<PAGE>


      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 31, 2002

                                                           REGISTRATION NO. 333-

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                    FORM S-1

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

                          PRUCO LIFE INSURANCE COMPANY

                           (EXACT NAME OF REGISTRANT)

                                     ARIZONA

 -------------------------------------------------------------------------------
         (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

                                    22-194455

                     (I.R.S. EMPLOYER IDENTIFICATION NUMBER)

                        C/O PRUCO LIFE INSURANCE COMPANY

                              213 WASHINGTON STREET

                          NEWARK, NEW JERSEY 07102-2992

                                 (973) 802-7333

 -------------------------------------------------------------------------------
          (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

                                THOMAS C. CASTANO

                               ASSISTANT SECRETARY

                          PRUCO LIFE INSURANCE COMPANY

                              213 WASHINGTON STREET

                          NEWARK, NEW JERSEY 07102-2992

                                 (973) 802-4708

 -------------------------------------------------------------------------------
           (NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

                                COPIES TO:

                  C. CHRISTOPHER SPRAGUE
                  VICE PRESIDENT, CORPORATE COUNSEL
                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                  213 WASHINGTON STREET
                  NEWARK,  NEW JERSEY 07102-2992

================================================================================

Approximate date of commencement of proposed sale to the public--Immediately
upon effectiveness

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box ........................[x]

<TABLE>
<CAPTION>

                                                  CALCULATION OF REGISTRATION FEE

                     TITLE OF EACH             AMOUNT            PROPOSED            PROPOSED           AMOUNT OF
                  CLASS OF SECURITIES           TO BE        MAXIMUM OFFERING    MAXIMUM AGGREGATE    REGISTRATION
                   TO BE REGISTERED          REGISTERED*      PRICE PER UNIT*     OFFERING PRICE          FEE**
               -----------------------   -----------------  ------------------   -----------------    ------------
<S>                                      <C>                <C>                  <C>                   <C>
               Market-value adjusted

               annuity contracts            $500,000,000                           $500,000,000        $ 46,000

</TABLE>

----------
*   Securities are not issued in predetermined units

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 may determine.

Prudential Investment Management Services LLC, the principal underwriter of
these contracts under a "best efforts" arrangement, will be reimbursed by Pruco
Life Insurance Company for its costs and expenses incurred in connection with
the sale of these contracts.

The risk factors section appears on page 6 of the prospectus.


<PAGE>

STRATEGIC PARTNERS(SM)
MVA
--------------------------------------------------------------------------------
PROSPECTUS: JANUARY 2, 2003

THIS PROSPECTUS DESCRIBES A MARKET VALUE ADJUSTED INDIVIDUAL ANNUITY CONTRACT
OFFERED BY PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE). PRUCO LIFE IS A WHOLLY
OWNED SUBSIDIARY OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. PRUCO LIFE IS
LOCATED AT 213 WASHINGTON STREET, NEWARK, NJ 07102-2992, AND CAN BE CONTACTED BY
CALLING (973) 367-1730. PRUCO LIFE ADMINISTERS THE STRATEGIC PARTNERS MVA
CONTRACTS AT THE PRUDENTIAL ANNUITY SERVICE CENTER, P.O. BOX 7960, PHILADELPHIA,
PA 19101. YOU CAN CONTACT THE PRUDENTIAL ANNUITY SERVICE CENTER BY CALLING,
TOLL-FREE, (888) PRU-2888.

PLEASE READ THIS PROSPECTUS
------------------------------------------------------------

Please read this prospectus before purchasing a Strategic Partners MVA annuity
contract and keep it for future reference.

 THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
 SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
 OFFENSE TO STATE OTHERWISE. INVESTMENT IN A MARKET VALUE ADJUSTED ANNUITY
 CONTRACT IS SUBJECT TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR MONEY. AN
 INVESTMENT IN STRATEGIC PARTNERS MVA IS NOT A BANK DEPOSIT AND IS NOT INSURED
 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

 ORD01009
<PAGE>

CONTENTS
--------------------------------------------------------------------------------

<Table>
                    <S>                                                           <C>
                    PART I: STRATEGIC PARTNERS MVA PROSPECTUS
                    ------------------------------------------------------------

                    SUMMARY
                    ------------------------------------------------------------
                             Glossary...........................................      4
                             Summary............................................      5
                             Risk Factors.......................................      6

                    PART II: STRATEGIC PARTNERS MVA PROSPECTUS
                    ------------------------------------------------------------
                        Section 1: What is the Strategic Partners MVA
                         Annuity?...............................................      8
                             Short Term Cancellation Right or "Free Look".......      8
                        Section 2: What Guarantee Periods Can I Choose?.........      9
                             Guarantee Periods..................................      9
                             Market Value Adjustment............................     10
                        Section 3: What Kind of Payments Will I Receive During
                         the Income Phase? (Annuitization)......................     11
                             Payment Provisions.................................     11
                                 Option 1: Annuity Payments for a Fixed
                                  Period........................................     11
                                 Option 2: Life Annuity with 120 Payments (10
                                  Years)........................................     11
                                 Option 3: Interest Payment Option..............     11
                                 Option 4: Other Annuity Options................     12
                                 Tax Considerations.............................     12
                        Section 4: What is the Death Benefit?...................     13
                             Beneficiary........................................     13
                             Calculation of the Death Benefit...................     13
                             Joint Ownership Rules..............................     13
                        Section 5: How Can I Purchase a Strategic Partners MVA
                         Contract?..............................................     14
                             Purchase Payment...................................     14
                             Allocation of Purchase Payment.....................     14
                        Section 6: What are the Expenses Associated with the
                         Strategic Partners MVA Contract?.......................     15
                             Withdrawal Charge..................................     15
                             Waiver of Withdrawal Charge for Critical Care......     15
                             Taxes Attributable to Premium......................     16
                        Section 7: How Can I Access My Money?...................     17
                             Automated Withdrawals..............................     17
                        Section 8: What are the Tax Considerations Associated
                         with the Strategic Partners MVA Contract? .............     18
                             Contracts Owned by Individuals (Not Associated with
                             Tax Favored Retirement Plans)......................     18
                             Contracts Held by Tax Favored Plans................     19
                        Section 9: Other Information............................     25
                             Pruco Life Insurance Company.......................     25
                             Sale and Distribution of the Contract..............     25
                             Assignment.........................................     26
                             Householding.......................................     26
                             Litigation.........................................     26
                             Management's Discussion and Analysis of Financial
                             Condition and Results of Operations ...............     27
                             Quantitative and Qualitative Disclosure about
                             Market Risk........................................     41
                             Directors and Officers.............................     46
                             Executive Compensation.............................     48
                             Selected Financial Data............................     48
                             Company Financial Information......................     49
                             Experts............................................     80
                             Indemnification....................................     80
                             Market-Value Adjustment Formula....................     81
                             IRA Disclosure Statement...........................     84
</Table>

 2
<PAGE>

PART I SUMMARY
--------------------------------------------------------------------------------
STRATEGIC PARTNERS MVA PROSPECTUS

                                                                               3
<PAGE>

                                                                          PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

GLOSSARY
--------------------------------------------------------------------------------
WE HAVE TRIED TO MAKE THIS PROSPECTUS AS EASY TO READ AND UNDERSTAND AS
POSSIBLE. BY THE NATURE OF THE CONTRACT, HOWEVER, CERTAIN TECHNICAL WORDS OR
TERMS ARE UNAVOIDABLE. WE HAVE IDENTIFIED THE FOLLOWING AS SOME OF THE KEY WORDS
OR TERMS. OTHER DEFINED TERMS ARE SET FORTH IN YOUR CONTRACT.

ACCUMULATION PHASE

The period that begins with the contract date (see below definition) and ends
when you start receiving income payments or earlier if the contract is
terminated through a full withdrawal or payment of a death benefit.

ADJUSTED CONTRACT VALUE

When you begin receiving income payments, the value of your contract minus any
charge we impose for premium taxes.

ANNUITANT

The person whose life determines the amount of income payments that will be
paid. If, upon the death of the annuitant, there is no surviving co-annuitant,
and the owner is not the annuitant, then the owner becomes the annuitant.

ANNUITY DATE

The date when income payments are scheduled to begin.

BENEFICIARY

The person(s) or entity you have chosen to receive a death benefit.

CO-ANNUITANT

The person shown on the contract data pages who becomes the annuitant upon the
death of the annuitant before the annuity date. No co-annuitant may be
designated if the owner is a non-natural person.

CONTRACT DATE

The date we receive your purchase payment and all necessary paperwork in good
order at the Prudential Annuity Service Center. Contract anniversaries are
measured from the contract date. A contract year starts on the contract date or
on a contract anniversary.

CONTRACT OWNER, OWNER OR YOU

The person entitled to the ownership rights under the contract.

CONTRACT SURRENDER VALUE

This is the total value of your contract adjusted by any market-value
adjustment, minus any withdrawal charge(s) and premium taxes.

CONTRACT VALUE

The total value of the amount in a contract allocated to a guarantee period as
of a particular date.

DEATH BENEFIT

If the sole owner or first to die of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g. a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the death
of the annuitant. See "What is the Death Benefit?" on page 25.

GUARANTEE PERIOD

A period of time during which your invested purchase payment earns interest at
the declared rate. We currently make available guarantee periods equal to any or
all of the following: 1 year (currently available only as a renewal option), 3
years, 5 years, 7 years, and 10 years.

INCOME OPTIONS

Options under the contract that define the frequency and duration of income
payments. In your contract, these are referred to as payout or annuity options.

INVESTED PURCHASE PAYMENT

Your purchase payment (which we define below) less any deduction we make for any
premium or other tax charge. In addition to the initial invested purchase
payment, we allow you to make additional purchase payments during the 30 days
preceding the end of a guarantee period.

JOINT OWNER

The person named as the joint owner, who shares ownership rights with the owner
as defined in the contract. Joint owners may be spouses, but are not required to
be spouses.

PRUDENTIAL ANNUITY SERVICE CENTER

For general correspondence: P.O. Box 7960, Philadelphia, PA, 19101. For express
overnight mail: 2101 Welsh Road, Dresher, PA 19025. The phone number is (888)
PRU-2888. Prudential's Web site is www.prudential.com.

PURCHASE PAYMENT

The amount of money you pay us to purchase the contract, as well as any
additional payment you make.

TAX DEFERRAL

This is a way to increase your assets without currently being taxed. You do not
pay taxes on your contract earnings until you take money out of your contract.

 4
<PAGE>

                                                                          PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

SUMMARY OF SECTIONS 1-9
--------------------------------------------------------------------------------

FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN THE PROSPECTUS.

SECTION 1
WHAT IS THE STRATEGIC PARTNERS MVA ANNUITY?

This market value adjusted annuity contract, offered by Pruco Life, is a
contract between you, as the owner, and us. The contract is intended for
retirement savings or other long-term investment purposes and provides a death
benefit and guaranteed income options.

   While your money remains in the contract for the full guarantee period, your
principal amount is guaranteed and the interest amount that your money will earn
is guaranteed by us to always be at least 3%. Payments allocated to the contract
are held as a separate pool of assets, but the income, gains or losses
experienced by these assets are not directly credited or charged against the
contracts. As a result, the strength of our guarantees under the contract are
based on the overall financial strength of Pruco Life.

   The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
grow on a tax-deferred basis and are taxed as income when you make a withdrawal.
The income phase starts when you begin receiving regular payments from your
contract. The amount of money you are able to accumulate in your contract during
the accumulation phase will help determine the amount of the payments you will
receive during the income phase. Other factors will affect the amount of your
payments such as age, gender and the payout option you selected.

   Free Look. If you change your mind about owning Strategic Partners MVA, you
may cancel your contract within 10 days after receiving it (or whatever time
period is required in the state where the contract was issued).

SECTION 2
WHAT GUARANTEE PERIODS CAN I CHOOSE?

You can allocate your initial purchase payment to one of the guarantee periods
available under the contract. We have the right under the contract to offer one
or more of the following guarantee periods: 1 year (currently available only as
a renewal option), 3 years, 5 years, 7 years, or 10 years, and we may offer
other guarantee periods in the future. At any time, we may offer any or all of
these guarantee periods. You may not allocate your purchase payment to more than
one guarantee period.

SECTION 3
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)

If you want to receive regular income from your annuity, you can choose one of
several options, including guaranteed payments for the annuitant's lifetime.
Once you begin receiving regular payments, you cannot change your payment plan.

SECTION 4
WHAT IS THE DEATH BENEFIT?

If the sole owner or the first of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g., a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the death
of the annuitant.

SECTION 5
HOW CAN I PURCHASE A STRATEGIC PARTNERS MVA CONTRACT?

You can purchase this contract, under most circumstances, with a minimum
purchase payment of $5,000. We allow you to make additional purchase payments
only during the 30 days immediately preceding the end of a guarantee period.
Your representative can help you fill out the proper forms.

SECTION 6
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS MVA CONTRACT?

There are a few states/jurisdictions that assess a premium tax when you begin
receiving regular income payments from your annuity. In those states, we will
impose the required premium tax charge which can range up to 3.5%.

                                                                               5
<PAGE>

SUMMARY OF SECTIONS 1-9 CONTINUED
--------------------------------------------------------------------------------

                                                                          PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

   During the accumulation phase, if you withdraw money, you may have to pay a
withdrawal charge on all or part of the withdrawal. The withdrawal charge that
we impose depends on the guarantee period from which you are withdrawing your
money. The withdrawal charge ranges from 0% to 7%. You also will be subject to a
market value adjustment if you make a withdrawal prior to the end of a guarantee
period.

SECTION 7
HOW CAN I ACCESS MY MONEY?

You may take money out at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if you make a withdrawal prior to
age 59 1/2, an additional tax penalty as well. Each contract year after the
first, you may withdraw without charge an amount equal to the interest you
earned (but did not withdraw) during the contract year immediately preceding the
withdrawal. Withdrawals greater than that amount will be subject to a withdrawal
charge. A market-value adjustment may also apply.

SECTION 8
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS MVA
CONTRACT?

Your earnings are not taxed until withdrawn. If you take money out during the
accumulation phase, earnings are withdrawn first and are taxed as ordinary
income. If you are younger than age 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings in addition to ordinary
taxation. A portion of the payments you receive during the income phase is
considered partly a return of your original investment. As a result, that
portion of each payment is not taxable as income. Generally, all amounts
withdrawn from IRA contracts (excluding Roth IRAs) are fully taxable and subject
to the 10% penalty if withdrawn prior to age 59 1/2.

SECTION 9
OTHER INFORMATION

This contract is issued by Pruco Life, a subsidiary of The Prudential Insurance
Company of America and sold by registered representatives. Section 9 of the
prospectus provides a detailed discussion of Pruco Life's operations and assets.

RISK FACTORS

There are various risks associated with the purchase of the Strategic Partners
MVA annuity that we summarize below.

   ISSUER RISK. Your MVA annuity is issued by Pruco Life, and thus is backed by
the financial strength of that company. If Pruco Life were to experience
significant financial adversity, it is possible that Pruco Life's ability to pay
interest and principal under the MVA annuity could be impaired.

   RISKS RELATED TO CHANGING INTEREST RATES. You do not participate directly in
the investment experience of the bonds and other instruments that Pruco Life
holds to support the MVA annuities. Nonetheless, the market value adjustment
formula (which is detailed in the appendix to this prospectus) reflects the
effect that prevailing interest rates have on those bonds and other instruments.
If you need to withdraw your money during a period in which prevailing interest
rates have risen above their level when you made your purchase, you will
experience a "negative" market value adjustment. When we impose this market
value adjustment, it could result in the loss of both the interest you have
earned and a portion of your purchase payments. Thus, before you commit to a
particular guarantee period, you should consider carefully whether you have the
ability to remain in the contract throughout the guarantee period. In addition,
we cannot, of course, assure you that the Strategic Partners MVA annuity will
perform better than another investment that you might have made.

   RISKS RELATED TO THE WITHDRAWAL CHARGE. We impose withdrawal charges that
range as high as 7%. If you anticipate needing to withdraw your money prior to
the end of a guarantee period, you should be prepared to pay the withdrawal
charge that we will impose.

   A more comprehensive discussion of the risks inherent in Pruco Life's
operations appears in Section 9 under "Quantitative and Qualitative Disclosures
About Market Risk."

 6
<PAGE>

PART II SECTIONS 1-9
--------------------------------------------------------------------------------
STRATEGIC PARTNERS MVA PROSPECTUS

                                                                               7
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        1:
WHAT IS THE STRATEGIC PARTNERS MVA

        ANNUITY?
--------------------------------------------------------------------------------

THE STRATEGIC PARTNERS MVA ANNUITY IS A CONTRACT BETWEEN YOU, THE

OWNER, AND US, THE INSURANCE COMPANY, PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE,

WE OR US).

Under our contract or agreement, in exchange for your payment to us, we promise
to pay you a guaranteed income stream that can begin any time after the second
contract anniversary. This time period may differ in certain states. Your
annuity is in the accumulation phase until you decide to begin receiving annuity
payments. The date you begin receiving annuity payments is the annuity date. On
the annuity date, your contract switches to the income phase.

   This annuity contract benefits from tax deferral. Tax deferral means that you
are not taxed on earnings or appreciation on the assets in your contract until
you withdraw money from your contract.

   Strategic Partners MVA allows you to allocate a purchase payment to one of
several guarantee periods that we offer at the time. As the owner of the
contract, you have all of the decision-making rights under the contract. You
will also be the annuitant unless you designate someone else. The owner is the
person upon whose death during the accumulation phase, the death benefit
generally is payable. The annuitant is the person whose life is used to
determine the amount of annuity payments and how long the payments will
continue. On and after the annuity date, the annuitant may not be changed.

   The beneficiary is the person(s) or entity designated to receive any death
benefit if the owner (or first to die of joint owners) dies during the
accumulation phase. You may change the beneficiary any time prior to the annuity
date by making a written request to us. Your request becomes effective when we
approve it.

SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"

If you change your mind about owning Strategic Partners MVA, you may cancel your
contract within 10 days after receiving it (or whatever period is required by
applicable law). You can request a refund by returning the contract either to
the representative who sold it to you, or to the Prudential Annuity Service
Center at the address shown on the first page of this prospectus. You will
receive, depending on applicable state law:

-  Your full purchase payment; or

-  The amount your contract is worth as of the day we receive your request.

We impose neither a withdrawal charge nor any market value adjustment if you
cancel your contract under this provision.

 8
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        2:
WHAT GUARANTEE PERIODS

        CAN I CHOOSE?
--------------------------------------------------------------------------------

THE CONTRACT GIVES YOU THE CHOICE OF ALLOCATING YOUR PURCHASE PAYMENT TO ONE OF
THE GUARANTEE PERIODS THAT WE ARE OFFERING AT THE TIME.

GUARANTEE PERIODS

Under each Strategic Partners MVA contract, we have the right to offer one or
more of several guarantee periods. These guarantee periods are 1 year (currently
available only as a renewal option), 3 years, 5 years, 7 years, or 10 years in
length. In the future, we may offer other guarantee periods on substantially the
same terms as described in this prospectus. We are not obligated to offer more
than one guarantee period at any time. We will apply your purchase payment to
the guarantee period you have chosen. We do not allow you to allocate your
purchase payment to more than one guarantee period.

   We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare no less than 3% interest
with respect to any guarantee period. You will earn interest on your invested
purchase payment at the rate that we have declared for the guarantee period you
have chosen.

   In addition to the basic interest, we also may pay additional interest with
respect to guarantee periods other than the one year and three year periods. The
amount of the additional interest varies according to the amount of your
purchase payment. Specifically, we will pay additional interest equal to 0.50%
annually for a purchase payment of $25,000 to $74,999, and 1.00% annually for a
purchase payment of $75,000 or more.

   If we grant additional interest to you, you will earn that interest only
during the first year of your contract (and during the first year of the initial
renewal guarantee period, other than the one and three year periods). We are not
obligated to offer this additional interest continuously, meaning that we
reserve the right to offer additional interest only during limited time periods
of our choosing. We also reserve the right to change the amount of the
additional interest.

   We express interest rates as annual rates, although we credit interest within
each guarantee period on a daily basis. The daily interest that we credit is
equal to the pro rated portion of the interest that would be earned on an annual
basis. We credit interest from the business day on which your purchase payment
is received in good order at the Prudential Annuity Service Center until the
earliest to occur of any of the following events: (a) full surrender of the
Contract, (b) commencement of annuity payments or settlement, (c) cessation of
the guarantee period, or (d) death of the first to die of the owner and joint
owner (or annuitant, for entity-owned contracts).

   During the 30 day period immediately preceding the end of a guarantee period,
we allow you to do any of the following, without the imposition of the
withdrawal charge or market value adjustment: (a) surrender the contract, in
whole or in part, (b) allocate the contract value to another guarantee period
available at that time (provided that the new guarantee period ends prior to the
contract anniversary next following the annuitant's 95th birthday and that you
reinvest at least $2,000), or (c) apply the adjusted contract value to the
annuity or settlement option of your choice. If we do not receive instructions
from you concerning the disposition of the contract value in your maturing
guarantee period, we will reinvest the contract value in a guarantee period
having the same duration as the guarantee period that matured (provided that the
new guarantee period ends prior to the contract anniversary next following the
annuitant's 95th birthday and that you reinvest at least $2,000). If any
available new guarantee period would end on or after the contract anniversary
next following the annuitant's 95th birthday, or if the annuitant is 88 years
old at the end of the guarantee period, then we will make only the one year
guarantee period available as the renewal period. We will not impose a
withdrawal charge on amounts you withdraw from the one year guarantee period
described in the immediately preceding sentence, although such a withdrawal
would be subject to a market value adjustment.

                                                                               9
<PAGE>

        2:
WHAT GUARANTEE PERIODS CAN I CHOOSE? CONTINUED

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

MARKET VALUE ADJUSTMENT

When you allocate a purchase payment to a guarantee period, we use that money to
buy and sell securities and other instruments to support our obligation to pay
interest. Generally, we buy bonds for this purpose. The duration of the bonds
and other instruments that we buy with respect to a particular guarantee period
is influenced significantly by the length of the guarantee period. Thus, for
example, we typically would acquire longer-duration bonds with respect to the 10
year guarantee period than we do for the 3 year guarantee period. The value of
these bonds is affected by changes in interest rates, among other factors. The
market value adjustment that we assess against your contract value if you
withdraw prior to the end of a guarantee period involves our attributing to you
a portion of our investment experience on these bonds and other instruments. For
example, if you make a full withdrawal when interest rates have risen since the
time of your investment, the bonds and other investments in the guarantee period
likely would have decreased in value, meaning that we would impose a "negative"
market value adjustment on you (i.e., one that results in a reduction of the
withdrawal proceeds that you receive). For a partial withdrawal, we would deduct
a negative market value adjustment from your remaining contract value.
Conversely, if interest rates have decreased, the market value adjustment would
be positive.

   Other things you should know about the market value adjustment include the
following:

-  We determine the market value adjustment according to a mathematical formula,
   which is set forth at the end of this prospectus under the heading
   "Market-Value Adjustment Formula." In that section of the prospectus, we also
   provide hypothetical examples of how the formula works.

-  A negative market value adjustment could cause you to lose not only the
   interest you have earned but also a portion of your principal. However, the
   laws of certain states provide for an absolute limit or "floor" on the amount
   of a negative market value adjustment. This floor operates regardless of how
   much interest rates have risen since you made your purchase payment.

-  You may withdraw, without the imposition of any market value adjustment, an
   amount equal to the interest earned but not withdrawn under your contract
   during the immediately preceding contract year.

-  In addition to imposing a market value adjustment on withdrawals, we also
   will impose a market value adjustment on the contract value you apply to an
   annuity or settlement option, except if you annuitize during the 30 day
   period preceding the end of a guarantee period (See Section 3 for details).
   The laws of certain states may prohibit us from imposing a market value
   adjustment on the annuity date.

   YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFITS UNDER YOUR CONTRACT DOES NOT DEPEND ON THE INVESTMENT
PERFORMANCE OF THE BONDS AND OTHER INSTRUMENTS THAT WE HOLD WITH RESPECT TO YOUR
GUARANTEE PERIOD. APART FROM THE EFFECT OF ANY MARKET VALUE ADJUSTMENT, WE DO
NOT PASS THROUGH TO YOU THE GAINS OR LOSSES ON THE BONDS AND OTHER INSTRUMENTS
THAT WE HOLD IN CONNECTION WITH A GUARANTEE PERIOD.

 10
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        3:

WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE

        INCOME PHASE? (ANNUITIZATION)
--------------------------------------------------------------------------------

PAYMENT PROVISIONS

We can begin making annuity payments any time after the second contract
anniversary. (This time period may differ in certain states.) Annuity payments
must begin no later than the contract anniversary next following the annuitant's
95th birthday. If you begin annuity payments or commence Option 3 at a time
other than the 30 day period prior to the end of a guarantee period, then:

-  We will impose both a withdrawal charge and a market value adjustment if you
   choose an annuity option with a fixed period of fewer than 10 years or Option
   3. (If your adjusted contract value is allocated to the one year guarantee
   period, we will impose only a market value adjustment).

-  We will impose a market value adjustment if you choose a life annuity or an
   annuity option with a fixed period of at least 10 years.

   We make the income plans described below available before the annuity date.
These plans are called annuity options. You must choose an annuity option at
least 30 days in advance of the annuity date. If you do not, we will select
Option 2 below on your behalf unless prohibited by applicable law. During the
income phase, all of the annuity options under this contract are fixed annuity
options. GENERALLY, ONCE THE ANNUITY PAYMENTS BEGIN, THE ANNUITY OPTION CANNOT
BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.

   If the annuitant dies or assigns the contract, and the new annuitant is older
than the original annuitant, then the annuity date will be based on the new
annuitant's age. If the annuitant dies or assigns the contract, and the new
annuitant is younger than the original annuitant, then the annuity date will
remain unchanged. In no event, however, may an original or revised annuity date
be later than the contract anniversary next following the annuitant's 95th
birthday.

OPTION 1
ANNUITY PAYMENTS FOR A FIXED PERIOD

Under this option, we will make equal payments for the period chosen, up to 25
years (but no less than 5 years). The annuity payments may be made monthly,
quarterly, semi-annually, or annually for as long as the annuitant is alive. If
the annuitant dies during the income phase, a lump sum payment generally will be
made to the beneficiary. The amount of the lump sum payment is determined by
calculating the present value of the unpaid future payments. This is done by
using the interest rate used to compute the actual payments. The interest rate
used will always be at least 3.0% a year.

OPTION 2
LIFE ANNUITY WITH 120 PAYMENTS (10 YEARS)

Under this option, we will make annuity payments monthly, quarterly,
semi-annually, or annually as long as the annuitant is alive. If the annuitant
dies before we have made 10 years worth of payments, we will pay the beneficiary
the present value of the remaining annuity payments in one lump sum unless we
were specifically instructed that the remaining annuity payments continue to be
paid to the beneficiary. The present value of the remaining annuity payments is
calculated by using the interest rate used to compute the amount of the original
payments. The interest rate used will always be at least 3.0% a year.

OPTION 3
INTEREST PAYMENT OPTION

Under this option, we will credit interest on the adjusted contract value until
you request payment of all or part of the adjusted contract value. We can make
interest payments on a monthly, quarterly, semiannual, or annual basis or allow
the interest to accrue on your contract assets. Under this option, we will pay
you interest at an effective rate of at least 1.50% a year. This option is not
available if you hold your contract in an IRA.

                                                                              11
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        3:

WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

OPTION 4
OTHER ANNUITY OPTIONS

We currently offer a variety of other annuity options not described above. At
the time annuity payments are chosen, we may make available to you any of the
fixed annuity options that are offered at your annuity date.

TAX CONSIDERATIONS

If your contract is held under a tax-favored plan, as discussed on page 19, you
should consider the minimum distribution requirements mentioned on page 22 when
selecting your annuity option.

   For certain contracts held in connection with "qualified" retirement plans
(such as a Section 401(k) plan), please note that if you are married at the time
your payments commence, you may be required by federal law to choose an income
option that provides at least a 50 percent joint and survivor annuity to your
spouse, unless your spouse waives that right. Similarly, if you are married at
the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. For more information, consult the terms of your retirement
arrangement.

 12
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        4:

WHAT IS THE

        DEATH BENEFIT?
--------------------------------------------------------------------------------

THE DEATH BENEFIT FEATURE PROTECTS THE VALUE OF THE CONTRACT FOR THE
BENEFICIARY.

BENEFICIARY

The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued, unless you
change it at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before the owner or last surviving owner
dies.

CALCULATION OF THE DEATH BENEFIT

If the owner (or first to die of the owner and joint owner) dies during the
accumulation phase, we will, upon receiving appropriate proof of death and any
other needed documentation ("due proof of death"), pay a death benefit to the
beneficiary designated by the contract owner. If the contract is owned by an
entity (e.g., a corporation or trust), rather than by an individual, then we
will pay the death benefit upon the death of the annuitant. We require due proof
of death to be submitted promptly. The beneficiary will receive a death benefit
equal to the contract value as of the date that due proof of death is received
in good order at the Prudential Annuity Service Center.

   Instead of asking us to pay a death benefit, the surviving spouse may opt to
continue the contract, as discussed below. Generally, we impose no withdrawal
charge or market value adjustment when we pay the death benefit.

JOINT OWNERSHIP RULES

   If the contract has an owner and a joint owner and they are spouses, then
upon the first to die of the owner and joint owner, the surviving spouse has the
choice of the following:

-  The contract can continue, with the surviving spouse as the sole owner of the
   contract; or

-  The surviving spouse can receive the death benefit and the contract will end.
   If the surviving spouse wishes to receive the death benefit, he or she must
   make that choice within the first 60 days following our receipt of due proof
   of death. Otherwise, the contract will continue with the surviving spouse as
   the sole owner.

   If the contract has an owner and a joint owner, and they are not spouses, the
contract will not continue. Instead, the beneficiary will receive the death
benefit.

   The payout options are:

   Choice 1. Lump sum.

   Choice 2. Payment of the entire death benefit within 5 years of the date of
             death of the first to die. Under this choice, we will impose
             withdrawal charges and a market value adjustment upon any
             withdrawal made during the 5 year period (unless the withdrawal is
             made during the 30 day period immediately preceding the end of a
             guarantee period).

   Choice 3. Payment under an annuity or settlement option over the lifetime of
             the beneficiary or over a period not extending beyond the life
             expectancy of the beneficiary with distribution beginning within
             one year of the date of death of the first to die.

   This contract is subject to special tax rules that govern the required
distributions upon the death of the owner or joint owner. See "What are the Tax
Considerations Associated with the Strategic Partners MVA Contract?" section
beginning on page 18.

                                                                              13
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        5:

HOW CAN I PURCHASE A STRATEGIC PARTNERS

        MVA CONTRACT?
--------------------------------------------------------------------------------

PURCHASE PAYMENT

A purchase payment is the amount of money you give us to purchase the contract.
The minimum initial purchase payment is $5,000. You must get our prior approval
for any purchase payment over $5 million. You can allocate subsequent purchase
payments to a guarantee period only during the 30 day period immediately
preceding the end of a guarantee period, provided that any such purchase payment
is at least $1,000.

   Generally, your initial purchase payment consists of a single sum. However,
with respect to an exchange or roll-over, your purchase payment can consist of
multiple sums that you identify at the time of application. With respect to the
latter:

-  we will aggregate each sum for purposes of computing the amount of any
   additional interest that we pay on each sum; and

-  each sum will earn interest only from the business day on which it is
   received in good order at the Prudential Annuity Service Center until the end
   of the guarantee period.

   We will sell you a contract only if the eldest of the owner, any joint owner,
annuitant, and any co-annuitant is 85 or younger on the date that the
application is signed.

