ -----------
Additions (reductions)
for Contract Owners'
transactions.......... 34,131 38,266 2,191 -- 3,333 -- 1,874 2,536
------------- ------------- ----------- -- ----------- -- ------------ -----------
Net additions
(reductions) for the
year.................. 51,062 48,837 2,183 -- 3,392 -- 6,315 3,645
Contract Owners' Equity,
beginning of the year..... 70,831 21,994 -- -- -- -- 9,497 5,852
------------- ------------- ----------- -- ----------- -- ------------ -----------
Contract Owners' Equity,
end of the year........... $ 121,893 $ 70,831 $ 2,183 $-- $ 3,392 $-- $ 15,812 $ 9,497
============= ============= =========== == =========== == ============ ===========
Units Outstanding,
beginning of the year..... 3,336,587.033 1,310,991.579 -- -- -- -- 751,967.322 527,947.156
Units Outstanding, end of
the year.................. 4,831,868.560 3,336,587.033 222,858.340 -- 337,765.646 -- 885,257.497 751,967.322
Net Asset Value per
Unit: .................... $ 25.227080 $ 21.228526 $ 9.793689 $-- $ 10.043547 $-- $ 17.862102 $ 12.630064
</TABLE>

The accompanying notes are an integral part of the financial statements

F-6
<PAGE> 74

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
ALGER AMERICAN ALGER AMERICAN
ALGER AMERICAN MIDCAP GROWTH LEVERAGED ALLCAP
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------- ------------------------- ---------------------------
1999 1998 1999 1998 1999 1998
------------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income...... $ 44 $ 22 $ -- $ -- $ -- $ --
Reinvested capital gains........ 3,016 1,332 1,560 542 912 215
Administrative expenses......... (582) (158) (165) (103) (297) (85)
------------- ----------- ----------- ----------- ------------- -----------
Net investment income (loss)
and capital gains:.......... 2,478 1,196 1,395 439 615 130
------------- ----------- ----------- ----------- ------------- -----------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares.... 1,360 592 538 124 3,895 882
Increase (decrease) in
unrealized appreciation of
investments................... 7,924 2,678 1,247 1,294 9,047 1,999
------------- ----------- ----------- ----------- ------------- -----------
Net realized and unrealized
gains (losses).............. 9,284 3,270 1,785 1,418 12,942 2,881
------------- ----------- ----------- ----------- ------------- -----------
Additions (reductions) from
operations.................. 11,762 4,466 3,180 1,857 13,557 3,011
------------- ----------- ----------- ----------- ------------- -----------
Contract Owners' transactions:
Net premium payments............ 26,399 7,649 2,744 2,530 13,573 2,583
Surrenders...................... (1,223) (259) (346) (182) (768) (307)
Policy loans.................... (217) (89) (62) (40) (179) (62)
Transfers between sub-accounts
and/or fixed account.......... 5,842 2,085 (506) 225 6,214 1,560
Death benefits.................. (37) (27) -- (14) (19) (35)
Loan collateral interest........ 5 1 2 1 5 1
------------- ----------- ----------- ----------- ------------- -----------
Additions (reductions) for
Contract Owners'
transactions................ 30,769 9,360 1,832 2,520 18,826 3,740
------------- ----------- ----------- ----------- ------------- -----------
Net additions (reductions) for
the year.................... 42,531 13,826 5,012 4,377 32,383 6,751
Contract Owners' Equity,
beginning of the year........... 19,414 5,588 9,397 5,020 10,235 3,484
------------- ----------- ----------- ----------- ------------- -----------
Contract Owners' Equity, end of
the year........................ $ 61,945 $ 19,414 $ 14,409 $ 9,397 $ 42,618 $ 10,235
============= =========== =========== =========== ============= ===========
Units Outstanding, beginning of
the year........................ 958,685.252 402,924.566 590,793.803 405,579.543 491,436.239 260,379.569
Units Outstanding, end of the
year............................ 2,319,441.894 958,685.252 696,730.346 590,793.803 1,165,393.104 491,436.239
Net Asset Value per Unit:........ $ 26.707017 $ 20.250135 $ 20.680155 $ 15.905871 $ 36.568441 $ 20.826047

<CAPTION>
JANUS ASPEN SERIES
AGGRESSIVE GROWTH
PORTFOLIO
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net investment income (loss):
Reinvested dividend income...... $ 87 $ --
Reinvested capital gains........ 151 --
Administrative expenses......... (128) (13)
----------- -----------
Net investment income (loss)
and capital gains:.......... 110 (13)
----------- -----------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares.... 583 7
Increase (decrease) in
unrealized appreciation of
investments................... 9,439 407
----------- -----------
Net realized and unrealized
gains (losses).............. 10,022 414
----------- -----------
Additions (reductions) from
operations.................. 10,132 401
----------- -----------
Contract Owners' transactions:
Net premium payments............ 8,077 1,359
Surrenders...................... (215) (5)
Policy loans.................... (118) (7)
Transfers between sub-accounts
and/or fixed account.......... 7,908 133
Death benefits.................. (11) --
Loan collateral interest........ 2 --
----------- -----------
Additions (reductions) for
Contract Owners'
transactions................ 15,643 1,480
----------- -----------
Net additions (reductions) for
the year.................... 25,775 1,881
Contract Owners' Equity,
beginning of the year........... 2,072 191
----------- -----------
Contract Owners' Equity, end of
the year........................ $ 27,847 $ 2,072
=========== ===========
Units Outstanding, beginning of
the year........................ 143,610.929 17,505.521
Units Outstanding, end of the
year............................ 868,256.942 143,610.929
Net Asset Value per Unit:........ $ 32.074748 $ 14.429920
</TABLE>

The accompanying notes are an integral part of the financial statements

F-7
<PAGE> 75

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

JANUS ASPEN SERIES JANUS ASPEN SERIES
JANUS ASPEN SERIES INTERNATIONAL GROWTH WORLDWIDE GROWTH
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------- ------------------------- -----------------------------
1999 1998 1999 1998 1999 1998
------------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income...... $ 50 $ 132 $ 11 $ 32 $ 85 $ 305
Reinvested capital gains........ 94 105 -- 5 -- 115
Administrative expenses......... (278) (59) (72) (30) (708) (182)
------------- ----------- ----------- ----------- ------------- -------------
Net investment income (loss)
and capital gains:........ (134) 178 (61) 7 (623) 238
------------- ----------- ----------- ----------- ------------- -------------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares.... 138 18 469 7 692 636
Increase (decrease) in
unrealized appreciation of
investments................... 7,677 1,375 3,297 155 28,177 1,880
------------- ----------- ----------- ----------- ------------- -------------
Net realized and unrealized
gains (losses)............ 7,815 1,393 3,766 162 28,869 2,516
------------- ----------- ----------- ----------- ------------- -------------
Additions (reductions) from
operations................ 7,681 1,571 3,705 169 28,246 2,754
------------- ----------- ----------- ----------- ------------- -------------
Contract Owners' transactions:
Net premium payments............ 13,038 5,914 1,914 1,702 26,479 16,293
Surrenders...................... (451) (84) (123) (57) (1,422) (238)
Policy loans.................... (147) (49) (47) (17) (398) (116)
Transfers between sub-accounts
and/or fixed account.......... 5,320 796 921 469 2,743 4,112
Death benefits.................. (9) -- -- -- (72) (2)
Loan collateral interest........ 2 -- 1 -- 5 1
------------- ----------- ----------- ----------- ------------- -------------
Additions (reductions) for
Contract Owners'
transactions.............. 17,753 6,577 2,666 2,097 27,335 20,050
------------- ----------- ----------- ----------- ------------- -------------
Net additions (reductions)
for the year.............. 25,434 8,148 6,371 2,266 55,581 22,804
Contract Owners' Equity,
beginning of the year........... 8,981 833 3,050 784 25,698 2,894
------------- ----------- ----------- ----------- ------------- -------------
Contract Owners' Equity, end of
the year........................ $ 34,415 $ 8,981 $ 9,421 $ 3,050 $ 81,279 $ 25,698
============= =========== =========== =========== ============= =============
Units Outstanding, beginning of
the year........................ 662,697.182 82,286.238 275,637.403 81,884.298 2,066,481.457 295,875.300
Units Outstanding, end of the
year............................ 1,788,563.915 662,697.182 473,654.385 275,637.403 4,030,342.090 2,066,481.457
Net Asset Value per Unit:........ $ 19.242112 $ 13.552209 $ 19.890241 $ 11.065792 $ 20.166752 $ 12.435746

<CAPTION>
NEUBERGER BERMAN
ADVISERS MANAGEMENT
TRUST
LIMITED MATURITY
BOND PORTFOLIO
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net investment income (loss):
Reinvested dividend income...... $ 145 $ 25
Reinvested capital gains........ -- --
Administrative expenses......... (50) (16)
----------- -----------
Net investment income (loss)
and capital gains:........ 95 9
----------- -----------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares.... (24) (12)
Increase (decrease) in
unrealized appreciation of
investments................... (66) 26
----------- -----------
Net realized and unrealized
gains (losses)............ (90) 14
----------- -----------
Additions (reductions) from
operations................ 5 23
----------- -----------
Contract Owners' transactions:
Net premium payments............ 2,420 1,686
Surrenders...................... (134) (26)
Policy loans.................... (4) (5)
Transfers between sub-accounts
and/or fixed account.......... (202) 309
Death benefits.................. (20) --
Loan collateral interest........ -- --
----------- -----------
Additions (reductions) for
Contract Owners'
transactions.............. 2,060 1,964
----------- -----------
Net additions (reductions)
for the year.............. 2,065 1,987
Contract Owners' Equity,
beginning of the year........... 2,212 225
----------- -----------
Contract Owners' Equity, end of
the year........................ $ 4,277 $ 2,212
=========== ===========
Units Outstanding, beginning of
the year........................ 210,708.844 22,028.741
Units Outstanding, end of the
year............................ 407,141.658 210,708.844
Net Asset Value per Unit:........ $ 10.504095 $ 10.497074
</TABLE>

The accompanying notes are an integral part of the financial statements

F-8
<PAGE> 76

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
NEUBERGER BERMAN TRUST
ADVISERS MANAGEMENT SOCIALLY
TRUST RESPONSIVE
PARTNERS PORTFOLIO PORTFOLIO
----------------------------- -----------------
1999 1998 1999 1998
------------- ------------- ---------- ----
<S> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income... $ 202 $ 18 $ -- $--
Reinvested capital gains..... 351 579 -- --
Administrative expenses...... (263) (155) (3) --
------------- ------------- ---------- ---
Net investment (loss)
income and capital
gains:................. 290 442 (3) --
------------- ------------- ---------- ---
Realized and unrealized gains
(losses):
Net realized gains (losses)
on redemptions of fund
shares..................... (181) (235) 4 --
Increase (decrease) in
unrealized appreciation of
investments................ 855 (197) 14 --
------------- ------------- ---------- ---
Net realized and
unrealized gains
(losses)............... 674 (432) 18 --
------------- ------------- ---------- ---
Additions (reductions)
from operations........ 964 10 15 --
------------- ------------- ---------- ---
Contract Owners' transactions:
Net premium payments......... 4,481 13,234 245 --
Surrenders................... (503) (225) -- --
Policy loans................. (124) (73) -- --
Transfers between
sub-accounts and/or fixed
account.................... (4,929) 1,123 115 --
Death benefits............... (51) (2) -- --
Loan collateral interest..... 3 1 -- --
------------- ------------- ---------- ---
Additions (reductions)
for Contract Owners'
transactions........... (1,123) 14,058 360 --
------------- ------------- ---------- ---
Net additions
(reductions) for the
year................... (159) 14,068 375 --
Contract Owners' Equity,
beginning of the year........ 16,694 2,626 -- --
------------- ------------- ---------- ---
Contract Owners' Equity, end
of the year.................. $ 16,535 $ 16,694 $ 375 $--
============= ============= ========== ===
Units Outstanding, beginning
of the year.................. 1,582,047.842 255,773.135 -- --
Units Outstanding, end of the
year......................... 1,479,974.075 1,582,047.842 32,882.649 --
Net Asset Value per Unit:..... $ 11.172272 $ 10.552069 $11.382656 $--

NORTHSTAR GALAXY
TRUST
EMERGING GROWTH NORTHSTAR GALAXY TRUST
PORTFOLIO GROWTH + VALUE PORTFOLIO
------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income... $ -- $ 121 $ -- $ 5
Reinvested capital gains..... 2,781 223 8,169 162
Administrative expenses...... (135) (63) (432) (285)
----------- ----------- ------------- -------------
Net investment (loss)
income and capital
gains:................. 2,646 281 7,737 (118)
----------- ----------- ------------- -------------
Realized and unrealized gains
(losses):
Net realized gains (losses)
on redemptions of fund
shares..................... 3,047 83 4,823 252
Increase (decrease) in
unrealized appreciation of
investments................ 3,507 317 7,789 2,933
----------- ----------- ------------- -------------
Net realized and
unrealized gains
(losses)............... 6,554 400 12,612 3,185
----------- ----------- ------------- -------------
Additions (reductions)
from operations........ 9,200 681 20,349 3,067
----------- ----------- ------------- -------------
Contract Owners' transactions:
Net premium payments......... 2,687 1,511 6,075 5,973
Surrenders................... (404) (103) (1,273) (532)
Policy loans................. (50) (16) (214) (105)
Transfers between
sub-accounts and/or fixed
account.................... 4,420 (405) 536 (2,100)
Death benefits............... (60) (65) (148) (57)
Loan collateral interest..... 1 1 6 3
----------- ----------- ------------- -------------
Additions (reductions)
for Contract Owners'
transactions........... 6,594 923 4,982 3,182
----------- ----------- ------------- -------------
Net additions
(reductions) for the
year................... 15,794 1,604 25,331 6,249
Contract Owners' Equity,
beginning of the year........ 5,203 3,599 21,756 15,507
----------- ----------- ------------- -------------
Contract Owners' Equity, end
of the year.................. $ 20,997 $ 5,203 $ 47,087 $ 21,756
=========== =========== ============= =============
Units Outstanding, beginning
of the year.................. 338,592.875 270,967.530 1,333,885.420 1,118,715.737
Units Outstanding, end of the
year......................... 574,894.532 338,592.875 1,501,434.187 1,333,885.420
Net Asset Value per Unit:..... $ 36.524615 $ 15.366323 $ 31.360614 $ 16.310327
</TABLE>

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

F-9
<PAGE> 77

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND

CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
NORTHSTAR GALAXY NORTHSTAR GALAXY NORTHSTAR GALAXY
TRUST TRUST TRUST
INTERNATIONAL VALUE RESEARCH ENHANCED HIGH YIELD BOND
PORTFOLIO INDEX PORTFOLIO PORTFOLIO
------------------------- --------------------------- -------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income
(loss):
Reinvested dividend
income................... $ 101 $ 38 $ 170 $ 266 $ 810 $ 346
Reinvested capital gains... 778 163 -- 1 -- 11
Administrative expenses.... (80) (29) (172) (49) (128) (57)
----------- ----------- ------------- ----------- ----------- -----------
Net investment income
(loss) and capital
gains:................. 799 172 (2) 218 682 300
----------- ----------- ------------- ----------- ----------- -----------
Realized and unrealized
gains (losses):
Net realized gains (losses)
on redemptions of fund
shares................... 137 22 (371) (24) (430) (98)
Increase (decrease) in
unrealized appreciation
of investments........... 1,480 68 1,660 (205) (646) (197)
----------- ----------- ------------- ----------- ----------- -----------
Net realized and
unrealized gains
(losses)............... 1,617 90 1,289 (229) (1,076) (295)
----------- ----------- ------------- ----------- ----------- -----------
Additions (reductions)
from operations........ 2,416 262 1,287 (11) (394) 5
----------- ----------- ------------- ----------- ----------- -----------
Contract Owners'
transactions:
Net premium payments....... 2,234 2,838 5,806 2,631 2,511 7,246
Surrenders................. (197) (47) (612) (97) (353) (91)
Policy loans............... (18) (2) (8) (1) (12) (4)
Transfers between
sub-accounts and/or fixed
account.................. 129 208 9,393 (507) (2,419) 709
Death benefits............. -- -- -- (31) (237) --
Loan collateral interest... -- -- -- -- -- --
----------- ----------- ------------- ----------- ----------- -----------
Additions (reductions)
for Contract Owners'
transactions......... 2,148 2,997 14,579 1,995 (510) 7,860
----------- ----------- ------------- ----------- ----------- -----------
Net additions
(reductions) for the
year................. 4,564 3,259 15,866 1,984 (904) 7,865
Contract Owners' Equity,
beginning of the year...... 3,839 580 4,864 2,880 8,940 1,075
----------- ----------- ------------- ----------- ----------- -----------
Contract Owners' Equity, end
of the year................ $ 8,403 $ 3,839 $ 20,730 $ 4,864 $ 8,036 $ 8,940
=========== =========== ============= =========== =========== ===========
Units Outstanding, beginning
of the year................ 330,553.044 57,506.716 403,214.084 238,690.820 885,661.645 105,615.457
Units Outstanding, end of
the year................... 488,502.094 330,553.044 1,646,855.701 403,214.084 834,113.419 885,661.645
Net Asset Value per Unit:... $ 17,200711 $ 11,614952 $ 12,587412 $ 12,062872 $ 9,633236 $ 10,094227

OCC ACCUMULATION
TRUST
EQUITY PORTFOLIO
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net investment income
(loss):
Reinvested dividend
income................... $ 28 $ 8
Reinvested capital gains... 128 32
Administrative expenses.... (51) (23)
----------- -----------
Net investment income
(loss) and capital
gains:................. 105 17
----------- -----------
Realized and unrealized
gains (losses):
Net realized gains (losses)
on redemptions of fund
shares................... 33 6
Increase (decrease) in
unrealized appreciation
of investments........... (107) 97
----------- -----------
Net realized and
unrealized gains
(losses)............... (74) 103
----------- -----------
Additions (reductions)
from operations........ 31 120
----------- -----------
Contract Owners'
transactions:
Net premium payments....... 1,260 1,927
Surrenders................. (129) (22)
Policy loans............... (45) (14)
Transfers between
sub-accounts and/or fixed
account.................. (438) 169
Death benefits............. (7) --
Loan collateral interest... 1 --
----------- -----------
Additions (reductions)
for Contract Owners'
transactions......... 642 2,060
----------- -----------
Net additions
(reductions) for the
year................. 673 2,180
Contract Owners' Equity,
beginning of the year...... 2,666 486
----------- -----------
Contract Owners' Equity, end
of the year................ $ 3,339 $ 2,666
=========== ===========
Units Outstanding, beginning
of the year................ 227,142.692 45,654.119
Units Outstanding, end of
the year................... 281,366.932 227,142.692
Net Asset Value per Unit:... $ 11,868401 $ 11,737470
</TABLE>

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

F-10
<PAGE> 78

NORTHERN LIFE SEPARATE ACCOUNT ONE
STATEMENTS OF OPERATIONS AND

CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
OCC ACCUMULATION
TRUST OCC ACCUMULATION
GLOBAL EQUITY OCC ACCUMULATION TRUST TRUST
PORTFOLIO MANAGED PORTFOLIO SMALL CAP PORTFOLIO
----------------------- ----------------------------- -------------------------
1999 1998 1999 1998 1999 1998
---------- ---------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income................. $ 15 $ 8 $ 276 $ 39 $ 15 $ 3
Reinvested capital gains................... 157 28 619 129 -- 29
Administrative expenses.................... (15) (5) (291) (138) (39) (21)
---------- ---------- ------------- ------------- ----------- -----------
Net investment income (loss) and capital
gains:................................. 157 31 604 30 (24) 11
---------- ---------- ------------- ------------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions
of fund shares........................... 100 21 (38) 58 (122) (22)
Increase (decrease) in unrealized
appreciation of investments.............. (33) (30) 108 221 71 (129)
---------- ---------- ------------- ------------- ----------- -----------
Net realized and unrealized gains
(losses)............................... 67 (9) 70 279 (51) (151)
---------- ---------- ------------- ------------- ----------- -----------
Additions (reductions) from operations... 224 22 674 309 (75) (140)
---------- ---------- ------------- ------------- ----------- -----------
Contract Owners' transactions:
Net premium payments....................... 293 546 5,379 14,219 1,132 1,908
Surrenders................................. (19) (3) (570) (263) (65) (27)
Policy loans............................... (7) (5) (104) (56) (22) (8)
Transfers between sub-accounts and/or fixed
account.................................. (93) 2 (5,439) 692 (540) 85
Death benefits............................. -- -- (20) (1) (3) --
Loan collateral interest................... -- -- 2 -- -- --
---------- ---------- ------------- ------------- ----------- -----------
Additions (reductions) for Contract
Owners' transactions................... 174 540 (752) 14,591 502 1,958
---------- ---------- ------------- ------------- ----------- -----------
Net additions (reductions) for the
year................................... 398 562 (78) 14,900 427 1,818
Contract Owners' Equity, beginning of the
year....................................... 741 179 17,670 2,770 2,314 496
---------- ---------- ------------- ------------- ----------- -----------
Contract Owners' Equity, end of the year.... $ 1,139 $ 741 $ 17,592 $ 17,670 $ 2,741 $ 2,314
========== ========== ============= ============= =========== ===========
Units Outstanding, beginning of the year.... 70,138.035 18,968.362 1,659,487.954 274,772.663 252,953.621 48,630.367
Units Outstanding, end of the year.......... 86,458.145 70,138.035 1,595,695.537 1,659,487.954 309,634.347 252,953.621
Net Asset Value per Unit: .................. $13.184735 $10.567329 $ 11.024589 $ 10.647991 $ 8.854102 $ 9.146562
</TABLE>

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

F-11
<PAGE> 79

NORTHERN LIFE
SEPARATE ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION:
Northern Life Separate Account One (the "Account") is a separate account of
Northern Life Insurance Company ("Northern Life"), an indirect,
wholly-owned subsidiary of ReliaStar Financial Corp. The Account commenced
operations on October 20, 1995 and is registered as a unit investment trust
under the Investment Company Act of 1940.