ALLOCATION OF PURCHASE PAYMENT

When you purchase a contract, we will allocate your invested purchase payment to
the guarantee period of your choosing, provided that we are offering that
guarantee period at the time.

 14
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        6:

WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC

PARTNERS MVA CONTRACT?
--------------------------------------------------------------------------------

THERE ARE CHARGES ASSOCIATED WITH THE CONTRACT THAT MAY REDUCE THE RETURN ON
YOUR INVESTMENT. THESE CHARGES AND EXPENSES ARE DESCRIBED BELOW.

WITHDRAWAL CHARGE

The withdrawal charge is for the payment of the expenses involved in selling and
distributing the contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature and other
promotional activities.

   You may surrender your contract in whole or in part while the guarantee
period remains in effect. If you do so, however, you will be subject to (a) a
possible withdrawal charge, (b) a market value adjustment (which we discussed in
Section 2 above) and (c) possible tax penalties. After the first contract year,
you may withdraw, without the imposition of any withdrawal charge or market
value adjustment, an amount equal to the interest earned under your contract
during the immediately preceding contract year. When we calculate the withdrawal
charge and market value adjustment, we first take into account any available
charge-free amount. We impose a withdrawal charge and market value adjustment
only after that amount has been exhausted. In addition, we do not impose either
a withdrawal charge or a market value adjustment on amounts you withdraw to
satisfy Internal Revenue Service minimum distribution requirements.

   If you make a full withdrawal, we will deduct the withdrawal charge from the
proceeds that we pay to you. If you make a partial withdrawal, we will deduct
the withdrawal charge from the contract value remaining in the guarantee period.
We calculate the withdrawal charge after we have given effect to any market
value adjustment.

   The withdrawal charge that we impose is equal to a specified percentage of
the contract value withdrawn that is in excess of the charge-free amount
described above, and is based on the number of contract anniversaries that have
elapsed since the contract date. These withdrawal charges also apply to a
withdrawal you make from your first, renewal guarantee period, and the contract
anniversaries set out in the table below also refer to contract anniversaries
within the first, renewal guarantee period. No withdrawal charges apply to any
guarantee period that you choose subsequent to your first, renewal guarantee
period. Moreover, we impose no withdrawal charge on withdrawals from any one
year guarantee period. The withdrawal charge is equal to the following:

<Table>
<Caption>
NUMBER OF CONTRACT
ANNIVERSARIES SINCE
 PURCHASE PAYMENT    WITHDRAWAL CHARGE
-------------------  -----------------
<S>                  <C>
         0                  7%
         1                  7%
         2                  7%
         3                  6%
         4                  5%
         5                  5%
         6                  4%
         7                  3%
         8                  2%
         9                  1%
        10                  0%
</Table>

   Some or all of the guarantee periods that we offer at any given time will be
shorter than the time periods indicated immediately above. As such, the length
of the guarantee period that you have selected, in and of itself, may prevent
you from taking advantage of the decreasing withdrawal charges depicted above.
If a withdrawal is effective on the day before a contract anniversary, the
withdrawal charge percentage will be that as of the next following contract
anniversary.

WAIVER OF WITHDRAWAL CHARGE FOR CRITICAL CARE

We will allow you to withdraw money from the contract, and will waive any
withdrawal charge and market value adjustment, if the owner or joint owner (if
applicable) becomes confined to an eligible nursing home or hospital for a
period of at least three consecutive months after the contract was purchased.
You would need to provide us with proof of the confinement. If a physician has
certified that the owner or joint owner is terminally ill (has twelve months or
less to live) there will

                                                                              15
<PAGE>

        6:

WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS MVA CONTRACT?
CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

be no charge imposed for withdrawals nor any market value adjustment. Critical
Care Access is not available in all states.

TAXES ATTRIBUTABLE TO PREMIUM

There are federal, state and local premium based taxes applicable to your
purchase payment. We are responsible for the payment of these taxes and may make
a deduction from the value of the contract to pay some or all of these taxes.
Some of these taxes are due when the contract is issued, others are due when the
annuity payments begin. It is our current practice not to deduct a charge for
state premium taxes until annuity payments begin. In the states that impose a
premium tax, the current rates range up to 3.5%. It is also our current practice
not to deduct a charge for the federal deferred acquisition costs paid by us
that are based on premium received. However, we reserve the right to charge the
contract owner in the future for any such deferred acquisition costs and any
federal, state or local income, excise, business or any other type of tax
measured by the amount of premium received by us.

 16
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        7:

HOW CAN I ACCESS

        MY MONEY?
--------------------------------------------------------------------------------

You can take money out at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if the withdrawal is prior to
your attaining age 59 1/2, an additional tax penalty. You will need our consent
to make a partial withdrawal if the requested withdrawal is less than $250.
During the accumulation phase, we generally have the right to terminate your
contract and pay you the contract value if the current contract value is less
than $2,000 and certain other conditions apply.

   INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS
PROSPECTUS.

AUTOMATED WITHDRAWALS

We offer an automated withdrawal feature. This feature enables you to receive
periodic withdrawals in monthly, quarterly, semiannual, or annual intervals. We
will process your withdrawal at the end of the business day at the intervals you
specify. We will continue at these intervals until you tell us otherwise. We
reserve the right to cease paying automated withdrawals if paying any such
withdrawal would cause the contract value to be less than $2,000.

   The minimum automated withdrawal amount you can make is $100. Withdrawal
charges, and a market value adjustment, may apply to any automated withdrawal
you make.

   INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO AUTOMATED
WITHDRAWALS. FOR A MORE COMPLETE DISCUSSION, SEE SECTION 8 OF THIS PROSPECTUS.

                                                                              17
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        8:

WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS MVA
CONTRACT?
--------------------------------------------------------------------------------

The tax considerations associated with the Strategic Partners MVA contract vary
depending on whether the contract is (i) owned by an individual and not
associated with a tax-favored retirement plan, or (ii) held under a tax-favored
retirement plan. We discuss the tax considerations for these categories of
contracts below. The discussion is general in nature and describes only federal
income tax law (not state or other tax laws). It is based on current law and
interpretations, which may change. It is not intended as tax advice. A tax
adviser should be consulted for complete information and advice.

CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX FAVORED RETIREMENT
PLANS)

TAXES PAYABLE BY YOU

We believe the contract is an annuity contract for tax purposes. Accordingly, as
a general rule, you should not pay any tax until you receive money under the
contract.

   Generally, annuity contracts issued by the same company (and affiliates) to
you during the same calendar year must be treated as one annuity contract for
purposes of determining the amount subject to tax under the rules described
below.

TAXES ON WITHDRAWALS AND SURRENDER

If you make a withdrawal from your contract or surrender it before annuity
payments begin, the amount you receive will be taxed as ordinary income, rather
than as return of purchase payments, until all gain has been withdrawn. You will
generally be taxed on any withdrawal from a contract while you are alive even if
the withdrawal is paid to someone else.

   If you assign or pledge all or part of your contract as collateral for a
loan, the part assigned will be treated as a withdrawal. Also, if you elect the
interest payment option, you will be treated, for tax purposes, as surrendering
your contract.

   If you transfer your contract for less than full consideration, such as by
gift, you will trigger tax on the gain in the contract. This rule does not apply
if you transfer the contract to your spouse or under most circumstances if you
transfer the contract incident to divorce.

TAXES ON ANNUITY PAYMENTS

A portion of each annuity payment you receive will be treated as a partial
return of your purchase payments and will not be taxed. The remaining portion
will be taxed as ordinary income. Generally, the nontaxable portion is
determined by multiplying the annuity payment you receive by a fraction, the
numerator of which is your purchase payments (less any amounts previously
received tax-free) and the denominator of which is the total expected payments
under the contract.

   After the full amount of your purchase payments have been recovered tax-free,
the full amount of the annuity payments will be taxable. If annuity payments
stop due to the death of the annuitant before the full amount of your purchase
payments have been recovered, a tax deduction may be allowed for the unrecovered
amount.

TAX PENALTY ON WITHDRAWALS AND ANNUITY PAYMENTS

Any taxable amount you receive under your contract may be subject to a 10
percent tax penalty. Amounts are not subject to this tax penalty if:

-  the amount is paid on or after you reach age 59 1/2 or die;

-  the amount received is attributable to your becoming disabled;

-  the amount paid or received is in the form of level annuity payments not less
   frequently than annually under a lifetime annuity; and

-  the amount received is paid under an immediate annuity contract (in which
   annuity payments begin within one year of purchase).

   If you modify the lifetime annuity payment stream (other than as a result of
death or disability) before you reach age 59 1/2 (or before the end of the five
year period beginning with the first payment and ending after you reach age
59 1/2), your tax for the year of modification will be increased by the penalty
tax that

 18
<PAGE>

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

would have been imposed without the exception, plus interest for the deferral.

TAXES PAYABLE BY BENEFICIARIES

The death benefit is subject to income tax to the extent the distribution
exceeds the adjusted basis in the contract and the full value of the death
benefit is included in the owner's estate.

   Generally, the same tax rules apply to amounts received by your beneficiary
as those set forth above with respect to you. The election of an annuity payment
option instead of a lump sum death benefit may defer taxes. Certain minimum
distribution requirements apply upon your death, as discussed further below.

REPORTING AND WITHHOLDING ON DISTRIBUTIONS

Taxable amounts distributed from your annuity contracts are subject to federal
and state income tax reporting and withholding. In general, we will withhold
federal income tax from the taxable portion of such distribution based on the
type of distribution. In the case of an annuity or similar periodic payment, we
will withhold as if you are a married individual with 3 exemptions unless you
designate a different withholding status. In the case of all other
distributions, we will withhold at a 10% rate. You may generally elect not to
have tax withheld from your payments. An election out of withholding must be
made on forms that we provide.

   State income tax withholding rules vary and we will withhold based on the
rules of your State of residence. Special tax rules apply to withholding for
nonresident aliens, and we generally withhold income tax for nonresident aliens
at a 30% rate. A different withholding rate may be applicable to a nonresident
alien based on the terms of an existing income tax treaty between the United
States and the nonresident alien's country.

   Regardless of the amount withheld by us, you are liable for payment of
federal and state income tax on the taxable portion of annuity distributions.
You should consult with your tax advisor regarding the payment of the correct
amount of these income taxes and potential liability if you fail to pay such
taxes.

ANNUITY QUALIFICATION

   REQUIRED DISTRIBUTIONS UPON YOUR DEATH -- Upon your death (or the death of a
joint owner, if earlier), certain distributions must be made under the contract.
The required distributions depend on whether you die on or before you start
taking annuity payments under the contract or after you start taking annuity
payments under the contract.

   If you die on or after the annuity date, the remaining portion of the
interest in the contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death.

   If you die before the annuity date, the entire interest in the contract must
be distributed within 5 years after the date of death. However, if an annuity
payment option is selected by your designated beneficiary and if annuity
payments begin within 1 year of your death, the value of the contract may be
distributed over the beneficiary's life or a period not exceeding the
beneficiary's life expectancy. Your designated beneficiary is the person to whom
benefit rights under the contract pass by reason of death, and must be a natural
person in order to elect an annuity payment option based on life expectancy or a
period exceeding five years.

   If any portion of the contract is payable to (or for the benefit of) your
surviving spouse, such portion of the contract may be continued with your spouse
as the owner.

   CHANGES IN THE CONTRACT -- We reserve the right to make any changes we deem
necessary to assure that the contract qualifies as an annuity contract for tax
purposes. Any such changes will apply to all contractowners and you will be
given notice to the extent feasible under the circumstances.

ADDITIONAL TAX CONSIDERATIONS

For additional information about the requirements of federal tax law applicable
to tax favored plans, see the "IRA Disclosure Statement" on page 84.

CONTRACTS HELD BY TAX FAVORED PLANS

Currently, the contract may be purchased for use in connection with individual
retirement accounts and

                                                                              19
<PAGE>

        8:
TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS MVA CONTRACT CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

annuities ("IRAs") which are subject to Sections 408(a), 408(b) and 408A of the
Internal Revenue Code of 1986, as amended (Code). At some future time we may
allow the contract to be purchased in connection with other retirement
arrangements which are also entitled to favorable federal income tax treatment
("tax favored plans"). These other tax favored plans include:

-  Simplified employee pension plans ("SEPs") under Section 408(k) of the Code;

-  Saving incentive match plans for employees-IRAs ("SIMPLE-IRAs") under Section
   408(p) of the Code; and

-  Tax-deferred annuities ("TDAs") under Section 403(b) of the Code.

   This description assumes that (i) we will be offering this to both IRA and
non-IRA tax favored plans, and (ii) you have satisfied the requirements for
eligibility for these products.

   YOU SHOULD BE AWARE THAT TAX FAVORED PLANS SUCH AS IRAS GENERALLY PROVIDE TAX
DEFERRAL REGARDLESS OF WHETHER THEY INVEST IN ANNUITY CONTRACTS. THIS MEANS THAT
WHEN A TAX FAVORED PLAN INVESTS IN AN ANNUITY CONTRACT, IT GENERALLY DOES NOT
RESULT IN ANY ADDITIONAL TAX DEFERRAL BENEFITS.

TYPES OF TAX FAVORED PLANS

   IRAs If you buy a contract for use as an IRA, we will provide you a copy of
the prospectus and the contract. The "IRA Disclosure Statement" on page 84
contains information about eligibility, contribution limits, tax particulars and
other IRA information. In addition to this information (some of which is
summarized below), the IRS requires that you have a "free look" after making an
initial contribution to the contract. During this time, you can cancel the
contract by notifying us in writing, and we will refund all of the purchase
payments under the contract (or, if greater, the amount credited under the
contract, calculated as of the date that we receive this cancellation notice).

   Contributions Limits/Rollovers: Because of the way the contract is designed,
you may only purchase a contract for an IRA in connection with a "rollover" of
amounts from a qualified retirement plan or transfer from another IRA. The
minimum payment under the contract ($5,000) is greater than the maximum amount
of the annual contribution currently allowed by law for an IRA. For 2002 to
2004, the IRA contribution limit is $3,000; increasing for 2005 to 2007, to
$4,000; and for 2008, $5,000. After 2008 the contribution amount will be indexed
for inflation. The tax law also provides for a catch-up provision for
individuals who are age 50 and above. These taxpayers will be permitted to
contribute an additional $500 in years 2002 to 2005 and an additional $1,000 in
2006 and years thereafter). The "rollover" rules under the Code are fairly
technical; however, an individual (or his or her surviving spouse) may generally
"roll over" certain distributions from tax favored retirement plans (either
directly or within 60 days from the date of these distributions) if he or she
meets the requirements for distribution. Once you buy the contract, you can make
regular IRA contributions under the contract (to the extent permitted by law).
However, if you make such regular IRA contributions, you should note that you
will not be able to treat the contract as a "conduit IRA," which means that you
will not retain possible favorable tax treatment if you subsequently "roll over"
the contract funds originally derived from a qualified retirement plan or TDA
into another Section 401(a) plan or TDA.

   Required Provisions: Contracts that are IRAs (or endorsements that are part
of the contract) must contain certain provisions:

-  You, as owner of the contract, must be the "annuitant" under the contract
   (except in certain cases involving the division of property under a decree of
   divorce);

-  Your rights as owner are non-forfeitable;

-  You cannot sell, assign or pledge the contract, other than to Pruco Life;

-  The annual premium you pay cannot be greater than the maximum amount allowed
   by law, including catch-up contributions if applicable (which does not
   include any rollover amounts);

-  The date on which annuity payments must begin cannot be later than the April
   1st of the calendar year after the calendar year you turn age 70 1/2; and

 20
<PAGE>

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

-  Death and annuity payments must meet "minimum distribution requirements"
   (described below).

   Usually, the full amount of any distribution from an IRA (including a
distribution from this contract) which is not a rollover is taxable. As taxable
income, these distributions are subject to the general tax withholding rules
described earlier. In addition to this normal tax liability, you may also be
liable for the following, depending on your actions:

-  A 10% "early distribution penalty" (described below);

-  Liability for "prohibited transactions" if you, for example, borrow against
   the value of an IRA; or

-  Failure to take a minimum distribution (also generally described below).

   SEPs SEPs are a variation on a standard IRA, and contracts issued to a SEP
must satisfy the same general requirements described under IRAs (above). There
are, however, some differences:

-  If you participate in a SEP, you generally do not include in income any
   employer contributions made to the SEP on your behalf up to the lesser of (a)
   $40,000 in 2002 or (b) 25% of the employee's earned income (not including the
   employer contribution amount as "earned income" for these purposes). However,
   for these purposes, compensation in excess of certain limits established by
   the IRS will not be considered. In 2002, this limit is $200,000.

-  SEPs must satisfy certain participation and nondiscrimination requirements
   not generally applicable to IRAs; and

-  Some SEPs for small employers permit salary deferrals up to $11,000 in 2002
   with the employer making these contributions to the SEP. However, no new
   "salary reduction" or "SAR-SEPs" can be established after 1996. Individuals
   participating in a SARSEP who are age 50 or above by the end of the year will
   be permitted to contribute an additional $1,000 in 2002, increasing in $1,000
   increments per year until reaching $5,000 in 2006. Thereafter the amount is
   indexed for inflation.

   You will also be provided the same information, and have the same "free look"
period, as you would have if you were purchasing the contract for a standard
IRA.

   SIMPLE-IRAs SIMPLE-IRAs are another variation on the standard IRA, available
to small employers (under 100 employees, on a "controlled group" basis) that do
not offer other tax favored plans. SIMPLE-IRAs are also subject to the same
basic IRA requirements with the following exceptions:

-  Participants in a SIMPLE-IRA may contribute up to $7,000 in 2002, as opposed
   to the usual IRA contribution limit, and employer contributions may also be
   provided as a match (up to 3% of your compensation); and

-  Beginning in 2002, individuals age 50 or above by the end of the year will be
   permitted to contribute an additional $500 in 2002, increasing in $500
   increments per year until reaching $2,500 in 2006. Thereafter the amount is
   indexed for inflation.

-  SIMPLE-IRAs are not subject to the SEP nondiscrimination rules.

   ROTH IRAs Congress amended the Code in 1997 to add a new Section 408A,
creating the "Roth IRA" as a new type of individual retirement plan. Like
standard IRAs, income within a Roth IRA accumulates tax-deferred, and
contributions are subject to specific limits. Roth IRAs have, however, the
following differences:

-  Contributions to a Roth IRA cannot be deducted from your gross income;

-  "Qualified distributions" (generally, held for 5 tax years and payable on
   account of death, disability, attainment of age 59 1/2, or first
   time-homebuyer) from Roth IRAs are excludable from your gross income; and

-  If eligible, you may make contributions to a Roth IRA after attaining age
   70 1/2, and distributions are not required to begin upon attaining such age
   or at any time thereafter.

   The annual contribution allowed by law for Roth IRAs increases in the same
manner as the increases for traditional IRAs as described on page 20). The Code
permits persons who meet certain income limitations

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(generally, adjusted gross income under $100,000), and who receive certain
qualifying distributions from such non-Roth IRAs, to directly rollover or make,
within 60 days, a "rollover" of all or any part of the amount of such
distribution to a Roth IRA which they establish. This conversion triggers
current taxation (but is not subject to a 10% early distribution penalty). Once
the contract has been purchased, regular Roth IRA contributions will be accepted
to the extent permitted by law.

   TDAs You may own TDAs generally if you are either an employer or employee of
a tax-exempt organization (as defined under Code Section 501(c)(3)) or a public
educational organization. You may make contributions to a TDA so long as the
employee's rights to the annuity are nonforfeitable. Contributions to a TDA, and
any earnings, are not taxable until distribution. You may also make
contributions to a TDA under a salary reduction agreement, generally up to a
maximum of $11,000 in 2002. Individuals participating in a TDA who are age 50 or
above by the end of the year will be permitted to contribute an additional
$1,000 in 2002, increasing in $1,000 increments per year until reaching $5,000
in 2006. Thereafter the amount is indexed for inflation. Further, you may roll
over TDA amounts to another TDA or an IRA. Beginning in 2002, TDA amounts may
also be rolled over to a qualified retirement plan, a SEP and a 457 government
plan.

   A contract may only qualify as a TDA if distributions (other than
"grandfathered" amounts held as of December 31, 1988) may be made only on
account of:

-  Your attainment of age 59 1/2;

-  Your severance of employment;

-  Your death;

-  Your total and permanent disability; OR

-  Hardship (under limited circumstances, and only related to salary deferrals
   and any earnings attributable to these amounts).

In any event, you must begin receiving distributions from your TDA by April 1st
of the calendar year after the calendar year you turn age 70 1/2 or retire,
whichever is later.

   These distribution limits do not apply either to transfers or exchanges of
investments under the contract, or to any "direct transfer" of your interest in
the contract to another TDA or to a mutual fund "custodial account" described
under Code Section 403(b)(7).

   Employer contributions to TDAs are subject to the same general contribution,
nondiscrimination, and minimum participation rules applicable to "qualified"
retirement plans.

MINIMUM DISTRIBUTION REQUIREMENTS AND PAYMENT OPTION

If you hold the contract under an IRA (or other tax-favored plan), IRS minimum
distribution requirements must be satisfied. This means that payments must start
by April 1 of the year after the year you reach age 70 1/2 and must be made for
each year thereafter. The amount of the payment must at least equal the minimum
required under the IRS rules. Several choices are available for calculating the
minimum amount, permitted under IRS regulations released in April 2002. More
information on the mechanics of this calculation is available on request. Please
contact us a reasonable time before the IRS deadline so that a timely
distribution is made. Please note that there is a 50% IRS penalty tax on the
amount of any minimum distribution not made in a timely manner.

   You can use the Minimum Distribution option to satisfy the IRS minimum
distribution requirements for this contract without either beginning annuity
payments or surrendering the contract. We will send you a check for this minimum
distribution amount, less any other partial withdrawals that you made during the
year. Please note that the Minimum Distribution option may need to be modified
to satisfy recently announced changes in IRS rules.

PENALTY FOR EARLY WITHDRAWALS

You may owe a 10% tax penalty on the taxable part of distributions received from
an IRA, SEP, SIMPLE-IRA (which may increase to 25%), Roth IRA, TDA or qualified
retirement plan before you attain age 59 1/2.

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                                                                         PART II
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There are only limited exceptions to this tax, and you should consult your tax
adviser for further details.

WITHHOLDING

Unless a distribution is an eligible rollover distribution that is "directly"
rolled over into another qualified plan, IRA (including the IRA variations
described above) SEP, 457 government plan, or TDA, we will withhold at the rate
of 20%. This 20% withholding does not apply to distributions from IRAs and Roth
IRAs. For all other distributions, unless you elect otherwise, we will withhold
federal income tax from the taxable portion of such distribution at an
appropriate percentage. The rate of withholding on annuity payments where no
mandatory withholding is required is determined on the basis of the withholding
certificate that you file with us. If you do not file a certificate, we will
automatically withhold federal taxes on the following basis:

-  For any annuity payments not subject to mandatory withholding, you will have
   taxes withheld by us as if you are a married individual, with 3 exemptions;
   and

-  For all other distributions, we will withhold at a 10% rate.

   We will provide you with forms and instructions concerning the right to elect
that no amount be withheld from payments in the ordinary course. However, you
should know that, in any event, you are liable for payment of federal income
taxes on the taxable portion of the distributions, and you should consult with
your tax advisor to find out more information on your potential liability if you
fail to pay such taxes.

ERISA DISCLOSURE/REQUIREMENTS

ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevents a fiduciary and other "parties in interest" with respect to a plan
(and, for these purposes, an IRA would also constitute a "plan") from receiving
any benefit from any party dealing with the plan, as a result of the sale of the
contract. Administrative exemptions under ERISA generally permit the sale of
insurance/annuity products to plans, provided that certain information is
disclosed to the person purchasing the contract. This information has to do
primarily with the fees, charges, discounts and other costs related to the
contract, as well as any commissions paid to any agent selling the contract.

   Information about any applicable fees, charges, discounts, penalties or
adjustments may be found under "What Are the Expenses Associated with the
Strategic Partners Select Contract" starting on page 15.

   Information about sales representatives and commissions may be found under
"Other Information" and "Sale and Distribution of the Contract" on page 25.

   In addition, other relevant information required by the exemptions is
contained in the contract and accompanying documentation. Please consult your
tax advisor if you have any additional questions.

SPOUSAL CONSENT RULES FOR RETIREMENT PLANS--QUALIFIED CONTRACTS

If you are married at the time your payments commence, you may be required by
federal law to choose an income option that provides survivor annuity income to
your spouse, unless your spouse waives that right. Similarly, if you are married
at the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. A brief explanation of the applicable rules follows. For more
information, consult the terms of your retirement arrangement.

   Defined Benefit Plans, Money Purchase Pension Plans, and ERISA 403(b)
Annuities.  If you are married at the time your payments commence, federal law
requires that benefits be paid to you in the form of a "qualified joint and
survivor annuity" ("QJSA"), unless you and your spouse waive that right, in
writing. Generally, this means that you will receive a reduced payment during
your life and, upon your death, your spouse will receive at least one-half of
what you were receiving for life. You may elect to receive another income option
if your spouse consents to the election and waives his or her right to receive
the QJSA. If your

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                                                                         PART II
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spouse consents to the alternative form of payment, your spouse may not receive
any benefits from the plan upon your death. Federal law also requires that the
plan pay a death benefit to your spouse if you are married and die before you
begin receiving your benefit. This benefit must be available in the form of an
annuity for your spouse's lifetime and is called a "qualified pre-retirement
survivor annuity" ("QPSA"). If the plan pays death benefits to other
beneficiaries, you may elect to have a beneficiary other than your spouse
receive the death benefit, but only if your spouse consents to the election and
waives his or her right to receive the QPSA. If your spouse consents to the
alternate beneficiary, your spouse will receive no benefits from the plan upon
your death. Any QPSA waiver prior to your attaining age 35 will become null and
void on the first day of the calendar year in which you attain age 35, if still
employed.

   Defined Contribution Plans (including 401(k) Plans). Spousal consent to a
distribution is generally not required. Upon your death, your spouse will
receive the entire death benefit, even if you designated someone else as your
beneficiary, unless your spouse consents in writing to waive this right. Also,
if you are married and elect an annuity as a periodic income option, federal law
requires that you receive a QJSA (as described above), unless you and your
spouse consent to waive this right.

   IRAs, non-ERISA 403(b) Annuities, and 457 Plans. Spousal consent to a
distribution is not required. Upon your death, any death benefit will be paid to
your designated beneficiary.

ADDITIONAL INFORMATION

For additional information about the requirements of federal tax law applicable
to tax favored plans, see the "IRA Disclosure Statement" on page 84. The
following additional tax considerations also may be of interest.

ENTITY OWNERS.

Where a contract is held by a non-natural person (e.g., a corporation), other
than as an agent or nominee for a natural person (or in other limited
circumstances), the contract will not be taxed as an annuity and increases in
the value of the contract will be subject to tax.

PURCHASE PAYMENTS MADE BEFORE AUGUST 14, 1982.

If your contract was issued in exchange for a contract containing purchase
payments made before August 14, 1982, favorable tax rules may apply to certain
withdrawals from the contract. Generally, withdrawals are treated as a recovery
of your investment in the contract first until purchase payments made before
August 14, 1982 are withdrawn. Moreover, any income allocable to purchase
payments made before August 14, 1982, is not subject to the 10% tax penalty.

GENERATION-SKIPPING TRANSFERS.

If you transfer your contract to a person two or more generations younger than
you (such as a grandchild or grandniece) or to a person that is more than 37 1/2
years younger than you, there may be generation-skipping transfer tax
consequences.

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                                                                         PART II
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OTHER

        INFORMATION
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PRUCO LIFE INSURANCE COMPANY

Pruco Life Insurance Company ("Pruco Life") is a stock life insurance company,
organized in 1971 under the laws of the State of Arizona. It is licensed to sell
life insurance and annuities in the District of Columbia, Guam, and in all
states except New York. Pruco Life's primary competitors are other insurers that
sell fixed and variable insurance products. Pruco Life currently has no
employees.

   Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company
of America ("Prudential"), a New Jersey stock life insurance company that has
been doing business since 1875. Prudential is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey
insurance holding company. As Pruco Life's ultimate parent, Prudential Financial
exercises significant influence over the operations and capital structure of
Pruco Life and Prudential. However, neither Prudential Financial, Prudential,
nor any other related company has any legal responsibility to pay amounts that
Pruco Life may owe under the contract.

   Pruco Life publishes annual and quarterly reports that are filed with the
SEC. These reports contain financial information about Pruco Life that is
annually audited by independent accountants. Pruco's Life annual report for the
year ended December 31, 2001, together with subsequent periodic reports that
Pruco Life files with the SEC, are incorporated by reference into this
prospectus. You can obtain copies, at no cost, of any and all of this
information, including the Pruco Life annual report that is not ordinarily
mailed to contractholders, the more current reports and any subsequently filed
documents at no cost by contacting us at the address or telephone number listed
on the cover. You may read and copy any filings made by Pruco Life with the SEC
at the SEC's Public Reference Room at 450 Fifth Street, Washington, D.C. 20549.
You can obtain information on the operation of the Public Reference Room by
calling 1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC at http://www.sec.gov.

SALE AND DISTRIBUTION OF THE CONTRACT

Prudential Investment Management Services LLC ("PIMS"), 100 Mulberry Street,
Newark, New Jersey 07102-4077, acts as the distributor of the contracts under a
"best efforts" underwriting agreement with Pruco Life under which PIMS is
reimbursed for its costs and expenses. PIMS is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. and is a limited liability corporation
organized under Delaware law in 1996. It is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. We pay the broker-dealer whose registered
representatives sell the contract either:

-  a commission of up to 3.0% of your purchase payments; or

-  a combination of a commission on purchase payments and a "trail"
   commission -- which is a commission determined as a percentage of your
   contract value that is paid periodically over the life of your contract.

The commission amount quoted above is the maximum amount which is paid. In most
circumstances, the registered representative who sold the contract will receive
significantly less. The broker-dealer who sells a contract to you will deliver
or make available to you a copy of the prospectus for the Strategic Partners
MVA.

   From time to time, Prudential or its affiliates may offer and pay non-cash
compensation to registered representatives who sell the contract. For example,
Prudential or an affiliate may pay for a training and education meeting that is
attended by registered representatives of both Prudential-affiliated broker-
dealers and independent broker-dealers. Prudential and its affiliates retain
discretion as to which broker-dealers to offer non-cash (and cash) compensation
arrangements, and will comply with NASD rules and other pertinent laws in making
such offers and payments. Our payment of cash or non-cash

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                                                                         PART II
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compensation in connection with sales of the contract does not result directly
in any additional charge to you.

ASSIGNMENT

You can assign the contract at any time during your lifetime. We will not be
bound by the assignment until we receive written notice. We will not be liable
for any payment or other action we take in accordance with the contract if that
action occurs before we receive notice of the assignment. An assignment, like
any other change in ownership, may trigger a taxable event.

   If the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your financial professional.

HOUSEHOLDING

To reduce costs, we now send only a single copy of prospectuses and shareholder
reports to each consenting household, in lieu of sending a copy to each
contractholder that resides in the household. If you are a member of such a
household, you should be aware that you can revoke your consent to householding
at any time, and begin to receive your own copy of prospectuses and shareholder
reports, by calling 1-877-778-5008.

LITIGATION

We are subject to legal and regulatory actions in the ordinary course of our
businesses, including class actions. Pending legal and regulatory actions
include proceedings specific to our practices and proceedings generally
applicable to business practices in the industries in which we operate. In
certain of these lawsuits, large and/or indeterminate amounts are sought,
including punitive or exemplary damages.