Payments received under the contracts are allocated to sub-accounts of the
Account, each of which is invested in one of the funds listed below during
the year:

<TABLE>
<CAPTION>
Neuberger Berman Advisers
The Alger American Fund Management Trust Northstar Galaxy Trust
----------------------- ------------------------- ----------------------
<S> <C> <C>
Small Capitalization AMT Limited Maturity Bond Emerging Growth Portfolio
Portfolio Portfolio Growth + Value Portfolio
Growth Portfolio AMT Partners Portfolio International Value Portfolio
MidCap Growth Portfolio AMT Socially Responsive Research Enhanced Index
Leveraged AllCap Portfolio Portfolio Portfolio
High Yield Bond Portfolio
</TABLE>

<TABLE>
<CAPTION>
Janus Aspen Series OCC Accumulation Trust Fidelity VIP
------------------ ---------------------- ------------
<S> <C> <C>
Aggressive Growth Portfolio Equity Portfolio VIP Equity-Income Portfolio --
Growth Portfolio Global Equity Portfolio IC Shares
International Growth Managed Portfolio VIP Growth Portfolio -- IC Shares
Portfolio Small Cap Portfolio VIP Money Market Portfolio --
Worldwide Growth Portfolio IC Shares
VIP Overseas Portfolio -- IC Shares
</TABLE>

<TABLE>
<CAPTION>
Fidelity VIP II Fidelity VIP III
--------------- ----------------
<S> <C>
VIP II Asset Manager Portfolio -- IC Shares VIP III Growth Opportunities
VIP II Asset Manager Growth Portfolio -- IC Shares Portfolio -- IC Shares
VIP II Contrafund Portfolio -- IC Shares
VIP II Index 500 Portfolio -- IC Shares
VIP II Investment Grade Bond Portfolio -- IC Shares
</TABLE>

Fred Alger Management, Inc. is the investment adviser for the four
portfolios of The Alger American Fund and is paid fees for its services by
The Alger American Fund Portfolios. Fidelity Management & Research Company
is the investment adviser for Fidelity Variable Insurance Products Fund
(VIP), Variable Insurance Products Fund II (VIP II) and Variable Insurance
Products Fund III (VIP III) and is paid for its services by the VIP, VIP II
and VIP III Portfolios. Pilgrim Advisors, Inc., an affiliate of Northern
Life, is the investment adviser for the five portfolios offered through the
Northstar Galaxy Trust and is paid for its services by the Northstar Funds.
Janus Capital Corporation is the investment adviser for the four portfolios
of Janus Aspen Series and is paid fees for its services by the Janus Aspen
Series Portfolios. Neuberger Berman Management is the investment manager
for the three portfolios of the Advisers Management Trust and is paid fees
for its services by the Neuberger Berman Advisers Management Trust Funds.
OpCap Advisors is the investment adviser for the four portfolios of the OCC
Accumulation Trust and is paid fees for its services by the OCC
Accumulation Trust Funds.

Fidelity VIP II Contrafund Portfolio is a registered trademark of FMMR
Corporation.

On July 29, 1998, Northstar Variable Trust Portfolio changed its name to
Northstar Galaxy Trust Portfolios (GT). Also on July 29, 1998, the
Northstar Variable Trust Growth Portfolio changed its name to Northstar
Galaxy Trust Growth + Value Portfolio.

F-12
<PAGE> 80
NORTHERN LIFE
SEPARATE ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS, CONTINUED

1. ORGANIZATION, CONTINUED:
On November 9, 1998, Northstar Galaxy Trust Income and Growth Portfolio
changed its name to Northstar Galaxy Trust Emerging Growth Portfolio.

On January 4, 1999, sub-accounts investing in Neuberger Berman Advisers
Management Trust Socially Responsive Portfolio and Fidelity VIP III Growth
Opportunities Portfolio were made available to the Account.

On April 30, 1999, sub-accounts investing in Fidelity VIP II Investment
Grade Bond Portfolio were made available to the Account. Also on April 30,
1999, Northstar Galaxy Trust Multi-Sector Bond Portfolio changed its name
to Northstar Galaxy Trust Research Enhanced Index Portfolio and Fidelity
VIP Overseas Portfolio and Fidelity VIP II Asset Manager Portfolio were
closed to new premium and transfers.

On November 1, 1999, Northstar Investment Management Corporation changed
its name to Pilgrim Advisors, Inc. Substantially the same personnel are
performing the investment advisory services on behalf of Pilgrim Advisors,
Inc.

2. SIGNIFICANT ACCOUNTING POLICIES:
SECURITIES VALUATION TRANSACTIONS AND
RELATED INVESTMENT INCOME:
The market value of investments in the sub-accounts is based on the closing
net asset values of the fund shares held at the end of the year. Investment
transactions are accounted for on the trade date (date the order to
purchase or redeem is executed) and dividend income and capital gain
distributions are recorded on the ex-dividend date. Net realized gains and
losses on redemptions of shares of the funds are determined on the basis of
specific identification of fund share costs.

VARIABLE ANNUITY RESERVES:
The amount of the reserves for contracts in the distribution year is
determined by actuarial assumptions which meet statutory requirements.
Gains or losses resulting from actual mortality experience, the full
responsibility for which is assumed by Northern Life, are offset by
transfers to or from Northern Life.

3. FEDERAL INCOME TAXES:
Northern Life is taxed as a life insurance company under the Internal
Revenue Code of 1986, as amended (the "Code"). Since the Separate Account
is not a separate entity from Northern Life, and its operations form a part
of Northern Life, it is not taxed separately as a "regulated investment
company" under Sub-chapter M of the Code. Under existing Federal income tax
law, investment income of the Separate Account, to the extent that it is
applied to increase reserves under a contract, is not taxed and may be
compounded through reinvestment without additional tax to Northern Life.

4. CONTRACT CHARGES:
No deduction is made for a sales charge from the purchase payments made for
the contracts. However, on certain surrenders Northern Life will deduct
from the contract value a surrender charge as set forth in the contract.

Certain charges are made by Northern Life to Contract Owners' Variable
Account Contract Value in accordance with the terms of the contracts. These
charges may include: an annual contract charge of $30 from each contract on
the anniversary date or at the time of surrender, if surrender is at a time
other than the anniversary date; a daily administrative charge; and a daily
charge for mortality and expense risk assumed by Northern Life.

F-13
<PAGE> 81
NORTHERN LIFE
SEPARATE ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. CONTRACT CHARGES, CONTINUED:
Various states and other governmental units levy a premium tax on annuity
contracts issued by insurance companies. If the owner of a contract lives
in a state which levies such a tax, Northern Life may deduct the amount of
the tax from the purchase payments received or the value of the contract at
annuitization.

5. INVESTMENTS:
For the year ended December 31, 1999, investment activity in the funds was
as follows (in thousands):

<TABLE>
<CAPTION>
COST OF PROCEEDS
INVESTING FUND PURCHASES FROM SALES
-------------- --------- ----------
<S> <C> <C>
Fidelity's VIP:
VIP Equity-Income Portfolio -- IC Shares.................. $ 10,978 $ 4,678
VIP Growth Portfolio -- IC Shares......................... 24,022 509
VIP Money Market Portfolio -- IC Shares................... 14,950 8,351
VIP Overseas Portfolio -- IC Shares....................... 528 3,438
Fidelity's VIP II:
VIP II Asset Manager Portfolio -- IC Shares............... 1,979 3,106
VIP II Asset Manager Growth Portfolio -- IC Shares........ 7,718 2,348
VIP II Contrafund Portfolio -- IC Shares.................. 26,910 1,636
VIP II Index 500 Portfolio -- IC Shares................... 47,016 13,077
VIP II Investment Grade Bond Portfolio -- IC Shares....... 2,542 362
Fidelity's VIP III:
VIP III Growth Opportunities Portfolio -- IC Shares....... 3,655 345
The Alger American Fund:
Alger American Small Capitalization Portfolio............. 4,155 1,176
Alger American Growth Portfolio........................... 38,063 4,760
Alger American MidCap Growth Portfolio.................... 5,793 2,559
Alger American Leveraged AllCap Portfolio................. 33,798 14,315
Janus Aspen Series:
Aggressive Growth Portfolio............................... 17,283 1,495
Growth Portfolio.......................................... 18,115 464
International Growth Portfolio............................ 4,954 2,340
Worldwide Growth Portfolio................................ 29,152 2,363
Neuberger Berman Advisers Management Trust:
AMT Limited Maturity Bond Portfolio....................... 3,092 934
AMT Partners Portfolio.................................... 3,201 4,033
AMT Socially Responsive Portfolio......................... 402 45
Northstar Galaxy Trust:
Northstar Emerging Growth Portfolio....................... 21,133 11,871
Northstar Growth + Value Portfolio........................ 25,959 13,206
Northstar International Value Portfolio................... 3,741 788
Northstar Research Enhanced Index Portfolio............... 17,897 3,300
Northstar High Yield Bond Portfolio....................... 6,081 5,923
OCC Accumulation Trust:
Equity Portfolio.......................................... 1,315 567
Global Equity Portfolio................................... 1,892 1,560
Managed Portfolio......................................... 8,017 8,164
Small Cap Portfolio....................................... 1,122 642
-------- --------
Total.................................................. $385,463 $118,355
======== ========
</TABLE>

F-14
<PAGE> 82

NORTHERN LIFE INSURANCE COMPANY

(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

STATUTORY BASIS FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

AND

INDEPENDENT AUDITORS' REPORT

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
INDEPENDENT AUDITORS' REPORT................................ F-16
STATUTORY BASIS FINANCIAL STATEMENTS:
Statutory Basis Statements of Admitted Assets,
Liabilities, Surplus and Other Funds................... F-17
Statutory Basis Statements of Operations.................. F-18
Statutory Basis Statements of Changes in Capital and
Surplus................................................ F-19
Statutory Basis Statements of Cash Flows.................. F-20
Notes to Statutory Basis Financial Statements............. F-21
</TABLE>

F-15
<PAGE> 83

INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholder
Northern Life Insurance Company
(A Wholly Owned Subsidiary of ReliaStar Life Insurance Company)
Seattle, Washington

We have audited the accompanying statutory basis statements of admitted
assets, liabilities, surplus and other funds of Northern Life Insurance Company
(the Company) as of December 31, 1999 and 1998, and the related statutory basis
statements of operations, changes in capital and surplus, and cash flows for the
years then ended. These statutory basis financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these statutory basis financial statements based on our audits.

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

As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Insurance Department of the State of Washington, which
practices differ from generally accepted accounting principles. The effects of
such financial statements of the differences between the statutory basis of
accounting and generally accepted accounting principles are described in Note
10.

In our opinion, because of the effects of the matters discussed in the
preceding paragraph, the financial statements do not present fairly, in
accordance with generally accepted accounting principles, the financial position
of the Company as of December 31, 1999 and 1998, or the results of its
operations or its cash flows for the years then ended.

In our opinion, such statutory basis financial statements present fairly,
in all material respects, the admitted assets, liabilities, and surplus and
other funds of the Company as of December 31, 1999 and 1998, and the results of
its operations and its cash flows for the years then ended, on the basis of
accounting described in Note 1.

Minneapolis, Minnesota
March 22, 2000

F-16
<PAGE> 84

NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

STATUTORY BASIS STATEMENTS OF ADMITTED ASSETS, LIABILITIES,
SURPLUS AND OTHER FUNDS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1999 1998
-------- --------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Bonds, at NAIC Value (Market: 1999, $4,580.0; 1998,
$4,675.9)................................................. $4,702.3 $4,503.2
Stocks, at NAIC Value (Cost: 1999, $16.8; 1998, $18.5)...... 16.3 18.5
Mortgage Loans on Real Estate............................... 1,042.3 978.5
Real Estate................................................. .4 --
Policy Loans................................................ 386.9 354.0
Cash on Hand and on Deposit................................. 21.8 8.8
Short-Term Investments...................................... 23.9 19.0
Other Invested Assets....................................... 36.7 45.9
-------- --------
TOTAL CASH AND INVESTED ASSETS.............................. 6,230.6 5,927.9
Reinsurance Recoverable..................................... 1.9 .9
Life Insurance Premiums and Annuity Considerations Deferred
and Uncollected........................................... 7.7 5.9
Investment Income Due and Accrued........................... 73.4 73.9
Other Assets................................................ 3.0 2.0
From Separate Account Statement............................. 778.5 377.6
-------- --------
TOTAL ADMITTED ASSETS....................................... $7,095.1 $6,388.2
======== ========
LIABILITIES, SURPLUS AND OTHER FUNDS
Aggregate Reserves for Policies and Contracts............... $5,808.3 $5,564.0
Policy and Contract Claims.................................. 2.5 4.9
Policyholders' Dividends.................................... 10.9 10.7
Liability for Premiums and Other Deposit Funds.............. 1.8 1.0
Other Policy and Contract Liabilities....................... 12.4 11.9
Commissions Payable......................................... 3.8 1.8
General Expenses Due or Accrued............................. 6.3 8.3
Taxes, Licenses, and Fees Due or Accrued, Excluding Federal
Income Taxes.............................................. (.2) .4
Federal Income Taxes Due or Accrued......................... 7.4 (4.5)
Unearned Investment Income.................................. 1.6 1.6
Asset Valuation Reserve..................................... 58.9 62.1
Other Liabilities........................................... 37.3 22.6
From Separate Account Statement............................. 778.5 377.6
-------- --------
TOTAL LIABILITIES........................................... 6,729.5 6,062.4
-------- --------
SURPLUS AND OTHER FUNDS
Common Capital Stock........................................ 2.5 1.5
Gross Paid In and Contributed Surplus....................... 125.5 126.5
Unassigned Surplus.......................................... 237.6 197.8
-------- --------
TOTAL SURPLUS AND OTHER FUNDS............................... 365.6 325.8
-------- --------
TOTAL LIABILITIES, SURPLUS AND OTHER FUNDS.................. $7,095.1 $6,388.2
======== ========
</TABLE>

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

F-17
<PAGE> 85

NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

STATUTORY BASIS STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------
1999 1998
--------- ---------
(IN MILLIONS)
<S> <C> <C>
REVENUES
Premiums and Annuity Considerations......................... $ 84.7 $ 86.9
Deposit-Type Funds.......................................... 766.7 716.6
Considerations for Supplementary Contracts and Dividend
Accumulations............................................. 12.8 12.5
Net Investment Income....................................... 449.2 428.8
Other Income................................................ 27.0 9.1
-------- --------
TOTAL REVENUES.............................................. 1,340.4 1,253.9
-------- --------
BENEFITS AND EXPENSES
Death Benefits.............................................. 13.4 16.1
Matured Endowments.......................................... .1 .2
Annuity Benefits............................................ 73.2 48.5
Disability and Accident and Health Benefits................. -- .1
Surrender Benefits and Other Fund Withdrawals............... 566.0 503.1
Interest on Policy or Contract Funds........................ .2 .1
Payments on Supplementary Contracts and of Dividend
Accumulations............................................. 13.3 11.5
Change in Reserve for Policies and Contracts................ 244.2 331.4
Change in Reserve for Supplementary Contracts Without Life
Contingencies and for Dividend and Coupon Accumulations... .3 1.8
-------- --------
Total Benefits.............................................. 910.7 912.8
Commissions................................................. 63.2 56.8
General Insurance Expenses.................................. 65.9 57.6
Insurance Taxes, Licenses and Fees, Excluding Federal Income
Taxes..................................................... 3.0 4.2
Other Disbursements......................................... 1.3 2.6
Net Transfers to Separate Accounts.......................... 242.8 188.3
-------- --------
TOTAL BENEFITS AND EXPENSES................................. 1,286.9 1,222.3
-------- --------
Net Gain from Operations before Dividends to Policyholders
and Federal Income Taxes.................................. 53.5 31.6
Dividends to Policyholders.................................. .7 .5
-------- --------
Net Gain from Operations before Federal Income Taxes........ 52.8 31.1
Federal Income Taxes (Excluding Taxes on Capital Losses).... 7.7 8.8
-------- --------
Net Gain from Operations before Realized Capital Losses..... 45.1 22.3
Net Realized Capital Losses, Net of Tax..................... (8.9) (3.0)
-------- --------
NET INCOME.................................................. $ 36.2 $ 19.3
======== ========
</TABLE>

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

F-18
<PAGE> 86

NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

STATUTORY BASIS STATEMENTS OF CHANGES IN
CAPITAL AND SURPLUS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
----------------
1999 1998
------ ------
(IN MILLIONS)
<S> <C> <C>
CAPITAL AND SURPLUS, BEGINNING OF YEAR...................... $325.8 $308.4
Net Income.................................................. 36.2 19.3
Change in Net Unrealized Capital Gains and Losses........... (4.6) (.5)
Change in Non-Admitted Assets and Related Items............. 5.0 2.9
Change in Asset Valuation Reserve........................... 3.2 (4.3)
------ ------
CAPITAL AND SURPLUS, END OF YEAR............................ $365.6 $325.8
====== ======
</TABLE>

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

F-19
<PAGE> 87

NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

STATUTORY BASIS STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------
1999 1998
--------- ---------
(IN MILLIONS)
<S> <C> <C>
CASH FROM OPERATIONS
Premiums and Annuity Considerations......................... $ 83.0 $ 87.0
Deposit-Type Funds.......................................... 766.7 716.6
Other Premiums, Considerations and Deposits................. 12.8 12.4
Allowances and Reserve Adjustments Received on Reinsurance
Ceded..................................................... .1 .1
Investment Income Received.................................. 446.7 428.6
Fees from Separate Accounts................................. 6.8 2.9
Other Income Received....................................... 16.5 1.3
Life and Accident and Health Claims Paid.................... (16.8) (14.9)
Surrender Benefits and Other Fund Withdrawals Paid.......... (565.9) (503.0)
Other Benefits to Policyholders Paid........................ (86.8) (60.4)
Commissions, Other Expenses and Taxes Paid.................. (133.8) (118.2)
Net Transfers to Separate Accounts.......................... (242.8) (188.3)
Dividends to Policyholders Paid............................. (.7) (.5)
Federal Income Taxes Received (Paid)........................ 2.6 (8.3)
--------- ---------
Net Cash From Operations.................................... 288.4 355.3
--------- ---------
CASH FROM INVESTMENTS
Proceeds from Investments Sold, Matured or Repaid
Bonds..................................................... 923.7 613.8
Stocks.................................................... 1.9 12.2
Mortgage Loans............................................ 130.6 291.5
Real Estate............................................... -- .6
Other Invested Assets..................................... 9.5 31.6
Miscellaneous Proceeds.................................... 3.0 1.3
Taxes on Capital Gains and Losses........................... (2.6) (11.5)
--------- ---------
Total Investment Proceeds......................... 1,066.1 939.5
--------- ---------
Cost of Investments Acquired
Bonds..................................................... (1,122.7) (963.2)
Stocks.................................................... -- (25.2)
Mortgage Loans............................................ (192.9) (273.6)
Real Estate............................................... (.4) --
Other Invested Assets..................................... (5.1) (15.7)
Miscellaneous Applications................................ (1.9) (4.3)
--------- ---------
Total Investments Acquired........................ (1,323.0) (1,282.0)
--------- ---------
Net Change in Policy Loans and Premium Notes................ (32.9) (30.3)
--------- ---------
Net Cash From Investments................................... (289.8) (372.8)
--------- ---------
CASH FROM FINANCING AND MISCELLANEOUS SOURCES
Other Sources (Applications), Net........................... 19.3 (.6)
--------- ---------
Net Cash from Financing and Miscellaneous Sources........... 19.3 (.6)
--------- ---------
Net Change in Cash and Short-Term Investments............... 17.9 (18.1)
Cash and Short-Term Investments at Beginning of Year........ 27.8 45.9
--------- ---------
Cash and Short-Term Investments at End of Year.............. $ 45.7 $ 27.8
========= =========
</TABLE>

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

F-20
<PAGE> 88

NORTHERN LIFE INSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF RELIASTAR LIFE INSURANCE COMPANY)

NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS

NOTE 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING
POLICIES

NATURE OF OPERATIONS
Northern Life Insurance Company (the Company) is principally engaged in the
business of providing individual life insurance and annuities. The Company
operates primarily in the United States and is authorized to conduct business in
all states except New York.

BASIS OF PRESENTATION
The accompanying statutory basis financial statements of the Company have
been prepared in conformity with accounting practices prescribed or permitted by
the National Association of Insurance Commissioners (NAIC) and the State of
Washington. Such statutory insurance accounting practices differ from generally
accepted accounting principles and are intended to reflect a more conservative
perspective by, for example, requiring the immediate recognition of acquisition
costs, providing only for income taxes currently payable, recording assets
considered non-admitted as a direct adjustment of surplus and requiring an asset
valuation reserve. The amounts in these financial statements pertain to the
entire business of the Company including, as appropriate, its Separate Account
business.

All outstanding shares of the Company are owned by ReliaStar Life Insurance
Company (ReliaStar Life), a Minnesota domiciled insurance company. ReliaStar
Life is, in turn, a wholly owned subsidiary of ReliaStar Financial Corp.
(ReliaStar), a holding and management company domiciled in Delaware.

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

During 1998, ReliaStar approved a plan to consolidate its five individual
life insurance and annuity service center operations into one new center. This
consolidation is expected to be substantially complete by the end of the year
2000 and affects approximately 250 positions at the Company's Seattle service
center operation. Estimated costs recorded by the Company related to this plan
totaled $3.8 million (pre-tax) and were primarily for employee-related
termination and non-cancelable lease contract costs associated with vacated
facilities. The 1999 transition of annuity operations to the new center was
completed as originally scheduled.

INVESTMENTS
Security investments are valued in accordance with the requirements of the
NAIC, as follows:

Bonds not backed by other loans at amortized cost using the interest
method; loan-backed bonds and structured securities at amortized cost using the
interest method including anticipated prepayments at the date of purchase.
Significant changes in estimated cash flows from the original purchase
assumptions are accounted for using the interest method. Prepayment assumptions
for loan-backed bonds and structured securities were obtained from vendor
provided prepayment models, broker-dealer survey values or internal estimates.
These assumptions are consistent with the current interest rate and economic
environment. The retrospective adjustment method is used to value all
loan-backed bonds and structured securities.

Preferred stocks in good standing are valued at cost, which approximates
market value.

F-21
<PAGE> 89

Common stocks are carried at estimated market value.

Mortgage loans on real estate are carried at amortized cost.

Real estate acquired in satisfaction of debt is stated at the lower of the
appraised value of the asset foreclosed, or book value of the mortgage at the
date of foreclosure.

Policy loans are valued at the aggregate unpaid balance.

Short-term investments are carried at amortized cost, which approximates
market value.

Other invested assets, primarily limited partnerships and call options, are
carried on the cost or equity basis.

Derivative instruments, such as interest rate swaps, are valued in
accordance with the NAIC Accounting Practices and Procedures manual and the
Purposes and Procedures manual of the Securities Valuation Office. All
derivative instruments are valued consistently with the hedged items. The
Company recognizes investment income on interest rate swap agreements whereby
the difference between the amounts paid and amounts received or accrued on
interest rate swap agreements are reflected in net investment income.

All other security investments are presented at values prescribed by or
deemed acceptable to the NAIC, generally market value.

The Company uses straight-line depreciation for all of its depreciable
assets, with useful lives varying depending on the asset.

Realized investment gains and losses on sales of securities are included in
the determination of net income and are determined on the specific
identification method. Unrealized investment gains and losses are accounted for
as direct increases or decreases in surplus. Income tax effects of unrealized
gains and losses are not recognized.

Due and accrued income is excluded from investment income on mortgage
loans, bonds and short-term investments where interest is past due more than 90
days. The total amount excluded at December 31, 1999 and 1998, was $.9 million
and $1.7 million, respectively.

SEPARATE ACCOUNTS
The Company operates separate accounts. The assets and liabilities of the
separate accounts are primarily related to variable annuity contracts and
represent policyholder-directed funds that are separately administered. The
assets (primarily investments) and liabilities (principally to contractholders)
of each account are clearly identifiable and distinguishable from other assets
and liabilities of the Company. Assets are carried at market value.

NONADMITTED ASSETS
Assets of the Company designated as "nonadmitted," primarily furniture and
equipment, are excluded from admitted assets. The change in such assets, net of
depreciation, is reflected as a direct increase or decrease in surplus.

AGGREGATE RESERVES FOR POLICIES AND CONTRACTS
Reserves for future policy and contract benefits for life insurance are
computed by the net level premium and preliminary term and other modified
reserve methods on the basis of interest rates and mortality assumptions
prescribed by state regulatory authorities. Annuity reserves are computed using
interest rates and mortality assumptions where needed as prescribed by state
regulatory authorities. Waiver of premium reserves were primarily based on the
1952 Disability Study (Period 2) combined with 1958 CSO using 3% interest.

The Company waives deduction of deferred fractional premiums upon the death
of the insured and returns any portion of the final premium beyond the date of
death. Surrender values are not promised in excess of the legally computed
reserves.

F-22
<PAGE> 90

Extra premiums in addition to the basic gross premium are charged for
substandard lives. Mean reserves are determined by computing the regular mean
reserves and holding in addition the unearned portion of the extra premium
charge for the year.

All substandard policies except Adjustable Life and Universal Life are
valued as standard plus an amount determined by valuation representing the
excess amount of the multiple table reserves over the standard reserves. All
Adjustable Life and Universal Life policies are valued directly on a multiple
table basis.

As of December 31, 1999, the Company had insurance in force of $63.6
million for which the gross premiums are less than the net premiums according to
the standard valuation set by the State of Washington. Reserves to cover this
insurance totaled $.9 million at December 31, 1999.

Of the total net annuity actuarial reserves and deposit fund liabilities at
December 31, 1999, approximately 48% were subject to discretionary
withdrawal -- with adjustment; approximately 49% were subject to discretionary
withdrawal -- without adjustment; and approximately 3% were not subject to
discretionary withdrawal provisions.

INCOME TAXES DUE AND ACCRUED
The provision for income taxes is based upon income that is estimated to be
currently taxable.

PREMIUM REVENUE AND BENEFITS TO POLICYHOLDERS
Premiums on life insurance contracts are generally recognized as revenue
over the premium paying period of the contract. Contract benefits are recognized
over the life of the contract by providing reserves for future policy and
contract benefits.

POLICY ACQUISITION COSTS
Costs of acquiring new business are charged to operating expenses when
incurred.

RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to current
year presentation.

F-23
<PAGE> 91

NOTE 2. INVESTMENTS

BONDS
The statement value and estimated market values of investments in bonds by
type of investment were as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1999
-------------------------------------------
GROSS UNREALIZED ESTIMATED
STATEMENT ----------------- MARKET
VALUE(1) GAINS (LOSSES) VALUE
--------- ----- -------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
United States Government and Government Agencies and
Authorities........................................ $ 3.1 -- -- $ 3.1
States, Municipalities and Political Subdivisions.... 13.2 $ .5 $ (.2) 13.5
Foreign Governments.................................. 19.2 .1 -- 19.3
Public Utilities..................................... 160.1 1.6 (3.1) 158.6
Corporate Securities................................. 2,885.6 20.3 (90.1) 2,815.8
Mortgage-Backed/Structured Finance................... 1,621.1 4.7 (56.1) 1,569.7
-------- ----- ------- --------
TOTAL...................................... $4,702.3 $27.2 $(149.5) $4,580.0
======== ===== ======= ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
GROSS UNREALIZED ESTIMATED
STATEMENT ------------------ MARKET
VALUE(1) GAINS (LOSSES) VALUE
--------- ------ -------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
United States Government and Government Agencies and
Authorities....................................... $ 3.6 $ .1 -- $ 3.7
States, Municipalities and Political Subdivisions... 21.8 1.3 -- 23.1
Foreign Governments................................. 33.5 3.9 -- 37.4
Public Utilities.................................... 169.5 10.1 $ (.2) 179.4
Corporate Securities................................ 2,973.8 145.2 (18.2) 3,100.8
Mortgage-Backed/Structured Finance.................. 1,301.0 33.9 (3.4) 1,331.5
-------- ------ ------ --------
TOTAL..................................... $4,503.2 $194.5 $(21.8) $4,675.9
======== ====== ====== ========
</TABLE>

- ------------------------
(1) Statement value at December 31, 1999 and 1998, includes unrealized losses
related to NAIC 6 rated bonds of $6.7 million and $2.4 million,
respectively.

F-24
<PAGE> 92

The statement value and estimated market value of bonds, by contractual
maturity, are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------
ESTIMATED
STATEMENT MARKET
VALUE VALUE
--------- ---------
(IN MILLIONS)
<S> <C> <C>
Maturing in:
One Year or Less....................................... $ 89.0 $ 89.2
One to Five Years...................................... 1,321.9 1,307.9
Five to Ten Years...................................... 1,205.8 1,164.1
Ten Years or Later..................................... 464.5 449.1
Mortgage-Backed/Structured Finance..................... 1,621.1 1,569.7
-------- --------
TOTAL............................................. $4,702.3 $4,580.0
======== ========
</TABLE>

The estimated market values for the actively traded marketable bonds are
determined based upon quoted market prices. The estimated market values for
marketable bonds without an active market are obtained through several
commercial pricing services, which provide the estimated market values.
Estimated market values of privately placed bonds are determined utilizing a
matrix-based pricing model. The model considers the current level of risk-free
interest rates, current corporate spreads, the credit quality of the issuer and
cash flow characteristics of the security. Using this data, the model generates
market values which the Company considers reflective of the estimated market
value of each privately placed bond.

At December 31, 1999, the largest industry concentration of the private
placement portfolio was consumer noncyclical where 15.7% of the portfolio was
invested, and the largest industry concentration of the marketable bond
portfolio was mortgage-backed/structured finance, where 43.9% of the portfolio
was invested.

STOCKS
The cost and statement value of stocks were as follows:

<TABLE>
<CAPTION>
DECEMBER 31
----------------
1999 1998
----- -----
(IN MILLIONS)
<S> <C> <C>
Cost........................................................ $16.8 $18.5
Gross Unrealized Gains...................................... .3 .2
Gross Unrealized Losses..................................... (.8) (.2)
----- -----
STATEMENT VALUE............................................. $16.3 $18.5
===== =====
</TABLE>

MORTGAGE LOANS ON REAL ESTATE
The maximum and minimum lending rates for all mortgage loans issued during
1999 were 8.75% and 5.50%.

During 1999 and 1998, the Company did not reduce interest rates of
outstanding mortgage loans.

F-25
<PAGE> 93

The maximum percentage of any one loan to the value of security at the time
of the loan was 80%. Fire insurance is required on all properties covered by
mortgage loans at least equal to the excess of the loan over the maximum loan
which would be permitted by law on the land without buildings. As of December
31, 1999, the Company held mortgages with a statement value of $.3 million which
had $33,127 of interest more than one year overdue.

At December 31, 1999, the largest geographic concentration of commercial
mortgage loans was in the Midwest region of the United States, where
approximately 35.4% of the commercial mortgage loan portfolio was invested.

INVESTMENT INCOME
Investment income summarized by type of investment was as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
----------------
1999 1998
------ ------
(IN MILLIONS)
<S> <C> <C>
Bonds....................................................... $348.8 $329.5
Preferred Stocks............................................ 1.3 .8
Mortgage Loans on Real Estate............................... 77.3 75.6
Real Estate................................................. -- .1
Policy Loans................................................ 20.8 18.8
Short-Term Investments...................................... 2.5 3.2
Derivative Instruments...................................... 3.4 3.0
Other....................................................... 2.5 5.8
------ ------
Gross Investment Income..................................... 456.6 436.8
Investment Expenses......................................... 7.4 8.0
------ ------
NET INVESTMENT INCOME....................................... $449.2 $428.8
====== ======
</TABLE>

F-26
<PAGE> 94

REALIZED INVESTMENT GAINS AND LOSSES
Net realized capital gains (losses) were as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
--------------
1999 1998
----- -----
(IN MILLIONS)
<S> <C> <C>
Bonds
Gross Gains............................................... $ 9.7 $12.0
Gross Losses.............................................. (8.5) (2.9)
Preferred Stocks............................................ -- (1.0)
Common Stocks............................................... -- .1
Mortgage Loans on Real Estate............................... 1.6 1.2
Real Estate................................................. -- (.1)
Other....................................................... (4.0) .3
----- -----
Net Pretax Realized Capital Gains (Losses).................. (1.2) 9.6
Income Tax Expense.......................................... (4.3) (6.9)
Net Pretax Realized Capital Gains Transferred to
Interest Maintenance Reserve (IMR)........................ (5.2) (8.8)
Income Tax Expense Transferred to IMR....................... 1.8 3.1
----- -----
NET REALIZED CAPITAL LOSSES, NET OF TAX..................... $(8.9) $(3.0)
===== =====
</TABLE>

DERIVATIVE INSTRUMENTS
The Company has an established program prescribing the use of derivatives
in its asset/liability management activity. The investment policy of the Company
expressly precludes the use of such instruments for speculative purposes. The
policy details permissible uses and instruments and contains accounting and
management controls designed to assure compliance with these policies. The
Company is not a party to leveraged derivatives.

The insurance liabilities of the Company are sensitive to changes in market
interest rates. The Company has established procedures for evaluating these
liabilities and structures investment asset portfolios with compatible
characteristics. Investment assets are selected which provide yield, cash flow
and interest rate sensitivities appropriate to support the insurance products.

The Company uses interest rate swaps and call options as part of this
asset/liability management program. The Company has acquired a significant
amount of certain shorter duration investments, such as floating rate or
adjustable rate investments. Acquisition of these assets shortens the duration
of an asset portfolio. The Company uses interest rate swaps to extend the
duration of these portfolios as an alternative to purchasing longer duration
investments. The call options are based on the S&P 500 Index and are used to
hedge the Company's equity indexed annuity product. On the termination date the
counterparty will make one payment to the Company based on the level of the
index and strike price.

The Company is exposed to credit-related losses in the event of
nonperformance by counterparties to derivative instruments, but it does not
expect any counterparties to fail to meet their obligations given their high
credit ratings. In addition, the Company has established an issuer holder
limitation program whereby the maximum credit exposure to a single issuer is
established based upon the credit rating of the issuer and the structure of the
investment. The positive market value of swap positions are included in the
computation of the maximum issuer limitation.

F-27
<PAGE> 95

NOTE 3. INCOME TAXES

The Company's 1999 federal income tax return will be consolidated with the
following entities: ReliaStar Financial Corp., ReliaStar Life Insurance Company,
Norlic, Inc., NWNL Benefits Corporation, NWNL Health Management Corp., ReliaStar
Investment Research, Inc., Washington Square Securities, Inc., Pilgrim Holdings,
Inc., Pilgrim Advisors, Inc., Northstar Distributors, Inc., Northstar
Administrators Corporation, Pilgrim Funding, Inc., International Risks, Inc.,
Northeastern Corporation, Successful Money Management Seminars, Inc., PrimeVest
Financial Services, Inc., PrimeVest Mortgage, Inc., PrimeVest Insurance Agency
of Alabama, Inc., PrimeVest Insurance Agency of New Mexico, Inc., PrimeVest
Insurance Agency of Oklahoma, Inc., PrimeVest Insurance Agency of Texas, Inc.,
PrimeVest Insurance Agency of Ohio, Inc., Branson Insurance Agency, Inc.,
Granite Investment Services, Inc., Washington Square Insurance Agency, Inc.,
(Massachusetts), Washington Square Insurance Agency, Inc., (Texas), Washington
Square Insurance Agency, Inc., (Ohio), Washington Square Insurance Agency, Inc.,
(New Mexico), ReliaStar Bancshares, Inc., ReliaStar Bank, ReliaStar Investment
Services, Inc., ReliaStar Managing Underwriters, Inc., ReliaStar Payroll Agent,
Inc., Financial Northeastern Securities, Inc., Financial Northeastern
Corporation, FNC Insurance Services, Inc., Pilgrim Investment, Inc., Express
America T.C. Corp, EAMC Liquidation Corp., and Pilgrim Financial, Inc.

The method by which the total consolidated federal income tax for each
entity is allocated to each of these companies is subject to a written agreement
approved by the Company's Board of Directors. Allocation is based on separate
return calculations such that each company in the consolidated return pays the
same tax or receives the same refunds it would have paid or received had it
consistently filed separate federal income tax returns. Intercompany tax
balances are settled within a reasonable time after filing of the consolidated
federal income tax returns with the Internal Revenue Service.

Federal income tax regulations allowed certain special deductions for 1983
and prior years which are accumulated in a memorandum tax account designated as
"policyholders' surplus." Generally, this policyholders' surplus account will
become subject to tax at the then current rates only if the accumulated balance
exceeds certain maximum limitations or if certain cash distributions are deemed
to be paid out of the account. At December 31, 1999, the Company had accumulated
approximately $5.5 million in its separate policyholders' surplus account.

The difference between the U.S. federal income tax rate and the Company's
effective tax rate is summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
-------------
1999 1998
---- -----
<S> <C> <C>
Statutory Tax Rate.......................................... 35.0% 35.0%
Accrual of Market Discount on Bonds......................... (6.9) (12.1)
Prior Year Provision True-Up................................ (9.8) 1.1
IMR Amortization............................................ (2.0) (2.6)
Other....................................................... (1.8) 6.9
---- -----
EFFECTIVE TAX RATE.......................................... 14.5% 28.3%
==== =====
</TABLE>

Cash paid to ReliaStar for federal income taxes was $19.9 million during
1998. No cash was paid for federal income taxes during 1999.

NOTE 4. EMPLOYEE BENEFIT PLANS

SUCCESS SHARING PLAN AND ESOP
The Success Sharing Plan and ESOP (Success Sharing Plan) was designed to
increase employee ownership and reward employees when certain ReliaStar
performance objectives are met. Essentially all employees are eligible to
participate in the Success Sharing Plan. The Success Sharing Plan has both
qualified and nonqualified components. The nonqualified component is equal to
25% of the annual award and is paid in

F-28
<PAGE> 96

cash to employees. The qualified component is equal to 75% of the annual award
which is contributed to the ESOP portion of the Success Sharing Plan.