   Beginning in 1995, regulatory authorities and customers brought significant
regulatory actions and civil litigation against Pruco Life and Prudential
involving individual life insurance sales practices. In 1996, Prudential, on
behalf of itself and many of its life insurance subsidiaries, including Pruco
Life, entered into settlement agreements with relevant insurance regulatory
authorities and plaintiffs in the principal life insurance sales practices class
action lawsuit covering policyholders of individual permanent life insurance
policies issued in the United States from 1982 to 1995. Pursuant to the
settlements, the companies agreed to various changes to their sales and business
practices controls, to a series of fines, and to provide specific forms of
relief to eligible class members. Virtually all claims by class members filed in
connection with the settlements have been resolved and virtually all aspects of
the remediation program have been satisfied.

   As of December 31, 2001 Prudential and/or Pruco Life remained a party to
approximately 44 individual sales practices actions filed by policyholders who
"opted out" of the class action settlement relating to permanent life insurance
policies issued in the United States between 1982 and 1995. In addition, there
were 19 sales practices actions pending that were filed by policyholders who
were members of the class and who failed to "opt out" of the class action
settlement. Prudential and Pruco Life believed that those actions are governed
by the class settlement release and expects them to be enjoined and/or
dismissed. Additional suits may be filed by class members who "opted out" of the
class settlements or who failed to "opt out" but nevertheless seek to proceed
against Prudential and/or Pruco Life. A number of the plaintiffs in these cases
seek large and/or indeterminate amounts, including punitive or exemplary
damages. Some of these actions are brought on behalf of multiple plaintiffs. It
is possible that substantial punitive damages might be awarded in any of these
actions and particularly in an action involving multiple plaintiffs.

   Prudential has indemnified Pruco Life for any liabilities incurred in
connection with sales practices litigation covering policyholders of individual
permanent life insurance policies issued in the United States from 1982 to 1995.

   Pruco Life's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted. It is possible that the
results of operations or the cash flow of Pruco Life in a particular quarterly
or annual period could be materially affected by an ultimate unfavorable
resolution of

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                                                                         PART II
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pending litigation and regulatory matters. Management believes, however, that
the ultimate outcome of all pending litigation and regulatory matters should not
have a material adverse effect on Pruco Life's financial position.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATIONS

The following analysis should be read in conjunction with the Notes to
Consolidated Financial Statements.

   Pruco Life (the "Company") sells interest-sensitive individual life insurance
and variable life insurance, term life insurance, individual variable and fixed
annuities, and a non-participating guaranteed interest contract ("GIC") called
Prudential Credit Enhanced ("PACE") primarily through Prudential's sales force
in the United States. These markets are subject to regulatory oversight with
particular emphasis placed on company solvency and sales practices. These
markets are also subject to increasing competitive pressure as the legal
barriers, which have historically segregated the markets of the financial
services industry, have been changed through both legislative and judicial
processes. Regulatory changes have opened the insurance industry to competition
from other financial institutions, particularly banks and mutual funds that are
positioned to deliver competing investment products through large, stable
distribution channels. The Company also marketed individual life insurance
through its branch office in Taiwan. The Taiwan branch was transferred to an
affiliated Company on January 31, 2001, as described in the Notes to the
Financial Statements.

   Generally, policyholders who purchase the Company's products have the option
of investing in the Separate Accounts, segregated funds for which investment
risks are borne by the customer, or the Company's portfolio, referred to as the
General Account. The Company earns its profits through policy fees charged to
Separate Account annuity and life policyholders and through the interest spread
for the GIC and General Account annuity and life products. Policy charges and
fee income consist mainly of three types, sales charges or loading fees on new
sales, mortality and expense charges ("M&E") assessed on fund balances, and
mortality and related charges based on total life insurance in-force business.
Policyholder fund values are affected by net sales (sales less withdrawals),
changes in interest rates and investment returns. The interest spread represents
the difference between the investment income earned by the Company on its
investment portfolio and the amount of interest credited to the policyholders'
accounts. Products that generate spread income primarily include the GIC
product, general account life insurance products, fixed annuities and the
fixed-rate option of variable annuities. The majority of the fund balances and
new sales, except for the GIC product, are in the Separate Accounts.

   In accordance with a profit sharing agreement with Prudential that was in
effect through December 31, 2000, the Company received fee income from
policyholder account balances invested in the Prudential Series Funds ("PSF").
PSF are a portfolio of mutual fund investments related to the Company's Separate
Account products. These revenues were recorded as "Asset management fees" in the
Consolidated Statements of Operations and Comprehensive Income. The Company was
charged an asset management fee by Prudential Global Asset Management ("PGAM")
and Jennison Associates LLC ("Jennison") for managing the PSF portfolio. These
fees were a component of "general, administrative and other expenses."

   On September 29, 2000, the Board of Directors for the Prudential Series Fund,
Inc. ("PSFI") adopted resolutions to terminate the existing management agreement
between PSFI and Prudential, and has appointed another subsidiary of Prudential
as the fund manager for the PSF. The change was approved by the shareholders of
PSFI during early 2001 and was effective as of January 1, 2001. Therefore as of
January 1, 2001, the Company no longer receives fees associated with the PSF or
incurs asset management expenses from PGAM and Jennison associated with the PSF.
This transaction resulted in a decrease in net income from the prior year of
$34.2 million.

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                                                                         PART II
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   On January 31, 2001, the Company transferred all of its assets and
liabilities associated with the Company's Taiwan branch including Taiwan's
insurance book of business to an affiliated Company, Prudential Life Insurance
Company of Taiwan Inc. ("Prudential of Taiwan"), a wholly owned subsidiary of
Prudential.

   The mechanism used to transfer this block of business in Taiwan is referred
to as a "full acquisition and assumption" transaction. Under this mechanism, the
Company is jointly liable with Prudential of Taiwan for two years from the
giving of notice to all obligees for all matured obligations and for two years
after the maturity date of not-yet-matured obligations. Prudential of Taiwan is
also contractually liable, under indemnification provisions of the transaction,
for any liabilities that may be asserted against the Company. The transfer of
the insurance related assets and liabilities was accounted for as a
long-duration coinsurance transaction under accounting principles generally
accepted in the United States. Under this accounting treatment, the insurance
related liabilities remain on the books of the Company and an offsetting
reinsurance recoverable is established.

   As part of this transaction, the Company made a capital contribution to
Prudential of Taiwan in the amount of the net equity of the Company's Taiwan
branch as of the date of transfer. In July 2001, the Company dividended its
interest in Prudential of Taiwan totaling $45.8 million to Prudential.

   Beginning February 1, 2001 Taiwan's net income is not included in the
Company's results of operations. The Taiwan branch had net income of $1.8
million ($97.8 million in revenues and $96.0 million in expenses) in 2000.

   On December 28, 2001, the Company paid to Prudential an extraordinary
dividend which was approved by the Insurance Department of Arizona. The dividend
was $108 million and was paid with cash of $26 million and fixed maturities of
$82 million.

   In connection with Prudential's demutualization, qualified annuity contract
holders were given increases to their policy values in the form of policy
credits. The policy credits of $128.0 million are reflected as a reduction of
retained earnings.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires the application of accounting policies
that often involve a significant degree of judgment. Management, on an ongoing
basis, reviews critical estimates and assumptions. If management determines, as
a result of its consideration of facts and circumstances, that modifications in
assumptions and estimates are appropriate, results of operations and financial
position as reported in the Consolidated Financial Statements may change
significantly.

   The following sections discuss accounting policies applied in preparing our
financial statements that Management believes are most dependent on the
application of estimates and assumptions.

VALUATION OF INVESTMENTS

The major portion of our investments are recorded at fair value in the statement
of financial position. Fair values are based on quoted market prices or
estimates from independent pricing services, when available. However, when such
information is not available, for example, with respect to private placement
fixed maturity securities, fair value is estimated, typically by using a
discounted cash flow model, which considers current market credit spreads for
publicly traded issues with similar terms by companies of comparable credit
quality. Consequently, changes in estimated future cash flows or in our
assessment of the issuer 's credit quality will result in changes in carrying
value. For fixed maturities and equity securities classified as available for
sale, the impact of such changes is recorded in "Accumulated other comprehensive
income (loss)," a separate component of equity. However, the carrying value of
these securities is written down to estimated fair value when a decline in value
is considered to be other than temporary, and we record the corresponding
impairment loss in "Realized investment losses, net," in the Consolidated
Statements of Operations and Comprehensive Income. The factors we consider to

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                                                                         PART II
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determine if an impairment loss is warranted are discussed more fully in Note 2
to the Consolidated Financial Statements. The level of impairment losses can be
expected to increase when economic conditions worsen and decrease when economic
conditions improve.

POLICYHOLDER LIABILITIES AND DEFERRED POLICY ACQUISITION COSTS

The liability for future policy benefits is primarily comprised of the present
value of estimated future payments to holders of life insurance and annuity
products where the timing and amount of payment depends on policyholder
mortality surrender or retirement experience. For life insurance and annuity
products, expected mortality is generally based on the Company 's historical
experience or standard industry tables. Interest rate assumptions are based on
factors such as market conditions and expected investment returns. Although
mortality and interest rate assumptions are "locked-in" upon the issuance of new
insurance or annuity business with fixed and guaranteed terms, significant
changes in experience or assumptions may require us to provide for expected
future losses on a product by establishing premium deficiency reserves.

   Our liability for Unpaid claims and claim adjustment expenses includes
estimates of claims that we believe have been incurred, but have not yet been
reported ("IBNR"), as of the balance sheet date. These estimates, and estimates
of the amounts of loss we will ultimately incur on reported claims, which are
based in part on our historical experience, are regularly adjusted to reflect
actual claims experience. When actual experience differs from our previous
estimate, the resulting difference will be included in our reported results for
the period of the change in estimate.

   For most life insurance and annuity products that we sell, we defer costs
that vary with and are related primarily to the production of new business to
the extent these costs are deemed recoverable from future profits, and we record
these costs as an asset known as deferred policy acquisition costs or "DAC" in
the statements of financial position. We amortize this DAC asset over the
expected lives of the contracts, based on the level and timing of either
estimated profits or premiums, depending on the type of contract. For products
with amortization based on future premiums, the amortization rate is locked-in
when the product is sold. However, for products with amortization based on
estimated profits, the amortization rate is periodically updated to reflect
current period experience or changes in assumptions that affect future
profitability, such as lapse rates, investment returns, mortality experience,
expense margins and surrender charges. These changes result in adjustments to
DAC balances in the period that we change our assumptions as well as changes in
prospective DAC amortization. For example, adverse market conditions in 2001
resulted in declines in the market values of assets supporting our variable life
insurance and annuity products, which in turn resulted in lower expectations
regarding our estimated future gross profits from fee-based income. As a result,
we recorded a higher level of DAC amortization in 2001 for these products. DAC
is also subject to periodic recoverability testing.

RESERVES FOR CONTINGENCIES AND LITIGATION

A contingency is an existing condition that involves a degree of uncertainty
that will ultimately be resolved upon the occurrence of future events. Under
GAAP, reserves for contingencies are required to be established when the future
event is probable and its impact can be reasonably estimated. An example is the
establishment of a reserve for losses in connection with an unresolved legal
matter. The initial reserve reflects management 's best estimate of the probable
cost of ultimate resolution of the matter and is revised accordingly as facts
and circumstances change and, ultimately, when the matter is brought to closure.
In situations in which the Company is to be indemnified by Prudential, as with
the sales practices actions, a reserve for contingencies would not need to be
established in the Company's financial statements.

OTHER SIGNIFICANT ESTIMATES

In addition to the items discussed above, the application of GAAP requires
management to make other

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                                                                         PART II
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estimates and assumptions. One example is the recognition of deferred tax
assets, which depends on management's assumption that future earnings will be
sufficient to realize the deferred benefit. This is discussed in Note 8 to the
Consolidated Financial Statements.

   The Company's Changes in Financial Position and Results of Operations are
described below.

CHANGES IN FINANCIAL POSITION

2001 VERSUS 2000

From December 31, 2000 to December 31, 2001 there was a decrease of $966 million
in total assets from $23.059 billion to $22.093 billion, the majority of which
relates to a $1.310 billion decrease in Separate Accounts primarily from stock
market declines, as described below. The fixed maturity portfolio increased $139
million resulting from unrealized appreciation from declining interest rates and
from positive cash inflows. The transfer of the Company's Taiwan branch
accounted for using coinsurance accounting required the establishment of
reinsurance recoverable of $260.6 million, and the inclusion of the Taiwan
branch future policy reserve liabilities on the Company's balance sheet. The
Company also reclassified held-to-maturity securities, amounting to $324.5
million at January 1, 2001 to the available-for-sale category.

   During the year, liabilities decreased by $784 million from $21.226 billion
to $20.442 billion. Separate account liabilities decreased $1.310 billion as a
result of net investment losses of $1.388 billion, expense disbursements and
other changes of $244 million offset by net sales of $322 million. Current year
net sales of $322 million ($1.540 billion of contributions less $1.218 billion
of surrenders and withdrawals) are $918 million lower than the same period prior
year sales of $1.240 billion ($2.376 billion of contributions less $1.136
billion of surrenders and withdrawals). The primary reason for the decrease is
declines in Discovery Select annuity product ("Discovery Select") exchange sales
resulting from the discontinuation of the Exchange Program on May 1, 2000. The
Exchange Program had provided the contract holders of older Prudential or Pruco
Life annuity products an opportunity to convert to the Discovery Select product.
Annuity product net sales declined $1.118 billion while variable life insurance
sales grew $200 million from the prior year.

   Policyholder account balances increased by $301 million from interest
credited and positive cash inflows for the PACE product and the general account
life and annuity products. Future policy benefit liabilities increased by $105
million resulting from sales of term insurance, additional extended term
insurance, and increases to Taiwan branch reserves. Other liabilities increased
by $108 million as a result of policy credits granted to Separate Account
qualified annuity contract holders related to the demutualization.

   Total equity declined $181 million from $1.832 billion at December 31, 2000
to $1.651 billion at December 31, 2001. The largest factor in this decrease is
the payment of two dividends, which are discussed above, to Prudential totaling
$153.8 million. One dividend consisted of an extraordinary dividend approved by
the Insurance Department of Arizona for $108 million. The other dividend of
$45.8 million represented the Company's net investment in its Taiwan branch,
which was contributed to a sister company, Prudential Life Insurance Company of
Taiwan, and subsequently dividended to Prudential. Refer to Note 14 for more
information on the Taiwan dividend. Equity was also reduced by $128.0 million
for policy credits to be made to eligible policyholders. In connection with
Prudential's demutualization, qualified annuity contract holders were given
increases to their policy values in the form of policy credits. In addition,
equity was increased by net income of $67.6 million, net unrealized investment
gains of $30.0 million and net foreign currency translation adjustments of $3.2
million.

2000 VERSUS 1999

Total assets increased from $21.768 billion at December 31, 1999 to $23.059
billion at December 31, 2000, an increase of $1.291 billion, primarily from
increases in investments and cash and cash equivalents of $945 million, and
Separate Accounts of $198 million. Investments increased due to

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

positive insurance cash inflows and unrealized appreciation of fixed maturities.
A discussion of Separate Account balances and net sales follows.

   Although there were positive Separate Account net sales of $1.240 billion
(contributions of $2.376 billion less withdrawals of $1.136 billion), growth in
the Separate Accounts was minimized by expense disbursements and other changes
of $384 million, and in particular, investment losses from stock value declines
of $658 million. This was in contrast to the prior year which experienced
investment gains of $2.164 billion. However, the average Separate Account fund
value during the current year, which is more indicative of fee income, was
approximately $3 billion higher than the prior year, due to beginning of the
year 2000 balances being substantially higher than the prior year. The majority
of the net sales were from the Discovery Select annuity product ("Discovery
Select"), which had net sales of $1.115 billion. This was significantly lower
than net sales of Discovery Select of $2.646 billion in 1999 due primarily to
the termination of the Exchange program in May 2000. Surrenders also increased
due to the aging of the business and since exchange assets are not subject to
surrender charges.

   Total liabilities increased from $20.099 billion at December 31, 1999 to
$21.226 billion at December 31, 2000, an increase of $1.127 billion. The
increase was primarily due to increases to policyholder account balances of $522
million, securities lending liabilities of $181 million, Separate Account
liabilities of $198 million, and an increase to future policy reserves of $73
million. The increase in policyholders' account balances from $3.125 billion at
December 31, 1999 to $3.647 billion at December 31, 2000 was primarily due to
increases of $315 million from sales of the PACE product, and an increase of
$175 million, mainly due to exchanges and sales of the Discovery Select product
for the General Account. Future policy benefits increased by $73 million from
$630 million at December 31, 1999 to $703 million at December 31, 2000 primarily
the result of increased sales and in-force business at the Taiwan branch.

RESULTS OF OPERATIONS

2001 VERSUS 2000

NET INCOME

Consolidated net income was $35.9 million lower for the year ended December 31,
2001 than for the year ended December 31, 2000. Economic and market downturns
resulted in increased realized investment losses for impairments and sales of
fixed maturities of $39.8 million. In addition, there was increased amortization
of deferred policy acquisition costs ("DAC") of $35.2 million for domestic life
and annuity products, resulting from a decline in expected future profits. Net
asset management fee revenue declined $34.2 million ($63.3 million in revenues
less $29.1 million of expenses). The Company ceased receiving fee income or
paying asset management fee expenses related to the Prudential Series Fund
("PSF") as of January 1, 2001, as described in the Notes to Consolidated
Financial Statements. Policyholder benefits were $8.0 million higher as
increases to domestic individual life product reserves, death benefits, and
surrender benefits offset decreases in the Taiwan branch's policyholder
benefits. Tax expense for the current year is lower than the prior year by $79.7
million due to reduced income from operations before income taxes and a
refinement of the estimated benefits from nontaxable investment income.

REVENUES

Consolidated revenues decreased by $110.6 million, from $987.7 million to $877.1
million. As discussed above, the elimination of PSF asset management fees
reduced revenues by $63.3 million. Premiums decreased by $31.0 million from the
prior year. The ceding of premiums pursuant to the transfer of the Company's
Taiwan branch caused an $80.6 million decline in premiums. This was partially
offset by higher term insurance sales of the Term Essential and Term Elite
products, as those products were not launched until late 2000, and an increase
in premiums related to extended term policy conversions. As an option in the
event of a lapse, individual variable life insurance policies provide
policyholders with additional extended

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

term or reduced paid-up life insurance based on the amount that can be purchased
with the remaining cash value of the contract (if the policyholder does not
elect to receive the remaining cash value as a cash distribution). The
application of the remaining cash value to purchase such coverage is recorded as
premium revenue in the Statement of Operations. Future policy benefit reserves
are also increased by the amount of these premiums.

   Realized investment losses increased by $39.8 million from the prior year as
recognized writedowns on fixed maturities with other than temporary impairments
increased by $41.2 million in 2001. In addition, a realized loss of $29.2
million was recorded on the sale of Enron fixed maturities in 2001. Partially
offsetting these investment declines were gains on sales of fixed maturities of
$21.8 million in 2001(excluding Enron) compared to losses of $22.3 million in
2000 as interest rates declined in 2001 increasing the fair value of the bonds.
The sales in 2000 were made in the early part of the year before rates
substantially declined. Derivative instruments and other investment gains were
$13.5 million less than in 2000. This was mainly the result of the Company's net
short position in futures during 2001, versus a net long position in 2000, as
interest rates were generally declining in both years.

   These decreases were partially offset by increases in policy charges and fee
income and net investment income. Policy charges and fee income, consisting
primarily of mortality and expense ("M&E"), loading and other insurance charges
assessed on General and Separate Account policyholder fund balances, increased
by $15.3 million. The increase was a result of a $29.0 million increase for
domestic individual life products offset by a $13.7 million decrease for annuity
products. Mortality and sales based loading charges for life products increased
as a result of growth in the in-force business and higher new sales. The
in-force business grew from $53.214 billion at December 31, 2000 to $58.743
billion at December 31, 2001, an increase of 10.3%. In contrast, annuity fees
are mainly asset based fees which are dependent on the fund balances which are
affected by net sales as well as asset depreciation or appreciation on the
underlying investment funds in which the customer has the option to invest.
Annuity fund balances have declined as a result of unfavorable valuation changes
in the securities market and lower sales due to the discontinuation of the
Exchange program.

   Net investment income increased by $5.7 million from the prior year as income
from fixed maturities rose as a result of a higher average asset base from
reinvestment of proceeds from GIC sales, and general account annuity life
deposits. Partially offsetting this increase was a decline in short term
investments and cash equivalent income mainly as a result of lower interest
rates.

   Other income increased $2.5 million due to an increase in the modal premium
charge for policyholders who pay other than annual premiums, as a result of the
growth of the term insurance business.

BENEFITS AND EXPENSES

Policyholder benefits increased by $8.0 million from increases in domestic
individual life product reserves, death benefits, and surrender benefits; offset
by decreases in Taiwan's policyholder benefits. Death benefits increased $29.0
million due mainly to the increased in force business, with $11.6 million of the
increase specifically related to the September 11 terrorist attacks. Domestic
individual life reserves increased $32.6 million as a result of sales of term
insurance and extended term premiums. There were also increased benefits paid on
surrenders of reduced paid up policies of $8.3 million. Offsetting these were
decreases in reserve provisions and benefits for the Company's Taiwan branch of
$61.6 million.

   Interest credited to policyholder account balances increased by $25.0 million
as policyholder account balances grew by $301.0 million from December 2000
mainly as a result of GIC and general account life and annuity sales, as
mentioned above.

   General, administrative, and other expenses decreased $28.0 million from the
prior year. Commission and distribution expenses after

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

capitalization, excluding the Taiwan branch, are $33.2 million lower resulting
from a change in the allocation of distribution expenses to a market based
pricing arrangement as of April 1, 2000 and higher capitalization of commissions
from new sales. The elimination of asset management expenses lowered expenses by
$29.1 million. The transfer of the Company's Taiwan branch resulted in an
expense reduction of $25.2 million.

   Partially offsetting these decreases was an increase in DAC amortization of
domestic life and annuity products of $35.2 million from increases in deferrable
expenses as a result of sales, and increased amortization associated with a
decline in expected future profits from stock market declines. There was also an
additional $24.3 million of expenses, excluding the Taiwan branch, driven by
higher allocations charged to the Company for salary, consulting, and data
processing costs. The Company is assuming a larger share of allocated costs as
allocations are based on new sales of which the Company has a higher percentage
than in the previous year.

2000 VERSUS 1999

NET INCOME

Net income for the year ended December 31, 2000 was $103.5 million; an increase
of $47.9 million from $55.6 million earned in the year ended December 31, 1999.
The increase reflects a $168.2 million, or 20.5% increase in revenues, offset in
part by a $95.8 million, 13.1% increase in expenses. Income taxes increased by
$24.5 million corresponding with the income increase.

REVENUES

Policy charges and fee income increased by $60.4 million, to $474.9 million in
2000 from $414.4 million in 1999. In addition, asset management fees, primarily
representing fees collected from the Pru Series Funds ("PSF") increased by $10.8
million from the prior year. Although the Separate Account fund balances as of
December 31, 2000 are only slightly higher than the prior year end due to stock
market declines, (especially in the fourth quarter) the average fund balance
during the year was $3 billion higher than the prior year, as is described in
the "Changes In Financial Position" section. Strong securities market conditions
contributed to significant appreciation in Separate Account asset values during
1999 which had a carryover effect on 2000 income, as beginning of the year
balances were substantially higher than in the previous year. Policy charges for
annuity and life products were $37.4 million and $23.0 million higher,
respectively, than the prior year. Most of the annuity increase came from higher
M&E charges from Discovery Select, as net sales of this product were
approximately $1.1 billion. The increase in life policy fees is also due to a
higher average fund balance than in the previous year.

   Premiums increased $22.9 million to $121.9 million for the year ended
December 31, 2000. The increase was primarily due to continued growth at the
Company's Taiwan branch, which sells traditional life insurance products. New
sales for the Taiwan branch grew by 21% and gross insurance in force increased
by 17%. Premiums from annuitizations of Discovery Select contracts also
contributed somewhat to the growth in premiums.

   Net investment income increased by $61.1 million to $337.9 million in 2000.
The increase was primarily the result of higher income from fixed maturities of
$45.8 million, and $10.4 million from short-term and cash equivalents, as the
asset base increased. Investment of cash inflows from the PACE product was the
primary cause of the increase in the asset base.

   Realized investment losses, net were $20.7 million in 2000 compared to
realized losses of $32.5 million for the prior year. This improvement of $11.8
million came primarily from derivative gains in 2000 of $15.0 million versus
losses of $1.6 million in 1999. Partially offsetting this were realized losses
on fixed maturities that were $5.7 million higher than in 1999, as most of the
sales were made in early 2000, when interest rates were higher and writedowns
for impairments deemed other than temporary were $12.3 million, an increase of
$1.1 million from 1999.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

BENEFITS AND EXPENSES

Policyholders' benefits including changes in reserves were $248.1 million for
the year ended December 31, 2000, an increase of $43.0 million from the prior
year. Increases to reserves were $31.0 million higher than the prior year of
which $14.8 million is related to continued business expansion in the Company's
Taiwan branch. Discovery Select annuitizations of $7.7 million, and higher life
reserves for extended term insurance and disability reserves of $8.5 million
also contributed to the reserve increases. Policyholder benefits were $12.0
million higher mainly due to an increase in death claims of $9.8 million and
increased annuity and Taiwanese policyholder benefits due to the growth in
business.

   Interest credited to policyholder account balances for the year ended
December 31, 2000 was $171.0 million, an increase of $34.2 million from 1999.
Interest credited for the PACE product increased by $25.8 million as the PACE
policyholder account balances increased $315 million. Interest credited on
annuity products increased by $7.5 million as the General Account fund balances
increased and there were higher new money rates due to higher incentive rates
for Discovery Select.

   General, administrative and other expenses, net of capitalization increased
$18.6 million to $410.7 million in 2000. The largest factor in this increase is
amortization of deferred policy acquisition costs ("DAC") of $129.0 million,
which is $32.6 million higher than the prior year. Annuity DAC amortization
increased $39.3 million to $72.8 million, due to growth in profitability of
Discovery Select, and accelerated amortization associated with a decline in
expected future gross profits as a result of unfavorable market conditions in
2000. Amortization of life products declined by $10.2 million due to prior year
write-offs of DAC for policies that were rescinded as a result of the Company's
policyholder remediation program, as described in the Notes to the financial
statements. The Taiwan branch DAC amortization increased by $3.5 million due to
growth in the business.

   Commission and distribution expenses, net of capitalization are lower by $1.1
million due mainly to two offsetting factors. Growth in trail commissions on
Discovery Select exchanges, which are nondeferable, increased expenses by $8.0
million. This was offset by a change in the allocation of distribution expenses
to reflect a market based pricing arrangement. This decreased year over year
expenses (net of capitalization) by $8.9 million.

   Other general and administrative expenses were down $16.1 million from the
prior year due to decreases in consulting fees, salary expenses, and charges to
the reserve for unbeknownst modified endowment contracts ("UMEC"). Consulting
and external contracted services charges were lower in 2000 by $7.9 million as
the prior year had contracted external programmers for Year 2000 system
preparation and data integrity projects. Decreases in staffing levels from the
prior year resulted in reductions in salary expense and employee benefits of
$4.1 million. Provisions made to UMEC were $6.3 million in 2000 which is $3.9
million less than the prior year. Offsetting these decreases slightly was an
increase of $3.2 million for asset management fees, asset based charges for
managing Separate Account investment portfolios, due to the increase in the
average Separate Account balance.

INVESTMENT PORTFOLIO AND INVESTMENT STRATEGIES

The Company's investment portfolio supports its insurance and annuity
liabilities and other obligations to customers for which it assumes investment
related risks. The portfolio was comprised of total investments amounting to
$5.207 billion at December 31, 2001, versus $5.048 billion at December 31, 2000.
A diversified portfolio of publicly traded bonds, private placements, commercial
loans on real estate and equity investments is managed under strategies intended
to maintain a competitive asset mix consistent with current and anticipated cash
flow requirements of the related obligations. The risk tolerance reflects the
Company's aggregate capital position, exposure to business risk, liquidity and
rating agency considerations.

   The asset management strategy for the portfolio is in accordance with an
investment policy statement

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

developed and coordinated within the Company by the Asset Liability and Risk
Management Group, agreed to by senior management, and approved by the Board of
Directors. In managing the investment portfolio, the long-term objective is to
generate favorable investment results through asset-liability management,
strategic and tactical asset allocation and asset manager selection. Asset
management strategies take into account the need to match asset structure to
product liabilities, considering the underlying income and return
characteristics of investment alternatives and seeking to closely approximate
the interest rate sensitivity of the asset portfolio with the estimated interest
rate sensitivity of the product liabilities. Asset management strategies also
include broad diversification across asset classes, issuers and sectors;
effective utilization of capital while maintaining liquidity believed to be
adequate to satisfy cash flow requirements; and achievement of competitive
performance. The major categories of invested assets, quality across the
portfolio, and recent activities to manage the portfolio are discussed below.

FIXED MATURITIES

The fixed maturity portfolio is diversified across maturities, sectors and
issuers. The Company has classified all publicly traded securities as available
for sale ("AFS"). As of December 31, 2001 all privately placed securities were
classified as AFS compared to approximately 78% in 2000. The remainder of
privately placed fixed maturities in 2000 was classified as held to maturity
("HTM"). AFS securities are carried in the Consolidated Statement of Financial
Position at fair value, with unrealized gains and losses (after certain related
adjustments) recognized by credits and charges to equity capital. HTM securities
are carried at amortized cost, and unrealized gains or losses on these
securities are not recognized in the financial statements. At December 31, 2001
the fixed maturities portfolio totaled $4.025 billion, an increase of $143
million, based on fair value, compared to December 31, 2000. This increase in
fixed maturities reflected growth in the overall portfolio due to positive cash
flow from insurance operations during 2000, appreciation arising from a lower
interest rate environment, as well as reinvestment of net investment income,
offset by dividends paid in the form of fixed maturities. The following table
displays a public/private breakout of this year's net unrealized appreciation in
the fixed income portfolio versus during 2001.

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
<Caption>
                                                               2001                                      2000
                                               ----------------------------------------------------------------------------------
                                                                            NET                                      NET
                                               AMORTIZED    ESTIMATED    UNREALIZED   AMORTIZED    ESTIMATED     UNREALIZED
                                                  COST      FAIR VALUE     GAINS         COST      FAIR VALUE   GAINS(LOSSES)
<S>                                            <C>          <C>          <C>          <C>          <C>          <C>           <C>
FIXED MATURITIES (In Thousands)
---------------------------------------------------------------------------------------------------------------------------------
   Publicly traded                             $2,638,917   $2,695,135    $56,218     $2,385,108   $2,393,919      $8,811
   Privately placed                             1,296,555    1,329,758     33,203      1,491,682    1,488,236      (3,446)
---------------------------------------------------------------------------------------------------------------------------------
TOTAL                                          $3,935,472   $4,024,893    $89,421     $3,876,790   $3,882,155      $5,365
</Table>

   At December 31, 2001, the net unrealized capital gains/(losses) on the
"available for sale" fixed maturity portfolio totaled $89.4 million compared to
$9.3 million ($5.4 million including HTM) at December 31, 2000. The increase in
the net unrealized capital gain position is primarily due to the effect of lower
interest rates in 2001 versus 2000.

   Gross investment income on fixed maturities increased by $16.1 million from
2000 to 2001 as a result of a higher asset base in 2001, offset by reinvestment
and new purchases at lower rates. Realized losses of $60.9 million were $26.3
million greater than December 31, 2000. This variance is attributed to higher
impairments taken in 2001 of $41.2 million, primarily relating to asset-backed
securities, and losses on sale of Enron holdings of $29.2 million, offset by
higher trading gains of

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

$44.1 million, occurring mainly in the first half of the year.

   The table below summarizes fixed maturity investment results:

<Table>
<Caption>

<S>                                    <C>        <C>      <C>
<Caption>
                                       YEAR ENDED DECEMBER 31
                                       ---------------------------
                                          2001         2000
(IN THOUSANDS)
<S>                                    <C>          <C>        <C>
  Gross Investment Income               $279,477     $263,325
  Yield(1)                                 7.32%        7.53%
  Realized Capital Losses               ($60,924)    ($34,812)
</Table>

(1) YIELDS ARE DETERMINED BY DIVIDING GROSS INVESTMENT INCOME BY THE AVERAGE OF
    YEAR-END ASSET CARRYING VALUES, EXCLUDING UNREALIZED GAINS AND LOSSES, LESS
    ONE-HALF OF GROSS INVESTMENT INCOME.

CREDIT QUALITY

The following table describes the credit quality of the fixed maturity
portfolio, based on ratings assigned by the National Association of Insurance
Commissioners ("NAIC") or Moody's Corporation, an independent rating agency:

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------
<C>   <S>                  <C>          <C>      <C>          <C>      <C>          <C>      <C>          <C>    <C>
<Caption>

                                       DECEMBER 31, 2001                           DECEMBER 31, 2000
                           -----------------------------------------------------------------------------------------
                           AMORTIZED             ESTIMATED             AMORTIZED             ESTIMATED
NAIC       MOODY'S            COST        %      FAIR VALUE     %         COST        %      FAIR VALUE     %
<C>   <S>                  <C>          <C>      <C>          <C>      <C>          <C>      <C>          <C>    <C>
--------------------------------------------------------------------------------------------------------------------
<Caption>
                                                              (In Thousands)
<C>   <S>                  <C>          <C>      <C>          <C>      <C>          <C>      <C>          <C>    <C>
 1    AAA to AAA-          $1,889,567    48.0%   $1,930,014    48.0%   $1,811,068    46.7%   $1,835,642    47.3%
 2    BBB+ to BBB-          1,727,161    43.9%    1,778,254    44.2%    1,794,309    46.3%    1,784,694    46.0%
 3    BB+ to BB-              198,945     5.1%      201,466     5.0%      118,652     3.0%      117,793     3.1%
 4    B+ to B-                 81,558     2.1%       77,436     1.9%      113,050     2.9%      106,699     2.7%
 5    CCC or lower             20,782     0.5%       20,786     0.5%       22,093     0.6%       20,067     0.5%
 6    In or near default       17,459     0.4%       16,937     0.4%       17,618     0.5%       17,260     0.4%
--------------------------------------------------------------------------------------------------------------------
      TOTAL                $3,935,472   100.0%   $4,024,893   100.0%   $3,876,790   100.0%   $3,882,155   100.0%
</Table>

   The fixed maturity portfolio consists largely of investment grade assets
(rated "1" or "2" by the NAIC). Based on fair value, these investments accounted
for 92% and 93% of the portfolio as of December 31, 2001 and 2000, respectively.
As of December 31, 2001 and 2000, less than 1% of the fixed maturities portfolio
was rated "6" by the NAIC, defined as public and private placement securities
which are currently non-performing or believed to be subject to default in the
near-term.

   The Company maintains separate monitoring processes for public and private
fixed maturities and create watch lists to highlight securities, which require
special scrutiny and management. Our public fixed maturity asset managers
formally review all public fixed maturity holdings on a monthly basis and more
frequently when necessary to identify potential credit deterioration whether due
to ratings downgrades, unexpected price variances, and/or industry specific
concerns. We classify public fixed maturity securities of issuers that have
defaulted as loans not in good standing and all other public watch list assets
as closely monitored.

   Our private fixed maturity asset managers conduct specific servicing tests on
each investment on an ongoing basis to determine whether the investment is in

 36
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

compliance or should be placed on the watch list or assigned an early warning
classification. We assign early warning classification to those issuers that
have failed a servicing test or experienced a minor covenant default, and we
continue to monitor them for improvement or deterioration. We assign closely
monitored status to those investments that have been recently restructured or
for which a restructuring is a possibility due to substantial credit
deterioration or material covenant defaults. We classify as not in good standing
securities of issuers that are in more severe conditions, for example,
bankruptcy or payment default.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------

<Caption>

                                                                 DECEMBER 31, 2001           DECEMBER 31, 2000
                                                              -----------------------------------------------------
(IN THOUSANDS)                                                BOOK VALUE   % OF TOTAL   BOOK VALUE   % OF TOTAL
-------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>          <C>        <C>
Performing                                                    $3,903,871     99.2%      $3,799,529      98.0%
Watch List
  Closely monitored                                               26,230      0.7%          56,513       1.5%
  Not in good standing                                             5,371      0.1%          20,748       0.5%
-------------------------------------------------------------------------------------------------------------------
TOTAL                                                         $3,935,472    100.0%      $3,876,790     100.0%
</Table>

Writedowns for impairments of fixed maturities which were deemed to be other
than temporary were $53.5 million, $12.3 million and $11.2 million for the years
2001, 2000 and 1999 respectively.

PORTFOLIO DIVERSITY

The fixed maturity portfolio is broadly diversified by type and industry of
issuer. As of December 31, 2001, the greatest industry concentrations within the
public portfolio were finance, utilities, and manufacturing. The greatest

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

industry concentrations within the private portfolio were asset-backed
securities, manufacturing and service. The fixed maturities portfolio is
summarized below by issuer category:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------

<Caption>

                                                           DECEMBER 31, 2001                      DECEMBER 31, 2000
                                                  -------------------------------------------------------------------------------
                                                  AMORTIZED    ESTIMATED    % OF FAIR    AMORTIZED    ESTIMATED    % OF FAIR
                 (IN THOUSANDS)                      COST      FAIR VALUE     VALUE         COST      FAIR VALUE     VALUE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>          <C>          <C>
United States Government Securities and
  Obligations                                     $  303,606   $  303,453       7.5%     $  309,609   $  317,479       8.2%
Mortgage Backed Securities                            10,148       10,247       0.3%         31,479       31,809       0.8%
Asset Backed Securities(1)                           577,528      590,245      14.7%        544,447      541,315      14.0%
Foreign Government Securities                         27,331       29,454       0.7%        136,133      143,706       3.7%
Manufacturing                                        782,944      803,155      19.9%        791,609      788,188      20.3%
Utilities                                            646,628      663,645      16.5%        634,671      628,657      16.2%
Retail and Wholesale                                 223,373      230,162       5.7%        230,303      229,162       5.9%
Energy                                                 5,223        5,173       0.1%          1,304        1,359         0%
Finance                                              688,064      711,932      17.7%        519,690      528,020      13.6%
Services                                             557,311      565,654      14.1%        548,729      544,555      14.0%
Transportation                                       106,687      104,716       2.6%        122,655      121,565       3.1%
Other                                                  6,629        7,057       0.2%          6,161        6,340       0.2%
---------------------------------------------------------------------------------------------------------------------------------
TOTAL                                             $3,935,472   $4,024,893     100.0%     $3,876,790   $3,882,155     100.0%
</Table>

(1) Asset backed securities are primarily backed by credit card receivables,
    home equity loans, trade receivables and auto loans.

COMMERCIAL LOANS ON REAL ESTATE

As of December 31, 2001, the Company's portfolio of commercial loans on real
estate portfolio totaled $8.2 million, a reduction of $1.1 million from December
31, 2000, reflecting maturities and prepayments. The portfolio is comprised of
commercial loans on real estate, with diversification by property type and
geographic location. Refer to Footnote 3 in the Notes to Consolidated Financial
Statements. Mortgage investment income is $0.9 million, which is $0.1 million
lower than the prior year due to a lower asset base.

   The Company evaluates its loans on a quarterly basis for watch list status
based on compliance with various financial ratios and other covenants set forth
in the loan agreements, borrower credit quality, property condition and other
factors. The Company may place loans on early warning status in cases where it
detects that the physical condition of the property, the financial situation of
the borrower or tenant, or other factors could lead to a loss of principal or
interest. The Company classifies as closely monitored those loans that have
experienced material covenant defaults or substantial credit or collateral
deterioration. Not in good standing loans are those for which there is a high
probability of loss of principal, such as when the borrower is in bankruptcy or
the loan is in foreclosure. An experienced staff of workout professionals
actively manages the loans in the closely monitored and not in good standing
categories.

EQUITY SECURITIES

The Company's equity securities are comprised of common and non-redeemable
preferred stock and are carried at estimated fair value on the Statement of
Financial Position. Based on fair value, equity securities totaled $0.4 million
in 2001 compared to $10.8 million in 2000. At December 31, 2001, the unrealized
capital gains on the equity portfolio totaled $0.2 million compared to $2.6
million of losses at December 31, 2000. The equity securities' asset base
declined due to the transfer of stocks in connection with the transfer of the
Taiwan branch.

SHORT-TERM INVESTMENTS

Short-term investments include liquid debt instruments that have maturities
between 3-12 months from date of

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                                                                         PART II
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purchase. These securities are carried at amortized cost, which approximates
fair value. As of December 31, 2001, the Company's short-term investments
totaled $215.6 million, an increase of $12.8 million compared to $202.8 million
at December 31, 2000. Short-term yields decreased due to lower rates in 2001,
partially offset by greater spread income earned on securities lending activity.

DERIVATIVES

The Company uses derivatives primarily to alter mismatches between the duration
of assets in its portfolios and the duration of insurance and annuity
liabilities supported by those assets. These derivative contracts do not qualify
for hedge accounting and, consequently, we recognize the changes in fair value
of such contracts from period to period in current earnings. During 2001, $2.9
million of gains were realized in swaps versus a gain of $5.6 million in 2000.
This was due to favorable 2001 and 2000 trends in exchange rates and spreads.
During 2001, $4.3 million of losses were realized from futures versus gains of
$9.4 million in 2000. This was the result of the Company's net short position in
futures during 2001, versus a net long position in 2000, as interest rates were
generally declining in both years.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity requirements include the payment of sales commissions,
other underwriting expenses and the funding of its contractual obligations for
the life insurance and annuity contracts in-force. The Company has developed and
utilizes a cash flow projection system and regularly performs asset/liability
duration matching in the management of its asset and liability portfolios. The
Company anticipates funding all its cash requirements utilizing cash from
operations, normal investment maturities and anticipated calls and repayments or
through short term borrowing from its affiliate Prudential Funding Corporation
(refer to Footnote 14 in the Notes to Consolidated Financial Statements). As of
December 31, 2001, the Company's assets included $3.0 billion of cash and cash
equivalents, short-term investments and investment grade publicly traded fixed
maturity securities that could be liquidated if funds were required.

   In order to continue to market life insurance and annuity products, the
Company must meet or exceed the statutory capital and surplus requirements of
the insurance departments of the states in which it conducts business. Statutory
accounting practices differ from generally accepted accounting principles
("GAAP") in two major respects. First, under statutory accounting practices, the
acquisition costs of new business are charged to expense, while under GAAP they
are initially deferred and amortized over a period of time. Second, under
statutory accounting practices, the required additions to statutory reserves for
new business in some cases may initially exceed the statutory revenues
attributable to such business. These practices result in a reduction of
statutory income and surplus at the time of recording new business.

   Insurance companies are subject to Risk-Based Capital ("RBC") guidelines,
monitored by insurance regulatory authorities, that measure the ratio of the
Company's statutory surplus with certain adjustments ("Adjusted Capital") to its
required capital, based on the risk characteristics of its insurance liabilities
and investments. Required capital is determined by statutory formulae that
consider risks related to the type and quality of invested assets,
insurance-related risks associated with the Company's products, interest rate
risks, and general business risks. The RBC calculations are intended to assist
regulators in measuring the adequacy of the Company's statutory capitalization.

   The Company considers RBC implications in its asset/liability management
strategies. Each year, the Company conducts a thorough review of the adequacy of
statutory insurance reserves and other actuarial liabilities. The review is
performed to ensure that the Company's statutory reserves are computed in
accordance with accepted actuarial standards, reflect all contractual
obligations, meet the requirements of state laws and regulations and include
adequate provisions for any other actuarial liabilities that need to be
established. All significant reserve changes are reviewed by the Board of
Directors and are subject to

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                                                                         PART II
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approval by the Arizona Department of Insurance and the New Jersey Department of
Banking and Insurance (the "Insurance Departments"). The Company believes that
its statutory capital is adequate for its currently anticipated levels of risk
as measured by regulatory guidelines.

   In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles guidance ("Codification"), which replaces the current Accounting
Practices and Procedures manual as the NAIC's primary guidance on statutory
accounting as of January 1, 2001. The Codification provides guidance for areas
where statutory accounting has been silent and changes current statutory
accounting in certain areas. Certain of the standards could have an impact on
the measurement of statutory capital, which, in turn, could affect RBC ratios of
insurance companies. The Company has adopted the Codification guidance effective
January 1, 2001. As a result of these changes, the Company reported an increase
to statutory surplus of $88 million, primarily as a result of the recognition of
deferred tax assets.

REGULATORY ENVIRONMENT

The Company is subject to the laws of the Insurance Departments. A detailed
financial statement in the prescribed form (the "Annual Statement") is filed
with the Insurance Departments each year covering the Company's operations for
the preceding year and its financial position as of the end of that year.
Regulation by the Insurance Departments includes periodic examinations to verify
the accuracy of contract liabilities and reserves. The Company's books and
accounts are subject to review by the Insurance Departments at all times. A full
examination of the Company's operations is conducted periodically by the
Insurance Departments and under the auspices of the NAIC.

   The Company is subject to regulation under the insurance laws of all
jurisdictions in which it operates. The laws of the various jurisdictions
establish supervisory agencies with broad administrative powers with respect to
various matters, including licensing to transact business, overseeing trade
practices, licensing agents, approving contract forms, establishing reserve
requirements, fixing maximum interest rates on life insurance contract loans and
minimum rates for accumulation of surrender values, prescribing the form and
content of required financial statements and regulating the type and amounts of
investments permitted. The Company is required to file the Annual Statement with
supervisory agencies in each of the jurisdictions in which it does business, and
its operations and accounts are subject to examination by these agencies at
regular intervals.

   The NAIC has adopted several regulatory initiatives designed to improve the
surveillance and financial analysis regarding the solvency of insurance
companies in general. These initiatives include the development and
implementation of a risk-based capital formulae as described in the Liquidity
and Capital Resources disclosure. The implementation of these standards has not
had a significant impact on the Company.

   Although the federal government generally does not directly regulate the
business of insurance, federal initiatives often have an impact on the business
in a variety of ways. Certain insurance products of the Company are subject to
various federal securities laws and regulations. In addition, current and
proposed federal measures which may significantly affect the insurance business
include regulation of insurance company solvency, employee benefit regulation,
removal of barriers preventing banks from engaging in the insurance business,
tax law changes affecting the taxation of insurance companies and the tax
treatment of insurance products and its impact on the relative desirability of
various personal investment vehicles.

EFFECTIVE NEW ACCOUNTING PRONOUNCEMENTS

Refer to Footnote 2, "Summary of Significant Accounting Policies," of the Notes
to Consolidated Financial Statements.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

RISK MANAGEMENT, MARKET RISK, AND DERIVATIVE FINANCIAL INSTRUMENTS

As a wholly-owned subsidiary of Prudential, the Company benefits from the risk
management strategies implemented by its parent. Risk management includes the
identification and measurement of various forms of risk, establishment of
acceptable risk thresholds, and creation of processes intended to maintain risks
within these thresholds while optimizing returns on the underlying assets or
liabilities. Prudential considers risk management an integral part of its core
businesses.

   The risks inherent in the Company's operations include market risk, product
risk, credit risk, and operating risk.

   MARKET RISK is the risk of change in the value of financial instruments as a
result of absolute or relative changes in interest rates, foreign currency
exchange rates or equity or commodity prices. To varying degrees, the investment
activities supporting all of the Company's products and services generate market
risks. Market risks incurred and the strategies for managing these risks vary by
product.

   With respect to non-variable life insurance products, fixed rate annuities
and the fixed rate options in our variable life insurance and annuity products,
the Company incurs market risk primarily in the form of interest rate risk. The
Company manages this risk through asset/liability management strategies that
seek to match the interest rate sensitivity of the assets to that of the
underlying liabilities. The Company's overall objective in these strategies is
to limit the net change in value of assets and liabilities arising from interest
rate movements. While it is more difficult to measure the interest sensitivity
of the Company's insurance liabilities than that of the related assets, to the
extent the Company can measure such sensitivities the Company believes that
interest rate movements will generate asset value changes that substantially
offset changes in the value of the liabilities relating to the underlying
products.

   For variable annuities and variable life insurance products, excluding the
fixed rate options in these products, the Company's main exposure is the risk
that asset management fees may decrease as a result of declines in assets under
management due to changes in prices of securities. The Company is also exposed
to the risk that asset management fees calculated by reference to performance
could be lower. For variable annuity and variable life insurance products with
minimum guaranteed death benefits, the Company also faces the indirect risk that
declines in the value of underlying investments as a result of changes in
securities prices may increase the Company's net exposure to death benefits
under these contracts. The Company does not believe that these indirect risks
add significantly to the Company's overall risk. The Company manages its
exposure to equity price risk primarily by seeking to match the risk profile of
equity investments against risk-adjusted equity market benchmarks. The Company
measures benchmark risks level in terms of price volatility in relation to the
market in general.

   The Company's exposure to market risk results from "other than trading"
activities in its insurance businesses. Market risks in the Company's insurance
business are managed through an investment process that incorporates
asset/liability management techniques and other risk management policies and
limits. Derivatives, as discussed further below, are used to alter interest rate
or currency exposures arising from mismatches between assets and liabilities.
These include sensitivity and Value-at-Risk measures, positions and other limits
based on type of risk, and various hedging methods.

INSURANCE ASSET/LIABILITY MANAGEMENT

The Company's asset/liability management strategies seek to match the interest
rate sensitivity of the assets to that of the underlying liabilities and to
construct asset mixes consonant with product features, such as interest
crediting strategies. The Company also considers risk-based capital implications
in its asset/liability management strategies. The Company seeks to

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                                                                         PART II
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maintain interest rate and equity exposures within established ranges, which are
periodically adjusted based on market conditions and the design of related
insurance products sold to customers. The Company's risk managers, who work with
portfolio and asset managers but under separate management, establish investment
risk limits for exposures to any issuer, or type of security and oversee efforts
to manage risk within policy constraints set by management and approved by the
Board of Directors.

   The Company uses duration and convexity analyses to estimate the price
sensitivity of assets and liabilities to interest rate changes. Duration is an
estimate of the sensitivity of the fair value of a financial instrument relative
to changes in interest rates. Convexity is an estimate of the rate of change of
duration with respect to changes in interest rate, and is commonly used for
managing assets with prepayment risk, such as mortgage backed securities. The
Company seeks to manage its interest rate exposure by matching the relative
sensitivity of asset and liability values to interest rate changes, or
controlling "duration mismatch" of assets and liabilities. The Company has a
target duration mismatch level of plus or minus 0.6 years. As of December 31,
2001, the difference between the pre-tax duration of assets and the target
duration of liabilities in the Company's duration managed portfolio was 0.2
years.

   The Company also performs portfolio stress testing as part of its regulatory
cash flow testing. In this testing, the Company evaluates the impact of altering
its interest-sensitive assumptions under various moderately adverse interest
rate environments. These interest-sensitive assumptions relate to the timing and
amounts of redemptions and pre-payments of fixed-income securities and lapses
and surrenders of insurance products. The Company evaluates any shortfalls that
this cash flow testing reveals to determine if there is a need to increase
statutory reserves or adjust portfolio management strategies.

MARKET RISK RELATED TO INTEREST RATES

Assets that subject the Company to interest rate risk include fixed maturities,
commercial loans on real estate, and policy loans. In the aggregate, the
carrying value of these assets represented 68% of consolidated assets, other
than assets that are held in Separate Accounts, as of December 31, 2001 and 70%
as of December 31, 2000. With respect to liabilities, the Company is exposed to
interest rate risk through policyholder account balances relating to life
insurance and annuity investment type contracts.

   The Company assesses interest rate sensitivity for its financial assets,
financial liabilities and derivatives using hypothetical test scenarios which
assume both upward and downward 100 basis point parallel shifts in the yield
curve from prevailing interest rates. The following tables set forth the
potential loss in fair value from a hypothetical 100 basis point upward shift at
December 31, 2001 and 2000, because this scenario results in the greatest net
exposure to interest rate risk of the hypothetical scenarios tested at those
dates. While the test scenario is for illustrative purposes only and does not
reflect management's expectations regarding future interest rates or the
performance of fixed income markets, it is a near-term, reasonably possible
hypothetical change that illustrates the potential impact of such events. These
test scenarios do not measure the changes in value that could result from
non-parallel shifts in the yield curve, which would be expected to produce
different changes in discount rates for different maturities. As a result, the
actual loss in fair value from a 100 basis point change in interest rates could
be different from that indicated by these calculations.

   This presentation does not include $2.753 billion and $2.587 billion of
insurance reserves and deposit liabilities at December 31, 2001 and 2000,
respectively. The Company believes that the interest rate sensitivities of these
insurance liabilities offset, in large measure,

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

the interest rate risk of the financial assets set forth in the following
tables.
<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------------------------------
<Caption>

                                                    DECEMBER 31, 2001                      DECEMBER 31, 2000
                                    ----------------------------------------------------------------------------
                                                              FAIR VALUE
                                                              AFTER + 100
                                                              BASIS POINT HYPOTHETICAL
                                      NOTIONAL     ESTIMATED   PARALLEL    CHANGE IN     NOTIONAL     ESTIMATED
                                        VALUE        FAIR     YIELD CURVE     FAIR         VALUE        FAIR
(IN MILLIONS)                       (DERIVATIVES)    VALUE       SHIFT       VALUE     (DERIVATIVES)    VALUE
----------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>
  Financial Assets and Liabilities
  with Interest Rate Risk:
    Financial Assets:
    Fixed Maturities:
      Available for Sale                   --       $ 4,025     $ 3,902      $(123)          --        $ 3,562
      Held to Maturity                     --            --          --         --           --            321
    Commercial Loans on Real
    Estate                                 --            10          10         --           --             11
    Policy Loans                           --           934         880        (54)          --            883
  Derivatives:
    Futures                              (128)           --           6          6          202              2
    Swaps                                   9             1           1         --            9             .3
  Financial Liabilities:
    Investment Contracts                   --        (2,053)     (2,028)        25           --         (1,785)
----------------------------------------------------------------------------------------------------------------
      TOTAL ESTIMATED POTENTIAL
      LOSS                                                                   $(146)

<Caption>

                                       DECEMBER 31, 2000
                                    ------------------------
                                    FAIR VALUE
                                    AFTER + 100
                                    BASIS POINT HYPOTHETICAL
                                     PARALLEL    CHANGE IN
                                    YIELD CURVE     FAIR
(IN MILLIONS)                          SHIFT       VALUE
----------------------------------  ------------------------
<S>                                 <C>         <C>
  Financial Assets and Liabilities
  with Interest Rate Risk:
    Financial Assets:
    Fixed Maturities:
      Available for Sale              $ 3,468     $   (94)
      Held to Maturity                    313          (8)
    Commercial Loans on Real
    Estate                                 10          (1)
    Policy Loans                          838         (45)
  Derivatives:
    Futures                                 1          (1)
    Swaps                                  .1         (.2)
  Financial Liabilities:
    Investment Contracts               (1,760)         25
----------------------------------  ------------------------
      TOTAL ESTIMATED POTENTIAL
      LOSS                                        $(124.2)
</Table>

   The estimated changes in fair values of the financial assets shown above
relate to assets invested in support of the Company's insurance liabilities, but
do not include assets associated with products for which investment risk is
borne primarily by the contract holders rather than the Company.

MARKET RISK RELATED TO EQUITY PRICES

The Company actively manages equity price risk relative to benchmarks in
respective markets. Equity holdings are benchmarked against a blend of leading
market indices, mainly the Standard & Poor's ("S&P") 500 and Russell 2000, and
targets price sensitivities that approximate those of the benchmark indices. The
Company estimates its equity price risk from a hypothetical 10% decline in
equity benchmark market levels and measures this risk in terms of the decline in
the fair value of the equity securities it holds. Using this methodology, the
Company's estimated equity price risk at December 31, 2001 was $.038 million,
representing a hypothetical decline in fair market value of equity securities
held by the Company at that date from $.375 million to $.338 million. The
Company's estimated equity price risk using this methodology at December 31,
2000 was $1.1 million, representing a hypothetical decline in fair market value
of equity securities the Company held at that date from $10.8 million to $9.7
million. These amounts exclude equity securities relating to products for which
investment risk is borne primarily by the contract holder rather than by the
Company. While these scenarios are for illustrative purposes only and do not
reflect management's expectations regarding future performance of equity markets
or of the Company's equity portfolio, they represent near term reasonably
possible hypothetical changes that illustrate the potential impact of such
events.

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MARKET RISK RELATED TO FOREIGN CURRENCY EXCHANGE RATES

The Company is exposed to foreign currency exchange risk in its investment
portfolio and through its operations in Taiwan. The Company generally hedges
substantially all foreign currency-denominated fixed-income investments
supporting its U.S. insurance operations into U.S. dollars, using foreign
exchange currency swaps, in order to mitigate the risk that the fair value of
these investments fluctuates as a result of changes in foreign exchange rates.
The Company generally does not hedge all of the foreign currency risk of its
equity investments in unaffiliated foreign entities.

   Foreign currency exchange risk is actively managed within specified limits at
the enterprise (Prudential) level using Value-at-Risk ("VaR") analysis. This
statistical technique estimates, at a specified confidence level, the potential
pretax loss in portfolio market value that could occur over an assumed time
horizon due to adverse market movements. This calculation utilizes a
variance/covariance approach.

   The Company calculates VaR estimates of exposure to loss from volatility in
foreign currency exchange for a one month time period. The Company's estimated
VaR at December 31, 2001 for foreign currency assets not hedged to U.S. dollars,
measured at the 95% confidence level and using a one month time horizon, was
$0.8 million, representing a hypothetical decline in fair market value of these
foreign currency assets from $17.6 million to $16.8 million. The Company's
estimated VaR at December 31, 2000 for foreign currency assets not hedged to
U.S. dollars, measured at the 95% confidence level and using a one month time
horizon, was $2.3 million, representing a hypothetical decline in fair market
value of these foreign currency assets from $133.2 million to $130.9 million.
These calculations use historical price volatilities and correlation data at a
95% confidence level.

   The Company's average monthly VaR from foreign currency exchange rate
movements measured at the 95% confidence level over a one month time horizon was
$1.33 million during 2001 and $2.3 million during 2000.

LIMITATIONS OF VAR MODELS

Although VaR models represent a recognized tool for risk management, they have
inherent limitations, including reliance on historical data that may not be
indicative of future market conditions or trading patterns. Accordingly VaR
models should not be viewed as a predictor of future results. The Company may
incur losses that could be materially in excess of the amounts indicated by the
model on a particular trading day or over a period of time. A VaR model does not
estimate the greatest possible loss. The Company uses these models together with
other risk management tools, including stress testing. The results of these
models and analysis thereof are subject to the judgment of the Company's risk
management personnel.

DERIVATIVES

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, various financial indices, or the value of
securities or commodities. Derivative financial instruments can be
exchange-traded or contracted in the over-the-counter market and include swaps,
futures, options and forwards contracts. See Footnote 11 of the Notes to
Consolidated Financial Statements as to the Company's derivative positions at
December 31, 2001 and 2000. Under insurance statutes the Company may only use
derivative securities in activities intended to offset changes in the market
value of assets held, obligations, and anticipated transactions. These statutes
prohibit the use of derivatives for speculation. The Company uses derivative
financial instruments to manage market risk from changes in interest rates or
foreign currency exchange rates, and to alter interest rate or currency
exposures arising from mismatches between assets and liabilities.

   PRODUCT RISK is the risk of adverse results due to deviation of experience
from expected levels reflected in pricing. Products are priced to reflect the
expected levels of benefits and expense while allowing a margin for adverse
deviation. The level of margin varies with product design and pricing strategy
with respect to the targeted market. The Company seeks to maintain

 44
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

underwriting standards so that premium charged is consistent with risk assumed
on an overall basis. Additionally, most of the Company's policies and contracts
allow the Company to adjust credits (via interest crediting rates) and/or
charges (in contracts where elements such as mortality and expense charges are
not guaranteed), allowing the Company some flexibility to respond to changes in
actuarial experience. The Company also considers the competitive environment in
determining pricing elements including premiums, crediting rates, and
non-guaranteed charges.

   Mortality risks, generally inherent in most of the Company's life insurance
and annuity products, are incorporated in pricing based on the Company's
experience (if available and relevant) and/or industry experience. Mortality
studies are performed periodically to compare the actual incidence of death
claims in relation to business in force, to levels assumed in pricing and to
industry experience. Expense risk is the risk that actual expenses exceed those
assumed in pricing relates to all products and varies by volume of business as
well as general price level changes. Persistency risk represents the risk that
the pattern of policy surrenders will deviate from assumed levels so that
policies do not remain in force long enough to allow the Company to recover its
acquisition costs. Certain products are designed, by use of surrender charges
and other features, to discourage early surrenders and thus mitigate this risk
to the Company. Periodic studies are performed to compare actual surrender
experience to pricing assumptions and industry experience.

   For fee-based products in which investment risk is borne by the client, the
Company retains the risk that fees charged may not adequately cover
administrative expenses. The ability to earn a spread between these fees and the
associated costs is dependent upon the competitive environment, product
performance, the ability to attract clients and assets, and the Company's
control of expense levels.

   CREDIT RISK is the risk that counterparties or issuers may default or fail to
fully honor contractual obligations and is inherent in investment portfolio
asset positions including corporate bonds and commercial loans on real estate,
private placements and other lending-type products, certain derivative
transactions, and various investment operations functions. In derivative
transactions, the Company follows an established credit approval process which
includes risk control limits and monitoring procedures. The Company is also
exposed to credit risk resulting from reinsurance transactions. Limits of
exposure by counterparty, are in place at the portfolio level, and counterparty
concentration risk is also reviewed at the enterprise level. Credit
concentration risks are limited based on credit quality, and enterprise-level
concentrations are reviewed on a quarterly basis. Business group credit analysis
units evaluate creditworthiness of counterparties and assign internal credit
ratings based on data from independent rating agencies and their own fundamental
analysis.

   OPERATING RISK is the risk of potential loss from internal or external events
such as mismanagement, fraud, systems breakdowns, business interruption, or
failure to satisfy legal or fiduciary responsibilities. Like other financial
institutions, the Company is exposed to the risk of misconduct by employees that
are contrary to the internal controls the Company designed to manage those
risks. Legal risk may arise from inadequate control over contract documentation,
marketing processes, or other operations. The Company is subject to internal
controls established by Prudential to manage regulatory, legal, credit, asset
management and other risks at the business unit level for specific lines of
business and at the enterprise level for company-wide processes. Business unit
management personnel, internal auditors and an enterprise level Management
Internal Control unit monitor the Company's controls. The Company's controls are
subject to regulatory review in certain instances.

   Another aspect of operating risk relates to the Company's ability to conduct
transactions electronically and to gather, process, and disseminate information
and maintain data integrity and uninterrupted operations given the possibility
of unexpected or unusual events. The Company has implemented a business
continuation initiative to address these concerns.

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DIRECTORS AND OFFICERS

The directors and major officers of Pruco Life, listed with their principal
occupations during the past 5 years, are shown below.

DIRECTORS OF PRUCO LIFE

   JAMES J. AVERY, JR., Vice Chairman and Director -- President, Prudential
Individual Life Insurance since 1998; prior to 1998: Senior Vice President,
Chief Actuary and CFO, Prudential Individual Insurance Group.