In addition, the Success Sharing Plan has a 401(k) feature whereby
participants may elect to contribute a percentage of their eligible earnings to
the plan. Beginning in 1999, the Company matched participants' 401(k)
contributions up to 6% of eligible earnings.

Costs charged to expense for the Success Sharing Plan were $1.3 million and
$1.2 million for the years ended December 31, 1999 and 1998, respectively.

PENSION AND OTHER POSTRETIREMENT BENEFITS
Pension Plans -- The Company participates in funded and unfunded
noncontributory defined benefit retirement plans sponsored by an affiliate which
provide benefits to employees upon retirement (Pension Plans). Effective
December 31, 1998, the qualified defined benefit retirement plan was amended to
suspend the accrual of additional benefits for future services. Eligible
employees retain all of their accrued benefits as of December 31, 1998, which
will be paid monthly at retirement according to the provisions of the plan.
Employees meeting certain age and service requirements will receive certain
transition benefits until retirement.

At January 1, 1999, the date of the most recent actuarial valuation, the
plan accumulated benefit obligation/present value of accrued benefits and the
amount of vested benefits for the Pension Plans was $188.0 million and $183.5
million, respectively, based on an assumed 8.5% interest rate. The fair value of
plan assets was $251.7 million as of January 1, 1999 and included in plan assets
are 1.2 million shares of ReliaStar common stock with a fair value of $56.9
million as of January 1, 1999.

A pension credit totaling $.2 million and $.6 million for the years ended
December 31, 1999 and 1998, respectively, was allocated to the Company for its
portion of the cost of the Pension Plans.

Postretirement Benefits -- Through a plan sponsored by an affiliate, the
Company provides certain health care and life insurance benefits to retired
employees and their eligible dependents (Postretirement Plan). The
postretirement health care plan is contributory, with retiree contribution
levels adjusted annually; the life insurance plan provides a flat amount of
noncontributory coverage and optional contributory coverage.

The amount of accumulated benefits obligation for retirees and vested
employees covered under the Postretirement Plan as of December 31, 1999 was
$11.1 million and the amount of accumulated benefits obligation for non-vested
employees as of December 31, 1999 was $2.5 million. The discount rate used in
determining the postretirement benefit obligation as of December 31, 1999 was
7.5% and health care cost trend rate used was 5.0%. A one-percentage point
increase in the assumed health care cost trend rate would not have a significant
impact on the postretirement benefit obligation or the service and interest cost
components of annual expense.

A credit totaling $.1 million was allocated to the Company for its portion
of the cost of the Postretirement Plan for the year ended December 31, 1999.
Expense totaling $.1 million was allocated to the Company for its portion of the
cost of the Postretirement Plan for the year ended December 31, 1998.

STOCK INCENTIVE PLAN
Officers and key employees of the Company participate in the stock
incentive plan of ReliaStar. ReliaStar applies Accounting Principles Board
Opinion No. 25 and related interpretations in accounting for its plans.
Accordingly, no compensation expense for stock-based compensation plans has been
allocated to the Company.

NOTE 5. CAPITAL AND SURPLUS

The ability of the Company to pay cash dividends to its parent is
restricted by law or subject to approval of the insurance regulatory authorities
of Washington. These authorities recognize only statutory accounting practices
for determining the ability of an insurer to pay dividends to its shareholders.

F-29
<PAGE> 97

Under the laws of the State of Washington, the Company can pay dividends to
shareholders only from earned statutory surplus, and the distribution in any
year is limited, by law, to the greater of the prior year's net income or 10% of
prior year-end statutory surplus.

Total unassigned surplus at December 31, 1999 was $237.6 million and has no
restrictions, except as described above.

NOTE 6. REINSURANCE

The Company is a member of reinsurance associations established for the
purpose of ceding the excess of life insurance over retention limits.

Reinsurance contracts do not relieve the Company from its obligations to
policyholders. Failure of reinsurers to honor their obligations could result in
losses to the Company; consequently, allowances are established for amounts
deemed uncollectible. The amount of the allowance for uncollectible reinsurance
receivables was immaterial at December 31, 1999 and 1998. The Company evaluates
the financial condition of its reinsurers and monitors concentrations of credit
risk to minimize its exposure to significant losses from reinsurer insolvencies.

The Company's retention limit is $400,000 per insurable life for individual
coverage.

As of December 31, 1999, $.4 billion of life insurance in force was ceded
to other companies of which 57% (based on inforce) has been ceded to three
unaffiliated reinsurers and an additional 8% (based on inforce) has been ceded
to ReliaStar Life. In addition, the Company had assumed $.7 billion of life
insurance in force as of December 31, 1999, from ReliaStar Life.

The effect of reinsurance on premiums and recoveries is as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
--------------
1999 1998
----- -----
(IN MILLIONS)
<S> <C> <C>
Direct Premiums............................................. $84.0 $86.8
Reinsurance Assumed......................................... 3.6 2.9
Reinsurance Ceded........................................... (2.9) (2.8)
----- -----
NET PREMIUMS................................................ $84.7 $86.9
===== =====
REINSURANCE RECOVERIES...................................... $ 2.3 $ 1.6
===== =====
</TABLE>

NOTE 7. RELATED PARTY TRANSACTIONS

The Company maintains intercompany loan agreements with its parent company.
There were no loans taken from or made to the parent company during 1999 and
1998. In addition, there were no intercompany loans outstanding at December 31,
1999 or 1998.

The Company and its affiliates have entered into agreements whereby they
provide certain management, administrative, legal and other services to each
other. The net amounts billed to the Company were of $20.5 million and $18.0
million in 1999 and 1998, respectively. The net costs allocated to the Company
under these agreements may not be indicative of costs the Company might incur if
these services were not provided by the Company's affiliates.

NOTE 8. COMMITMENTS AND CONTINGENCIES

LITIGATION
The Company is a defendant in a number of lawsuits arising out of the
normal course of its business. Some of the claims seek to be granted class
action status and many of the claims seek both compensatory and punitive
damages. In the opinion of management, the ultimate resolution of such
litigation will not have a

F-30
<PAGE> 98

material adverse impact to the financial position of the Company. It should be
noted, however, that a number of financial services companies have been
subjected to significant awards in connection with punitive damages claims and
the Company can make no assurances that it will not be subjected to such an
award.

FINANCIAL INSTRUMENTS
The Company is a party to financial instruments with on and
off-balance-sheet risk in the normal course of business to reduce its exposure
to fluctuations in interest rates and equity prices. These financial instruments
include commitments to extend credit, interest rate swaps and equity indexed
call options. Those instruments involve, to varying degrees, elements of credit,
interest rate, equity price or liquidity risk in excess of the amount recognized
in the Statutory Basis Statements of Admitted Assets, Liabilities, Surplus and
Other Funds.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual amount of those instruments. The Company uses the
same credit policies in making commitments and conditional obligations as it
does for on-balance-sheet instruments. For swaps and equity indexed call
options, the contract or notional amounts do not represent exposure to credit
loss. The Company's exposure to credit loss is limited to those financial
instruments where the Company has an unrealized gain.

Unless otherwise noted, the Company does not require collateral or other
security to support financial instruments with credit risk.

<TABLE>
<CAPTION>
DECEMBER 31
----------------
1999 1998
------ ------
(IN MILLIONS)
<S> <C> <C>
CONTRACT OR NOTIONAL AMOUNT
Financial Instruments Whose Contract Amounts Represent
Credit Risk:
Commitments to Extend Credit.............................. $ 16.0 $ 28.3
Financial Instruments Whose Notional or Contract Amounts
Exceed the Amount of Credit Risk:
Interest Rate Swap Agreements.......................... 401.0 431.0
Equity Indexed Call Options............................ 23.1 7.3
</TABLE>

Commitments to Extend Credit -- Commitments to extend credit are legally
binding agreements to lend to a customer. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee.
They generally may be terminated by the Company in the event of deterioration in
the financial condition of the borrower. Since some of the commitments are
expected to expire without being drawn upon, the total commitment amounts do not
necessarily represent future liquidity requirements. The Company evaluates each
customer's creditworthiness on a case-by-case basis.

Interest Rate Swap Agreements -- The Company enters into interest rate swap
agreements to manage interest rate exposure. The primary reason for the interest
rate swap agreements is to extend the duration of adjustable rate investments.
Interest rate swap transactions generally involve the exchange of fixed and
floating rate interest payment obligations without the exchange of the
underlying principal amounts. Changes in market interest rates impact income
from adjustable rate investments and have an opposite (and approximately
offsetting) effect on the reported income from the swap portfolio. The risks
under interest rate swap agreements are generally similar to those of futures
contracts. Notional principal amounts are often used to express the volume of
these transactions but do not represent the much smaller amounts potentially
subject to credit risk. The amount subject to credit risk is approximately equal
to the unrealized gain on the agreements. At December 31, 1999, there was no
unrealized gain on the agreements.

Equity Indexed Call Options -- The Company holds certain call options
indexed to the performance of the S&P 500 Index as part of its asset/liability
management strategy for its equity indexed annuity products. The Company held 22
call options with an aggregate notional amount of $23.1 million and an estimated
fair value of $2.7 million as of December 31, 1999.

F-31
<PAGE> 99

LEASES
The Company has operating leases for office space and certain computer
processing and other equipment. Rental expense for these items was $2.9 million
and $2.7 million for 1999 and 1998, respectively.

Future minimum aggregate rental commitments at December 31, 1999 for
operating leases were as follows:

<TABLE>
<CAPTION>
(IN MILLIONS)
---------------------------
<S> <C>
2000 -- $2.7................................................ 2003 -- $ 2.8
2001 -- $2.8................................................ 2004 -- $ 2.8
2002 -- $2.8................................................ 2005 and
thereafter -- $11.3
</TABLE>

NOTE 9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosures are made in accordance with the requirements of
Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosures about
Fair Value of Financial Instruments." SFAS No. 107 requires disclosure of fair
value information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the discount rate and
estimates of future cash flows. In that regard, the derived fair value
estimates, in many cases, could not be realized in immediate settlement of the
instrument.

SFAS No. 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate fair
value amounts presented do not represent the underlying value of the Company.

The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1999 and 1998. Although
management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date; therefore,
current estimates of fair value may differ significantly from the amounts
presented herein.

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

Bonds -- The estimated market value disclosures for bonds satisfy the fair
value disclosure requirements of SFAS No. 107 (see Note 2).

Stocks -- Fair value equals carrying value for common stocks as these
securities are carried at NAIC value, which approximates quoted market value.
Fair value for preferred stocks equals NAIC market value, which approximates
quoted market value.

Mortgage Loans on Real Estate -- The fair values for mortgage loans on real
estate are estimated using discounted cash flow analyses, using interest rates
currently being offered in the marketplace for similar loans to borrowers with
similar credit ratings. Loans with similar characteristics are aggregated for
purposes of the calculations.

Cash, Short-Term Investments and Policy Loans -- The carrying amounts for
these assets approximate the assets' fair values.

Other Financial Instruments Reported as Assets -- The carrying amounts for
these financial instruments (primarily premiums and other accounts receivable
and accrued investment income) approximate those assets' fair values.

Investment Contract Liabilities -- The fair value for deferred annuities
was estimated to be the amount payable on demand at the reporting date as those
investment contracts have no defined maturity and are

F-32
<PAGE> 100

similar to a deposit liability. The amount payable at the reporting date was
calculated as the account balance less applicable surrender charges.

The fair values for supplementary contracts without life contingencies and
immediate annuities were estimated using discounted cash flow analyses. The
discount rate was based upon treasury rates plus a pricing margin.

The carrying amounts reported for other investment contracts, approximate
those liabilities' fair value.

Other Financial Instruments Reported as Liabilities -- The carrying amounts
for other financial instruments (primarily normal payables of a short-term
nature) approximate those liabilities' fair values.

Interest Rate Swaps -- The fair value for interest rate swaps was estimated
using discounted cash flow analyses. The discount rate was based upon rates
currently being offered for similar interest rate swaps available from similar
counterparties.

The carrying amounts and estimated fair values of the Company's financial
instruments as of December 31, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------------
1999 1998
---------------------- ----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
FINANCIAL INSTRUMENTS RECORDED AS ASSETS:
Bonds....................................... $ 4,702.3 $ 4,580.0 $ 4,503.2 $ 4,675.9
Stocks...................................... 16.3 15.0 18.5 17.7
Mortgage Loans on Real Estate:
Commercial............................... 833.1 824.5 766.5 1,315.1
Residential and Other.................... 209.2 208.1 212.0 352.1
Policy Loans................................ 386.9 386.9 354.0 354.0
Cash and Short-Term Investments............. 45.7 45.7 27.8 27.8
Other Financial Instruments Recorded as
Assets................................... 62.5 62.5 84.9 84.9
FINANCIAL INSTRUMENTS RECORDED AS LIABILITIES:
Investment Contracts
Deferred Annuities....................... (5,542.3) (5,218.5) (5,024.6) (4,987.6)
Supplementary Contracts and Immediate
Annuities.............................. (160.6) (157.5) (121.8) (121.8)
Other Investment Contracts............... (1.6) (1.6) (.9) (.9)
Other Financial Instruments Recorded as
Liabilities.............................. (34.0) (34.0) (15.9) (15.9)
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS:
INTEREST RATE SWAPS........................... -- (1.9) -- 14.3
</TABLE>

Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result from
offering for sale at one time the Company's holdings of a particular financial
instrument. Because no market exists for a significant portion of the Company's
financial instruments, fair value estimates are based on judgments regarding
future expected loss experience, current economic conditions, risk
characteristics of various financial instruments, and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

F-33
<PAGE> 101

Fair value estimates are based on existing on and off-balance sheet
financial instruments without attempting to estimate the value of anticipated
future business and the value of assets and liabilities that are not considered
financial instruments. In addition, the tax ramifications related to the
realization of the unrealized gains and losses can have a significant effect on
fair value estimates and have not been considered in the estimates.

NOTE 10: RECONCILIATION OF STATUTORY NET INCOME AND EQUITY TO GAAP NET INCOME
AND EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------
1999 1998
-------- --------
(IN MILLIONS)
<S> <C> <C>
Statutory Net Income as Reported............................ $ 36.2 $ 19.3
Adjustments Concerning:
Deferred Acquisition Costs................................ 35.0 30.4
Deferred Federal Income Taxes............................. (22.4) (21.4)
Reserves for Future Benefits.............................. 20.4 18.7
Interest Maintenance Reserve.............................. (3.0) (2.3)
Other..................................................... (2.4) 11.3
------- -------
NET INCOME IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES................................................ $ 63.8 $ 56.0
======= =======
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1999 1998
------- -------
(IN MILLIONS)
<S> <C> <C>
Statutory Capital and Surplus as Reported................... $ 365.6 $ 325.8
Adjustments Concerning:
Deferred Acquisition Costs................................ 627.4 513.1
Deferred Federal Income Taxes............................. (48.2) (107.9)
Reserves for Future Benefits.............................. (286.2) (306.6)
Unrealized Investment Gains (Losses)...................... (124.6) 190.1
Nonadmitted Assets........................................ 11.7 13.3
Asset Valuation Reserve................................... 58.9 62.1
Interest Maintenance Reserve.............................. 12.4 11.9
Other..................................................... (8.1) (4.4)
------- -------
SHAREHOLDER'S EQUITY IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES..................................... $ 608.9 $ 697.4
======= =======
</TABLE>

F-34
<PAGE> 102

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:

Part A: None

Part B: Separate Account One

Independent Auditors' Report
Statement of Assets and Liabilities as of December 31, 1999
Combined Statements of Operations and Changes in Contract
Owners' Equity
for the years ended December 31, 1999 and December 31, 1998
Notes to Financial Statements

Northern Life Insurance Company

Independent Auditors' Report
Statutory-Basis Statements of Admitted Assets, Liabilities,
Surplus and Other Funds
as of December 31, 1999 and 1998
Statutory-Basis Statements of Operations for the years ended
December 31, 1999
and 1998
Statutory-Basis Statements of Changes in Capital and Surplus
for the years ended
December 31, 1999 and 1998
Statutory-Basis Statement of Cash Flows for the years ended
December 31, 1999
and 1998
Notes to Statutory Basis Financial Statements
Independent Auditor's Report on Supplemental Schedule of Assets
and Liabilities
Supplemental Schedule of Assets and Liabilities for the year
ended December 31, 1999

(b) Exhibits:

<TABLE>
<C> <C> <S>
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").(2)
2. Not Applicable.
3. (a) Form of Distribution and Administrative Services Agreement
between Washington Square Securities, Inc. and Depositor.(2)
(b) Form of selling group (or distribution) agreement between
Washington Square Securities, Inc. and selling group
members.(2)
(c) Form of Amended Broker/Dealer Variable Annuity Compensation
Schedule.(5)
4. (a) Form of Flexible Premium Individual Deferred Annuity
Contract (RIA Series -- TSA)(6)
(b) Form of Individual Deferred Retirement Annuity Contract (RIA
Series -- IRA/Non-Qualified)(6)
(c) Roth IRA Endorsement.(2)
(d) Form of Internal Revenue Code Section 457 Endorsement.(5)
5. Contract Application Form (Retail Series, Plus Series and
RIA Series).(5)
6. (a) Articles of Incorporation of Depositor.(2)
(b) Bylaws of Depositor.(2)
7. Not Applicable.
8. (a) Form of Participation Agreement by and among AIM Variable
Insurance Funds, Inc., A I M Distributors, Inc., and
Northern Life Insurance Company.
(b) Participation Agreement with The Alger American Fund and
Fred Alger and Company.(2)
(c) Participation Agreement among Fidelity Variable Insurance
Products Fund, Fidelity Distributors Corporation, and
Northern Life Insurance Company.(2)
(d) Amendment to Participation Agreement among Fidelity Variable
Insurance Products Fund, Fidelity Distributors Corporation,
and Northern Life Insurance Company, dated July 24, 1997.(3)
</TABLE>

II-1
<PAGE> 103

<TABLE>
<S> <C> <C>
(e) Participation Agreement among Fidelity Variable Insurance Products Fund II, Fidelity Distributors
Corporation, and Northern Life Insurance Company.(2)
(f) Amendment to Participation Agreement among Fidelity Variable Insurance Products Fund II, Fidelity
Distributors Corporation, and Northern Life Insurance Company, dated July 24, 1997.(3)
(g) Form of Participation Agreement among Fidelity Variable Insurance Products Fund III, Fidelity
Distributors Corporation and Northern Life Insurance Company.(1)
(h) Participation Agreement by and between the Janus Aspen Series and Northern Life Insurance Company,
dated August 8, 1997.(3)
(i) Participation Agreement by and among Northern Life Insurance Company, Neuberger Berman Advisers
Management Trust, Advisers Managers Trust and Neuberger Berman Management Inc., dated August 8,
1997.(3)
(j) Amendment No. 1 to Participation Agreement by and among Northern Life Insurance Company, Neuberger
Berman Advisers Management Trust, Advisers Managers Trust and Neuberger Berman Management Inc.
dated December 1, 1998.(1)
(k) Participation Agreement by and among OCC Accumulation Trust, Northern Life Insurance Company and
OCC Distributors, dated August 8, 1997.(3)
(l) Form of Service Agreement between Northern Life Insurance Company and A I M Advisors, Inc.
(m) Service Agreement by and between Fred Alger Management, Inc. and Northern Life Insurance Company,
dated as of August 8, 1997.(3)
(n) Form of Service Agreement and Contract between ReliaStar Life Insurance Company, WSSI, and
Fidelity Investments Institutional Operations Company and Fidelity Distributors Corporation dated
January 1, 1997.(4)
(o) Service Agreement by and between Janus Capital Corporation and Northern Life Insurance Company,
dated August 8, 1997.(3)
(p) Service Agreement by and between Neuberger Berman Management Inc. and Northern Life Insurance
Company, effective August 8, 1997.(3)
(q) Service Agreement by and between OpCap Advisors and Northern Life Insurance Company, dated as of
August 8, 1997.(3)
9. Consent and Opinion of Stewart D. Gregg as to the legality of the securities being registered.
10. Consent of Deloitte & Touche LLP.
11. No financial statements are omitted from Item 23.
12. Not Applicable.
13. Schedule of computation of performance data.(1)
14. Financial Data Schedule. Not required.
15. Powers of Attorney for Richard R. Crowl, Michael J. Dubes, Wayne R. Huneke, Robert C. Salipante, and John G.
Turner.(6)
</TABLE>

- ------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Form N-4 Registration Statement, File No. 33-90474, filed April
23, 1999.