   VIVIAN L. BANTA, President, Chairman, and Director -- Executive Vice
President, Individual Financial Services, U.S. Consumer Group since 2000; 1998
to 1999: Consultant, Individual Financial Services; prior to 1998: Consultant,
Morgan Stanley.

   RICHARD J. CARBONE, Director -- Senior Vice President and Chief Financial
Officer since 1997.

   HELEN M. GALT, Director -- Company Actuary, Prudential since 1993.

   JEAN D. HAMILTON, Director -- Executive Vice President, Prudential
Institutional since 1998; prior to 1998: President, Diversified Group.

   RONALD P. JOELSON, Director -- Senior Vice President, Prudential Asset,
Liability and Risk Management since 1999; prior to 1999: President, Guaranteed
Products, Prudential Institutional.

   DAVID R. ODENATH, JR., Director -- President, Prudential Investments since
1999; prior to 1999: Senior Vice President and Director of Sales, Investment
Consulting Group, PaineWebber.

OFFICERS WHO ARE NOT DIRECTORS

   SHAUN M. BYRNES, Senior Vice President -- Senior Vice President, Director of
Mutual Funds, Annuities and UITs, Prudential Investments since 2001; 2000 to
2001: Senior Vice President, Director of Research, Prudential Investments; 1999
to 2000: Senior Vice President, Director of Mutual Funds, Prudential
Investments; prior to 1999: Vice President, Mutual Funds, Prudential
Investments.

   C. EDWARD CHAPLIN, Treasurer -- Senior Vice President and Treasurer,
Prudential since 2000; prior to 2000, Vice President and Treasurer, Prudential.

   THOMAS F. HIGGINS, Senior Vice President -- Vice President, Annuity Services,
Prudential Individual Financial Services since 1999; 1998 to 1999: Vice
President, Mutual Funds, Prudential Individual Financial Services; prior to
1998: Principal, Mutual Fund Operations, The Vanguard Group.

   CLIFFORD E. KIRSCH, Chief Legal Officer and Secretary -- Chief Counsel,
Variable Products, Prudential Law Department since 1995.

   ANDREW J. MAKO, Executive Vice President -- Vice President, Finance, U.S.
Consumer Group since 1999; prior to 1999: Vice President, Business Performance
Management Group.

   ESTHER H. MILNES, Senior Vice President -- Vice President and Chief Actuary,
Prudential Individual Life Insurance since 1999; prior to 1999: Vice President
and Actuary, Prudential Individual Insurance Group.

   JAMES M. O'CONNOR, Senior Vice President and Actuary -- Vice President,
Guaranteed Products since 2001; 1998 to 2000: Corporate Vice President,
Guaranteed Products; prior to 1998: Corporate Actuary, Prudential Investments.

   SHIRLEY H. SHAO, Senior Vice President and Chief Actuary -- Vice President
and Associate Actuary, Prudential since 1996.

   WILLIAM J. ECKERT, IV, Vice President and Chief Accounting Officer -- Vice
President and IFS Controller, Prudential Enterprise Financial Management since
2000; 1999 to 2000: Vice President and Individual Life Controller, Prudential
Enterprise Financial Management; prior to 1999: Vice President, Accounting,
Enterprise Financial Management.

   The business address of all directors and officers of Pruco Life is 213
Washington Street, Newark, New Jersey 07102-2992.

   Pruco Life directors and officers are elected annually.

   VIVIAN L. BANTA, Pruco Life Insurance Company's president, also serves as
director of the following entities, each of which is under the ultimate control
of Prudential Financial, Inc.: Pruco Life Insurance Company of New Jersey,
Prudential Securities Group, Prudential Select Life Insurance Company of
America,

 46
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

Prudential Select Holdings, Inc. and Prudential P&C Holdings, Inc.

   JAMES B. O'CONNOR, Pruco Life Insurance Company's senior vice president and
actuary, also serves as director of The Prudential Assigned Settlement Services
Corp., which is under the ultimate control of Prudential Financial, Inc.

   C. EDWARD CHAPLIN, Pruco Life Insurance Company's treasurer, also serves as
director of the following entities, each of which is under the ultimate control
of Prudential Financial, Inc.: Bree Investments Limited, Gibraltar Properties,
Inc., Gateway Holdings, Inc., PIM Warehouse, Inc., PRUCO, Inc., Prudential Human
Resources Management Company, Inc., Prudential Global Funding, Inc., Prudential
Resources Management Asia Limited, Prudential Funding, LLC and Prudential
Holdings, LLC.

   RICHARD J. CARBONE and RONALD P. JOELSON are an executive officer of one or
more of such Prudential Financial, Inc. entities.

   Officers of Pruco Life Insurance Company receive salary and other
compensation from The Prudential Insurance Company of America, rather than from
Pruco Life. Each such officer provides services to Pruco Life Insurance Company
pursuant to a service agreement between Prudential and Pruco Life. Prudential
allocates to Pruco Life a portion of its compensation costs for these Pruco Life
officers. No director or officer of Pruco Life, nor the Pruco Life directors and
officers collectively, own more than 1% of any class of equity security of
Prudential Financial, Inc.

                                                                              47
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OTHER INFORMATION CONTINUED

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

EXECUTIVE COMPENSATION

The following table shows the 2001 annual compensation, paid by Prudential, and
allocated based on time devoted to the duties as an executive of Pruco Life
Insurance Company for services provided to Pruco Life Insurance Company:

<Table>
<Caption>
-------------------------------------------------------------------------
                                                             OTHER ANNUAL
NAME AND PRINCIPAL POSITION      YEAR   SALARY     BONUS     COMPENSATION
-------------------------------------------------------------------------
<S>                              <C>    <C>       <C>        <C>
Vivian L. Banta, President       2001   $35,084   $213,904     $      0
Esther H. Milnes, President      2000    21,533      3,132            0
Esther H. Milnes, President      1999    20,782     23,238            0
</Table>

SELECTED FINANCIAL DATA

<Table>
<Caption>
                                                                           PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY
                                                                                FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)                                             2001          2000          1999          1998          1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>           <C>
Revenues
  Premiums and other revenue                            $   593,912   $   670,445   $   575,190   $   473,975   $   435,547
  Realized investment (losses) gains, net                   (60,476)      (20,679)      (32,545)       44,841        10,974
  Net investment income                                     343,638       337,919       276,821       261,430       259,634
                                                        -------------------------------------------------------------------
Total revenues                                              877,074       987,685       819,466       780,246       706,155
                                                        -------------------------------------------------------------------
Benefits and Expenses
  Policyholders' benefits and interest credited to
    policyholders' account balances                         452,046       419,073       341,894       312,731       310,352
  Other expenses                                            382,701       410,684       392,041       231,320       227,561
                                                        -------------------------------------------------------------------
Total benefits and expenses                                 834,747       829,757       733,935       544,051       537,913
                                                        -------------------------------------------------------------------
Income before income tax provision                           42,327       157,928        85,531       236,195       168,242
Income tax (benefit) provision                              (25,255)       54,432        29,936        84,233        61,868
                                                        -------------------------------------------------------------------
Net income                                              $    67,582   $   103,496   $    55,595   $   151,962   $   106,374
                                                        -------------------------------------------------------------------
Total assets at year end                                $22,093,412   $23,059,009   $21,768,508   $16,812,781   $12,851,467
                                                        -------------------------------------------------------------------
Separate Account liabilities at year end                $14,920,584   $16,230,264   $16,032,449   $11,490,751   $ 7,948,788
                                                        -------------------------------------------------------------------
</Table>

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

                         COMPANY FINANCIAL INFORMATION

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2001 AND 2000 (IN THOUSANDS)

<Table>
<Caption>
---------------------------------------------------------------------------------------
                                                                 2001          2000
                                                              -----------   -----------
<S>                                                           <C>           <C>
ASSETS
Fixed maturities
  Available for sale, at fair value (amortized cost, 2001:
    $3,935,472; 2000: $3,552,244)                             $ 4,024,893   $ 3,561,521
  Held to maturity, at amortized cost (fair value, 2000:
    $320,634)                                                          --       324,546
Equity securities -- available for sale, at fair value
  (cost, 2001: $173; 2000: $13,446)                                   375        10,804
Commercial loans on real estate                                     8,190         9,327
Policy loans                                                      874,065       855,374
Short-term investments                                            215,610       202,815
Other long-term investments                                        84,342        83,738
                                                              -----------   -----------
        Total investments                                       5,207,475     5,048,125
Cash and cash equivalents                                         374,185       453,071
Deferred policy acquisition costs                               1,159,830     1,132,653
Accrued investment income                                          77,433        82,297
Reinsurance recoverable                                           300,697        31,568
Receivables from affiliates                                        33,074        51,586
Other assets                                                       20,134        29,445
Separate Account assets                                        14,920,584    16,230,264
                                                              -----------   -----------
TOTAL ASSETS                                                  $22,093,412   $23,059,009
                                                              ===========   ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policyholders' account balances                               $ 3,947,690   $ 3,646,668
Future policy benefits and other policyholder liabilities         808,230       702,862
Cash collateral for loaned securities                             190,022       185,849
Securities sold under agreements to repurchase                     80,715       104,098
Income taxes payable                                              266,096       235,795
Other liabilities                                                 228,596       120,891
Separate Account liabilities                                   14,920,584    16,230,264
                                                              -----------   -----------
TOTAL LIABILITIES                                              20,441,933    21,226,427
                                                              -----------   -----------
CONTINGENCIES (SEE FOOTNOTE 12)
STOCKHOLDER'S EQUITY
Common stock, $10 par value;
    1,000,000 shares, authorized; 250,000 shares, issued and
    outstanding                                                     2,500         2,500
Paid-in-capital                                                   466,748       466,748
Retained earnings                                               1,147,665     1,361,924
Accumulated other comprehensive income (loss):
    Net unrealized investment gains                                34,718         4,730
    Foreign currency translation adjustments                         (152)       (3,320)
                                                              -----------   -----------
Accumulated other comprehensive income                             34,566         1,410
                                                              -----------   -----------
TOTAL STOCKHOLDER'S EQUITY                                      1,651,479     1,832,582
                                                              -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                    $22,093,412   $23,059,009
                                                              ===========   ===========
</Table>

                 See Notes to Consolidated Financial Statements

                                                                              49
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OTHER INFORMATION CONTINUED

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)

<Table>
<Caption>
------------------------------------------------------------------------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>      <C>
REVENUES
Premiums                                                      $ 90,868   $121,921   $ 98,976
Policy charges and fee income                                  490,185    474,861    414,425
Net investment income                                          343,638    337,919    276,821
Realized investment losses, net                                (60,476)   (20,679)   (32,545)
Asset management fees                                            7,897     71,160     60,392
Other income                                                     4,962      2,503      1,397
                                                              --------   --------   --------
TOTAL REVENUES                                                 877,074    987,685    819,466
                                                              --------   --------   --------
BENEFITS AND EXPENSES
Policyholders' benefits                                        256,080    248,063    205,042
Interest credited to policyholders' account balances           195,966    171,010    136,852
General, administrative and other expenses                     382,701    410,684    392,041
                                                              --------   --------   --------
TOTAL BENEFITS AND EXPENSES                                    834,747    829,757    733,935
                                                              --------   --------   --------
Income from operations before income taxes                      42,327    157,928     85,531
                                                              --------   --------   --------
Income tax (benefit) provision                                 (25,255)    54,432     29,936
                                                              --------   --------   --------
NET INCOME                                                      67,582    103,496     55,595
                                                              --------   --------   --------
Other comprehensive income (loss), net of tax:
  Unrealized gains (losses) on securities, net of
    reclassification adjustment                                 29,988     33,094    (38,266)
  Foreign currency translation adjustments                       3,168       (993)      (742)
                                                              --------   --------   --------
Other comprehensive income (loss)                               33,156     32,101    (39,008)
                                                              --------   --------   --------
TOTAL COMPREHENSIVE INCOME                                    $100,738   $135,597   $ 16,587
                                                              ========   ========   ========
</Table>

                 See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------------
                                                                                                ACCUMULATED
                                                                                                   OTHER           TOTAL
                                                              COMMON   PAID-IN-    RETAINED    COMPREHENSIVE   STOCKHOLDER'S
                                                              STOCK    CAPITAL     EARNINGS    INCOME (LOSS)      EQUITY
                                                              ------   --------   ----------   -------------   -------------
<S>                                                           <C>      <C>        <C>          <C>             <C>
BALANCE, JANUARY 1, 1999                                      $2,500   $439,582   $1,202,833       $8,317       $1,653,232
Net income                                                       --          --       55,595           --           55,595
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --         (742)            (742)
Change in net unrealized investment losses, net of
  reclassification adjustment and taxes                          --          --           --      (38,266)         (38,266)
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 1999                                    2,500     439,582    1,258,428      (30,691)       1,669,819
Net income                                                       --          --      103,496           --          103,496
Contribution from Parent                                         --      27,166           --           --           27,166
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --         (993)            (993)
Change in net unrealized investment losses, net of
  reclassification adjustment and taxes                          --          --           --       33,094           33,094
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 2000                                    2,500     466,748    1,361,924        1,410        1,832,582
Net income                                                       --          --       67,582           --           67,582
Policy credits issued to eligible policyholders                  --          --     (128,025)          --         (128,025)
Dividends to Parent                                              --          --     (153,816)          --         (153,816)
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --        3,168            3,168
Change in net unrealized investment gains, net of
  reclassification adjustment and taxes                          --          --           --       29,988           29,988
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 2001                                    $2,500   $466,748   $1,147,665      $34,566       $1,651,479
                                                              ======   ========   ==========     ========       ==========
</Table>

                 See Notes to Consolidated Financial Statements

                                                                              51
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OTHER INFORMATION CONTINUED

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)

<Table>
<Caption>
-----------------------------------------------------------------------------------------------------
                                                                 2001          2000          1999
                                                              -----------   -----------   -----------
<S>                                                           <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                    $    67,582   $   103,496   $    55,595
Adjustments to reconcile net income to net cash (used in)
  provided by operating activities:
  Policy charges and fee income                                   (54,970)      (72,275)      (83,961)
  Interest credited to policyholders' account balances            195,966       171,010       136,852
  Realized investment losses, net                                  60,476        20,679        32,545
  Amortization and other non-cash items                           (49,594)      (48,141)       75,037
  Change in:
    Future policy benefits and other policyholders'
     liabilities                                                  105,368        73,340       100,743
    Accrued investment income                                       4,864       (13,380)       (7,803)
    Receivable from/Payable to affiliate                           18,512       (24,907)      (66,081)
    Policy loans                                                  (40,645)      (63,022)      (25,435)
    Deferred policy acquisition costs                            (100,281)      (69,868)     (201,072)
    Income taxes payable/receivable                                38,839        90,195       (47,758)
    Other, net                                                    (38,114)       51,011        18,974
                                                              -----------   -----------   -----------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                    208,003       218,138       (12,364)
                                                              -----------   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale/maturity of:
    Fixed maturities:
      Available for sale                                        2,653,798     2,273,789     3,076,848
      Held to maturity                                                 --        64,245        45,841
    Equity securities                                                 482         1,198         5,209
    Commercial loans on real estate                                 1,137         1,182         6,845
    Other long-term investments                                        --        15,039           385
  Payments for the purchase of:
    Fixed maturities:
      Available for sale                                       (2,961,861)   (2,782,541)   (3,452,289)
      Held to maturity                                                 --            --       (24,170)
    Equity securities                                                (184)      (11,134)       (5,110)
    Other long-term investments                                      (130)       (6,917)      (39,094)
  Cash collateral for loaned securities, net                        4,174        98,513        14,000
  Securities sold under agreement to repurchase, net              (23,383)       82,947       (28,557)
  Short-term investments, net                                     (12,766)     (118,418)       92,199
                                                              -----------   -----------   -----------
CASH FLOWS USED IN INVESTING ACTIVITIES                          (338,733)     (382,097)     (307,893)
                                                              -----------   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Policyholders' account deposits                               1,456,668     2,409,399     3,457,158
  Policyholders' account withdrawals                           (1,313,300)   (1,991,363)   (3,091,565)
  Cash dividend to Parent                                         (26,048)           --            --
  Cash provided to affiliate                                      (65,476)           --            --
                                                              -----------   -----------   -----------
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES                     51,844       418,036       365,593
                                                              -----------   -----------   -----------
  Net increase in cash and cash equivalents                       (78,886)      254,077        45,336
  Cash and cash equivalents, beginning of year                    453,071       198,994       153,658
                                                              -----------   -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                        $   374,185   $   453,071   $   198,994
                                                              ===========   ===========   ===========
SUPPLEMENTAL CASH FLOW INFORMATION
  Income taxes (received) paid                                $   (46,021)  $   (14,832)  $    55,144
                                                              -----------   -----------   -----------
NON-CASH TRANSACTIONS DURING THE YEAR
  Dividend paid with fixed maturities                         $    81,952   $        --   $        --
                                                              -----------   -----------   -----------
  Taiwan branch dividend paid with net assets/liabilities     $    45,816   $        --   $        --
                                                              -----------   -----------   -----------
  Policy credits issued to eligible policyholders             $   128,025   $        --   $        --
                                                              -----------   -----------   -----------
  Contribution from Parent                                    $        --   $    27,166   $        --
                                                              -----------   -----------   -----------
</Table>

                 See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS

Pruco Life Insurance Company ("the Company") is a stock life insurance company,
organized in 1971 under the laws of the state of Arizona. The Company is
licensed to sell individual life insurance, variable life insurance, term life
insurance, variable and fixed annuities, and a non-participating guaranteed
interest contract ("GIC") called Prudential Credit Enhanced GIC ("PACE") in the
District of Columbia, Guam and in all states and territories except New York.
The Company also had marketed individual life insurance through its branch
office in Taiwan. The branch office was transferred to an affiliated Company on
January 31, 2001, as described in Footnote 14.

   The Company has one wholly owned subsidiary, Pruco Life Insurance Company of
New Jersey ("PLNJ"). PLNJ is a stock life insurance company organized in 1982
under the laws of the state of New Jersey. It is licensed to sell individual
life insurance, variable life insurance, term life insurance, fixed and variable
annuities only in the states of New Jersey and New York. Another wholly owned
subsidiary, The Prudential Life Insurance Company of Arizona ("PLICA") was
dissolved on September 30, 2000. All assets and liabilities were transferred to
the Company. PLICA had no new business sales in 2000 or 1999.

   The Company is a wholly owned subsidiary of The Prudential Insurance Company
of America ("Prudential"), an insurance company founded in 1875 under the laws
of the state of New Jersey. On December 18, 2001 ("the date of demutualization")
Prudential converted from a mutual life insurance company to a stock life
insurance company and became an indirect wholly owned subsidiary of Prudential
Financial, Inc. (the "Holding Company"). The demutualization was completed in
accordance with Prudential's Plan of Reorganization, which was approved by the
Commissioner of the New Jersey Department of Banking and Insurance in October
2001.

   Prudential intends to make additional capital contributions to the Company,
as needed, to enable it to comply with its reserve requirements and fund
expenses in connection with its business. Generally, Prudential is under no
obligation to make such contributions and its assets do not back the benefits
payable under the Company's policyholder contracts. During 2000, a capital
contribution of $27.2 million resulted from the forgiveness of an intercompany
receivable.

   The Company is engaged in a business that is highly competitive because of
the large number of stock and mutual life insurance companies and other entities
engaged in marketing insurance products, and individual and group annuities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). The Company has extensive transactions and relationships with
Prudential and other affiliates, as more fully described in Footnote 14. Due to
these relationships, it is possible that the terms of these transactions are not
the same as those that would result from transactions among wholly unrelated
parties.

                                                                              53
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OTHER INFORMATION CONTINUED

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, in particular deferred policy acquisition costs ("DAC")
and future policy benefits, and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.

INVESTMENTS

FIXED MATURITIES classified as "available for sale" are carried at estimated
fair value. Fixed maturities that the Company has both the intent and ability to
hold to maturity are stated at amortized cost and classified as "held to
maturity". The amortized cost of fixed maturities is written down to estimated
fair value if a decline in value is considered to be other than temporary.
Unrealized gains and losses on fixed maturities "available for sale", including
the effect on deferred policy acquisition costs and policyholders' account
balances that would result from the realization of unrealized gains and losses
are included in a separate component of equity, "Accumulated other comprehensive
income (loss)", net of income taxes.

EQUITY SECURITIES, available for sale, comprised of common and non-redeemable
preferred stock, are carried at estimated fair value. The associated unrealized
gains and losses, the effects on deferred policy acquisition costs and on
policyholders' account balances that would result from the realization of
unrealized gains and losses, are included in a separate component of equity,
"Accumulated other comprehensive income (loss)", net of income taxes.

COMMERCIAL LOANS ON REAL ESTATE are stated primarily at unpaid principal
balances, net of unamortized discounts and an allowance for losses. The
allowance for losses includes a loan specific reserve for impaired loans and a
portfolio reserve for incurred but not specifically identified losses. Impaired
loans include those loans for which it is probable that all amounts due
according to the contractual terms of the loan agreement will not be collected.
Impaired loans are measured at the present value of expected future cash flows
discounted at the loan's effective interest rate, or at the fair value of the
collateral if the loan is collateral dependent. Interest received on impaired
loans, including loans that were previously modified in a troubled debt
restructuring, is either applied against the principal or reported as revenue,
according to management's judgment as to the collectibility of principal.
Management discontinues accruing interest on impaired loans after the loans are
90 days delinquent as to principal or interest, or earlier when management has
serious doubts about collectibility. When a loan is recognized as impaired, any
accrued but uncollectible interest is reversed against interest income of the
current period. Generally, a loan is restored to accrual status only after all
delinquent interest and principal are brought current and, in the case of loans
where the payment of interest has been interrupted for a substantial period, a
regular payment performance has been established. The portfolio reserve for
incurred but not specifically identified losses considers the Company's past
loan loss experience, the current credit composition of the portfolio,
historical credit migration, property type diversification, default and loss
severity statistics and other relevant factors.

POLICY LOANS are carried at unpaid principal balances.

 54
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SHORT-TERM INVESTMENTS, consisting of highly liquid debt instruments other than
those held in "Cash and cash equivalents," with a maturity of twelve months or
less when purchased, are carried at amortized cost, which approximates fair
value.

OTHER LONG-TERM INVESTMENTS represent the Company's investments in joint
ventures and partnerships in which the Company does not exercise control,
derivatives held for purposes other than trading, and investments in the
Company's own Separate Accounts. Joint ventures and partnerships are recorded
using the equity method of accounting, reduced for other than temporary declines
in value. The Company's investment in the Separate Accounts is carried at
estimated fair value. The Company's net income from investments in joint
ventures and partnerships is generally included in "Net investment income."

REALIZED INVESTMENT LOSSES, NET are computed using the specific identification
method. Costs of fixed maturity and equity securities are adjusted for
impairments considered to be other than temporary. Impairment adjustments are
included in "Realized investment gains (losses), net." Factors considered in
evaluating whether a decline in value is other than temporary are: 1) whether
the decline is substantial; 2) the Company's ability and intent to retain the
investment for a period of time sufficient to allow for an anticipated recovery
in value; 3) the duration and extent to which the market value has been less
than cost; and 4) the financial condition and near-term prospects of the issuer.

CASH AND CASH EQUIVALENTS include cash on hand, amounts due from banks, money
market instruments, and other debt issues with a maturity of three months or
less when purchased.

DEFERRED POLICY ACQUISITION COSTS

The costs that vary with and that are related primarily to the production of new
insurance and annuity business are deferred to the extent that they are deemed
recoverable from future profits. Such costs include commissions, costs of policy
issuance and underwriting, and variable field office expenses. Deferred policy
acquisition costs are subject to recognition testing at the time of policy issue
and recoverability and premium deficiency testing at the end of each accounting
period. Deferred policy acquisition costs, for certain products, are adjusted
for the impact of unrealized gains or losses on investments as if these gains or
losses had been realized, with corresponding credits or charges included in
"Accumulated other comprehensive income (loss)."

   Policy acquisition costs related to interest-sensitive and variable life
products and certain investment-type products are deferred and amortized over
the expected life of the contracts (periods ranging from 25 to 30 years) in
proportion to estimated gross profits arising principally from investment
results, mortality and expense margins, and surrender charges based on
historical and anticipated future experience, which is updated periodically. The
effect of changes to estimated gross profits on unamortized deferred acquisition
costs is reflected in "General and administrative expenses" in the period such
estimated gross profits are revised.

   Deferred policy acquisition costs related to non-participating term insurance
are amortized over the expected life of the contracts in proportion to premium
income. For guaranteed investment contracts, acquisition costs are expensed as
incurred.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   Prudential and the Company have offered programs under which policyholders,
for a selected product or group of products, can exchange an existing policy or
contract issued by Prudential or the Company for another form of policy or
contract. These transactions are known as internal replacements. If the new
policies have terms that are substantially similar to those of the earlier
policies, the DAC is retained with respect to the new policies and amortized
over the life of the new policies. If the terms of the new policies are not
substantially similar to those of the former policy, the unamortized DAC on the
surrendered policies is immediately charged to expense.

SECURITIES LOANED

Securities loaned are treated as financing arrangements and are recorded at the
amount of cash received as collateral. The Company obtains collateral in an
amount equal to 102% and 105% of the fair value of the domestic and foreign
securities, respectively. The Company monitors the market value of securities
loaned on a daily basis with additional collateral obtained as necessary.
Non-cash collateral received is not reflected in the consolidated statements of
financial position because the debtor typically has the right to redeem the
collateral on short notice. Substantially all of the Company's securities loaned
are with large brokerage firms.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are treated as financing
arrangements and are carried at the amounts at which the securities will be
subsequently reacquired, including accrued interest, as specified in the
respective agreements. Assets to be repurchased are the same, or substantially
the same, as the assets transferred and the transferor, through right of
substitution, maintains the right and ability to redeem the collateral on short
notice. The market value of securities to be repurchased is monitored and
additional collateral is obtained, where appropriate, to protect against credit
exposure.

   Securities lending and securities repurchase agreements are used to generate
net investment income and facilitate trading activity. These instruments are
short-term in nature (usually 30 days or less). Securities loaned are
collateralized principally by U.S. Government and mortgage-backed securities.
Securities sold under repurchase agreements are collateralized principally by
cash. The carrying amounts of these instruments approximate fair value because
of the relatively short period of time between the origination of the
instruments and their expected realization.

SEPARATE ACCOUNT ASSETS AND LIABILITIES

Separate Account assets and liabilities are reported at estimated fair value and
represent segregated funds which are invested for certain policyholders and
other customers. The assets consist of common stocks, fixed maturities, real
estate related securities, and short-term investments. The assets of each
account are legally segregated and are not subject to claims that arise out of
any other business of the Company. Investment risks associated with market value
changes are borne by the customers, except to the extent of minimum guarantees
made by the Company with respect to certain accounts. The investment income and
gains or losses for Separate Accounts generally accrue to the policyholders and
are not included in the Consolidated Statements of Operations and Comprehensive
Income. Mortality, policy administration and surrender charges on the accounts
are included in "Policy charges and fee income".

 56
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   Separate Accounts represent funds for which investment income and investment
gains and losses accrue directly to, and investment risk is borne by, the
policyholders, with the exception of the Pruco Life Modified Guaranteed Annuity
Account. The Pruco Life Modified Guaranteed Annuity Account is a non-unitized
Separate Account, which funds the Modified Guaranteed Annuity Contract and the
Market Value Adjustment Annuity Contract. Owners of the Pruco Life Modified
Guaranteed Annuity and the Market Value Adjustment Annuity Contracts do not
participate in the investment gain or loss from assets relating to such
accounts. Such gain or loss is borne, in total, by the Company.

CONTINGENCIES

Amounts related to contingencies are accrued if it is probable that a liability
has been incurred and an amount is reasonably estimable. Management evaluates
whether there are incremental legal or other costs directly associated with the
ultimate resolution of the matter that are reasonably estimable and, if so, they
are included in the accrual.

INSURANCE REVENUE AND EXPENSE RECOGNITION

Premiums from insurance policies are generally recognized when due. Benefits are
recorded as an expense when they are incurred. For traditional life insurance
contracts, a liability for future policy benefits is recorded using the net
level premium method. For individual annuities in payout status, a liability for
future policy benefits is recorded for the present value of expected future
payments based on historical experience.

   Amounts received as payment for interest-sensitive life, individual annuities
and guaranteed investment contracts are reported as deposits to "Policyholders'
account balances". Revenues from these contracts reflected as "Policy charges
and fee income" consist primarily of fees assessed during the period against the
policyholders' account balances for mortality charges, policy administration
charges and surrender charges. Benefits and expenses for these products include
claims in excess of related account balances, expenses of contract
administration, interest credited and amortization of deferred policy
acquisition costs.

   Premiums, benefits and expenses are stated net of reinsurance ceded to other
companies. Estimated reinsurance recoverables and the cost of reinsurance are
recognized over the life of the reinsured policies using assumptions consistent
with those used to account for the underlying policies.

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

Assets and liabilities of the Taiwan branch are translated to U.S. dollars at
the exchange rate in effect at the end of the period. Revenues, benefits and
other expenses are translated at the average rate prevailing during the period.
Cumulative translation adjustments arising from the use of differing exchange
rates from period to period are charged or credited directly to "Other
comprehensive income (loss)." The cumulative effect of changes in foreign
exchange rates are included in "Accumulated other comprehensive income (loss)".

ASSET MANAGEMENT FEES

Through December 31, 2000, the Company received asset management fee income from
policyholder account balances invested in The Prudential Series Funds ("PSF"),
which are a portfolio of mutual fund investments related

                                                                              57
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

to the Company's Separate Account products (refer to Note 14). In addition, the
Company receives fees from policyholder account balances invested in funds
managed by companies other than Prudential. Asset management fees are recognized
as income as earned.

DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, financial indices, or the value of securities or
commodities. Derivative financial instruments used by the Company include swaps,
futures, forwards and option contracts and may be exchange-traded or contracted
in the over-the-counter market. See Note 11 for a discussion of the Company's
use of derivative financial instruments and the related accounting and reporting
treatment for such instruments.

INCOME TAXES

The Company and its subsidiary are members of the consolidated federal income
tax return of Prudential and file separate company state and local tax returns.
Pursuant to the tax allocation arrangement with Prudential, total federal income
tax expense is determined on a separate company basis. Members with losses
record tax benefits to the extent such losses are recognized in the consolidated
federal tax provision. Deferred income taxes are generally recognized, based on
enacted rates, when assets and liabilities have different values for financial
statement and tax reporting purposes. A valuation allowance is recorded to
reduce a deferred tax asset to that portion that is expected to be realized.

NEW ACCOUNTING PRONOUNCEMENTS

In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities -- a replacement of FASB Statement No. 125." The Company has adopted
the provisions of SFAS No. 140 relating to transfers and extinguishments of
liabilities which are effective for periods occurring after March 31, 2001. The
adoption did not have an effect on the results of operations of the Company.

   In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the
Company account for all business combinations in the scope of the statement
using the purchase method. SFAS No. 142 requires that an intangible asset
acquired either individually or with a group of other assets shall initially be
recognized and measured based on fair value. An intangible asset with a finite
life is amortized over its useful life to the reporting entity; an intangible
asset with an indefinite useful life, including goodwill, is not amortized. All
intangible assets shall be tested for impairment in accordance with the
statement. SFAS No. 142 is effective for fiscal years beginning after December
15, 2001; however, goodwill and intangible assets acquired after June 30, 2001
are subject immediately to the nonamortization and amortization provisions of
this statement. As of December 31, 2001, The Company does not have any goodwill
or intangible assets.