(2) Incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed April
20, 1998.

(3) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed July
29, 1997.

(4) Incorporated by reference to Post-Effective Amendment No. 4 to ReliaStar
Life Insurance Company's Form N-4 Registration Statement File No. 33-69892,
filed April 14, 1997.

(5) Incorporated by reference to Post-Effective Amendment No. 9 to the
Registrant's Form N-4 Registration Statement File No. 33-90474, filed
November 5, 1999.

(6) Incorporated by reference to the Registrant's Initial Registration Statement
on Form N-4, File No. 333-32948, filed March 21, 2000.

II-2
<PAGE> 104

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
- ----------------------------------- ------------------------------------------------------------
<S> <C>
John G. Turner.................... Director; Chairman
20 Washington Avenue South
Minneapolis, Minnesota 55401
Richard R. Crowl.................. Director; Senior Vice President, General Counsel and
20 Washington Avenue South Assistant Secretary
Minneapolis, Minnesota 55401
Michael J. Dubes.................. Director; President and Chief Executive Officer
1501 Fourth Avenue
Seattle, Washington 98101
Wayne R. Huneke................... Director; Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Robert C. Salipante............... Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Elisabeth R. Bennett.............. Vice President and Medical Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Richard Contreras................. Vice President, Marketing
1501 Fourth Avenue
Seattle, Washington 98101
Brad J. Corbin.................... Vice President, Sales
1501 Fourth Avenue
Seattle, Washington 98101
John A. Johnson................... Vice President
20 Washington Avenue South
Minneapolis, Minnesota 55401
Novian Junus...................... Vice President
1501 Fourth Avenue
Seattle, Washington 98101
Douglas R. Kaufman................ Vice President and Chief Information Officer
1501 Fourth Avenue
Seattle, Washington 98101
Jerome A. Mills................... Vice President, Strategic Alliances
1501 Fourth Avenue
Seattle, Washington 98101
Jeryl A. Millner.................. Vice President and Chief Financial Officer
1501 Fourth Avenue
Seattle, Washington 98101
Susan M. Bergen................... Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
James R. Miller................... Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Chris D. Schreier................. Vice President and Assistant Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
</TABLE>

II-3
<PAGE> 105

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.

ORGANIZATIONAL CHART

ReliaStar Financial Corp., the Parent Company ("RLR"), owns directly or
indirectly, capital stock of subsidiary companies as follows as of February 29,
2000 (second and third tier subsidiaries are listed, indented, directly below
their parent company):

<TABLE>
<CAPTION>
OWNER AND
COMPANY PERCENTAGE
------- -------------------
<S> <C>
ReliaStar Life Insurance Company ("RLIC")................... RLR-100%
Northern Life Insurance Company ("NLIC").................. RLIC-100%
Norlic, Inc............................................ NLIC-100%
Security-Connecticut Life Insurance Company ("SCL")....... RUSL-100%
ReliaStar Life Insurance Company of New York
("RLNY").............................................. SCL-100%
NWNL Benefits Corporation................................. RLIC-100%
ReliaStar Reinsurance Group (UK), Ltd..................... RLIC-100%
ReliaStar Investment Research, Inc.......................... RLR-100%
Washington Square Securities, Inc. ("WSSI")................. RLR-100%
Washington Square Insurance Agency, Inc. (Puerto Rico).... WSSI-100%
Pilgrim Capital Corporation ("PHC") Common................. RLR-100%
Preferred........ RLR-100%
Pilgrim Advisors, Inc..................................... PHC-100%
Pilgrim Group, Inc. (PGI)................................. PHC-100%
Pilgrim Securities, Inc. (PSI)......................... PGI-100%
Pilgrim Funding, Inc................................. PSI-100%
Pilgrim Investments, Inc............................... PGI-100%
Express American T.C. Corp................................ PHC-100%
EAMC Liquidation Corp..................................... PHC-100%
Pilgrim Financial, Inc.................................... PHC-100%
IB Holdings, Inc. ("IB").................................... RLR-100%
Northeastern Corporation.................................. IB-100%
The New Providence Insurance Company, Limited............. IB-100%
Successful Money Management Seminars, Inc. ("SMMS")......... RLR-100%
PrimeVest Financial Services, Inc. ("PVF").................. RLR-100%
PrimeVest Insurance Agency of Alabama, Inc................ PVF-100%
PrimeVest Insurance Agency of New Mexico, Inc............. PVF-100%
PrimeVest Insurance Agency of Ohio, Inc. Class A......... Robert Chapman-100%
Class B......... PVF-100%
Branson Insurance Agency, Inc............................. PVF-100%
Granite Investment Services, Inc.......................... PVF-100%
Bisys Brokerage Services, Inc............................. PVF-100%
Bancwest Investment Services, Inc......................... PVF-100%
Arrowhead, Ltd.............................................. RLR-100%
ReliaStar Payroll Agent, Inc................................ RLR-100%
ReliaStar Bancshares, Inc. ("RBS").......................... RLR-100%
ReliaStar Bank ("RB")..................................... RBS-100%
ReliaStar Investment Services, Inc..................... RB-100%
ReliaStar Managing Underwriters, Inc........................ RLR-100%
Financial Northeastern Corp. ("FNC")........................ RLR-100%
Financial Northeastern Securities, Inc...................... RLR-100%
FNC Insurance Services, Inc................................. RLR-100%
</TABLE>

II-4
<PAGE> 106

ITEM 27. NUMBER OF CONTRACT OWNERS
As of January 31, 2000, there were 41,366 owners of the Contracts, 38,900
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 this registration statement filed on Form N-4. 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 Principal Underwriter, subject to a $500,000
deductible.

ITEM 29. PRINCIPAL UNDERWRITERS
WSSI is the distributor and principal underwriter of the Contracts. WSSI
also acts as the principal distributor and underwriter of:

- variable annuity contracts issued by ReliaStar Life Insurance Company
("ReliaStar Life") through the ReliaStar Select Variable Account, a
separate account of ReliaStar Life registered as a unit investment trust
under the Investment Company Act of 1940;

- variable life insurance policies issued by ReliaStar Life through
Select-Life Variable Account, a separate account of ReliaStar Life
registered as a unit investment trust under the Investment Company Act of
1940;

- variable annuity contracts issued by ReliaStar Life Insurance Company of
New York ("RLNY") through the ReliaStar Life Insurance Company of New
York Variable Annuity Separate Account II, a separate account of RLNY
registered as a unit investment trust under the Investment Company Act of
1940; and

- variable life insurance policies issued by RLNY through ReliaStar Life
Insurance Company of New York Variable Life Separate Account I, a
separate account of RLNY registered as a unit investment trust under the
Investment Company Act of 1940.

II-5
<PAGE> 107

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

<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
- ------------------------------ ------------------------------------------------------------
<S> <C>
Wayne R. Huneke Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Robert C. Salipante Director
20 Washington Avenue South
Minneapolis, Minnesota 55401
Jeffrey A. Montgomery Director; President and Chief Executive Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Kenneth S. Cameranesi Executive Vice President and Chief Operations Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Gene Grayson Vice President, National Sales and Marketing
20 Washington Avenue South
Minneapolis, Minnesota 55401
Keith Loveland Vice President and Chief Compliance Officer
20 Washington Avenue South
Minneapolis, Minnesota 55401
David A. Sheridan Vice President
20 Security Drive
Avon, Connecticut 06001
Margaret B. Wall Vice President
20 Washington Avenue South
Minneapolis, Minnesota 55401
Daniel S. Kuntz Assistant Vice President and Treasurer
20 Washington Avenue South
Minneapolis, Minnesota 55401
Susan M. Bergen Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
Loralee A. Renelt Assistant Secretary
20 Washington Avenue South
Minneapolis, Minnesota 55401
Allen Kidd Assistant Secretary
222 North Arch Road
Richmond, Virginia 23236
</TABLE>

(c) For the year ended December 31, 1999 WSSI received $18,000,541 in fees,
including gross concessions, in connection with distribution of the Transfer
Series and Flex Series Contracts.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts and records of Registrant are located at the offices of
Depositor at 1501 Fourth Avenue, Suite 1000, Seattle, Washington 98101-3620.

ITEM 31. MANAGEMENT SERVICES
Not applicable.

II-6
<PAGE> 108

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 Depositor and the Registrant 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 Depositor represents that 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.

The Depositor and Registrant rely on SEC regulation (section)270.6c-7 with
respect to offering variable annuity contracts under the Texas Optional
Retirement Program and represent that the provisions of paragraphs (a)-(d) of
that regulation have been or will be complied with.

II-7
<PAGE> 109

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant has caused this Pre-Effective Amendment No. 1 to the
Registration Statement to be signed on its behalf, in the City of Seattle and
State of Washington, on this 29th day of March, 2000.

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 this Pre-Effective Amendment No. 1 to the
Registration Statement to be signed on its behalf, in the City of Seattle and
State of Washington, on this 29th day of March, 2000.

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, Pre-Effective Amendment No. 1 to the
Registration Statement has been signed on this 29th day of March, 2000 by the
following directors and officers of Depositor in the capacities indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

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

/s/ JERYL A. MILLNER Vice President and Chief Financial Officer
- --------------------------------------------
Jeryl A. Millner
</TABLE>

<TABLE>
<S> <C>
Richard R. Crowl Robert C. Salipante
Michael J. Dubes John G. Turner
Wayne R. Huneke
</TABLE>

Stewart D. Gregg, 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/ STEWART D. GREGG
---------------------------------------------------------
Stewart D. Gregg, Attorney-In-Fact

II-8
<PAGE> 110

EXHIBIT INDEX

(b) Exhibits

<TABLE>
<C> <C> <S>
8.a. Form of Participation Agreement by and among AIM Variable
Insurance Funds, Inc., A I M Distributors, Inc., and
Northern Life Insurance Company.
b. Form of Service Agreement by and between Northern Life
Insurance Company and A I M Advisors, Inc.
9. Consent and Opinion of Stewart D. Gregg as to the legality
of the securities being registered.
10. Consent of Deloitte & Touche LLP.
</TABLE>

<PAGE> 1
Exhibit 99.8(A)

PARTICIPATION AGREEMENT

BY AND AMONG

AIM VARIABLE INSURANCE FUNDS, INC.,

A I M DISTRIBUTORS, INC.

NORTHERN LIFE INSURANCE COMPANY,
ON BEHALF OF ITSELF AND
ITS SEPARATE ACCOUNTS,

AND

WASHINGTON SQUARE SECURITIES, INC.
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
DESCRIPTION PAGE

<S> <C>
Section 1. Available Funds....................................................................................... 2
1.1 Availability.................................................................................... 2
1.2 Addition, Deletion or Modification of Funds..................................................... 2
1.3 No Sales to the General Public.................................................................. 2

Section 2. Processing Transactions............................................................................... 3
2.1 Timely Pricing and Orders....................................................................... 3
2.2 Timely Payments................................................................................. 3
2.3 Applicable Price................................................................................ 4
2.4 Dividends and Distributions..................................................................... 4
2.5 Book Entry...................................................................................... 4

Section 3. Costs and Expenses.................................................................................... 4
3.1 General......................................................................................... 4
3.2 Parties To Cooperate............................................................................ 5

Section 4. Legal Compliance...................................................................................... 5
4.1 Tax Laws........................................................................................ 5
4.2 Insurance and Certain Other Laws................................................................ 7
4.3 Securities Laws................................................................................. 8
4.4 Notice of Certain Proceedings and Other Circumstances........................................... 9
4.5 LIFE COMPANY To Provide Documents; Information About AVIF....................................... 10
4.6 AVIF To Provide Documents; Information About LIFE COMPANY....................................... 11

Section 5. Mixed and Shared Funding.............................................................................. 12
5.1 General......................................................................................... 12
5.2 Disinterested Directors......................................................................... 12
5.3 Monitoring for Material Irreconcilable Conflicts................................................ 13
5.4 Conflict Remedies............................................................................... 14
5.5 Notice to LIFE COMPANY.......................................................................... 15
5.6 Information Requested by Board of Directors..................................................... 15
5.7 Compliance with SEC Rules....................................................................... 15
5.8 Other Requirements.............................................................................. 15

Section 6. Termination........................................................................................... 16
6.1 Events of Termination........................................................................... 16
6.2 Notice Requirement for Termination.............................................................. 17
6.3 Funds To Remain Available....................................................................... 17
6.4 Survival of Warranties and Indemnifications..................................................... 18
6.5 Continuance of Agreement for Certain Purposes................................................... 18
</TABLE>

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<PAGE> 3
<TABLE>
<S> <C>
Section 7. Parties To Cooperate Respecting Termination........................................................... 18

Section 8. Assignment............................................................................................ 18

Section 9. Notices............................................................................................... 18

Section 10. Voting Procedures.................................................................................... 19

Section 11. Foreign Tax Credits.................................................................................. 20

Section 12. Indemnification...................................................................................... 20
12.1 Of AVIF and AIM by LIFE COMPANY and UNDERWRITER................................................. 20
12.2 Of LIFE COMPANY and UNDERWRITER by AVIF and AIM................................................. 22
12.3 Effect of Notice................................................................................ 25
12.4 Successors...................................................................................... 25

Section 13. Applicable Law....................................................................................... 25

Section 14. Execution in Counterparts............................................................................ 25

Section 15. Severability......................................................................................... 25

Section 16. Rights Cumulative.................................................................................... 25

Section 17. Headings............................................................................................. 25

Section 18. Confidentiality...................................................................................... 26

Section 19. Trademarks and Fund Names............................................................................ 26

Section 20. Parties to Cooperate................................................................................. 27
</TABLE>

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<PAGE> 4
PARTICIPATION AGREEMENT

THIS AGREEMENT, made and entered into as of the ____ day of _________,
2000 ("Agreement"), by and among AIM Variable Insurance Funds, Inc., a Maryland
corporation ("AVIF"), A I M Distributors, Inc., a Delaware corporation (AIM),
Northern Life Insurance Company, a Washington life insurance company (LIFE
COMPANY), on behalf of itself and each of its segregated asset accounts listed
in Schedule A hereto, as the parties hereto may amend from time to time (each,
an "Account," and collectively, the "Accounts"); and Washington Square
Securities, Inc., an affiliate of LIFE COMPANY and the principal underwriter of
the Contracts ("UNDERWRITER") (collectively, the Parties).

WITNESSETH THAT:

WHEREAS, AVIF is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, AVIF currently consists of seventeen separate series
("Series"), shares ("Shares") each of which are registered under the Securities
Act of 1933, as amended (the "1933 Act") and are currently sold to one or more
separate accounts of life insurance companies to fund benefits under variable
annuity contracts and variable life insurance contracts; and

WHEREAS, AVIF will make Shares of each Series listed on Schedule A
hereto as the Parties hereto may amend from time to time (each a "Fund";
reference herein to "AVIF" includes reference to each Fund, to the extent the
context requires) available for purchase by the Accounts; and

WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and variable life insurance contracts ("Contracts") as set forth on
Schedule A hereto, as the Parties hereto may amend from time to time, which
Contracts (hereinafter collectively, the "Contracts"), if required by applicable
law, will be registered under the 1933 Act; and

WHEREAS, LIFE COMPANY will fund the Contracts through the Accounts,
each of which may be divided into two or more subaccounts ("Subaccounts";
reference herein to an "Account" includes reference to each Subaccount thereof
to the extent the context requires); and

WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each
of which is registered as a unit investment trust investment company under the
1940 Act (or exempt therefrom), and the security interests deemed to be issued
by the Accounts under the Contracts will be registered as securities under the
1933 Act (or exempt therefrom); and

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<PAGE> 5
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the Funds
on behalf of the Accounts to fund the Contracts; and

WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under
the Securities Exchange Act of 1934 ("1934 Act") and a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD");

WHEREAS, AIM is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD");

NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:

SECTION 1. AVAILABLE FUNDS

1.1 AVAILABILITY.

AVIF will make Shares of each Fund available to LIFE COMPANY for
purchase and redemption at net asset value and with no sales charges, subject to
the terms and conditions of this Agreement. The Board of Directors of AVIF may
refuse to sell Shares of any Fund to any person, or suspend or terminate the
offering of Shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of the
Directors acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, such action is deemed in the best
interests of the shareholders of such Fund.

1.2 ADDITION, DELETION OR MODIFICATION OF FUNDS.

The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, AVIF, or its Shares herein shall
include a reference to any such additional Fund. Schedule A, as amended from
time to time, is incorporated herein by reference and is a part hereof.

1.3 NO SALES TO THE GENERAL PUBLIC.

AVIF represents and warrants that no Shares of any Fund have been or
will be sold to the general public.

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<PAGE> 6
SECTION 2. PROCESSING TRANSACTIONS

2.1 TIMELY PRICING AND ORDERS.

(a) AVIF or its designated agent will use its best efforts to provide
LIFE COMPANY with the net asset value per Share for each Fund by 6:00 p.m.
Central Time on each Business Day. As used herein, "Business Day" shall mean any
day on which (i) the New York Stock Exchange is open for regular trading, (ii)
AVIF calculates the Fund's net asset value, and (iii) LIFE COMPANY is open for
business.

(b) LIFE COMPANY will use the data provided by AVIF each Business Day
pursuant to paragraph (a) immediately above to calculate Account unit values and
to process transactions that receive that same Business Day's Account unit
values. LIFE COMPANY will perform such Account processing in a timely manner and
will place corresponding orders to purchase or redeem Shares with AVIF by 9:00
a.m. Central Time the following Business Day; provided, however, that AVIF shall
provide additional time to LIFE COMPANY in the event that AVIF is unable to meet
the 6:00 p.m. time stated in paragraph (a) immediately above. Such additional
time shall be equal to the additional time that AVIF takes to make the net asset
values available to LIFE COMPANY.

(c) With respect to payment of the purchase price by LIFE COMPANY and
of redemption proceeds by AVIF, LIFE COMPANY and AVIF shall net purchase and
redemption orders with respect to each Fund and shall transmit one net payment
in accordance with Section 2.2, below.

(d) If AVIF provides materially incorrect Share net asset value
information (as determined under SEC guidelines), LIFE COMPANY shall be entitled
to an adjustment to the number of Shares purchased or redeemed to reflect the
correct net asset value per Share. Any material error in the calculation or
reporting of net asset value per Share, dividend or capital gain information
shall be reported promptly upon discovery to LIFE COMPANY. Materiality and
reprocessing cost reimbursement shall be determined in accordance with standards
established by the Parties as provided in Schedule B, attached hereto and
incorporated herein.

2.2 TIMELY PAYMENTS.

LIFE COMPANY will wire payment for net purchases to a custodial account
designated by AVIF by 1:00 p.m. Central Time on the same day as the order for
Shares is placed, to the extent practicable. AVIF will wire payment for net
redemptions to an account designated by LIFE COMPANY by 1:00 p.m. Central Time
on the same day as the Order is placed, to the extent practicable, but in any
event within five (5) calendar days after the date the order is placed in order
to enable LIFE COMPANY to pay redemption proceeds within the time specified in
Section 22(e) of the 1940 Act or such shorter period of time as may be required
by law.

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<PAGE> 7
2.3 APPLICABLE PRICE.

(a) Share purchase payments and redemption orders that result from
purchase payments, premium payments, surrenders and other transactions under
Contracts (collectively, "Contract transactions) and that LIFE COMPANY receives
prior to the close of regular trading on the New York Stock Exchange on a
Business Day will be executed at the net asset values of the appropriate Funds
next computed after receipt by AVIF or its designated agent of the orders. For
purposes of this Section 2.3(a), LIFE COMPANY shall be the designated agent of
AVIF for receipt of orders relating to Contract transactions on each Business
Day and receipt by such designated agent shall constitute receipt by AVIF;
provided that AVIF receives notice of such orders by 9:00 a.m. Central Time on
the next following Business Day or such later time as computed in accordance
with Section 2.1(b) hereof.

(b) All other Share purchases and redemptions by LIFE COMPANY will
be effected at the net asset values of the appropriate Funds next computed after
receipt by AVIF or its designated agent of the order therefor, and such orders
will be irrevocable.

2.4 DIVIDENDS AND DISTRIBUTIONS.

AVIF will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Fund. LIFE
COMPANY hereby elects to reinvest all dividends and capital gains distributions
in additional Shares of the corresponding Fund at the ex-dividend date net asset
values until LIFE COMPANY otherwise notifies AVIF in writing, it being agreed by
the Parties that the ex-dividend date and the payment date with respect to any
dividend or distribution will be the same Business Day. LIFE COMPANY reserves
the right to revoke this election and to receive all such income dividends and
capital gain distributions in cash.

2.5 BOOK ENTRY.

Issuance and transfer of AVIF Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from AVIF will
be recorded in an appropriate title for LIFE COMPANY, on behalf of its Account.

SECTION 3. COSTS AND EXPENSES

3.1 GENERAL.

Except as otherwise specifically provided in Schedule C, attached
hereto and made a part hereof, each Party will bear, or arrange for others to
bear, all expenses incident to its performance under this Agreement.

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<PAGE> 8
3.2 PARTIES TO COOPERATE.

Each Party agrees to cooperate with the others, as applicable, in
arranging to print, mail and/or deliver, in a timely manner, combined or
coordinated prospectuses or other materials of AVIF and the Accounts.

SECTION 4. LEGAL COMPLIANCE

4.1 TAX LAWS.

(a) AVIF represents and warrants that each Fund is currently qualified
as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and represents that it will use
its best efforts to qualify and to maintain qualification of each Fund as a RIC.
AVIF will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.

(b) AVIF represents that it will use its best efforts to comply and to
maintain each Fund's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code. AVIF will notify LIFE COMPANY immediately upon having a reasonable
basis for believing that a Fund has ceased to so comply or that a Fund might not
so comply in the future. In the event of a breach of this Section 4.1(b) by
AVIF, it will take all reasonable steps to adequately diversify the Fund so as
to achieve compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code.

(c) Notwithstanding any other provision of this Agreement, LIFE COMPANY
agrees that if the Internal Revenue Service ("IRS") asserts in writing in
connection with any governmental audit or review of LIFE COMPANY or, to LIFE
COMPANY's knowledge, of any Contract owners, annuitants, insureds or
participants (as appropriate) under the Contracts (collectively,
"Participants"), that any Fund has failed to comply with the diversification
requirements of Section 817(h) of the Code or LIFE COMPANY otherwise becomes
aware of any facts that could give rise to any claim against AVIF or its
affiliates as a result of such a failure or alleged failure:

(i) LIFE COMPANY shall promptly notify AVIF of such
assertion or potential claim (subject to the
Confidentiality provisions of Section 18 as to any
Participant);

(ii) LIFE COMPANY shall consult with AVIF as to how to
minimize any liability that may arise as a result of
such failure or alleged failure;

(iii) LIFE COMPANY shall use its best efforts to minimize
any liability of AVIF or its affiliates resulting
from such failure, including, without limitation,
demonstrating, pursuant to Treasury Regulations
Section 1.817-5(a)(2), to the Commissioner of the IRS
that such failure was inadvertent;

5
<PAGE> 9
(iv) LIFE COMPANY shall permit AVIF, its affiliates and
their legal and accounting advisors to participate in
any conferences, settlement discussions or other
administrative or judicial proceeding or contests
(including judicial appeals thereof) with the IRS,
any Participant or any other claimant regarding any
claims that could give rise to liability to AVIF or
its affiliates as a result of such a failure or
alleged failure; provided, however, that LIFE COMPANY
will retain control of the conduct of such
conferences discussions, proceedings, contests or
appeals;

(v) any written materials to be submitted by LIFE COMPANY
to the IRS, any Participant or any other claimant in
connection with any of the foregoing proceedings or
contests (including, without limitation, any such
materials to be submitted to the IRS pursuant to
Treasury Regulations Section 1.817-5(a)(2)), (a)
shall be provided by LIFE COMPANY to AVIF (together
with any supporting information or analysis); subject
to the confidentiality provisions of Section 18, at
least ten (10) business days or such shorter period
to which the Parties hereto agree prior to the day on
which such proposed materials are to be submitted,
and (b) shall not be submitted by LIFE COMPANY to any
such person without the express written consent of
AVIF which shall not be unreasonably withheld;

(vi) LIFE COMPANY shall provide AVIF or its affiliates and
their accounting and legal advisors with such
cooperation as AVIF shall reasonably request
(including, without limitation, by permitting AVIF
and its accounting and legal advisors to review the
relevant books and records of LIFE COMPANY) in order
to facilitate review by AVIF or its advisors of any
written submissions provided to it pursuant to the
preceding clause or its assessment of the validity or
amount of any claim against its arising from such a
failure or alleged failure;

(vii) LIFE COMPANY shall not with respect to any claim of
the IRS or any Participant that would give rise to a
claim against AVIF or its affiliates (a) compromise
or settle any claim, (b) accept any adjustment on
audit, or (c) forego any allowable administrative or
judicial appeals, without the express written consent
of AVIF or its affiliates, which shall not be
unreasonably withheld, provided that LIFE COMPANY
shall not be required, after exhausting all
administrative remedies, to appeal any adverse
judicial decision unless AVIF or its affiliates shall
have provided an opinion of independent counsel to
the effect that a reasonable basis exists for taking
such appeal; and provided further that the costs of
any such appeal shall be borne equally by the Parties
hereto; and

(viii) If LIFE COMPANY fails to comply with any of the
foregoing clauses (i) through (vii), and such failure
can be shown to have materially contributed

6
<PAGE> 10
to the liability of AVIF or its affiliates, then AVIF
and its affiliates shall have no liability pursuant
to Section 12 hereof as a result of a Fund's failure
or alleged failure to comply with the diversification
requirements of Section 817(h) of the Code. AVIF and
its affiliates shall have no liability as a result of
such failure or alleged failure if LIFE COMPANY fails
to comply with any of the foregoing clauses (i)
through (vii), and such failure could be shown to
have materially contributed to the liability.

Should AVIF or any of its affiliates refuse to give its written consent
to any compromise or settlement of any claim or liability hereunder, LIFE
COMPANY may, in its discretion, authorize AVIF or its affiliates to act in the
name of LIFE COMPANY in, and to control the conduct of, such conferences,
discussions, proceedings, contests or appeals and all administrative or judicial
appeals thereof, and in that event AVIF or its affiliates shall bear the fees
and expenses associated with the conduct of the proceedings that it is so
authorized to control; provided, that in no event shall LIFE COMPANY have any
liability resulting from AVIF's refusal to accept the proposed settlement or
compromise with respect to any failure caused by AVIF. As used in this
Agreement, the term "affiliates" shall have the same meaning as "affiliated
person" as defined in Section 2(a)(3) of the 1940 Act.

(d) LIFE COMPANY represents and warrants that the Contracts currently
are and will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; LIFE COMPANY will notify AVIF immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.

(e) LIFE COMPANY represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered exclusively
through the purchase of or transfer into a "variable contract," within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. LIFE COMPANY will use its best efforts to continue to meet such
definitional requirements, and it will notify AVIF immediately upon having a
reasonable basis for believing that such requirements have ceased to be met or
that they might not be met in the future.

4.2 INSURANCE AND CERTAIN OTHER LAWS.

(a) AVIF will use its best efforts to comply with any applicable state
insurance laws or regulations, to the extent specifically requested in writing
by LIFE COMPANY, including, the furnishing of information not otherwise
available to LIFE COMPANY which is required by state insurance law to enable
LIFE COMPANY to obtain the authority needed to issue the Contracts in any
applicable state.

(b) LIFE COMPANY represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws of
the State of Washington and has full corporate power, authority and legal right
to execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains

7
<PAGE> 11
each Account as a segregated asset account under Washington Insurance Law and
the regulations thereunder, and (iii) the Contracts comply in all material
respects with all other applicable federal and state laws and regulations.

(c) AVIF represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.

4.3 SECURITIES LAWS.

(a) LIFE COMPANY represents and warrants that (i) interests in each
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and the
law(s) of LIFE COMPANY's state(s) of organization and domicile, (iii) each
Account is and will remain registered under the 1940 Act, to the extent required
by the 1940 Act, (iv) each Account does and will comply in all material respects
with the requirements of the 1940 Act and the rules thereunder, to the extent
required, (v) each Account's 1933 Act registration statement relating to the
Contracts, together with any amendments thereto, will at all times comply in all
material respects with the requirements of the 1933 Act and the rules
thereunder, (vi) LIFE COMPANY will amend the registration statement for its
Contracts under the 1933 Act and for its Accounts under the 1940 Act from time
to time as required in order to effect the continuous offering of its Contracts
or as may otherwise be required by applicable law, and (vii) each Account
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.

(b) AVIF represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and duly authorized for issuance and sold in compliance with Maryland
law, (ii) AVIF is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) AVIF will amend the registration statement for
its Shares under the 1933 Act and itself under the 1940 Act from time to time as
required in order to effect the continuous offering of its Shares, (iv) AVIF
does and will comply in all material respects with the requirements of the 1940
Act and the rules thereunder, (v) AVIF's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all material
respects with the requirements of the 1933 Act and rules thereunder, and (vi)
AVIF's Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.

(c) AVIF will at its expense register and qualify its Shares for sale
in accordance with the laws of any state or other jurisdiction if and to the
extent reasonably deemed advisable by AVIF.

(d) AVIF currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it reserves the right to make such payments in the future. To the
extent that it decides to finance distribution expenses

8
<PAGE> 12
(e) pursuant to Rule 12b-1, AVIF undertakes to have its Board of
Directors, a majority of whom are not "interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.

(f) AVIF represents and warrants that all of its trustees, officers,
employees, investment advisers, and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.

4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.

(a) AVIF or AIM will immediately notify LIFE COMPANY of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to AVIF's registration statement
under the 1933 Act or AVIF Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or AVIF Prospectus that may affect the
offering of Shares of AVIF, (iii) the initiation of any proceedings for that
purpose or for any other purpose relating to the registration or offering of
AVIF's Shares, or (iv) any other action or circumstances that may prevent the
lawful offer or sale of Shares of any Fund in any state or jurisdiction,
including, without limitation, any circumstances in which (a) such Shares are
not registered and, in all material respects, issued and sold in accordance with
applicable state and federal law, or (b) such law precludes the use of such
Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY. AVIF and AIM will make every reasonable effort to
prevent the issuance, with respect to any Fund, of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.

(b) LIFE COMPANY or UNDERWRITER will immediately notify AVIF of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to each Account's registration
statement under the 1933 Act relating to the Contracts or each Account
Prospectus, (ii) any request by the SEC for any amendment to such registration
statement or Account Prospectus that may affect the offering of Shares of AVIF,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of each Account's interests
pursuant to the Contracts, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of said interests in any state or jurisdiction,
including, without limitation, any circumstances in which said interests are not
registered and, in all material respects, issued and sold in accordance with
applicable state and federal law. LIFE COMPANY and UNDERWRITER will make every
reasonable effort to prevent the issuance of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.

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<PAGE> 13
4.5 LIFE COMPANY TO PROVIDE DOCUMENTS; INFORMATION ABOUT AVIF.

(a) LIFE COMPANY will provide to AVIF or its designated agent at least
one (1) complete copy of all SEC registration statements, Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to each Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.

(b) LIFE COMPANY will provide to AVIF or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which AVIF or any of its affiliates is named, at least five (5)
Business Days prior to its use or such shorter period as the Parties hereto may,
from time to time, agree upon. No such material shall be used if AVIF or its
designated agent objects to such use within five (5) Business Days after receipt
of such material or such shorter period as the Parties hereto may, from time to
time, agree upon. AVIF hereby designates AIM as the entity to receive such sales
literature, until such time as AVIF appoints another designated agent by giving
notice to LIFE COMPANY in the manner required by Section 9 hereof.

(c) Neither LIFE COMPANY nor any of its affiliates, will give any
information or make any representations or statements on behalf of or concerning
AVIF or its affiliates in connection with the sale of the Contracts other than
(i) the information or representations contained in the registration statement,
including the AVIF Prospectus contained therein, relating to Shares, as such
registration statement and AVIF Prospectus may be amended from time to time; or
(ii) in reports or proxy materials for AVIF; or (iii) in published reports for
AVIF that are in the public domain and approved by AVIF for distribution; or
(iv) in sales literature or other promotional material approved by AVIF, except
with the express written permission of AVIF.

(d) LIFE COMPANY shall adopt and implement procedures reasonably
designed to ensure that information concerning AVIF and its affiliates that is
intended for use only by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Participants) ("broker only
materials") is so used, and neither AVIF nor any of its affiliates shall be
liable for any losses, damages or expenses relating to the improper use of such
broker only materials.

(e) For the purposes of this Section 4.5, the phrase "sales literature
or other promotional material includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media, (e.g.,
on-line networks such as the Internet or other electronic messages), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees,

10
<PAGE> 14
registration statements, prospectuses, statements of additional information,
shareholder reports, and proxy materials and any other material constituting
sales literature or advertising under the NASD rules, the 1933 Act or the 1940
Act.

4.6 AVIF TO PROVIDE DOCUMENTS; INFORMATION ABOUT LIFE COMPANY.

(a) AVIF will provide to LIFE COMPANY at least one (1) complete copy of
all SEC registration statements, AVIF Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to AVIF or the
Shares of a Fund, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.

(b) AVIF will provide to LIFE COMPANY a camera ready or electronic copy
of all AVIF prospectuses and printed copies, in an amount specified by LIFE
COMPANY, of AVIF statements of additional information, proxy materials, periodic
reports to shareholders and other materials required by law to be sent to
Participants who have allocated any Contract value to a Fund. AVIF will provide
such copies to LIFE COMPANY in a timely manner so as to enable LIFE COMPANY, as
the case may be, to print and distribute such materials within the time required
by law to be furnished to Participants.

(c) AVIF will provide to LIFE COMPANY or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which LIFE COMPANY, or any of its respective affiliates is named, or
that refers to the Contracts, at least five (5) Business Days prior to its use
or such shorter period as the Parties hereto may, from time to time, agree upon.
No such material shall be used if LIFE COMPANY or its designated agent objects
to such use within five (5) Business Days after receipt of such material or such
shorter period as the Parties hereto may, from time to time, agree upon. LIFE
COMPANY shall receive all such sales literature until such time as it appoints a
designated agent by giving notice to AVIF in the manner required by Section 9
hereof.

(d) Neither AVIF nor any of its affiliates will give any information or
make any representations or statements on behalf of or concerning LIFE COMPANY,
each Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement and
Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by LIFE COMPANY for distribution; or (iii) in sales literature or other
promotional material approved by LIFE COMPANY or its affiliates, except with the
express written permission of LIFE COMPANY.

(e) AVIF shall cause its principal underwriter to adopt and implement
procedures reasonably designed to ensure that information concerning LIFE
COMPANY, and its respective affiliates that is intended for use only by brokers
or agents selling the Contracts (i.e., information that is not intended for
distribution to Participants) ("broker only materials") is so used, and neither
LIFE COMPANY, nor any of its respective affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.

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<PAGE> 15
(f) For purposes of this Section 4.6, the phrase "sales literature or
other promotional material includes, but is not limited to, advertisements (such
as material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media, (e.g., on-line
networks such as the Internet or other electronic messages), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 1940 Act.

SECTION 5. MIXED AND SHARED FUNDING

5.1 GENERAL.

The SEC has granted an order to AVIF exempting it from certain
provisions of the 1940 Act and rules thereunder so that AVIF may be available
for investment by certain other entities, including, without limitation,
separate accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with LIFE
COMPANY, and trustees of qualified pension and retirement plans (collectively,
"Mixed and Shared Funding"). The Parties recognize that the SEC has imposed
terms and conditions for such orders that are substantially identical to many of
the provisions of this Section 5. Sections 5.2 through 5.8 below shall apply
pursuant to such an exemptive order granted to AVIF. AVIF hereby notifies LIFE
COMPANY that, in the event that AVIF implements Mixed and Shared Funding, it may
be appropriate to include in the prospectus pursuant to which a Contract is
offered disclosure regarding the potential risks of Mixed and Shared Funding.

5.2 DISINTERESTED DIRECTORS.

AVIF agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of AVIF within the meaning of Section 2(a)(19) of the 1940 Act and the
rules thereunder and as modified by any applicable orders of the SEC, except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any director, then the operation of this condition
shall be suspended (a) for a period of forty-five (45) days if the vacancy or
vacancies may be filled by the Board;(b) for a period of sixty (60) days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.

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<PAGE> 16
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.

AVIF agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
Participants in all separate accounts of life insurance companies utilizing AVIF
("Participating Insurance Companies"), including each Account, and participants
in all qualified retirement and pension plans investing in AVIF ("Participating
Plans"). LIFE COMPANY agrees to inform the Board of Directors of AVIF of the
existence of or any potential for any such material irreconcilable conflict of
which it is aware. The concept of a "material irreconcilable conflict" is not
defined by the 1940 Act or the rules thereunder, but the Parties recognize that
such a conflict may arise for a variety of reasons, including, without
limitation:

(a) an action by any state insurance or other regulatory authority;

(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;

(d) the manner in which the investments of any Fund are being managed;

(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract Participants or by Participants of
different Participating Insurance Companies;

(f) a decision by a Participating Insurance Company to disregard the
voting instructions of Participants; or

(g) a decision by a Participating Plan to disregard the voting
instructions of Plan participants.

Consistent with the SEC's requirements in connection with exemptive
orders of the type referred to in Section 5.1 hereof, LIFE COMPANY will assist
the Board of Directors in carrying out its responsibilities by providing the
Board of Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a decision
by LIFE COMPANY to disregard voting instructions of Participants. LIFE COMPANY's
responsibilities in connection with the foregoing shall be carried out with a
view only to the interests of Participants.

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<PAGE> 17
5.4 CONFLICT REMEDIES.

(a) It is agreed that if it is determined by a majority of the members
of the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, LIFE COMPANY will, if it is a
Participating Insurance Company for which a material irreconcilable conflict is
relevant, at its own expense and to the extent reasonably practicable (as
determined by a majority of the Disinterested Directors), take whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:

(i) withdrawing the assets allocable to some or all of
the Accounts from AVIF or any Fund and reinvesting
such assets in a different investment medium,
including another Fund of AVIF, or submitting the
question whether such segregation should be
implemented to a vote of all affected Participants
and, as appropriate, segregating the assets of any
particular group (e.g., annuity Participants, life
insurance Participants or all Participants) that
votes in favor of such segregation, or offering to
the affected Participants the option of making such a
change; and

(ii) establishing a new registered investment company of
the type defined as a "management company" in Section
4(3) of the 1940 Act or a new separate account that
is operated as a management company.

(b) If the material irreconcilable conflict arises because of LIFE
COMPANY's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at AVIF's election, to withdraw each Account's
investment in AVIF or any Fund. No charge or penalty will be imposed as a result
of such withdrawal. Any such withdrawal must take place within six (6) months
after AVIF gives notice to LIFE COMPANY that this provision is being
implemented, and until such withdrawal AVIF shall continue to accept and
implement orders by LIFE COMPANY for the purchase and redemption of Shares of
AVIF.

(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to LIFE COMPANY conflicts with
the majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in AVIF within six (6) months after AVIF's Board of
Directors informs LIFE COMPANY that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal AVIF shall
continue to accept and implement orders by LIFE COMPANY for the purchase and
redemption of Shares of AVIF. No charge or penalty will be imposed as a result
of such withdrawal.

(d) LIFE COMPANY agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Participants.

(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event,

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<PAGE> 18
however, will AVIF or any of its affiliates be required to establish a new
funding medium for any Contracts. LIFE COMPANY will not be required by the terms
hereof to establish a new funding medium for any Contracts if an offer to do so
has been declined by vote of a majority of Participants materially adversely
affected by the material irreconcilable conflict.

5.5 NOTICE TO LIFE COMPANY.

AVIF will promptly make known in writing to LIFE COMPANY the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.