   In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 eliminated the requirement that
discontinued operations be measured at net realizable value

 58
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

or that entities include losses that have not yet occurred. SFAS No. 144
eliminated the exception to consolidation for a subsidiary for which control is
likely to be temporary. SFAS No. 144 requires that long-lived assets that are to
be disposed of by sale be measured at the lower of book value or fair value less
cost to sell. An impairment for assets that are not considered to be disposed of
is recognized only if the carrying amounts of long-lived assets are not
recoverable and exceed their fair values. Additionally, SFAS No. 144 expands the
scope of discontinued operations to include all components of an entity with
operations and cash flows that (1) can be distinguished from the rest of the
entity and (2) will be eliminated from the ongoing operations of the entity in a
disposal transaction. SFAS No. 144 is effective for financial statements issued
for fiscal years beginning after December 15, 2001 and, generally, its
provisions are to be applied prospectively.

RECLASSIFICATIONS

Certain amounts in the prior years have been reclassified to conform to the
current year presentation.

3. INVESTMENTS

FIXED MATURITIES AND EQUITY SECURITIES:

The following tables provide additional information relating to fixed maturities
and equity securities as of December 31:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------
                                                                                    2001
                                                              -------------------------------------------------
                                                                             GROSS        GROSS
                                                              AMORTIZED    UNREALIZED   UNREALIZED   ESTIMATED
                                                                 COST        GAINS        LOSSES     FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
<S>                                                           <C>          <C>          <C>          <C>
FIXED MATURITIES AVAILABLE FOR SALE
U.S. Treasury Securities and Obligations of U.S. Government
  Corporations and Agencies                                   $  303,606    $  1,496     $ 1,648     $  303,454
Foreign Government Bonds                                          27,332       2,122          --         29,454
Corporate Securities                                           3,594,386     116,186      28,834      3,681,738
Mortgage-backed Securities                                        10,148         160          61         10,247
                                                              ----------    --------     -------     ----------
Total Fixed Maturities Available For Sale                     $3,935,472    $119,964     $30,543     $4,024,893
                                                              ==========    ========     =======     ==========
FIXED MATURITIES HELD TO MATURITY
Corporate Securities                                          $       --    $     --     $    --     $       --
                                                              ----------    --------     -------     ----------
Total Fixed Maturities Held To Maturity                       $       --    $     --     $    --     $       --
                                                              ==========    ========     =======     ==========
EQUITY SECURITIES AVAILABLE FOR SALE                          $      173    $    220     $    18     $      375
                                                              ==========    ========     =======     ==========
</Table>

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)


<Table>
<Caption>
                                                                                    2000
                                                              -------------------------------------------------
                                                                             GROSS        GROSS
                                                              AMORTIZED    UNREALIZED   UNREALIZED   ESTIMATED
                                                                 COST        GAINS        LOSSES     FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
<S>                                                           <C>          <C>          <C>          <C>
FIXED MATURITIES AVAILABLE FOR SALE
U.S. Treasury Securities and Obligations of U.S. Government
  Corporations and Agencies                                   $  309,609    $ 7,888      $    17     $  317,480
Foreign Government Bonds                                         136,133      8,093          520        143,706
Corporate Securities                                           3,075,023     43,041       49,538      3,068,526
Mortgage-backed Securities                                        31,479        330            0         31,809
                                                              ----------    -------      -------     ----------
Total Fixed Maturities Available For Sale                     $3,552,244    $59,352      $50,075     $3,561,521
                                                              ==========    =======      =======     ==========
FIXED MATURITIES HELD TO MATURITY
Corporate Securities                                          $  324,546    $ 1,500      $ 5,412     $  320,634
                                                              ----------    -------      -------     ----------
Total Fixed Maturities Held To Maturity                       $  324,546    $ 1,500      $ 5,412     $  320,634
                                                              ==========    =======      =======     ==========
EQUITY SECURITIES AVAILABLE FOR SALE                          $   13,446    $   197      $ 2,839     $   10,804
                                                              ==========    =======      =======     ==========
</Table>

   The amortized cost and estimated fair value of fixed maturities, by
contractual maturities at December 31, 2001 is shown below:

<Table>
<Caption>
                                                                  AVAILABLE FOR SALE
                                                              ---------------------------
                                                              AMORTIZED    ESTIMATED FAIR
                                                                 COST          VALUE
                                                              ----------   --------------
                                                                    (IN THOUSANDS)
<S>                                                           <C>          <C>
Due in one year or less                                       $  802,235     $  821,790
Due after one year through five years                          1,841,097      1,885,535
Due after five years through ten years                         1,026,709      1,045,693
Due after ten years                                              255,283        261,628
Mortgage-backed securities                                        10,148         10,247
                                                              ----------     ----------
Total                                                         $3,935,472     $4,024,893
                                                              ==========     ==========
</Table>

   Actual maturities may differ from contractual maturities because issuers have
the right to call or prepay obligations.

   Proceeds from the sale of fixed maturities available for sale during 2001,
2000, and 1999, were $2,380.4 million, $2,103.6 million, and $2,950.4 million,
respectively. Gross gains of $40.3 million, $15.3 million, $13.1 million, and
gross losses of $47.7 million, $33.9 million, and $31.1 million, were realized
on those sales during 2001, 2000, and 1999, respectively.

 60
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

   Proceeds from the maturity of fixed maturities available for sale during
2001, 2000, and 1999, were $273.4 million, $170.2 million, and $126.5 million,
respectively.

   Writedowns for impairments which were deemed to be other than temporary for
fixed maturities were $53.5 million, $12.3 million, and $11.2 million, for the
years 2001, 2000 and 1999, respectively.

   Due to the adoption of FAS 133, "Accounting for Derivative Instruments and
Hedging Activities", on January 1, 2001, the entire portfolio of fixed
maturities classified as held to maturity were transferred to the available for
sale category. The aggregate amortized cost of the securities was $324.5
million. Unrealized investment losses of $2.5 million, net of tax were recorded
in "Accumulated Other Comprehensive income (loss)" at the time of transfer.

   During 2000, certain securities classified as held to maturity were
transferred to the available for sale portfolio. These actions were taken as a
result of a significant deterioration in credit worthiness. The aggregate
amortized cost of the securities transferred was $6.6 million. Gross unrealized
investment losses of $0.3 million were recorded in "Accumulated Other
Comprehensive income (loss)" at the time of transfer. Prior to transfer,
impairments related to these securities, if any, were included in "realized
investment losses, net". During the year ended December 31, 1999, there were no
securities classified as held to maturity that were transferred. During the
years ended December 31, 2001, 2000, and 1999, there were no securities
classified as held to maturity that were sold.

COMMERCIAL LOANS ON REAL ESTATE

The Company's commercial loans on real estate were collateralized by the
following property types at December 31:

<Table>
<Caption>
                                                                   2001            2000
                                                              --------------  --------------
                                                                      (IN THOUSANDS)
<S>                                                           <C>     <C>     <C>     <C>
Retail Stores                                                 $4,623   56.4%  $5,615   60.2%
Industrial Buildings                                           3,567   43.6%   3,712   39.8%
                                                              ------  ------  ------  ------
  Net Carrying Value                                          $8,190  100.0%  $9,327  100.0%
                                                              ==============  ==============
</Table>

   The concentration of commercial loans are in the states of Washington (47%),
New Jersey (44%), and North Dakota (9%).

SPECIAL DEPOSITS AND RESTRICTED ASSETS

Fixed maturities of $2.9 million and $8.0 million at December 31, 2001 and 2000,
respectively, were on deposit with governmental authorities or trustees as
required by certain insurance laws. Equity securities restricted as to sale were
$.2 million at December 31, 2001 and 2000, respectively.

OTHER LONG-TERM INVESTMENTS

The Company's "Other long-term investments" of $84.3 million and $83.7 million
as of December 31, 2001 and 2000, respectively, are comprised of joint ventures
and limited partnerships, the Company's investment in the Separate Accounts and
certain derivatives for other than trading. Joint ventures and limited
partnerships totaled

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

$35.8 million and $34.3 million at December 31, 2001 and 2000, respectively. The
Company's share of net income from the joint ventures was $1.6 million, $.9
million, and $.3 million, for the years ended December 31, 2001, 2000 and 1999,
respectively, and is reported in "Net investment income." The Company's
investment in the Separate Accounts was $44.0 million and $46.9 million at
December 31, 2001 and 2000, respectively.

INVESTMENT INCOME AND INVESTMENT GAINS AND LOSSES

Net investment income arose from the following sources for the years ended
December 31:

<Table>
<Caption>

                                                                2001        2000        1999
                                                              ---------   ---------   ---------
                                                                       (IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
Fixed Maturities -- Available For Sale                        $279,477    $237,042    $188,236
Fixed Maturities -- Held To Maturity                                --      26,283      29,245
Equity Securities -- Available For Sale                             71          18          --
Commercial Loans On Real Estate                                    905       1,010       2,825
Policy Loans                                                    48,149      45,792      42,422
Short-Term Investments and Cash Equivalents                     24,253      29,582      19,208
Other                                                            6,021      16,539       4,432
                                                              --------    --------    --------
Gross Investment Income                                        358,876     356,266     286,368
  Less: Investment Expenses                                    (15,238)    (18,347)     (9,547)
                                                              --------    --------    --------
Net Investment Income                                         $343,638    $337,919    $276,821
                                                              ========    ========    ========
</Table>

REALIZED INVESTMENT LOSSES, NET including charges for other than temporary
reductions in value, for the years ended December 31, were from the following
sources:

<Table>
<Caption>
                                                                2001        2000        1999
                                                              ---------   ---------   ---------
                                                                       (IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
Fixed Maturities -- Available For Sale                        $(60,924)   $(34,600)   $(29,192)
Fixed Maturities -- Held To Maturity                                --        (212)        102
Equity Securities -- Available For Sale                            (56)        271         392
Derivatives                                                     (1,396)     15,039      (1,557)
Other                                                            1,900      (1,177)     (2,290)
                                                              --------    --------    --------
Realized Investment Losses, Net                               $(60,476)   $(20,679)   $(32,545)
                                                              ========    ========    ========
</Table>

SECURITIES PLEDGED TO CREDITORS

The Company pledges investment securities it owns to unaffiliated parties
through certain transactions including securities lending, securities sold under
agreements to repurchase, and futures contracts. At December 31, 2001 and 2000,
the carrying value of fixed maturities available for sale pledged to third
parties as reported in the Consolidated Statements of Financial Position were
$265.2 million and $287.8 million, respectively.

 62
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

NET UNREALIZED INVESTMENT GAINS (LOSSES)

Net unrealized investment gains (losses) on securities available for sale are
included in the Consolidated Statements of Financial Position as a component of
"Accumulated other comprehensive income (loss)." Changes in these amounts
include reclassification adjustments to exclude from "Other Comprehensive income
(loss)," those items that are included as part of "Net income" for a period that
also had been part of "Other Comprehensive income (loss)" in earlier periods.
The amounts for the years ended December 31, net of tax, are as follows:

<Table>
<Caption>
                                                                                                                ACCUMULATED
                                                                                                                   OTHER
                                                                                                               COMPREHENSIVE
                                                                                                               INCOME (LOSS)
                                                                DEFERRED                         DEFERRED      RELATED TO NET
                                               UNREALIZED        POLICY       POLICYHOLDERS'    INCOME TAX       UNREALIZED
                                             GAINS (LOSSES)    ACQUISITION       ACCOUNT        (LIABILITY)      INVESTMENT
                                             ON INVESTMENTS       COSTS          BALANCES         BENEFIT      GAINS (LOSSES)
                                             --------------    -----------    --------------    -----------    --------------
                                                                              (IN THOUSANDS)
<S>                                          <C>               <C>            <C>               <C>            <C>            <C>
BALANCE, JANUARY 1, 1999                       $  25,169        $(13,115)        $ 2,680         $ (4,832)        $  9,902
Net investment gains (losses) on
  investments arising during the period         (138,268)             --              --           47,785          (90,483)
Reclassification adjustment for gains
  (losses) included in net income                 28,698              --              --           (9,970)          18,728
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --          53,407              --          (16,283)          37,124
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --          (5,712)           2,077           (3,635)
                                               ---------        --------         -------         --------         --------
BALANCE, DECEMBER 31, 1999                       (84,401)         40,292          (3,032)          18,777          (28,364)
Net investment gains (losses) on
  investments arising during the period           56,707              --              --          (21,539)          35,168
Reclassification adjustment for gains
  (losses) included in net income                 34,329              --              --          (13,039)          21,290
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --         (39,382)             --           14,177          (25,205)
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --           2,877           (1,036)           1,841
                                               ---------        --------         -------         --------         --------
</Table>

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)


<Table>
<Caption>
                                                                                                                ACCUMULATED
                                                                                                                   OTHER
                                                                                                               COMPREHENSIVE
                                                                                                               INCOME (LOSS)
                                                                DEFERRED                         DEFERRED      RELATED TO NET
                                               UNREALIZED        POLICY       POLICYHOLDERS'    INCOME TAX       UNREALIZED
                                             GAINS (LOSSES)    ACQUISITION       ACCOUNT        (LIABILITY)      INVESTMENT
                                             ON INVESTMENTS       COSTS          BALANCES         BENEFIT      GAINS (LOSSES)
                                             --------------    -----------    --------------    -----------    --------------
                                                                              (IN THOUSANDS)
<S>                                          <C>               <C>            <C>               <C>            <C>            <C>
BALANCE, DECEMBER 31, 2000                         6,635             910            (155)          (2,660)           4,730
Net investment gains (losses) on
  investments arising during the period           22,007              --              --           (7,922)          14,085
Reclassification adjustment for gains
  (losses) included in net income                 60,980              --              --          (21,953)          39,027
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --         (41,223)             --           14,840          (26,383)
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --           5,092           (1,833)           3,259
                                               ---------        --------         -------         --------         --------
BALANCE, DECEMBER 31, 2001                     $  89,622        $(40,313)        $ 4,937         $(19,528)        $ 34,718
                                               =========        ========         =======         ========         ========
</Table>

4. DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in deferred policy acquisition costs as of and for
the years ended December 31, are as follows:

<Table>
<Caption>
                                                                 2001          2000          1999
                                                              ----------    ----------    ----------
                                                                          (IN THOUSANDS)
<S>                                                           <C>           <C>           <C>
Balance, Beginning of Year                                    $1,132,653    $1,062,785    $  861,713
Capitalization of Commissions, Sales and Issue Expenses          295,823       242,322       242,373
Amortization                                                    (156,092)     (129,049)      (96,451)
Change In Unrealized Investment (Gains) Losses                   (41,223)      (39,382)       53,407
Foreign Currency Translation                                       1,773        (4,023)        1,743
Transfer of Taiwan branch balance to an affiliated company       (73,104)           --            --
                                                              ----------    ----------    ----------
BALANCE, END OF YEAR                                          $1,159,830    $1,132,653    $1,062,785
                                                              ==========    ==========    ==========
</Table>

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. POLICYHOLDERS' LIABILITIES

Future policy benefits and other policyholder liabilities at December 31, are as
follows:

<Table>
<Caption>
                                                                2001        2000
                                                              --------    --------
                                                                 (IN THOUSANDS)
<S>                                                           <C>         <C>
Life Insurance -- Domestic                                    $500,974    $429,825
Life Insurance -- Taiwan                                       260,632     226,272
Individual Annuities                                            32,423      31,817
Group Annuities                                                 14,201      14,948
                                                              --------    --------
                                                              $808,230    $702,862
                                                              ========    ========
</Table>

   Life insurance liabilities include reserves for death benefits. Annuity
liabilities include reserves for annuities that are in payout status.

   The following table highlights the key assumptions generally utilized in
calculating these reserves:

<Table>
<Caption>
PRODUCT                                         MORTALITY                  INTEREST RATE              ESTIMATION METHOD
-------                           -------------------------------------   ---------------   -------------------------------------
<S>                               <C>                                     <C>               <C>
Life Insurance -- Domestic        Generally rates guaranteed in           2.5% to 11.25%    Net level premium based on
Variable and Interest-Sensitive   calculating cash surrender values                         non-forfeiture interest rate
Life Insurance -- Domestic Term   Best estimate plus a provision for       6.5% to 6.75%    Net level premium plus a provision
Insurance                         adverse deviation                                         for adverse deviation
Life Insurance -- International   Generally the Taiwan standard table      6.25% to 7.5%    Net level premium plus a provision
                                  plus a provision for adverse                              for adverse deviation
                                  deviation
Individual Annuities              Mortality table varies based on the     6.25% to 11.0%    Present value of expected future
                                  issue year of the contract. Current                       payments based on historical
                                  table (for 1998 & later issues) is                        experience
                                  the Annuity 2000 Mortality Table with
                                  certain modifications
Group Annuities                   1950 & 1971 Group Annuity Mortality         14.75%        Present value of expected future
                                  Table with certain modifications                          payments based on historical
                                                                                            experience
</Table>

   Policyholders' account balances at December 31, are as follows:

<Table>
<Caption>
                                                                 2001         2000
                                                              ----------   ----------
                                                                  (IN THOUSANDS)
<S>                                                           <C>          <C>
Interest-Sensitive Life Contracts                             $1,976,710   $1,886,714
Individual Annuities                                             976,237      859,996
Guaranteed Investment Contracts                                  994,743      899,958
                                                              ----------   ----------
                                                              $3,947,690   $3,646,668
                                                              ==========   ==========
</Table>

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. POLICYHOLDERS' LIABILITIES (CONTINUED)

   Policyholders' account balances for interest-sensitive life, individual
annuities, and guaranteed investment contracts are equal to policy account
values plus unearned premiums. The policy account values represent an
accumulation of gross premium payments plus credited interest less withdrawals,
expenses and mortality charges.

   Certain contract provisions that determine the policyholder account balances
are as follows:

<Table>
<Caption>
PRODUCT                           INTEREST RATE                   WITHDRAWAL/SURRENDER CHARGES
-------                          ---------------  ------------------------------------------------------------
<S>                              <C>              <C>
Interest Sensitive Life           3.0% to 6.75%   Various up to 10 years
Contracts
Individual Annuities              3.0% to 16.0%   0% to 7% for up to 9 years
Guaranteed Investment Contracts  4.32% to 8.03%   Subject to market value withdrawal provisions for any funds
                                                  withdrawn other than for benefit responsive and contractual
                                                  payments
</Table>

6. REINSURANCE

The Company participates in reinsurance, with Prudential and other companies, in
order to provide greater diversification of business, provide additional
capacity for future growth and limit the maximum net loss potential arising from
large risks. Reinsurance ceded arrangements do not discharge the Company or the
insurance subsidiary as the primary insurer. Ceded balances would represent a
liability of the Company in the event the reinsurers were unable to meet their
obligations to the Company under the terms of the reinsurance agreements. The
likelihood of a material reinsurance liability reassumed by the Company is
considered to be remote. The affiliated reinsurance agreements, including the
Company's reinsurance of all its Taiwanese business, are described further in
Note 14.

   Reinsurance amounts included in the Consolidated Statements of Operations and
Comprehensive Income for the year ended December 31, are as follows:

<Table>
<Caption>
                                                                2001      2000      1999
                                                              --------   -------   -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>        <C>       <C>
Domestic:
Reinsurance premiums ceded -- affiliated                      $ (9,890)  $(7,641)  $(5,630)
Reinsurance premiums ceded -- unaffiliated                     (13,399)   (2,475)       --
Policyholders' benefits ceded                                   10,803     3,558     3,140
Taiwan after the transfer:
Reinsurance premiums ceded -- affiliated                       (82,433)       --        --
Policyholders' benefits ceded -- affiliated                     12,859        --        --
Taiwan before the transfer:
Reinsurance premiums ceded -- affiliated                          (107)   (1,573)   (1,252)
Reinsurance premiums ceded -- unaffiliated                        (167)   (2,830)   (1,745)
Policyholders' benefits ceded                                       71     1,914     1,088
Reinsurance premiums assumed                                       162     1,671     1,778
</Table>

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. REINSURANCE (CONTINUED)

   Reinsurance recoverables, included in the Company's Consolidated Statements
of Financial Position at December 31, were as follows:

<Table>
<Caption>
                                                                2001      2000
                                                              --------   -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Domestic Life Insurance -- affiliated                         $ 11,014   $ 8,765
Domestic Life Insurance -- unaffiliated                         14,850     2,037
Other Reinsurance -- affiliated                                 14,201    14,948
Taiwan Life Insurance -- affiliated                            260,632        --
Taiwan Life Insurance -- unaffiliated                               --     5,818
                                                              --------   -------
                                                              $300,697   $31,568
                                                              ========   =======
</Table>

   The gross and net amounts of life insurance in force at December 31, were as
follows:

<Table>
<Caption>
                                                                  2001           2000           1999
                                                              ------------   ------------   ------------
                                                                            (IN THOUSANDS)
<S>                                                           <C>            <C>            <C>
Life Insurance Face Amount In Force                           $ 84,317,628   $ 66,327,999   $ 54,954,680
Ceded To Other Companies                                       (25,166,264)    (7,544,363)    (2,762,319)
                                                              ------------   ------------   ------------
Net Amount of Life Insurance In Force                         $ 59,151,364   $ 58,783,636   $ 52,192,361
                                                              ============   ============   ============
</Table>

7. EMPLOYEE BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT PLANS

The Company had a non-contributory defined benefit pension plan that covered
substantially all of its Taiwanese employees. The pension plan was transferred
to an affiliate on January 31, 2001 as described in Note 14. This plan was
established as of September 30, 1998 and the projected benefit obligation and
related expenses at December 31, 2000 were not material to the Consolidated
Statements of Financial Position or results of operations for the years
presented. All other employee benefit costs are allocated to the Company by
Prudential in accordance with the service agreement described in Footnote 14.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES

The components of income taxes for the years ended December 31, are as follows:

<Table>
<Caption>
                                                                2001       2000       1999
                                                              ---------   -------   --------
                                                                      (IN THOUSANDS)
<S>                                                           <C>         <C>       <C>
Current Tax Expense (Benefit):
  U.S.                                                        $(100,946)  $ 8,588   $(14,093)
  State and Local                                                 1,866        38        378
  Foreign                                                           124        35         15
                                                              ---------   -------   --------
  Total                                                         (98,956)    8,661    (13,700)
                                                              ---------   -------   --------
Deferred Tax Expense (Benefit):
  U.S.                                                           76,155    43,567     42,320
  State and Local                                                (2,454)    2,204      1,316
                                                              ---------   -------   --------
  Total                                                          73,701    45,771     43,636
                                                              ---------   -------   --------
Total Income Tax Expense                                      $ (25,255)  $54,432   $ 29,936
                                                              =========   =======   ========
</Table>

   The income tax expense for the years ended December 31, differs from the
amount computed by applying the expected federal income tax rate of 35% to
income from operations before income taxes for the following reasons:

<Table>
<Caption>
                                                                2001      2000      1999
                                                              --------   -------   -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>        <C>       <C>
Expected Federal Income Tax Expense                           $ 14,814   $55,275   $29,936
  State and Local Income Taxes                                    (382)    1,457     1,101
  Non taxable investment income                                (38,693)   (6,443)   (1,010)
  Incorporation of Taiwan Branch                                (1,774)       --        --
  Other                                                            780     4,143       (91)
                                                              --------   -------   -------
Total Income Tax Expense                                      $(25,255)  $54,432   $29,936
                                                              ========   =======   =======
</Table>

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES (CONTINUED)

   Deferred tax assets and liabilities at December 31, resulted from the items
listed in the following table:

<Table>
<Caption>
                                                                2001       2000
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Deferred Tax Assets
  Insurance Reserves                                          $ 43,317   $100,502
  State Net Operating Losses                                     5,642      1,400
  Other                                                          9,309      8,610
                                                              --------   --------
  Deferred Tax Assets                                           58,268    110,512
                                                              --------   --------
  Deferred Tax Liabilities
  Deferred Acquisition Costs                                   324,082    324,023
  Net Unrealized Gains on Securities                            32,264      2,389
  Investments                                                   20,644     19,577
                                                              --------   --------
  Deferred Tax Liabilities                                     376,990    345,989
                                                              --------   --------
Net Deferred Tax Liability                                    $318,722   $235,477
                                                              ========   ========
</Table>

   Management believes that based on its historical pattern of taxable income,
the Company and its subsidiary will produce sufficient income in the future to
realize its deferred tax assets. Adjustments to the valuation allowance will be
made if there is a change in management's assessment of the amount of the
deferred tax asset that is realizable. At December 31, 2001 and 2000, the
Company and its subsidiary had no federal operating loss carryforwards for tax
purposes. At December 31, 2001 and December 31, 2000, the Company had state
operating loss carryforwards for tax purposes of $369 million and $91 million,
which expire by 2021 and 2020, respectively.

   The Internal Revenue Service (the "Service") has completed all examinations
of the consolidated federal income tax returns through 1992. The Service has
examined the years 1993 through 1995. Discussions are being held with the
Service with respect to proposed adjustments. Management, however, believes
there are adequate defenses against, or sufficient reserves to provide for such
adjustments. The Service has completed its examination of 1996 and has begun its
examination of 1997 through 2000.

9. STATUTORY NET INCOME AND SURPLUS

The Company is required to prepare statutory financial statements in accordance
with accounting practices prescribed or permitted by the Arizona Department of
Insurance and the New Jersey Department of Banking and Insurance. Statutory
accounting practices primarily differ from GAAP by charging policy acquisition
costs to expense as incurred, establishing future policy benefit liabilities
using different actuarial assumptions and valuing investments, deferred taxes,
and certain assets on a different basis.

   Statutory net income (loss) of the Company amounted to $71.5 million, $(50.5)
million, and $(82.3) million for the years ended December 31, 2001, 2000, and
1999, respectively. Statutory surplus of the Company amounted to $728.7 million
and $849.6 million at December 31, 2001 and 2000, respectively.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. STATUTORY NET INCOME AND SURPLUS (CONTINUED)

   In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles guidance ("Codification"), which replaces the current Accounting
Practices and Procedures manual as the NAIC's primary guidance on statutory
accounting as of January 1, 2001. Codification provides guidance for areas where
statutory accounting has been silent and changes current statutory accounting in
certain areas. The Company has adopted the Codification guidance effective
January 1, 2001. As a result of these changes, the Company reported an increase
to statutory surplus of $88 million, primarily relating to the recognition of
deferred tax assets.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values presented below have been determined using available
market information and by applying valuation methodologies. Considerable
judgment is applied in interpreting data to develop the estimates of fair value.
Estimated fair values may not be realized in a current market exchange. The use
of different market assumptions and/or estimation methodologies could have a
material effect on the estimated fair values. The following methods and
assumptions were used in calculating the estimated fair values (for all other
financial instruments presented in the table, the carrying value approximates
estimated fair value).

FIXED MATURITIES AND EQUITY SECURITIES

Estimated fair values for fixed maturities and equity securities, other than
private placement securities, are based on quoted market prices or estimates
from independent pricing services. Generally, fair values for private placement
securities are estimated using a discounted cash flow model which considers the
current market spreads between the U.S. Treasury yield curve and corporate bond
yield curve, adjusted for the type of issue, its current credit quality and its
remaining average life. The estimated fair value of certain non-performing
private placement securities is based on amounts estimated by management.

COMMERCIAL LOANS ON REAL ESTATE

The estimated fair value of the portfolio of commercial loans on real estate is
primarily based upon the present value of the expected future cash flows
discounted at the appropriate U.S. Treasury rate, adjusted for the current
market spread for a similar quality loan.

POLICY LOANS

The estimated fair value of policy loans is calculated using a discounted cash
flow model based upon current U.S. Treasury rates and historical loan repayment
patterns.

INVESTMENT CONTRACTS

For guaranteed investment contracts, estimated fair values are derived using
discounted projected cash flows, based on interest rates being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued. For individual deferred annuities and other deposit
liabilities, fair value approximates carrying value.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

DERIVATIVE FINANCIAL INSTRUMENTS

Refer to Note 11 for the disclosure of fair values on these instruments.

The following table discloses the carrying amounts and estimated fair values of
the Company's financial instruments at December 31:

<Table>
<Caption>
                                                                       2001                      2000
                                                              -----------------------   -----------------------
                                                               CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                                                VALUE      FAIR VALUE     VALUE      FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
<S>                                                           <C>          <C>          <C>          <C>
Financial Assets:
  Fixed Maturities: Available For Sale                        $4,024,893   $4,024,893   $3,561,521   $3,561,521
  Fixed Maturities: Held To Maturity                                  --           --      324,546      320,634
  Equity Securities                                                  375          375       10,804       10,804
  Commercial Loans on Real Estate                                  8,190       10,272        9,327       10,863
  Policy Loans                                                   874,065      934,203      855,374      883,460
  Short-Term Investments                                         215,610      215,610      202,815      202,815
  Cash and Cash Equivalents                                      374,185      374,185      453,071      453,071
  Separate Account Assets                                     14,920,584   14,920,584   16,230,264   16,230,264
Financial Liabilities:
  Investment Contracts                                         2,003,265    2,053,259    1,762,794    1,784,767
  Cash Collateral for Loaned Securities                          190,022      190,022      185,849      185,849
  Securities Sold Under Repurchase Agreements                     80,715       80,715      104,098      104,098
  Separate Account Liabilities                                14,920,584   14,920,584   16,230,264   16,230,264
</Table>

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS

ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 133

The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" as amended, on January 1, 2001. The adoption of this
statement did not have a material impact on the results of operations of the
Company.

ACCOUNTING FOR DERIVATIVES AND HEDGING ACTIVITIES

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, financial indices, or the value of securities or
commodities. Derivative financial instruments used by the Company include swaps,
futures, forwards and option contracts and may be exchange-traded or contracted
in the over-the-counter market. Derivatives may be held for trading purposes or
held for purposes other than trading. All of the Company's derivatives are held
for purposes other than trading.

Derivatives held for purposes other than trading are used to seek to reduce
exposure to interest rates and foreign currency risks associated with assets
held or expected to be purchased or sold, and liabilities incurred or expected
to

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

be incurred. Other than trading derivatives are also used to manage the
characteristics of the Company's asset/liability mix, and to manage the interest
rate and currency characteristics of invested assets.

   Derivatives held for purposes other than trading are recognized on the
Consolidated Statements of Financial Position at their fair value. On the date
the derivative contract is entered into, the Company designates the derivative
as either (1) a hedge of the fair value of a recognized asset or liability or
unrecognized firm commitment ("fair value" hedge), (2) a hedge of a forecasted
transaction or the variability of cash flows to be received or paid related to a
recognized asset or liability ("cash flow" hedge), (3) a foreign currency or
cash flow hedge ("foreign currency" hedge), (4) a hedge of a net investment in a
foreign operation, or (5) a derivative that does not qualify for hedge
accounting. As of December 31, 2001, none of the Company's derivatives qualify
for hedge accounting treatment.

If a derivative does not qualify for hedge accounting, it is recorded at fair
value in "Other long-term investments" or "Other liabilities" in the
Consolidated Statements of Financial Position, and changes in fair value are
included in earnings without considering changes in fair value of the hedged
assets or liabilities. See "Types of Derivative Instruments" for further
discussion of the classification of derivative activity in current earnings.

TYPES OF DERIVATIVE INSTRUMENTS

INTEREST RATE SWAPS

The Company uses interest rate swaps to reduce market risk from changes in
interest rates and to manage interest rate exposures arising from mismatches
between assets and liabilities. Under interest rate swaps, the Company agrees
with other parties to exchange, at specified intervals, the difference between
fixed-rate and floating-rate interest amounts calculated by reference to an
agreed notional principal amount. Generally, no cash is exchanged at the outset
of the contract and no principal payments are made by either party. Cash is paid
or received based on the terms of the swap. These transactions are entered into
pursuant to master agreements that provide for a single net payment to be made
by one counterparty at each due date. The fair value of swap agreements is
estimated based on proprietary pricing models or market quotes.

   If the criteria for hedge accounting are not met, the swap agreements are
accounted for at fair value with changes in fair value reported in "Realized
investment losses, net" in the Consolidated Statement of Operations. During the
period that interest rate swaps are outstanding, net receipts or payments are
include in" Net investment income" in the Consolidated Statement of Operations.