5.6 INFORMATION REQUESTED BY BOARD OF DIRECTORS.

LIFE COMPANY and AVIF (or its investment adviser) will at least
annually submit to the Board of Directors of AVIF such reports, materials or
data as the Board of Directors may reasonably request so that the Board of
Directors may fully carry out the obligations imposed upon it by the provisions
hereof or any exemptive order granted by the SEC to permit Mixed and Shared
Funding, and said reports, materials and data will be submitted at any
reasonable time deemed appropriate by the Board of Directors. All reports
received by the Board of Directors of potential or existing conflicts, and all
Board of Directors actions with regard to determining the existence of a
conflict, notifying Participating Insurance Companies and Participating Plans of
a conflict, and determining whether any proposed action adequately remedies a
conflict, will be properly recorded in the minutes of the Board of Directors or
other appropriate records, and such minutes or other records will be made
available to the SEC upon request.

5.7 COMPLIANCE WITH SEC RULES.

If, at any time during which AVIF is serving as an investment medium
for variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to Mixed and Shared Funding, AVIF agrees that it will comply with the
terms and conditions thereof and that the terms of this Section 5 shall be
deemed modified if and only to the extent required in order also to comply with
the terms and conditions of such exemptive relief that is afforded by any of
said rules that are applicable.

5.8 OTHER REQUIREMENTS.

AVIF will require that each Participating Insurance Company and
Participating Plan enter into an agreement with AVIF that contains in substance
the same provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b),
4.5(a), 5, and 10 of this Agreement.

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<PAGE> 19
SECTION 6. TERMINATION

6.1 EVENTS OF TERMINATION.

Subject to Section 6.4 below, this Agreement will terminate as to a
Fund:

(a) at the option of any party, with or without cause with respect to
the Fund, upon sixty (60) days advance written notice to the other parties, or,
if later, upon receipt of any required exemptive relief from the SEC, unless
otherwise agreed to in writing by the parties; or

(b) at the option of AVIF upon institution of formal proceedings
against LIFE COMPANY or its affiliates by the NASD, the SEC, any state insurance
regulator or any other regulatory body regarding LIFE COMPANY's obligations
under this Agreement or related to the sale of the Contracts, the operation of
each Account, or the purchase of Shares, if, in each case, AVIF reasonably
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on the Fund with respect to which the Agreement is to be terminated; or

(c) at the option of LIFE COMPANY upon institution of formal
proceedings against AVIF, its principal underwriter, or its investment adviser
by the NASD, the SEC, or any state insurance regulator or any other regulatory
body regarding AVIF's obligations under this Agreement or related to the
operation or management of AVIF or the purchase of AVIF Shares, if, in each
case, LIFE COMPANY reasonably determines that such proceedings, or the facts on
which such proceedings would be based, have a material likelihood of imposing
material adverse consequences on LIFE COMPANY, or the Subaccount corresponding
to the Fund with respect to which the Agreement is to be terminated; or

(d) at the option of any Party in the event that (i) the Fund's Shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable federal or state law, or (ii) such law precludes the use of
such Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY; or

(e) upon termination of the corresponding Subaccount's investment in
the Fund pursuant to Section 5 hereof; or

(f) at the option of LIFE COMPANY if the Fund ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions, or
if LIFE COMPANY reasonably believes that the Fund may fail to so qualify; or

(g) at the option of LIFE COMPANY if the Fund fails to comply with
Section 817(h) of the Code or with successor or similar provisions, or if LIFE
COMPANY reasonably believes that the Fund may fail to so comply; or

16
<PAGE> 20
(h) at the option of AVIF if the Contracts issued by LIFE COMPANY cease
to qualify as annuity contracts or life insurance contracts under the Code
(other than by reason of the Fund's noncompliance with Section 817(h) or
Subchapter M of the Code) or if interests in an Account under the Contracts are
not registered, where required, and, in all material respects, are not issued or
sold in accordance with any applicable federal or state law; or

(i) upon another Party's material breach of any provision of this
Agreement.

6.2 NOTICE REQUIREMENT FOR TERMINATION.

No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives prior written notice to the other Party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:

(a) in the event that any termination is based upon the provision of
Section 6.1(e) hereof, such prior written notice shall be given at least six (6)
months in advance of the effective date of termination unless a shorter time is
agreed to by the Parties hereto;

(b) in the event that any termination is based upon the provisions of
Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto; and

(c) in the event that any termination is based upon the provision of
Section 6.1(a) hereof, such prior written notice shall be given at least sixty
(60) days in advance of the effective date of termination unless a shorter time
is agreed to by the Parties hereto;

(d) in the event that any termination is based upon the provisions of
Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written
notice shall be given as soon as possible within twenty-four (24) hours after
the terminating Party learns of the event causing termination to be required.

6.3 FUNDS TO REMAIN AVAILABLE.

Notwithstanding any termination of this Agreement, AVIF will, at the
option of LIFE COMPANY, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts). Specifically, without limitation, the
owners of the Existing Contracts will be permitted to reallocate investments in
the Fund (as in effect on such date), redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 6.3 will not apply to
any terminations under Section 5 and the effect of such terminations will be
governed by Section 5 of this Agreement.

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<PAGE> 21
6.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.

All warranties and indemnifications will survive the termination of
this Agreement.

6.5 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.

If any Party terminates this Agreement with respect to any Fund
pursuant to Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i)
hereof, this Agreement shall nevertheless continue in effect as to any Shares of
that Fund that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of the date as
of which an Account owns no Shares of the affected Fund or a date (the "Final
Termination Date") six (6) months following the Initial Termination Date, except
that LIFE COMPANY may, by written notice shorten said six (6) month period in
the case of a termination pursuant to Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or
6.1(i).
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION

The Parties hereto agree to cooperate and give reasonable assistance to
one another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to Section
6.1(a), the termination date specified in the notice of termination. Such steps
may include combining the affected Account with another Account, substituting
other mutual fund shares for those of the affected Fund, or otherwise
terminating participation by the Contracts in such Fund.

SECTION 8. ASSIGNMENT

This Agreement may not be assigned by any Party, except with the
written consent of each other Party.

SECTION 9. NOTICES

Notices and communications required or permitted will be given by means
mutually acceptable to the Parties concerned. Each other notice or communication
required or permitted by this Agreement will be given to the following persons
at the following addresses and facsimile numbers, or such other persons,
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:

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<PAGE> 22
AIM VARIABLE INSURANCE FUNDS, INC.
A I M DISTRIBUTORS, INC.
11 Greenway Plaza, Suite 100
Houston, Texas 77046
Facsimile: (713) 993-9185

Attn: Nancy L. Martin, Esq.

NORTHERN LIFE INSURANCE COMPANY
1501 4th Avenue
Seattle, Washington 98101
Facsimile: 612-342-7531

Attn: Stewart D. Gregg, Esq.

WASHINGTON SQUARE SECURITIES, INC.
20 Washington Avenue South
Minneapolis, Minnesota 55401
Facsimile: 612-342-7531

Attn: Stewart D. Gregg, Esq.

SECTION 10. VOTING PROCEDURES

Subject to the cost allocation procedures set forth in Section 3
hereof, LIFE COMPANY will distribute all proxy material furnished by AVIF to
Participants to whom pass-through voting privileges are required to be extended
and will solicit voting instructions from Participants. LIFE COMPANY will vote
Shares in accordance with timely instructions received from Participants. LIFE
COMPANY will vote Shares that are (a) not attributable to Participants to whom
pass-through voting privileges are extended, or (b) attributable to
Participants, but for which no timely instructions have been received, in the
same proportion as Shares for which said instructions have been received from
Participants, so long as and to the extent that the SEC continues to interpret
the 1940 Act to require pass through voting privileges for Participants. Neither
LIFE COMPANY nor any of its affiliates will in any way recommend action in
connection with or oppose or interfere with the solicitation of proxies for the
Shares held for such Participants. LIFE COMPANY reserves the right to vote
shares held in any Account in its own right, to the extent permitted by law.
LIFE COMPANY shall be responsible for assuring that each of its Accounts holding
Shares calculates voting privileges in a manner consistent with that of other
Participating Insurance Companies or in the manner required by the Mixed and
Shared Funding exemptive order obtained by AVIF. AVIF will notify LIFE COMPANY
of any changes of interpretations or amendments to Mixed and Shared Funding
exemptive order it has obtained. AVIF will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular, AVIF either will
provide for annual meetings

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<PAGE> 23
(except insofar as the SEC may interpret Section 16 of the 1940 Act not to
require such meetings) or will comply with Section 16(c) of the 1940 Act
(although AVIF is not one of the trusts described in Section 16(c) of that Act)
as well as with Sections 16(a) and, if and when applicable, 16(b). Further, AVIF
will act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of directors and with whatever
rules the SEC may promulgate with respect thereto.

SECTION 11. FOREIGN TAX CREDITS

AVIF agrees to consult in advance with LIFE COMPANY concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to its shareholders.

SECTION 12. INDEMNIFICATION

12.1 OF AVIF AND AIM BY LIFE COMPANY AND UNDERWRITER.

(a) Except to the extent provided in Sections 12.1(b) and 12.1(c),
below, LIFE COMPANY and UNDERWRITER agree to indemnify and hold harmless AVIF,
AIM, their affiliates, and each person, if any, who controls AVIF, AIM, or their
affiliates within the meaning of Section 15 of the 1933 Act and each of their
respective directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 12.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
LIFE COMPANY and UNDERWRITER) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or otherwise;
provided, the Account owns or has owned shares of the Fund and insofar as such
losses, claims, damages, liabilities or actions:

(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in any Account's 1933 Act registration
statement, any Account Prospectus, the Contracts, or
sales literature or advertising for the Contracts (or
any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading; provided, that
this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to LIFE COMPANY or UNDERWRITER by or on
behalf of AVIF or AIM for use in any Account's 1933
Act registration statement, any Account Prospectus,
the Contracts, or sales literature or advertising or
otherwise for use in connection with the sale of
Contracts or Shares (or any amendment or supplement
to any of the foregoing); or

20
<PAGE> 24
(ii) arise out of or as a result of any other statements
or representations (other than statements or
representations contained in AVIF's 1933 Act
registration statement, AVIF Prospectus, sales
literature or advertising of AVIF, or any amendment
or supplement to any of the foregoing, not supplied
for use therein by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates and on
which such persons have reasonably relied) or the
negligent, illegal or fraudulent conduct of LIFE
COMPANY, UNDERWRITER or their respective affiliates
or persons under their control (including, without
limitation, their employees and "persons associated
with a member," as that term is defined in paragraph
(q) of Article I of the NASD's By-Laws), in
connection with the sale or distribution of the
Contracts or Shares; or

(iii) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in AVIF's 1933 Act registration statement,
AVIF Prospectus, sales literature or advertising of
AVIF, or any amendment or supplement to any of the
foregoing, or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading if such a statement or omission was
made in reliance upon and in conformity with
information furnished to AVIF, AIM or their
affiliates by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates for use in
AVIF's 1933 Act registration statement, AVIF
Prospectus, sales literature or advertising of AVIF,
or any amendment or supplement to any of the
foregoing; or

(iv) arise as a result of any failure by LIFE COMPANY or
UNDERWRITER to perform the obligations, provide the
services and furnish the materials required of them
under the terms of this Agreement, or any material
breach of any representation and/or warranty made by
LIFE COMPANY or UNDERWRITER in this Agreement or
arise out of or result from any other material breach
of this Agreement by LIFE COMPANY or UNDERWRITER; or

(v) arise as a result of failure by the Contracts issued
by LIFE COMPANY to qualify as annuity contracts or
life insurance contracts under the Code, otherwise
than by reason of any Fund's failure to comply with
Subchapter M or Section 817(h) of the Code.

(b) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any losses, claims, damages, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the

21
<PAGE> 25
performance by that Indemnified Party of its duties or by reason of that
Indemnified Party's reckless disregard of obligations or duties (i) under this
Agreement, or (ii) to AVIF or AIM.

(c) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any action against an Indemnified Party unless AVIF
or AIM shall have notified LIFE COMPANY and UNDERWRITER in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY and
UNDERWRITER of any such action shall not relieve LIFE COMPANY and UNDERWRITER
from any liability which they may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 12.1. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, LIFE COMPANY and UNDERWRITER shall be entitled to
participate, at their own expense, in the defense of such action and also shall
be entitled to assume the defense thereof, with counsel approved by the
Indemnified Party named in the action, which approval shall not be unreasonably
withheld. After notice from LIFE COMPANY or UNDERWRITER to such Indemnified
Party of LIFE COMPANY's or UNDERWRITER's election to assume the defense thereof,
the Indemnified Party will cooperate fully with LIFE COMPANY and UNDERWRITER and
shall bear the fees and expenses of any additional counsel retained by it, and
neither LIFE COMPANY nor UNDERWRITER will be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.

12.2 OF LIFE COMPANY AND UNDERWRITER BY AVIF AND AIM.

(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e), below, AVIF and AIM agree to indemnify and hold harmless LIFE COMPANY,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
LIFE COMPANY, UNDERWRITER or their respective affiliates within the meaning of
Section 15 of the 1933 Act and each of their respective directors and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of AVIF and/or AIM) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law, or otherwise; provided, the Account owns or has owned shares of
the Fund and insofar as such losses, claims, damages, liabilities or actions:

(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in AVIF's 1933 Act registration statement,
AVIF Prospectus or sales literature or advertising of
AVIF (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading; provided, that this agreement to
indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged

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<PAGE> 26
statement or omission was made in reliance upon and
in conformity with information furnished to AVIF or
its affiliates by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates for use in
AVIF's 1933 Act registration statement, AVIF
Prospectus, or in sales literature or advertising or
otherwise for use in connection with the sale of
Contracts or Shares (or any amendment or supplement
to any of the foregoing); or

(ii) arise out of or as a result of any other statements
or representations (other than statements or
representations contained in any Account's 1933 Act
registration statement, any Account Prospectus, sales
literature or advertising for the Contracts, or any
amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of AVIF, AIM
or their affiliates and on which such persons have
reasonably relied) or the negligent, illegal or
fraudulent conduct of AVIF, AIM or their affiliates
or persons under their control (including, without
limitation, their employees and "persons associated
with a member" as that term is defined in Section (q)
of Article I of the NASD By-Laws), in connection with
the sale or distribution of AVIF Shares; or

(iii) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in any Account's 1933 Act registration
statement, any Account Prospectus, sales literature
or advertising covering the Contracts, or any
amendment or supplement to any of the foregoing, or
the omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, if such statement or omission was made in
reliance upon and in conformity with information
furnished to LIFE COMPANY, UNDERWRITER or their
respective affiliates by or on behalf of AVIF or AIM
for use in any Account's 1933 Act registration
statement, any Account Prospectus, sales literature
or advertising covering the Contracts, or any
amendment or supplement to any of the foregoing; or

(iv) arise as a result of any failure by AVIF to perform
the obligations, provide the services and furnish the
materials required of it under the terms of this
Agreement, or any material breach of any
representation and/or warranty made by AVIF in this
Agreement or arise out of or result from any other
material breach of this Agreement by AVIF.

(b) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e) hereof, AVIF and AIM agree to indemnify and hold harmless the
Indemnified Parties from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement thereof with, the written
consent of AVIF and/or AIM) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses) to which the Indemnified Parties
may become subject directly or indirectly under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any Fund to
operate as a

23
<PAGE> 27
regulated investment company in compliance with (i) Subchapter M of the Code and
regulations thereunder, or (ii) Section 817(h) of the Code and regulations
thereunder, including, without limitation, any income taxes and related
penalties, rescission charges, liability under state law to Participants
asserting liability against LIFE COMPANY pursuant to the Contracts, the costs of
any ruling and closing agreement or other settlement with the IRS, and the cost
of any substitution by LIFE COMPANY of Shares of another investment company or
portfolio for those of any adversely affected Fund as a funding medium for each
Account that LIFE COMPANY reasonably deems necessary or appropriate as a result
of the noncompliance.

(c) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties (i) under this Agreement, or (ii) to LIFE COMPANY,
UNDERWRITER, each Account or Participants.

(d) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless the Indemnified Party
shall have notified AVIF and/or AIM in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify AVIF or AIM of any such action shall not relieve
AVIF or AIM from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
12.2. Except as otherwise provided herein, in case any such action is brought
against an Indemnified Party, AVIF and/or AIM will be entitled to participate,
at its own expense, in the defense of such action and also shall be entitled to
assume the defense thereof (which shall include, without limitation, the conduct
of any ruling request and closing agreement or other settlement proceeding with
the IRS), with counsel approved by the Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from AVIF and/or
AIM to such Indemnified Party of AVIF's or AIM"s election to assume the defense
thereof, the Indemnified Party will cooperate fully with AVIF and AIM and shall
bear the fees and expenses of any additional counsel retained by it, and AVIF
and AIM will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof, other than reasonable
costs of investigation.

(e) In no event shall AVIF or AIM be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including,
without limitation, LIFE COMPANY, UNDERWRITER or any other Participating
Insurance Company or any Participant, with respect to any losses, claims,
damages, liabilities or expenses that arise out of or result from (i) a breach
of any representation, warranty, and/or covenant made by LIFE COMPANY or
UNDERWRITER hereunder or by any Participating Insurance Company under an
agreement containing substantially similar representations, warranties and
covenants; (ii) the failure by LIFE COMPANY or any Participating Insurance
Company to maintain its segregated asset account (which invests in any Fund) as
a legally and validly established segregated asset account under applicable

24
<PAGE> 28
state law and as a duly registered unit investment trust under the provisions of
the 1940 Act (unless exempt therefrom); or (iii) the failure by LIFE COMPANY or
any Participating Insurance Company to maintain its variable annuity or life
insurance contracts (with respect to which any Fund serves as an underlying
funding vehicle) as annuity contracts or life insurance contracts under
applicable provisions of the Code.

25
<PAGE> 29
12.3 EFFECT OF NOTICE.

Any notice given by the indemnifying Party to an Indemnified Party
referred to in Sections 12.1(c) or 12.2(d) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or responsibility,
and the indemnifying Party will remain free to contest liability with respect to
the claim among the Parties or otherwise.

12.4 SUCCESSORS.

A successor by law of any Party shall be entitled to the benefits of
the indemnification contained in this Section 12.

SECTION 13. APPLICABLE LAW

This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Maryland law, without regard for that state's
principles of conflict of laws.

SECTION 14. EXECUTION IN COUNTERPARTS

This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.

SECTION 15. SEVERABILITY

If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.

SECTION 16. RIGHTS CUMULATIVE

The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.

SECTION 17. HEADINGS

The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.

26
<PAGE> 30
SECTION 18. CONFIDENTIALITY

AVIF acknowledges that the identities of the customers of LIFE COMPANY
or any of its affiliates (collectively, the "LIFE COMPANY Protected Parties for
purposes of this Section 18), information maintained regarding those customers,
and all computer programs and procedures or other information developed by the
LIFE COMPANY Protected Parties or any of their employees or agents in connection
with LIFE COMPANY's performance of its duties under this Agreement are the
valuable property of the LIFE COMPANY Protected Parties. AVIF agrees that if it
comes into possession of any list or compilation of the identities of or other
information about the LIFE COMPANY Protected Parties' customers, or any other
information or property of the LIFE COMPANY Protected Parties, other than such
information as may be independently developed or compiled by AVIF from
information supplied to it by the LIFE COMPANY Protected Parties' customers who
also maintain accounts directly with AVIF, AVIF will hold such information or
property in confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with LIFE COMPANY's prior written
consent; or (b) as required by law or judicial process. LIFE COMPANY
acknowledges that the identities of the customers of AVIF or any of its
affiliates (collectively, the "AVIF Protected Parties' for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the AVIF Protected
Parties or any of their employees or agents in connection with AVIF's
performance of its duties under this Agreement are the valuable property of the
AVIF Protected Parties. LIFE COMPANY agrees that if it comes into possession of
any list or compilation of the identities of or other information about the AVIF
Protected Parties' customers or any other information or property of the AVIF
Protected Parties, other than such information as may be independently developed
or compiled by LIFE COMPANY from information supplied to it by the AVIF
Protected Parties' customers who also maintain accounts directly with LIFE
COMPANY, LIFE COMPANY will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with AVIF's prior written consent; or (b) as required by
law or judicial process. Each party acknowledges that any breach of the
agreements in this Section 18 would result in immediate and irreparable harm to
the other parties for which there would be no adequate remedy at law and agree
that in the event of such a breach, the other parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.