FUTURES AND OPTIONS

The Company uses exchange-traded Treasury futures and options to reduce market
risk from changes in interest rates, and to manage the duration of assets and
the duration of liabilities supported by those assets. In exchange-traded
futures transactions, the Company agrees to purchase or sell a specified number
of contracts, the value of which are determined by the value of designated
classes of Treasury securities, and to post variation margin on a daily basis in
an amount equal to the difference in the daily market values of those contracts.
The Company enters into exchange-traded futures and options with regulated
futures commissions merchants who are members of a trading exchange. The fair
value of futures and options is based on market quotes.

 72
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

   Treasury futures move substantially in value as interest rates change and can
be used to either modify or hedge existing interest rate risk. This strategy
protects against the risk that cash flow requirements may necessitate
liquidation of investments at unfavorable prices resulting from increases in
interest rates. This strategy can be a more cost effective way of temporarily
reducing the Company's exposure to a market decline than selling fixed income
securities and purchasing a similar portfolio when such a decline is believed to
be over.

   If futures meet hedge accounting criteria, changes in their fair value are
deferred and recognized as an adjustment to the carrying value of the hedged
item. Deferred gains or losses from the hedges for interest-bearing financial
instruments are amortized as a yield adjustment over the remaining lives of the
hedged item. Futures that do not qualify as hedges are carried at fair value
with changes in value reported in "Realized investment losses, net."

   When the Company anticipates a significant decline in the stock market which
will correspondingly affect its diversified portfolio, it may purchase put index
options where the basket of securities in the index is appropriate to provide a
hedge against a decrease in the value of the equity portfolio or a portion
thereof. This strategy effects an orderly sale of hedged securities. When the
Company has large cash flows which it has allocated for investment in equity
securities, it may purchase call index options as a temporary hedge against an
increase in the price of the securities it intends to purchase. This hedge
permits such investment transactions to be executed with the least possible
adverse market impact.

   Option premium paid or received is reported as an asset or liability and
amortized into income over the life of the option. If options meet the criteria
for hedge accounting, changes in their fair value are deferred and recognized as
an adjustment to the hedged item. Deferred gains or losses from the hedges for
interest-bearing financial instruments are recognized as an adjustment to
interest income or expense of the hedged item. If the options do not meet the
criteria for hedge accounting, they are fair valued, with changes in fair value
reported in current period earnings.

CURRENCY DERIVATIVES

The Company uses currency swaps to reduce market risk from changes in currency
values of investments denominated in foreign currencies that the Company either
holds or intends to acquire and to manage the currency exposures arising from
mismatches between such foreign currencies and the US Dollar.

   Under currency swaps, the Company agrees with other parties to exchange, at
specified intervals, the difference between one currency and another at a
forward exchange rate and calculated by reference to an agreed principal amount.
Generally, the principal amount of each currency is exchanged at the beginning
and termination of the currency swap by each party. These transactions are
entered into pursuant to master agreements that provide for a single net payment
to be made by one counterparty for payments made in the same currency at each
due date.

   If currency swaps are effective as hedges of foreign currency translation and
transaction exposures, gains or losses are recorded in a manner similar to the
hedged item. If currency swaps do not meet hedge accounting criteria, gains or
losses from those derivatives are recognized in "Realized investment (losses)
gains, net."

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

The table below summarizes the Company's outstanding positions by derivative
instrument types as of December 31, 2001 and 2000. All amounts presented have
been classified as other than trading based on management's intent at the time
of contract and throughout the life of the contract.

                         OTHER THAN TRADING DERIVATIVES

                           DECEMBER 31, 2001 AND 2000

                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                            2001                               2000
                                                              --------------------------------   --------------------------------
                                                                         ESTIMATED    CARRYING              ESTIMATED    CARRYING
                                                              NOTIONAL   FAIR VALUE    VALUE     NOTIONAL   FAIR VALUE    VALUE
                                                              --------   ----------   --------   --------   ----------   --------
<S>                                                           <C>        <C>          <C>        <C>        <C>          <C>
NON-HEDGE ACCOUNTING
SWAP INSTRUMENTS
Interest Rate
  Asset                                                       $ 9,470      $  638      $  638    $  9,470     $  327      $  327
  Liability                                                        --          --          --          --         --          --
Currency
  Asset                                                        24,785       3,858       3,858          --         --          --
  Liability                                                        --          --          --          --         --          --
FUTURE CONTRACTS
US Treasury Futures
  Asset                                                        76,800         394         394     139,800      3,530       3,530
  Liability                                                    64,500         238         238      61,900      1,067       1,067
HEDGE ACCOUNTING
SWAP INSTRUMENTS
Currency
  Asset                                                            --          --          --      28,326      1,633       2,155
  Liability                                                        --          --          --          --         --          --
</Table>

CREDIT RISK

The current credit exposure of the Company's derivative contracts is limited to
the fair value at the reporting date. Credit risk is managed by entering into
transactions with creditworthy counterparties and obtaining collateral where
appropriate and customary. The Company also attempts to minimize its exposure to
credit risk through the use of various credit monitoring techniques. All of the
net credit exposure for the Company from derivative contracts are with
investment grade counterparties. As of December 31, 2001, 86% of notional
consisted of interest rate derivatives, and 14% of notional consisted of foreign
currency derivatives.

 74
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. CONTINGENCIES AND LITIGATION

Prudential and the Company are subject to legal and regulatory actions in the
ordinary course of their businesses, including class actions. Pending legal and
regulatory actions include proceedings relating to aspects of the businesses and
operations that are specific to the Company and Prudential and that are typical
of the businesses in which the Company and Prudential operate. Some of these
proceedings have been brought on behalf of various alleged classes of
complainants. In certain of these matters, the plaintiffs are seeking large
and/or indeterminate amounts, including punitive or exemplary damages.

   Beginning in 1995, regulatory authorities and customers brought significant
regulatory actions and civil litigation against the Company and Prudential
involving individual life insurance sales practices. In 1996, Prudential, on
behalf of itself and many of its life insurance subsidiaries including the
Company entered into settlement agreements with relevant insurance regulatory
authorities and plaintiffs in the principal life insurance sales practices class
action lawsuit covering policyholders of individual permanent life insurance
policies issued in the United States from 1982 to 1995. Pursuant to the
settlements, the companies agreed to various changes to their sales and business
practices controls, to a series of fines, and to provide specific forms of
relief to eligible class members. Virtually all claims by class members filed in
connection with the settlements have been resolved and virtually all aspects of
the remediation program have been satisfied. While the approval of the class
action settlement is now final, Prudential and the Company remain subject to
oversight and review by insurance regulators and other regulatory authorities
with respect to its sales practices and the conduct of the remediation program.
The U.S. District Court has also retained jurisdiction as to all matters
relating to the administration, consummation, enforcement and interpretation of
the settlements.

   As of December 31, 2001, Prudential and/or the Company remained a party to
approximately 44 individual sales practices actions filed by policyholders who
"opted out" of the class action settlement relating to permanent life insurance
policies issued in the United States between 1982 and 1995. In addition, there
were 19 sales practices actions pending that were filed by policyholders who
were members of the class and who failed to "opt out" of the class action
settlement. Prudential and the Company believe that those actions are governed
by the class settlement release and expects them to be enjoined and/or
dismissed. Additional suits may be filed by class members who "opted out" of the
class settlements or who failed to "opt out" but nevertheless seek to proceed
against Prudential and/or the Company. A number of the plaintiffs in these cases
seek large and/or indeterminate amounts, including punitive or exemplary
damages. Some of these actions are brought on behalf of multiple plaintiffs. It
is possible that substantial punitive damages might be awarded in any of these
actions and particularly in an action involving multiple plaintiffs.

   Prudential has indemnified the Company for any liabilities incurred in
connection with sales practices litigation covering policyholders of individual
permanent life insurance policies issued in the United States from 1982 to 1995.

   The Company's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted. It is possible that the
results of operations or the cash flow of the Company in a particular quarterly
or annual period could be materially affected by an ultimate unfavorable
resolution of pending litigation

                                                                              75
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OTHER INFORMATION CONTINUED

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. CONTINGENCIES AND LITIGATION (CONTINUED)

and regulatory matters. Management believes, however, that the ultimate outcome
of all pending litigation and regulatory matters should not have a material
adverse effect on the Company's financial position.

13. DIVIDENDS

The Company is subject to Arizona law which limits the amount of dividends that
insurance companies can pay to stockholders. The maximum dividend which may be
paid in any twelve month period without notification or approval is limited to
the lesser of 10% of statutory surplus as of December 31 of the preceding year
or the net gain from operations of the preceding calendar year. Cash dividends
may only be paid out of surplus derived from realized net profits. Based on
these limitations, the Company would not be permitted a dividend distribution
until December 29, 2002.

   During 2001, the Company received approval from the Arizona Department of
Insurance to pay an extraordinary dividend to Prudential of $108 million.

14. RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential and
other affiliates. It is possible that the terms of these transactions are not
the same as those that would result from transactions among wholly unrelated
parties.

EXPENSE CHARGES AND ALLOCATIONS

All of the Company's expenses are allocations or charges from Prudential or
other affiliates. These expenses can be grouped into the following categories:
general and administrative expenses, retail distribution expenses and asset
management fees.

   The Company's general and administrative expenses are charged to the Company
using allocation methodologies based on business processes. Management believes
that the methodology is reasonable and reflects costs incurred by Prudential to
process transactions on behalf of the Company. Prudential and the Company
operate under service and lease agreements whereby services of officers and
employees (except for those agents employed directly by the Company in Taiwan),
supplies, use of equipment and office space are provided by Prudential. The
Company is allocated estimated distribution expenses from Prudential's retail
agency network for both its domestic life and annuity products. The Company has
capitalized the majority of these distribution expenses as deferred policy
acquisition costs. Beginning April 1, 2000, Prudential and the Company agreed to
revise the estimate of allocated distribution expenses to reflect a market based
pricing arrangement.

   In accordance with a profit sharing agreement with Prudential that was in
effect through December 31, 2000, the Company received fee income from
policyholder account balances invested in the Prudential Series Funds ("PSF").
These revenues were recorded as "Asset management fees" in the Consolidated
Statements of Operations and Comprehensive Income. The Company was charged an
asset management fee by Prudential Global Asset Management ("PGAM") and Jennison
Associates LLC ("Jennison") for managing the PSF portfolio. These fees are a
component of "general, administrative and other expenses."

 76
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. RELATED PARTY TRANSACTIONS (CONTINUED)

   On September 29, 2000, the Board of Directors for the Prudential Series Fund,
Inc. ("PSFI") adopted resolutions to terminate the existing management agreement
between PSFI and Prudential, and has appointed another subsidiary of Prudential
as the fund manager for the PSF. The change was approved by the shareholders of
PSF during early 2001 and effective January 1, 2001. The Company no longer
receives fees associated with the PSF. In addition, the Company will no longer
incur the asset management expense from PGAM and Jennison associated with the
PSF.

CORPORATE OWNED LIFE INSURANCE

The Company has sold three Corporate Owned Life Insurance ("COLI") policies to
Prudential. The cash surrender value included in Separate Accounts was $647.2
million and $685.9 million at December 31, 2001 and December 31, 2000,
respectively. The fees received related to the COLI policies were $7.0 million
and $9.6 million for the years ending December 31, 2001 and 2000.

REINSURANCE

The Company currently has four reinsurance agreements in place with Prudential
and affiliates. Specifically, the Company has a reinsurance Group Annuity
Contract, whereby the reinsurer, in consideration for a single premium payment
by the Company, provides reinsurance equal to 100% of all payments due under the
contract. In addition, there are two yearly renewable term agreements in which
the Company may offer and the reinsurer may accept reinsurance on any life in
excess of the Company's maximum limit of retention. The Company is not relieved
of its primary obligation to the policyholder as a result of these reinsurance
transactions. These agreements had no material effect on net income for the
periods ended December 31, 2001 or 2000. The fourth agreement, which is new for
2001, is described in the following paragraphs.

   On January 31, 2001, the Company transferred all of its assets and
liabilities associated with the Company's Taiwan branch including Taiwan's
insurance book of business to an affiliated Company, Prudential Life Insurance
Company of Taiwan Inc. ("Prudential of Taiwan"), a wholly owned subsidiary of
the Holding Company.

   The mechanism used to transfer this block of business in Taiwan is referred
to as a "full acquisition and assumption" transaction. Under this mechanism, the
Company is jointly liable with Prudential of Taiwan for two years from the
giving of notice to all obligees for all matured obligations and for two years
after the maturity date of not-yet-matured obligations. Prudential of Taiwan is
also contractually liable, under indemnification provisions of the transaction,
for any liabilities that may be asserted against the Company. The transfer of
the insurance related assets and liabilities was accounted for as a
long-duration coinsurance transaction under accounting principles generally
accepted in the United States. Under this accounting treatment, the insurance
related liabilities remain on the books of the Company and an offsetting
reinsurance recoverable is established.

   As part of this transaction, the Company made a capital contribution to
Prudential of Taiwan in the amount of the net equity of the Company's Taiwan
branch as of the date of transfer. In July 2001, the Company dividended its
interest in Prudential of Taiwan to Prudential.

                                                                              77
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        9:

OTHER INFORMATION CONTINUED

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. RELATED PARTY TRANSACTIONS (CONTINUED)

   Premiums and benefits ceded for the period ending December 31, 2001 from the
Taiwan coinsurance agreement were $82.4 million and $12.9 million, respectively.

DEBT AGREEMENTS

In July 1998, the Company established a revolving line of credit facility of up
to $500 million with Prudential Funding LLC, a wholly owned subsidiary of
Prudential. There is no outstanding debt relating to this credit facility as of
December 31, 2001 or December 31, 2000.

 78
<PAGE>
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDER OF
PRUCO LIFE INSURANCE COMPANY

In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Pruco
Life Insurance Company (a wholly-owned subsidiary of The Prudential Insurance
Company of America) and its subsidiary at December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
February 21, 2002

                                                                              79
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OTHER INFORMATION CONTINUED

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

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

EXPERTS

The consolidated financial statements of Pruco Life and its subsidiary as of
December 31, 2001 and 2000 and for each of the three years in the period ended
December 31, 2001 have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants given on the authority of
said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP's
principal business address is 1177 Avenue of the Americas, New York, New York
10036.

INDEMNIFICATION

Pruco Life, in conjunction with certain affiliates, maintains insurance on
behalf of any person who is or was a trustee, director, officer, employee, or
agent of Pruco Life, or who is or was serving at the request of Pruco Life as a
trustee, director, officer, employee or agent of such other affiliated trust or
corporation, against any liability asserted against and incurred by him or her
arising out of his or her position with such trust or corporation.

   Arizona, being the state of organization of Pruco Life, permits entities
organized under its jurisdiction to indemnify directors and officers with
certain limitations. The relevant provisions of Arizona law permitting
indemnification can be found in Section 10-850 et. seq. of the Arizona Statutes
Annotated. The text of Pruco Life's By-law, Article VIII, which relates to
indemnification of officers and directors, is incorporated by reference to
Exhibit 3(ii) to its form 10-Q filed August 15, 1997.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of Pruco
Life pursuant to the foregoing provisions or otherwise, Pruco Life has 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 Pruco Life of expenses incurred or
paid by a director, officer or controlling person of Pruco Life in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Pruco Life will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

 80
<PAGE>

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

MARKET-VALUE
        ADJUSTMENT FORMULA
--------------------------------------------------------------------------------

MARKET-VALUE ADJUSTMENT FORMULA

With respect to residents of states, other than Pennsylvania, in which Strategic
Partners MVA is being offered.

The formula under which Pruco Life calculates the market value adjustment
applicable to a full or partial surrender, annuitization, or settlement under
Strategic Partners MVA is set forth below. The market value adjustment is
expressed as a multiplier factor. That is, the Contract Value after the market
value adjustment ("MVA"), but before any surrender charge, is as follows:
Contract Value (after MVA) = Contract Value (before MVA) X (1 + MVA). The MVA
itself is calculated as follows:
                               1 + I
                    MVA = (-----------)to the N/12 power -1
                     1 + J + .0025

<Table>
<S>    <C>  <C>  <C>
where:  I   =    the guaranteed credited interest rate
                 (annual effective) for the given
                 contract at the time of withdrawal or
                 annuitization or settlement.
        J   =    the current credited interest rate
                 offered on new money at the time of
                 withdrawal or annuitization or
                 settlement for a guarantee period of
                 equal length to the number of whole
                 years remaining in the Contract's
                 current guarantee period plus one
                 year.
        N   =    equals the remaining number of months
                 in the contract's current guarantee
                 period (rounded up) at the time of
                 withdrawal or annuitization or
                 settlement.
</Table>

We use the same MVA formula with respect to contracts issued in Pennsylvania,
except that "J" in the formula above uses an interpolated rate as the current
credited interest rate. Specifically, "J" is the interpolated current credited
interest rate offered on new money at the time of withdrawal, annuitization, or
settlement. The interpolated value is calculated using the following formula:

            m/365 X (n + 1) year rate + (365 - m)/365 X n year rate,

where "n" equals the number of whole years remaining in the Contract's current
guarantee period, and "m" equals the number of days remaining in year "n" of the
current guarantee period.
MARKET VALUE ADJUSTMENT EXAMPLE

(ALL STATES EXCEPT PENNSYLVANIA)

The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.

Positive market value adjustment

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 4 years (the number of whole years remaining plus 1) is 5%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.

<Table>
<S> <C>  <C>
    N =  38
    I =  6% (0.06)
    J =  5% (0.05)
</Table>

    The MVA factor calculation would be: [(1.06)/(1.05 + .0025)](38/12) -1 =
    0.02274

                                                                              81
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MARKET-VALUE ADJUSTMENT FORMULA CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                          $10,527.11 X 0.02274 = $239.39

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 + $239.39 = $10,766.50

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,766.50 + $600.00 = $11,366.50

The MVA may not always be positive. Here is an example where it is negative.

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 4 years (the number of whole years remaining plus 1) is 7%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.

<Table>
<S> <C>  <C>
    N =  38
    I =  6% (0.06)
    J =  7% (0.07)
</Table>

   The MVA factor calculation would be: [(1.06)/(1.07+.0025)](38/12) -1 =
   -0.03644

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                         $10,527.11 X -0.03644 = -$383.61

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 - $383.61 = $10,143.50

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,143.50 + $600.00 = $10,743.50

MARKET VALUE ADJUSTMENT EXAMPLE

(PENNSYLVANIA)

The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.

Positive market value adjustment

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 3 years (the number of whole years remaining) is 4%, and for a
   guarantee period of 4 years (the number of whole years remaining plus 1) is
   5%.
    The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.

<Table>
<S> <C>  <C>
    N =  38
    I =  6% (0.06)
    J =  [(60/365) X 0.05] + [((365-60)/365) X 0.04] =
         0.0416
</Table>

   The MVA factor calculation would be: [(1.06)/(1.0416 + .0025)](38/12) -1 =
0.04902

 82
<PAGE>
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                          $10,527.11 X 0.04902 = $516.04

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                        $10,527.11 + $ 516.04 = $11,043.15

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $11,043.15 + $600.00 = $11,643.15

The MVA may not always be positive. Here is an example where it is negative.

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 3 years (the number of whole years remaining) is 7%, and for a
   guarantee period of 4 years (the number of whole years remaining plus 1) is
   8%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment Factor.

<Table>
<S> <C>  <C>
    N =  38
    I =  6% (0.06)
    J =  [(60/365) X 0.08] + [((365 - 60)/365) X 0.07] =
         0.0716
</Table>

   The MVA Factor calculation would be: [(1.06)/(1.0716 + .0025)](38/12) -1 =
-0.04098

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                         $10,527.11 X -0.04098 = -$431.40

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 - $431.40 = $10,095.71

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,095.71 + $600.00 = $10,695.71

                                                                              83
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

IRA DISCLOSURE STATEMENT
--------------------------------------------------------------------------------

This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your Roth IRA,
your simplified employee pension IRA (SEP) for employer contributions, your
Savings Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase
for your spouse. You can obtain more information regarding your IRA either from
your sales representative or from any district office of the Internal Revenue
Service. Those are federal tax law rules; state tax laws may vary.

FREE LOOK PERIOD

The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund within 10 days (or whatever period is
required by applicable state law) after it is delivered. This is a more liberal
provision than is required in connection with IRAs. To exercise this "free-look"
provision, return the contract to the representative who sold it to you or to
the Prudential Annuity Service Center at the address shown on the first page of
this prospectus.

ELIGIBILITY REQUIREMENTS

IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally, if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.

CONTRIBUTIONS AND DEDUCTIONS

Contributions to your IRA will be deductible if you are not an "active
participant" in an employer maintained qualified retirement plan or you have
"Adjusted Gross Income" (as defined under Federal tax laws) which does not
exceed the "applicable dollar limit." IRA (or SEP) contributions must be made by
no later than the due date for filing your income tax return for that year,
excluding extensions (generally by April 15th). For a single taxpayer, the
applicable dollar limitation is $34,000 in 2002, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $34,000 -- $44,000. For married couples filing jointly, the
applicable dollar limitation is $54,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$54,000-$64,000. There is no deduction allowed for IRA contributions when
Adjusted Gross Income reaches $44,000 for individuals and $64,000 for married
couples filing jointly. Income limits are scheduled to increase until 2006 for
single taxpayers and 2007 for married taxpayers.

   Contributions made by your employer to your SEP are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEP will be entitled to
elect to have their employer make contributions to their SEP on their behalf or
to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEP are limited to $11,000 in 2002 with a permitted catch-up contribution of
$1,000 for individuals age 50 and above. Contribution and catch-up contribution
limits are scheduled to increase through 2006 and are indexed for inflation
thereafter. Salary-reduction SEPs (also called "SARSEPs") are available only if
at least 50% of the employees elect to have amounts contributed to the SARSEP
and if the employer has 25 or fewer employees at all times during the preceding
year. New SARSEPs may not be established after 1996.

   The IRA maximum annual contribution and your tax deduction is limited to the
lesser of: (1) the maximum amount allowed by law, including catch-up
contributions if applicable, or (2) 100% of your earned compensation.
Contributions in excess of these limits may be subject to penalty. See below.

   Under a SEP agreement, the maximum annual contribution which your employer
may make on your behalf to a SEP contract that is excludable from your income is
the lesser of 25% of your salary or $40,000 in 2002. An employee who is a
participant in a SEP

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

agreement may make after-tax contributions to the SEP contract, subject to the
contribution limits applicable to IRAs in general. Those employee contributions
will be deductible subject to the deductibility rules described above.

   The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) the maximum amount allowed
by law, including catch-up contributions if applicable or (2) 100% of taxable
alimony.

   If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEP, the excess amount will be considered an "excess
contribution." You are permitted to withdraw an excess contribution from your
IRA or SEP before your tax filing date without adverse tax consequences. If,
however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.

   Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See PREMATURE DISTRIBUTIONS below for penalties imposed on
withdrawal when the contribution exceeds the maximum amount allowed by law,
including catch-up contributions if applicable.)

IRA FOR NON-WORKING SPOUSE

If you establish an IRA for yourself, you may also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and, if your
non-working spouse has compensation, his/her compensation must be less than your
compensation for the year. Contributions of up to the maximum amount allowed by
law, including catch-up contributions if applicable may be made to your IRA and
the spousal IRA if the combined compensation of you and your spouse is at least
equal to the amount contributed. If requirements for deductibility (including
income levels) are met, you will be able to deduct an amount equal to the least
of (i) the amount contributed to the IRAs; (ii) twice the maximum amount allowed
by law, including catch-up contributions if applicable; or (iii) 100% of your
combined gross income.

   Contributions in excess of the contribution limits may be subject to penalty.
See above under "Contributions and Deductions." If you contribute more than the
allowable amount, the excess portion will be considered an excess contribution.
The rules for correcting it are the same as discussed above for regular IRAs.

   Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.

ROLLOVER CONTRIBUTION

Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEP and reinvest it in another IRA or bond. Withdrawals may also be made
from other IRAs and contributed to this contract. This transfer of funds from
one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.

   A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. Unless you were a self-employed
participant in the distributing plan, you may later roll over such a
contribution to another qualified retirement plan as long as you have not mixed
it with IRA (or SEP) contributions you have deducted from your income. (You may
roll less than all of a qualified distribution into an IRA, but any part of it
not rolled over will be currently includable in your income without any capital
gains treatment.) Beginning in 2002, the rollover options increase. Funds can be
rolled over from an IRA or SEP to another IRA or SEP or to another qualified
retirement plan or 457

                                                                              85
<PAGE>

IRA DISCLOSURE STATEMENT CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

government plan even if additional contributions have been made to the account.

DISTRIBUTIONS

(a) PREMATURE DISTRIBUTIONS

At no time can your interest in your IRA or SEP be forfeited. To insure that
your contributions will be used for retirement, the federal tax law does not
permit you to use your IRA or SEP as security for a loan. Furthermore, as a
general rule, you may not sell or assign your interest in your IRA or SEP to
anyone. Use of an IRA (or SEP) as security or assignment of it to another will
invalidate the entire annuity. It then will be includable in your income in the
year it is invalidated and will be subject to a 10% tax penalty if you are not
at least age 59 1/2 or totally disabled. (You may, however, assign your IRA or
SEP without penalty to your former spouse in accordance with the terms of a
divorce decree.)

   You may surrender any portion of the value of your IRA (or SEP). In the case
of a partial surrender which does not qualify as a rollover, the amount
withdrawn will be includable in your income and subject to the 10% penalty if
you are not at least age 59 1/2 or totally disabled unless you comply with
special rules requiring distributions to be made at least annually over your
life expectancy.

   The 10% penalty tax does not apply to the withdrawal of an excess
contribution as long as the excess is withdrawn before the due date of your tax
return. Withdrawals of excess contributions after the due date of your tax
return will generally be subject to the 10% penalty unless the excess
contribution results from erroneous information from a plan trustee making an
excess rollover contribution or unless you are over age 59 1/2 or are disabled.

(b) DISTRIBUTION AFTER AGE 59 1/2

Once you have attained age 59 1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEP) regardless of when you
actually retire. In addition, you must commence distributions from your IRA by
April 1 following the year you attain age 70 1/2. You may elect to receive the
distribution under any one of the periodic payment options available under the
contract. The distributions from your IRA under any one of the periodic payment
options or in one sum will be treated as ordinary income as you receive them to
the degree that you have made deductible contributions. If you have made both
deductible and nondeductible contributions, the portion of the distribution
attributable to the nondeductible contribution will be tax-free.

(c) INADEQUATE DISTRIBUTIONS--50% TAX

Your IRA or SEP is intended to provide retirement benefits over your lifetime.
Thus, federal tax law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70 1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse/beneficiary.) The calculation is revised
under the IRS final regulations for distributions beginning in 2003 and are
optional for distributions in 2002. If the payments are not sufficient to meet
these requirements, an excise tax of 50% will be imposed on the amount of any
underpayment.

(d) DEATH BENEFITS

If you, (or your surviving spouse) die before receiving the entire value of your
IRA (or SEP), the remaining interest must be distributed to your beneficiary (or
your surviving spouse's beneficiary) in one lump-sum by December 31st of the
fifth year after your (or your surviving spouse's death, or applied to purchase
an immediate annuity for the beneficiary. This annuity must be payable over the
life expectancy of the beneficiary beginning by December 31 of the year
following the year after your or your spouse's death. If your spouse is the
designated beneficiary, he or she is treated as the owner of the IRA. If minimum
required distributions have begun and no designated beneficiary is identified by
September 30 of the year following the year of death, the entire amount must be
distributed

 86
<PAGE>
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

based on the life expectancy of the owner using the owner's age prior to death.
A distribution of the balance of your IRA upon your death will not be considered
a gift for federal tax purposes, but will be included in your gross estate for
purposes of federal estate taxes.

ROTH IRAS

Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a "Roth IRA." Contributions may be made to a Roth IRA by taxpayers
with adjusted gross incomes of less than $160,000 for married individuals filing
jointly and less than $110,000 for single individuals. Married individuals
filing separately are not eligible to contribute to a Roth IRA. The maximum
amount of contributions allowable for any taxable year to all Roth IRAs
maintained by an individual is generally the lesser of the maximum amount
allowed by law and 100% of compensation for that year (the maximum amount
allowed by law is phased out for incomes between $150,000 and $160,000 for
married and between $95,000 and $110,000 for singles). The contribution limit is
reduced by the amount of any contributions made to a non-Roth IRA. Contributions
to a Roth IRA are not deductible.

   For taxpayers with adjusted gross income of $100,000 or less, all or part of
amounts in a non-Roth IRA may be converted, transferred or rolled over to a Roth
IRA. Some or all of the IRA value will typically be includable in the taxpayer's
gross income. If such a rollover, transfer or conversion occurred before January
1, 1999, the portion of the amount includable in gross income must be included
in income ratably over the next four years beginning with the year in which the
transaction occurred. Provided a rollover contribution meets the requirements of
IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth IRA
to another Roth IRA.

   UNDER SOME CIRCUMSTANCES, IT MAY NOT BE ADVISABLE TO ROLL OVER, TRANSFER OR
CONVERT ALL OR PART OF A NON-ROTH IRA TO A ROTH IRA. PERSONS CONSIDERING A
ROLLOVER, TRANSFER OR CONVERSION SHOULD CONSULT THEIR OWN TAX ADVISOR.

   "Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements: (1)
the distribution must be made (a) after the owner of the IRA attains age 59 1/2;
(b) after the owner's death; (c) due to the owner's disability; or (d) for a
qualified first time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that
is at least five tax years after the first year for which a contribution was
made to any Roth IRA established for the owner or five years after a rollover,
transfer, or conversion was made from a non-Roth IRA to a Roth IRA.
Distributions from a Roth IRA that are not qualified distributions will be
treated as made first from contributions and then from earnings, and taxed
generally in the same manner as distributions from a non-Roth IRA.

   Distributions from a Roth IRA need not commence at age 70 1/2. However, if
the owner dies before the entire interest in a Roth IRA is distributed, any
remaining interest in the contract must be distributed under the same rules
applied to traditional IRAs where death occurs before the required beginning
date.

REPORTING TO THE IRS

Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments),
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your federal income tax return for the tax year in which the penalty
applies. Normal contributions and distributions must be shown on your income tax
return for the year to which they relate.

                                                                              87
<PAGE>




                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

REGISTRATION FEES

Pruco Life is registering $500 million of interests in the market value adjusted
annuity contracts described in this registration statement. Pruco Life will pay
$46,000 to the SEC for the registration fees required under the Securities Act
of 1933.

FEDERAL TAXES

Pruco Life Insurance Company estimates the federal tax effect associated wit the
deferred acquisition costs attributable to receipt of $500 million of purchase
payments over a two year period to be approximately $4 million.

STATE TAXES

Pruco Life estimates that approximately $14,000 in premium taxes will be owed
upon receipt of purchase payments under the contracts, and that additional
premium taxes in the approximate amount of $773,000 would be owed if the full
$500 million of purchase payments were applied to annuity options.

PRINTING COSTS

Pruco Life estimates that the cost of printing prospectuses for the amount of
securities registered herein will be approximately $30,000.

LEGAL COSTS

This registration statement was prepared by Prudential attorneys whose time is
allocated to Pruco Life.

ACCOUNTING COSTS

PricewaterhouseCooper LLC, the independent public accountant that audits Pruco
Life's financial statements, charges approximately $4,000 in connection with
each filing of this registration statement with the Commission.

PREMIUM PAID TO INDEMNIFY OFFICERS

Officers and Directors of Pruco Life Insurance Company are indemnified under a
policy that also covers officers and directors of other entities controlled by
Prudential Financial, Inc. A portion of the cost of that policy is attributed to
Pruco Life.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant, in connection with certain affiliates, maintains various
insurance coverages under which the underwriter and certain affiliated persons
may be insured against liability which may be incurred in such capacity, subject
to the terms, conditions and exclusions of the insurance policies.