SECTION 19. TRADEMARKS AND FUND NAMES

(a) Except as may otherwise be provided in a License Agreement among A
I M Management Group, Inc., LIFE COMPANY and UNDERWRITER, neither LIFE COMPANY
nor UNDERWRITER or any of their respective affiliates, shall use any trademark,
trade name, service mark or logo of AVIF, AIM or any of their respective
affiliates, or any variation of any such trademark, trade name, service mark or
logo, without AVIF's or AIM's prior written consent, the granting of which shall
be at AVIF's or AIM's sole option.

27
<PAGE> 31
(b) Except as otherwise expressly provided in this Agreement, neither
AVIF, its investment adviser, its principal underwriter, or any affiliates
thereof shall use any trademark, trade name, service mark or logo of LIFE
COMPANY, UNDERWRITER or any of their affiliates, or any variation of any such
trademark, trade name, service mark or logo, without LIFE COMPANY's or
UNDERWRITER's prior written consent, the granting of which shall be at LIFE
COMPANY's or UNDERWRITER's sole option.

SECTION 20. PARTIES TO COOPERATE

Each party to this Agreement will cooperate with each other party and
all appropriate governmental authorities (including, without limitation, the
SEC, the NASD and state insurance regulators) and will permit each other and
such authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.

SECTION 21. AMENDMENTS

No provision of this Agreement may be amended or modified in any manner
except by a written agreement executed by all parties hereto.

28
<PAGE> 32
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.

<TABLE>
<S> <C>
AIM VARIABLE INSURANCE FUNDS, INC.

Attest: ________________________ By: ______________________________________
Name: Nancy L. Martin Name: Robert H. Graham
Title Assistant Secretary Title: President

A I M DISTRIBUTORS, INC.

Attest: ________________________ By: ______________________________________
Name: Nancy L. Martin Name: Michael J. Cemo
Title: Assistant Secretary Title: President

NORTHERN LIFE INSURANCE COMPANY, on
behalf of itself and its separate
accounts

Attest: ________________________ By: ______________________________________

Name: ________________________ Name: ______________________________________

Title: ________________________ Title: ______________________________________

WASHINGTON SQUARE SECURITIES, INC.

Attest: ________________________ By: ______________________________________

Name: ________________________ Name: ______________________________________

Title: ________________________ Title: ______________________________________
</TABLE>

29
<PAGE> 33
SCHEDULE A

FUNDS AVAILABLE UNDER THE CONTRACTS

AIM VARIABLE INSURANCE FUNDS, INC.

AIM V.I. Dent Demographic Trends Fund

SEPARATE ACCOUNTS UTILIZING THE FUNDS

Northern Life Separate Account One

CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS

AdvantageSM Annuity
Advantage CenturySM Annuity
Advantage Century PlusSM Annuity
Advantage RIASM Annuity

30
<PAGE> 34
SCHEDULE B

AIM'S PRICING ERROR POLICIES

Determination of Materiality

In the event that AIM discovers an error in the calculation of the Fund's net
asset value, the following policies will apply:

If the amount of the error is less than $.01 per share, it is considered
immaterial and no adjustments are made.

If the amount of the error is $.01 per share or more, then the following
thresholds are applied:

a. If the amount of the difference in the erroneous net asset
value and the correct net asset value is less than .5% of the
correct net asset value, AIM will reimburse the affected Fund
to the extent of any loss resulting from the error. No other
adjustments shall be made.

b. If the amount of the difference in the erroneous net asset
value and the correct net asset value is .5% of the correct
net asset value or greater, then AIM will determine the impact
of the error to the affected Fund and shall reimburse such
Fund (and/or LIFE COMPANY, as appropriate, such as in the
event that the error was not discovered until after LIFE
COMPANY processed transactions using the erroneous net asset
value) to the extent of any loss resulting from the error. To
the extent that an overstatement of net asset value per share
is detected quickly and LIFE COMPANY has not mailed redemption
checks to Participants, LIFE COMPANY and AIM agree to examine
the extent of the error to determine the feasibility of
reprocessing such redemption transaction (for purposes of
reimbursing the Fund to the extent of any such overpayment).

Reprocessing Cost Reimbursement

To the extent a reprocessing of Participant transactions is required pursuant to
paragraph (b), above, AIM shall reimburse LIFE COMPANY for LIFE COMPANY's
reprocessing costs in an amount not to exceed $3.00 per contract affected by $10
or more. The reprocessing costs may be amended upon mutual agreement of the
Parties in writing.

The Pricing Policies described herein may be modified by AVIF as approved by its
Board of Directors. AIM agrees to use its best efforts to notify LIFE COMPANY at
least five (5) days prior to any such meeting of the Board of Directors of AVIF
to consider such proposed changes.

31
<PAGE> 35
SCHEDULE C
EXPENSE ALLOCATIONS

<TABLE>
<CAPTION>
LIFE COMPANY AVIF / AIM
------------ ----------

<S> <C>
Preparing and filing the Account's Preparing and filing the Fund's registration statement
registration statement

Text composition for Account prospectuses Text composition for Fund prospectuses and supplements
and supplements

Text alterations of prospectuses (Account) Text alterations of prospectuses (Fund) and
and supplements (Account) supplements (Fund)

Printing Account and Fund prospectuses and Camera ready and HTML Fund prospectus,
supplements for prospective purchasers Printing of Fund prospectus for policy owners of record

Text composition and printing Account SAIs Text composition and printing Fund SAIs

Mailing and distributing Account SAIs to Mailing and distributing Fund SAIs to policy owners
policy owners upon request by policy owners upon request by policy owners

Mailing and distributing Account prospectus Mailing and distributing Fund prospectus and Account
and Account supplements to policy owners supplements to policy owners of record as required by
of record as required by Federal Securities Federal Securities Laws
Laws and to prospective purchasers

Text composition, printing, mailing, and Text composition, printing, mailing, and distributing
distributing annual and semi-annual reports annual and semi-annual reports for Fund
for Account

Text composition, printing, mailing, Text composition, printing, mailing, distributing and
distributing, and tabulation of proxy tabulation of proxy statements and voting instruction
statements and voting instruction solicitation solicitation materials to policy owners with respect
materials to policy owners with respect to to proxies related to the Fund
proxies related to the Account

Preparation, printing and distributing sales
material and advertising relating to the Funds,
insofar as such materials are prepared by
LIFE COMPANY and relate to the Contracts
and filing such materials with and obtaining
approval from, the SEC, the NASD, any state
insurance regulatory authority, and any other
appropriate regulatory authority, to the extent
required
</TABLE>

<PAGE> 1
Exhibit 99.8(b)

ADMINISTRATIVE SERVICES AGREEMENT

RELIASTAR LIFE INSURANCE COMPANY, NORTHERN LIFE INSURANCE COMPANY,
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK (INSURERS) and A I M ADVISORS, INC.
("AIM) (collectively, the "Parties") mutually agree to the arrangements set
forth in this Administrative Services Agreement (the "Agreement") dated as of
___________, 2000.

WHEREAS, AIM is the investment adviser to AIM Variable Insurance
Funds, Inc. (the "Fund"); and

WHEREAS, AIM has entered into an amended Master Administrative
Services Agreement, dated May 1, 1998, with the Fund ("Master Agreement")
pursuant to which it has agreed to provide, or arrange to provide, certain
administrative services, including such services as may be requested by the
Fund's Board of Directors from time to time; and

WHEREAS, INSURERS issues variable life insurance policies and/or
variable annuity contracts (collectively, the "Contracts"); and

WHEREAS, INSURERS have entered into a participation agreements,
("Participation Agreements") with the Fund, pursuant to which the Fund has
agreed to make shares of certain of its portfolios ("Portfolios") available for
purchase by one or more of INSURERS' separate accounts or divisions thereof
(each, a "Separate Account"), in connection with the allocation by Contract
owners of purchase payments to corresponding investment options offered under
the Contracts; and

WHEREAS, INSURERS and AIM expect that the Fund, and its Portfolios,
can derive substantial savings in administrative expenses by virtue of having
one or more Separate Accounts of INSURERS each as a single shareholder of record
of Portfolio shares, rather than having numerous public shareholders of such
shares; and

WHEREAS, INSURERS and AIM expect that the Fund, and its Portfolios,
can derive such substantial savings because INSURERS performs the administrative
services listed on Schedule A hereto for the Fund in connection with the
Contracts issued by INSURERS; and

WHEREAS, INSURERS have no contractual or other legal obligation to
perform such administrative services, other than pursuant to this Agreement and
the Participation Agreements; and

WHEREAS, INSURERS desire to be compensated for providing such
administrative services; and

<PAGE> 2

WHEREAS, AIM desires that the Fund benefit from the lower
administrative expenses resulting from the administrative services performed by
INSURERS; and

WHEREAS, AIM desires to retain the administrative services of INSURERS
and to compensate INSURERS for providing such administrative services;

NOW, THEREFORE, the Parties agree as follows:

SECTION 1. ADMINISTRATIVE SERVICES; PAYMENTS THEREFOR.

(a) INSURERS shall provide the administrative services set out in
Schedule A hereto and made a part hereof, as the same may be amended from time
to time. For such services, AIM agrees to pay to INSURERS a quarterly fee
("Quarterly Fee") equal to a percentage of the average daily net assets of the
Fund attributable to the Contracts issued by INSURERS ("INSURERS Fund Assets) at
the annual rate of 0.25%.

(b) AIM shall calculate the Quarterly Fee at the end of each calendar
quarter and will make such payment to INSURERS, without demand or notice by
INSURERS, within 30 days thereafter, in a manner mutually agreed upon by the
Parties from time to time.

(c) From time to time, the Parties shall review the Quarterly Fee to
determine whether it exceeds or is reasonably expected to exceed the incurred
and anticipated costs, over time, of INSURERS. The Parties agree to negotiate in
good faith a reduction to the Quarterly Fee as necessary to eliminate any such
excess or as necessary to reflect a reduction in the fee paid by the Fund to AIM
pursuant to the Master Agreement.

SECTION 2. NATURE OF PAYMENTS.

The Parties to this Agreement recognize and agree that AIM's payments
hereunder are for administrative services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution of
Contracts or of Portfolio shares, and are not otherwise related to investment
advisory or distribution services or expenses. INSURERS represent and warrant
that the fees to be paid by AIM for services to be rendered by INSURERS pursuant
to the terms of this Agreement are to compensate the INSURERS for providing
administrative services to the Fund, and are not designed to reimburse or
compensate INSURERS for providing administrative services with respect to the
Contracts or any Separate Account (it being understood that for accounting
purposes INSURER does not allocate fees received to specific services provided
or expenses incurred on a dollar for dollar basis).

SECTION 3. TERM AND TERMINATION.

Any Party may terminate this Agreement, without penalty, on 60 days
written notice to the other Party. Unless so terminated, this Agreement shall
continue in effect for so long as AIM or its successor(s) in interest, or any
affiliate thereof, continues to perform in a similar capacity for the Fund, and
for so long as INSURERS provide the services contemplated hereunder with respect
to

<PAGE> 3

Contracts under which values or monies are allocated to a Portfolio.

SECTION 4. AMENDMENT.

This Agreement may be amended upon mutual agreement of the Parties in
writing.

SECTION 5. NOTICES.

All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered

RELIASTAR LIFE INSURANCE COMPANY
20 Washington Avenue South
Minneapolis, Minnesota 55401
Facsimile: (612) 342-7531
Attention: Stewart D. Gregg, Esq.

NORTHERN LIFE INSURANCE COMPANY
Street address
City, State Zip
Facsimile:
Attention:

RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
Street address
City, State Zip
Facsimile:
Attention:

A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100
Houston, Texas 77046
Facsimile: (713) 993-9185
Attention: Nancy L. Martin, Esq.

SECTION 6. MISCELLANEOUS.

(a) Successors and Assigns. This Agreement shall be binding upon the
Parties and their transferees, successors and assigns. The benefits of and the
right to enforce this Agreement shall accrue to the Parties and their
transferees, successors and assigns.

(b) Assignment. Neither this Agreement nor any of the rights,
obligations or liabilities of any Party hereto shall be assigned without the
written consent of the other Party.

3
<PAGE> 4

(c) Intended Beneficiaries. Nothing in this Agreement shall be
construed to give any person or entity other than the Parties, as well as the
Fund, any legal or equitable claim, right or remedy. Rather, this Agreement is
intended to be for the sole and exclusive benefit of the Parties, as well as the
Fund.

(d) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together constitute
one and the same instrument.

(e) Applicable Law. This Agreement shall be interpreted, construed,
and enforced in accordance with the laws of the State of Delaware without
reference to the conflict of law principles thereof.

(f) Severability. If any portion of this Agreement shall be found to
be invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but shall
have the same force and effect as if the invalid or unenforceable portion had
not been inserted.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date of first above written.

RELIASTAR LIFE INSURANCE COMPANY

By: ____________________________________

Title: ____________________________________

NORTHERN LIFE INSURANCE COMPANY

By: ____________________________________

Title: ____________________________________

RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK

By: ____________________________________

Title: ____________________________________

A I M ADVISORS, INC.

By: ____________________________________

Title: ____________________________________

4
<PAGE> 5
SCHEDULE A

ADMINISTRATIVE SERVICES FOR
AIM VARIABLE INSURANCE FUNDS, INC.

INSURERS shall provide certain administrative services respecting the
operations of the Fund, as set forth below. This Schedule, which may be amended
from time to time as mutually agreed upon by INSURERS and AIM, constitutes an
integral part of the Agreement to which it is attached. Capitalized terms used
herein shall, unless otherwise noted, have the same meaning as the defined terms
in the Agreement to which this Schedule relates.

A. RECORDS OF PORTFOLIO SHARE TRANSACTIONS; MISCELLANEOUS RECORDS

1. INSURERS shall maintain master accounts with the Fund, on behalf of
each Portfolio, which accounts shall bear the name of INSURERS as the record
owner of Portfolio shares on behalf of each Separate Account investing in the
Portfolio.

2. INSURERS shall maintain a daily journal setting out the number of
shares of each Portfolio purchased, redeemed or exchanged by Contract owners
each day, as well as the net purchase or redemption orders for Portfolio shares
submitted each day, to assist AIM, the Fund and/or the Fund's transfer agent in
tracking and recording Portfolio share transactions, and to facilitate the
computation of each Portfolio's net asset value per share. INSURERS shall
promptly provide AIM, the Fund, and the Fund's transfer agent with a copy of
such journal entries or information appearing thereon in such format as may be
reasonably requested from time to time. INSURERS shall provide such other
assistance to AIM, the Fund, and the Fund's transfer agent as may be necessary
to cause various Portfolio share transactions effected by Contract owners to be
properly reflected on the books and records of the Fund.

3. In addition to the foregoing records, and without limitation, INSURERS
shall maintain and preserve all records as required by law to be maintained and
preserved in connection with providing administrative services hereunder.

B. ORDER PLACEMENT AND PAYMENT

1. INSURERS shall determine the net amount to be transmitted to the
Separate Accounts as a result of redemptions of each Portfolio's shares based on
Contract owner redemption requests and shall disburse or credit to the Separate
Accounts all proceeds of redemptions of Portfolio shares. INSURERS shall notify
the Fund of the cash required to meet redemption payments.

2. INSURERS shall determine the net amount to be transmitted to the Fund
as a result of purchases of Portfolio shares based on Contract owner purchase
payments and transfers allocated to the Separate Accounts investing in each
Portfolio. INSURERS shall transmit net purchase payments to the Fund's
custodian.

5
<PAGE> 6

C. ACCOUNTING SERVICES

INSURERS shall perform miscellaneous accounting services as may be
reasonably requested from time to time by AIM, which services shall relate to
the business contemplated by the Participation Agreements between INSURERS and
the Fund, as amended from time to time. Such services shall include, without
limitation, periodic reconciliation and balancing of INSURERS' books and records
with those of the Fund with respect to such matters as cash accounts, Portfolio
share purchase and redemption orders placed with the Fund, dividend and
distribution payments by the Fund, and such other accounting matters that may
arise from time to time in connection with the operations of the Fund as related
to the business contemplated by the Participation Agreements.

D. REPORTS

INSURERS acknowledges that AIM may, from time to time, be called upon by
the Fund's Board of Directors ("Board"), to provide various types of information
pertaining to the operations of the Fund and related matters, and that AIM also
may, from time to time, decide to provide such information to the Board in its
own discretion. Accordingly, INSURERS agree to provide AIM with such assistance
as AIM may reasonably request so that AIM can report such information to the
Fund's Board in a timely manner. INSURERS acknowledges that such information and
assistance shall be in addition to the information and assistance required of
INSURERS pursuant to the Fund's mixed and shared funding SEC exemptive order,
described in the Participation Agreements.

INSURERS further agree to provide AIM with such assistance as AIM may
reasonably request with respect to the preparation and submission of reports and
other documents pertaining to the Fund to appropriate regulatory bodies and
third party reporting services.

E. FUND-RELATED CONTRACT OWNER SERVICES

INSURERS agree to print and distribute, in a timely manner, prospectuses,
statements of additional information, supplements thereto, periodic reports,
proxy materials and any other materials of the Fund required by law or otherwise
to be given to its shareholders, including, without limitation, Contract owners
investing in Portfolio shares. INSURERS further agree to provide telephonic
support for Contract owners, including, without limitation, advice with respect
to inquiries about the Fund and each Portfolio thereof (not including
information about performance or related to sales), communicating with Contract
owners about Fund (and Separate Account) performance, and assisting with proxy
solicitations, specifically with respect to soliciting voting instructions from
Contract owners.

F. MISCELLANEOUS SERVICES

INSURERS shall provide such other administrative support to the Fund as
mutually agreed between INSURERS and AIM or the Fund from time to time. INSURERS
shall, from time to time, relieve the Fund of other usual or incidental
administration services of the type ordinarily borne by mutual funds that offer
shares to individual members of the general public.

<PAGE> 1

EXHIBIT 99.9

March 29, 2000

Northern Life Insurance Company
1501 4th Avenue
Seattle, WA 98101

Dear Madam/Sir:

In connection with the proposed registration under the Securities Act of 1933,
as amended, of variable/fixed annuity contracts ("the Contract") and interests
in Separate Account One (the "Variable Account") I have examined documents
relating to the establishment of the Variable Account by the Board of Directors
of Northern Life Insurance Company (the "Company") as a separate account for
assets applicable to variable contracts, pursuant to RCW 48.18A.010 et seq., as
amended, and the Pre-effective Amendment No. 1 to the Registration Statement, on
Form N-4, File No. 333-32948 (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 Variable 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 Variable Account equal to
reserves and other contract liabilities with respect to the Variable
Account are not chargeable with liabilities arising out of any other
business the Company might conduct.

I consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

/s/ Stewart D. Gregg

Stewart D. Gregg
Counsel

<PAGE> 1
EXHIBIT 99.10

INDEPENDENT AUDITORS' CONSENT

Board of Directors
Northern Life Separate Account One

We consent to the incorporation by reference in this Pre-Effective Amendment No.
1 to Registration Statement File No. 333-32948 on Form N-4 of the Northern
Life Separate Account One filed under the Securities Act of 1933, and Amendment
No. 1 to the Registration Statement under the Investment Company Act of 1940,
respectively, of our report dated February 18, 2000 related to the financial
statements of Northern Life Separate Account One as of December 31, 1999 and for
each of the two years in the period then ended, and our report dated March 22,
2000 related to the consolidated statutory-basis financial statement of Northern
Life Insurance Company as of and for the years ended December 31, 1999 and 1998
appearing in the Statement of Additional Information of such Registration
Statement, and to the references to us under the heading "Experts" appearing in
the Prospectus and under the heading "Experts" appearing in the Statement of
Additional Information, all of which are part of such Registration Statement.

/s/ Deloitte & Touche LLP

Minneapolis, Minnesota
March 28, 2000