Arizona, being the state of organization of Pruco Life Insurance Company
("Pruco"), permits entities organized under its jurisdiction to indemnify
directors and officers with certain limitations. The relevant provisions of
Arizona law permitting indemnification can be found in Section 10-850, et seq.
of the


                                      II-1
<PAGE>
Arizona Statutes Annotated. The text of Pruco's By-law, Article VIII which
relates to indemnification of officers and directors, is incorporated by
reference to Exhibit 3(ii) to its Form 10-Q, filed August 15, 1997.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

Not Applicable

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

(1)    Form of a Distribution Agreement between Prudential Investment
         Management Services, Inc., ("PIMS") (Principal Underwriter) and Pruco
         Life Insurance Company (Depositor). (Note 2)

(1A)   Amendment No. 1 to Distribution Agreement between PIMS and Pruco Life
       Insurance Company. (To be filed by pre-effective amendment)

(3A)   Articles of Incorporation of Pruco Life Insurance Company, as amended
       October 19, 1993. (Note 6)

(3B)   By-Laws of Pruco Life Insurance Company, as amended May 6, 1997. (Note
       7)

(4)    Contract (To be filed by pre-effective amendment)

(4)(a) Application (To be filed by pre-effective amendment)

23(A)  Written consent of PricewaterhouseCoopers LLP, independent accountants.
       (Note 1)

23(B)  Opinion of Counsel as to the legality of the securities being
       registered. (To be filed by pre-effective amendment)

(24)   Powers of Attorney:

       (a)      Vivian L. Banta, Richard J. Carbone, Helen M. Galt and Jean D.
                Hamilton (Note 3)

       (b)      James J. Avery, Jr. (Note 4)

       (c)      David R. Odenath, Jr., William J. Eckert and Ronald P. Joelson
                (Note 5)

(Note 1) Filed herewith.

(Note 2) Incorporated by reference to Post Effective Amendment No. 4 on Form
S-1, Registration No. 33-61143, filed April 15, 1999, on behalf the Pruco Life
Insurance Company.

                                      II-2
<PAGE>

(Note 3) Incorporated by reference to Post-Effective Amendment No. 5 to Form
S-6, Registration No. 333-85115, filed on or about June 28, 2001 on behalf of
the Pruco Life Variable Universal Account.

(Note 4) Incorporated by reference to Post-Effective Amendment No. 2 to Form
S-6, Registration No. 333-07451, filed June 25, 1997 on behalf of the Pruco Life
Variable Appreciable Account.

(Note 5) Incorporated by reference to initial Registration on Form N-4,
Registration No. 333-52754, filed December 26, 2000 on behalf of the Pruco Life
Flexible Premium Variable Annuity Account.

(Note 6) Incorporated by reference to Form S-6, Registration No. 333-07451,
filed July 2, 1996, on behalf of the Pruco Life Variable Appreciable Account.

(Note 7) Incorporated by reference to Form 10-Q, Registration No. 033-37587,
filed August 15, 1997, on behalf of the Pruco Life Insurance Company.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

         (i)      To include any prospectus required by section 10 (a)(3) of the
                  Securities Act of 1933;

         (ii)     To reflect in the prospectus any facts or events arising after
                  the effective date of the registration statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information in the registration statement

         (iii)    To include any material information with respect to the plan
                  of distribution not previously disclosed in the registration
                  statement or any material change to such information in the
                  registration statement;

(2)      That, for the purpose of determining any liability under the Securities
         Act of 1933, each such post-effective amendment shall be deemed to be a
         new registration statement relating to the securities offered therein,
         and the offering of such securities at that time shall be deemed to be
         the initial bona fide offering thereof.

(3)      To remove from registration by means of a post-effective amendment any
         of the securities being registered which remain unsold at the
         termination of the offering.

(4)      Insofar as indemnification for liabilities arising under the Securities
         Act of 1933 may be permitted to directors, officers and controlling
         persons of the registrant pursuant to the foregoing provisions, or
         otherwise, the registrant has been advised that in the opinion of the
         Securities and Exchange Commission such indemnification is against
         public policy as expressed in the Act and is, therefore, unenforceable.
         In the event that a claim for indemnification against such liabilities
         (other than the payment by the registrant of expenses incurred or paid
         by a director, officer or controlling person of the registrant in the
         successful defense of any action, suit or proceeding) is asserted by
         such director, officer or controlling person in connection with the
         securities being registered, the registrant will, unless in the opinion
         of its counsel the matter has been settled by controlling precedent,
         submit to a court of appropriate jurisdiction the question whether such
         indemnification by it is against public policy as expressed in the Act
         and will be governed by the final adjudication of such issue.

                                      II-3
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Newark, State of New
Jersey, on this 31st day of May 2002.

                                                  PRUCO LIFE INSURANCE COMPANY

                                                  (Registrant)
                                                  By: /s/ ANDREW J. MAKO
                                                  ------------------------------
                                                  ANDREW J. MAKO
                                                  EXECUTIVE VICE PRESIDENT

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

                               SIGNATURE AND TITLE
<TABLE>
<CAPTION>
<S>                                                              <C>
             /s/*                                                May 31, 2002
          ----------------------------------------------------
                 VIVIAN L. BANTA
                 PRESIDENT AND CHAIRMAN

             /s/*                                                *By: /s/ C. CHRISTOPHER SPRAGUE
          ---------------------------------------------------    -------------------------------
                 WILLIAM J. ECKERT, IV                           C. CHRISTOPHER SPRAGUE
                 VICE PRESIDENT AND CHIEF                        (ATTORNEY-IN-FACT)
                 ACCOUNTING OFFICER,(PRINCIPAL
                 FINANCIAL OFFICER


             /s/*
          ----------------------------------------------------
                 RONALD P. JOELSON
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 RICHARD J. CARBONE
                 DIRECTOR

             /s/*
           ----------------------------------------------------
                 HELEN M. GALT
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 JEAN D. HAMILTON
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 JAMES J. AVERY, JR.
                 VICE CHAIRMAN OF THE BOARD AND
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 DAVID R. ODENATH, JR.
                 DIRECTOR
</TABLE>

                                      II-4
<PAGE>

                                  EXHIBIT INDEX

(23A) Written Consent of PricewaterhouseCoopers LLC, independent accountants
[{"type": "S-1", "sequence": "1", "filename": "y59266s1sv1.txt", "description": "PRUCO LIFE INSURANCE COMPANY", "secsgml_size_bytes": 352136}]
{"company-data": {"conformed-name": "PRUCO LIFE INSURANCE CO", "cik": "0000777917", "irs-number": "221944557", "state-of-incorporation": "AZ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-89530", "film-number": "02667898"}, "business-address": {"street1": "213 WASHINGTON ST", "street2": "111 DURHAM AVENUE", "city": "NEWARK", "state": "NJ", "zip": "07102", "phone": "2018026000"}, "mail-address": {"street1": "213 WASHINGTON STREET", "city": "NEWARK", "state": "NJ", "zip": "07102"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 31, 2002

                                                           REGISTRATION NO. 333-

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                    FORM S-1

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

                          PRUCO LIFE INSURANCE COMPANY

                           (EXACT NAME OF REGISTRANT)

                                     ARIZONA

 -------------------------------------------------------------------------------
         (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

                                    22-194455

                     (I.R.S. EMPLOYER IDENTIFICATION NUMBER)

                        C/O PRUCO LIFE INSURANCE COMPANY

                              213 WASHINGTON STREET

                          NEWARK, NEW JERSEY 07102-2992

                                 (973) 802-7333

 -------------------------------------------------------------------------------
          (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

                                THOMAS C. CASTANO

                               ASSISTANT SECRETARY

                          PRUCO LIFE INSURANCE COMPANY

                              213 WASHINGTON STREET

                          NEWARK, NEW JERSEY 07102-2992

                                 (973) 802-4708

 -------------------------------------------------------------------------------
           (NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

                                COPIES TO:

                  C. CHRISTOPHER SPRAGUE
                  VICE PRESIDENT, CORPORATE COUNSEL
                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                  213 WASHINGTON STREET
                  NEWARK,  NEW JERSEY 07102-2992

================================================================================

Approximate date of commencement of proposed sale to the public--Immediately
upon effectiveness

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box ........................[x]
CALCULATION OF REGISTRATION FEE

                     TITLE OF EACH             AMOUNT            PROPOSED            PROPOSED           AMOUNT OF
                  CLASS OF SECURITIES           TO BE        MAXIMUM OFFERING    MAXIMUM AGGREGATE    REGISTRATION
                   TO BE REGISTERED          REGISTERED*      PRICE PER UNIT*     OFFERING PRICE          FEE**
               -----------------------   -----------------  ------------------   -----------------    ------------
Market-value adjusted

               annuity contracts            $500,000,000                           $500,000,000        $ 46,000
----------
*   Securities are not issued in predetermined units

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 may determine.

Prudential Investment Management Services LLC, the principal underwriter of
these contracts under a "best efforts" arrangement, will be reimbursed by Pruco
Life Insurance Company for its costs and expenses incurred in connection with
the sale of these contracts.

The risk factors section appears on page 6 of the prospectus.
STRATEGIC PARTNERS(SM)
MVA
--------------------------------------------------------------------------------
PROSPECTUS: JANUARY 2, 2003

THIS PROSPECTUS DESCRIBES A MARKET VALUE ADJUSTED INDIVIDUAL ANNUITY CONTRACT
OFFERED BY PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE). PRUCO LIFE IS A WHOLLY
OWNED SUBSIDIARY OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. PRUCO LIFE IS
LOCATED AT 213 WASHINGTON STREET, NEWARK, NJ 07102-2992, AND CAN BE CONTACTED BY
CALLING (973) 367-1730. PRUCO LIFE ADMINISTERS THE STRATEGIC PARTNERS MVA
CONTRACTS AT THE PRUDENTIAL ANNUITY SERVICE CENTER, P.O. BOX 7960, PHILADELPHIA,
PA 19101. YOU CAN CONTACT THE PRUDENTIAL ANNUITY SERVICE CENTER BY CALLING,
TOLL-FREE, (888) PRU-2888.

PLEASE READ THIS PROSPECTUS
------------------------------------------------------------

Please read this prospectus before purchasing a Strategic Partners MVA annuity
contract and keep it for future reference.

 THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
 SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
 OFFENSE TO STATE OTHERWISE. INVESTMENT IN A MARKET VALUE ADJUSTED ANNUITY
 CONTRACT IS SUBJECT TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR MONEY. AN
 INVESTMENT IN STRATEGIC PARTNERS MVA IS NOT A BANK DEPOSIT AND IS NOT INSURED
 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

 ORD01009
CONTENTS
--------------------------------------------------------------------------------
PART I: STRATEGIC PARTNERS MVA PROSPECTUS
                    ------------------------------------------------------------

                    SUMMARY
                    ------------------------------------------------------------
                             Glossary...........................................      4
                             Summary............................................      5
                             Risk Factors.......................................      6

                    PART II: STRATEGIC PARTNERS MVA PROSPECTUS
                    ------------------------------------------------------------
                        Section 1: What is the Strategic Partners MVA
                         Annuity?...............................................      8
                             Short Term Cancellation Right or "Free Look".......      8
                        Section 2: What Guarantee Periods Can I Choose?.........      9
                             Guarantee Periods..................................      9
                             Market Value Adjustment............................     10
                        Section 3: What Kind of Payments Will I Receive During
                         the Income Phase? (Annuitization)......................     11
                             Payment Provisions.................................     11
                                 Option 1: Annuity Payments for a Fixed
                                  Period........................................     11
                                 Option 2: Life Annuity with 120 Payments (10
                                  Years)........................................     11
                                 Option 3: Interest Payment Option..............     11
                                 Option 4: Other Annuity Options................     12
                                 Tax Considerations.............................     12
                        Section 4: What is the Death Benefit?...................     13
                             Beneficiary........................................     13
                             Calculation of the Death Benefit...................     13
                             Joint Ownership Rules..............................     13
                        Section 5: How Can I Purchase a Strategic Partners MVA
                         Contract?..............................................     14
                             Purchase Payment...................................     14
                             Allocation of Purchase Payment.....................     14
                        Section 6: What are the Expenses Associated with the
                         Strategic Partners MVA Contract?.......................     15
                             Withdrawal Charge..................................     15
                             Waiver of Withdrawal Charge for Critical Care......     15
                             Taxes Attributable to Premium......................     16
                        Section 7: How Can I Access My Money?...................     17
                             Automated Withdrawals..............................     17
                        Section 8: What are the Tax Considerations Associated
                         with the Strategic Partners MVA Contract? .............     18
                             Contracts Owned by Individuals (Not Associated with
                             Tax Favored Retirement Plans)......................     18
                             Contracts Held by Tax Favored Plans................     19
                        Section 9: Other Information............................     25
                             Pruco Life Insurance Company.......................     25
                             Sale and Distribution of the Contract..............     25
                             Assignment.........................................     26
                             Householding.......................................     26
                             Litigation.........................................     26
                             Management's Discussion and Analysis of Financial
                             Condition and Results of Operations ...............     27
                             Quantitative and Qualitative Disclosure about
                             Market Risk........................................     41
                             Directors and Officers.............................     46
                             Executive Compensation.............................     48
                             Selected Financial Data............................     48
                             Company Financial Information......................     49
                             Experts............................................     80
                             Indemnification....................................     80
                             Market-Value Adjustment Formula....................     81
                             IRA Disclosure Statement...........................     84
2
PART I SUMMARY
--------------------------------------------------------------------------------
STRATEGIC PARTNERS MVA PROSPECTUS

                                                                               3
PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

GLOSSARY
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WE HAVE TRIED TO MAKE THIS PROSPECTUS AS EASY TO READ AND UNDERSTAND AS
POSSIBLE. BY THE NATURE OF THE CONTRACT, HOWEVER, CERTAIN TECHNICAL WORDS OR
TERMS ARE UNAVOIDABLE. WE HAVE IDENTIFIED THE FOLLOWING AS SOME OF THE KEY WORDS
OR TERMS. OTHER DEFINED TERMS ARE SET FORTH IN YOUR CONTRACT.

ACCUMULATION PHASE

The period that begins with the contract date (see below definition) and ends
when you start receiving income payments or earlier if the contract is
terminated through a full withdrawal or payment of a death benefit.

ADJUSTED CONTRACT VALUE

When you begin receiving income payments, the value of your contract minus any
charge we impose for premium taxes.

ANNUITANT

The person whose life determines the amount of income payments that will be
paid. If, upon the death of the annuitant, there is no surviving co-annuitant,
and the owner is not the annuitant, then the owner becomes the annuitant.

ANNUITY DATE

The date when income payments are scheduled to begin.

BENEFICIARY

The person(s) or entity you have chosen to receive a death benefit.

CO-ANNUITANT

The person shown on the contract data pages who becomes the annuitant upon the
death of the annuitant before the annuity date. No co-annuitant may be
designated if the owner is a non-natural person.

CONTRACT DATE

The date we receive your purchase payment and all necessary paperwork in good
order at the Prudential Annuity Service Center. Contract anniversaries are
measured from the contract date. A contract year starts on the contract date or
on a contract anniversary.

CONTRACT OWNER, OWNER OR YOU

The person entitled to the ownership rights under the contract.

CONTRACT SURRENDER VALUE

This is the total value of your contract adjusted by any market-value
adjustment, minus any withdrawal charge(s) and premium taxes.

CONTRACT VALUE

The total value of the amount in a contract allocated to a guarantee period as
of a particular date.

DEATH BENEFIT

If the sole owner or first to die of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g. a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the death
of the annuitant. See "What is the Death Benefit?" on page 25.

GUARANTEE PERIOD

A period of time during which your invested purchase payment earns interest at
the declared rate. We currently make available guarantee periods equal to any or
all of the following: 1 year (currently available only as a renewal option), 3
years, 5 years, 7 years, and 10 years.

INCOME OPTIONS

Options under the contract that define the frequency and duration of income
payments. In your contract, these are referred to as payout or annuity options.

INVESTED PURCHASE PAYMENT

Your purchase payment (which we define below) less any deduction we make for any
premium or other tax charge. In addition to the initial invested purchase
payment, we allow you to make additional purchase payments during the 30 days
preceding the end of a guarantee period.

JOINT OWNER

The person named as the joint owner, who shares ownership rights with the owner
as defined in the contract. Joint owners may be spouses, but are not required to
be spouses.

PRUDENTIAL ANNUITY SERVICE CENTER

For general correspondence: P.O. Box 7960, Philadelphia, PA, 19101. For express
overnight mail: 2101 Welsh Road, Dresher, PA 19025. The phone number is (888)
PRU-2888. Prudential's Web site is www.prudential.com.

PURCHASE PAYMENT

The amount of money you pay us to purchase the contract, as well as any
additional payment you make.

TAX DEFERRAL

This is a way to increase your assets without currently being taxed. You do not
pay taxes on your contract earnings until you take money out of your contract.

 4
PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

SUMMARY OF SECTIONS 1-9
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FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN THE PROSPECTUS.

SECTION 1
WHAT IS THE STRATEGIC PARTNERS MVA ANNUITY?

This market value adjusted annuity contract, offered by Pruco Life, is a
contract between you, as the owner, and us. The contract is intended for
retirement savings or other long-term investment purposes and provides a death
benefit and guaranteed income options.

   While your money remains in the contract for the full guarantee period, your
principal amount is guaranteed and the interest amount that your money will earn
is guaranteed by us to always be at least 3%. Payments allocated to the contract
are held as a separate pool of assets, but the income, gains or losses
experienced by these assets are not directly credited or charged against the
contracts. As a result, the strength of our guarantees under the contract are
based on the overall financial strength of Pruco Life.

   The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
grow on a tax-deferred basis and are taxed as income when you make a withdrawal.
The income phase starts when you begin receiving regular payments from your
contract. The amount of money you are able to accumulate in your contract during
the accumulation phase will help determine the amount of the payments you will
receive during the income phase. Other factors will affect the amount of your
payments such as age, gender and the payout option you selected.

   Free Look. If you change your mind about owning Strategic Partners MVA, you
may cancel your contract within 10 days after receiving it (or whatever time
period is required in the state where the contract was issued).

SECTION 2
WHAT GUARANTEE PERIODS CAN I CHOOSE?

You can allocate your initial purchase payment to one of the guarantee periods
available under the contract. We have the right under the contract to offer one
or more of the following guarantee periods: 1 year (currently available only as
a renewal option), 3 years, 5 years, 7 years, or 10 years, and we may offer
other guarantee periods in the future. At any time, we may offer any or all of
these guarantee periods. You may not allocate your purchase payment to more than
one guarantee period.

SECTION 3
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)

If you want to receive regular income from your annuity, you can choose one of
several options, including guaranteed payments for the annuitant's lifetime.
Once you begin receiving regular payments, you cannot change your payment plan.

SECTION 4
WHAT IS THE DEATH BENEFIT?

If the sole owner or the first of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g., a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the death
of the annuitant.

SECTION 5
HOW CAN I PURCHASE A STRATEGIC PARTNERS MVA CONTRACT?

You can purchase this contract, under most circumstances, with a minimum
purchase payment of $5,000. We allow you to make additional purchase payments
only during the 30 days immediately preceding the end of a guarantee period.
Your representative can help you fill out the proper forms.

SECTION 6
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS MVA CONTRACT?

There are a few states/jurisdictions that assess a premium tax when you begin
receiving regular income payments from your annuity. In those states, we will
impose the required premium tax charge which can range up to 3.5%.

                                                                               5
SUMMARY OF SECTIONS 1-9 CONTINUED
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                                                                          PART I
STRATEGIC PARTNERS MVA PROSPECTUS  SUMMARY

   During the accumulation phase, if you withdraw money, you may have to pay a
withdrawal charge on all or part of the withdrawal. The withdrawal charge that
we impose depends on the guarantee period from which you are withdrawing your
money. The withdrawal charge ranges from 0% to 7%. You also will be subject to a
market value adjustment if you make a withdrawal prior to the end of a guarantee
period.

SECTION 7
HOW CAN I ACCESS MY MONEY?

You may take money out at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if you make a withdrawal prior to
age 59 1/2, an additional tax penalty as well. Each contract year after the
first, you may withdraw without charge an amount equal to the interest you
earned (but did not withdraw) during the contract year immediately preceding the
withdrawal. Withdrawals greater than that amount will be subject to a withdrawal
charge. A market-value adjustment may also apply.

SECTION 8
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS MVA
CONTRACT?

Your earnings are not taxed until withdrawn. If you take money out during the
accumulation phase, earnings are withdrawn first and are taxed as ordinary
income. If you are younger than age 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings in addition to ordinary
taxation. A portion of the payments you receive during the income phase is
considered partly a return of your original investment. As a result, that
portion of each payment is not taxable as income. Generally, all amounts
withdrawn from IRA contracts (excluding Roth IRAs) are fully taxable and subject
to the 10% penalty if withdrawn prior to age 59 1/2.

SECTION 9
OTHER INFORMATION

This contract is issued by Pruco Life, a subsidiary of The Prudential Insurance
Company of America and sold by registered representatives. Section 9 of the
prospectus provides a detailed discussion of Pruco Life's operations and assets.

RISK FACTORS

There are various risks associated with the purchase of the Strategic Partners
MVA annuity that we summarize below.

   ISSUER RISK. Your MVA annuity is issued by Pruco Life, and thus is backed by
the financial strength of that company. If Pruco Life were to experience
significant financial adversity, it is possible that Pruco Life's ability to pay
interest and principal under the MVA annuity could be impaired.

   RISKS RELATED TO CHANGING INTEREST RATES. You do not participate directly in
the investment experience of the bonds and other instruments that Pruco Life
holds to support the MVA annuities. Nonetheless, the market value adjustment
formula (which is detailed in the appendix to this prospectus) reflects the
effect that prevailing interest rates have on those bonds and other instruments.
If you need to withdraw your money during a period in which prevailing interest
rates have risen above their level when you made your purchase, you will
experience a "negative" market value adjustment. When we impose this market
value adjustment, it could result in the loss of both the interest you have
earned and a portion of your purchase payments. Thus, before you commit to a
particular guarantee period, you should consider carefully whether you have the
ability to remain in the contract throughout the guarantee period. In addition,
we cannot, of course, assure you that the Strategic Partners MVA annuity will
perform better than another investment that you might have made.

   RISKS RELATED TO THE WITHDRAWAL CHARGE. We impose withdrawal charges that
range as high as 7%. If you anticipate needing to withdraw your money prior to
the end of a guarantee period, you should be prepared to pay the withdrawal
charge that we will impose.

   A more comprehensive discussion of the risks inherent in Pruco Life's
operations appears in Section 9 under "Quantitative and Qualitative Disclosures
About Market Risk."

 6
PART II SECTIONS 1-9
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STRATEGIC PARTNERS MVA PROSPECTUS

                                                                               7
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        1:
WHAT IS THE STRATEGIC PARTNERS MVA

        ANNUITY?
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THE STRATEGIC PARTNERS MVA ANNUITY IS A CONTRACT BETWEEN YOU, THE

OWNER, AND US, THE INSURANCE COMPANY, PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE,

WE OR US).

Under our contract or agreement, in exchange for your payment to us, we promise
to pay you a guaranteed income stream that can begin any time after the second
contract anniversary. This time period may differ in certain states. Your
annuity is in the accumulation phase until you decide to begin receiving annuity
payments. The date you begin receiving annuity payments is the annuity date. On
the annuity date, your contract switches to the income phase.

   This annuity contract benefits from tax deferral. Tax deferral means that you
are not taxed on earnings or appreciation on the assets in your contract until
you withdraw money from your contract.

   Strategic Partners MVA allows you to allocate a purchase payment to one of
several guarantee periods that we offer at the time. As the owner of the
contract, you have all of the decision-making rights under the contract. You
will also be the annuitant unless you designate someone else. The owner is the
person upon whose death during the accumulation phase, the death benefit
generally is payable. The annuitant is the person whose life is used to
determine the amount of annuity payments and how long the payments will
continue. On and after the annuity date, the annuitant may not be changed.

   The beneficiary is the person(s) or entity designated to receive any death
benefit if the owner (or first to die of joint owners) dies during the
accumulation phase. You may change the beneficiary any time prior to the annuity
date by making a written request to us. Your request becomes effective when we
approve it.

SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"

If you change your mind about owning Strategic Partners MVA, you may cancel your
contract within 10 days after receiving it (or whatever period is required by
applicable law). You can request a refund by returning the contract either to
the representative who sold it to you, or to the Prudential Annuity Service
Center at the address shown on the first page of this prospectus. You will
receive, depending on applicable state law:

-  Your full purchase payment; or

-  The amount your contract is worth as of the day we receive your request.

We impose neither a withdrawal charge nor any market value adjustment if you
cancel your contract under this provision.

 8
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        2:
WHAT GUARANTEE PERIODS

        CAN I CHOOSE?
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THE CONTRACT GIVES YOU THE CHOICE OF ALLOCATING YOUR PURCHASE PAYMENT TO ONE OF
THE GUARANTEE PERIODS THAT WE ARE OFFERING AT THE TIME.

GUARANTEE PERIODS

Under each Strategic Partners MVA contract, we have the right to offer one or
more of several guarantee periods. These guarantee periods are 1 year (currently
available only as a renewal option), 3 years, 5 years, 7 years, or 10 years in
length. In the future, we may offer other guarantee periods on substantially the
same terms as described in this prospectus. We are not obligated to offer more
than one guarantee period at any time. We will apply your purchase payment to
the guarantee period you have chosen. We do not allow you to allocate your
purchase payment to more than one guarantee period.

   We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare no less than 3% interest
with respect to any guarantee period. You will earn interest on your invested
purchase payment at the rate that we have declared for the guarantee period you
have chosen.

   In addition to the basic interest, we also may pay additional interest with
respect to guarantee periods other than the one year and three year periods. The
amount of the additional interest varies according to the amount of your
purchase payment. Specifically, we will pay additional interest equal to 0.50%
annually for a purchase payment of $25,000 to $74,999, and 1.00% annually for a
purchase payment of $75,000 or more.

   If we grant additional interest to you, you will earn that interest only
during the first year of your contract (and during the first year of the initial
renewal guarantee period, other than the one and three year periods). We are not
obligated to offer this additional interest continuously, meaning that we
reserve the right to offer additional interest only during limited time periods
of our choosing. We also reserve the right to change the amount of the
additional interest.

   We express interest rates as annual rates, although we credit interest within
each guarantee period on a daily basis. The daily interest that we credit is
equal to the pro rated portion of the interest that would be earned on an annual
basis. We credit interest from the business day on which your purchase payment
is received in good order at the Prudential Annuity Service Center until the
earliest to occur of any of the following events: (a) full surrender of the
Contract, (b) commencement of annuity payments or settlement, (c) cessation of
the guarantee period, or (d) death of the first to die of the owner and joint
owner (or annuitant, for entity-owned contracts).

   During the 30 day period immediately preceding the end of a guarantee period,
we allow you to do any of the following, without the imposition of the
withdrawal charge or market value adjustment: (a) surrender the contract, in
whole or in part, (b) allocate the contract value to another guarantee period
available at that time (provided that the new guarantee period ends prior to the
contract anniversary next following the annuitant's 95th birthday and that you
reinvest at least $2,000), or (c) apply the adjusted contract value to the
annuity or settlement option of your choice. If we do not receive instructions
from you concerning the disposition of the contract value in your maturing
guarantee period, we will reinvest the contract value in a guarantee period
having the same duration as the guarantee period that matured (provided that the
new guarantee period ends prior to the contract anniversary next following the
annuitant's 95th birthday and that you reinvest at least $2,000). If any
available new guarantee period would end on or after the contract anniversary
next following the annuitant's 95th birthday, or if the annuitant is 88 years
old at the end of the guarantee period, then we will make only the one year
guarantee period available as the renewal period. We will not impose a
withdrawal charge on amounts you withdraw from the one year guarantee period
described in the immediately preceding sentence, although such a withdrawal
would be subject to a market value adjustment.

                                                                               9
2:
WHAT GUARANTEE PERIODS CAN I CHOOSE? CONTINUED

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

MARKET VALUE ADJUSTMENT

When you allocate a purchase payment to a guarantee period, we use that money to
buy and sell securities and other instruments to support our obligation to pay
interest. Generally, we buy bonds for this purpose. The duration of the bonds
and other instruments that we buy with respect to a particular guarantee period
is influenced significantly by the length of the guarantee period. Thus, for
example, we typically would acquire longer-duration bonds with respect to the 10
year guarantee period than we do for the 3 year guarantee period. The value of
these bonds is affected by changes in interest rates, among other factors. The
market value adjustment that we assess against your contract value if you
withdraw prior to the end of a guarantee period involves our attributing to you
a portion of our investment experience on these bonds and other instruments. For
example, if you make a full withdrawal when interest rates have risen since the
time of your investment, the bonds and other investments in the guarantee period
likely would have decreased in value, meaning that we would impose a "negative"
market value adjustment on you (i.e., one that results in a reduction of the
withdrawal proceeds that you receive). For a partial withdrawal, we would deduct
a negative market value adjustment from your remaining contract value.
Conversely, if interest rates have decreased, the market value adjustment would
be positive.

   Other things you should know about the market value adjustment include the
following:

-  We determine the market value adjustment according to a mathematical formula,
   which is set forth at the end of this prospectus under the heading
   "Market-Value Adjustment Formula." In that section of the prospectus, we also
   provide hypothetical examples of how the formula works.

-  A negative market value adjustment could cause you to lose not only the
   interest you have earned but also a portion of your principal. However, the
   laws of certain states provide for an absolute limit or "floor" on the amount
   of a negative market value adjustment. This floor operates regardless of how
   much interest rates have risen since you made your purchase payment.

-  You may withdraw, without the imposition of any market value adjustment, an
   amount equal to the interest earned but not withdrawn under your contract
   during the immediately preceding contract year.

-  In addition to imposing a market value adjustment on withdrawals, we also
   will impose a market value adjustment on the contract value you apply to an
   annuity or settlement option, except if you annuitize during the 30 day
   period preceding the end of a guarantee period (See Section 3 for details).
   The laws of certain states may prohibit us from imposing a market value
   adjustment on the annuity date.

   YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFITS UNDER YOUR CONTRACT DOES NOT DEPEND ON THE INVESTMENT
PERFORMANCE OF THE BONDS AND OTHER INSTRUMENTS THAT WE HOLD WITH RESPECT TO YOUR
GUARANTEE PERIOD. APART FROM THE EFFECT OF ANY MARKET VALUE ADJUSTMENT, WE DO
NOT PASS THROUGH TO YOU THE GAINS OR LOSSES ON THE BONDS AND OTHER INSTRUMENTS
THAT WE HOLD IN CONNECTION WITH A GUARANTEE PERIOD.

 10
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        3:

WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE

        INCOME PHASE? (ANNUITIZATION)
--------------------------------------------------------------------------------

PAYMENT PROVISIONS

We can begin making annuity payments any time after the second contract
anniversary. (This time period may differ in certain states.) Annuity payments
must begin no later than the contract anniversary next following the annuitant's
95th birthday. If you begin annuity payments or commence Option 3 at a time
other than the 30 day period prior to the end of a guarantee period, then:

-  We will impose both a withdrawal charge and a market value adjustment if you
   choose an annuity option with a fixed period of fewer than 10 years or Option
   3. (If your adjusted contract value is allocated to the one year guarantee
   period, we will impose only a market value adjustment).

-  We will impose a market value adjustment if you choose a life annuity or an
   annuity option with a fixed period of at least 10 years.

   We make the income plans described below available before the annuity date.
These plans are called annuity options. You must choose an annuity option at
least 30 days in advance of the annuity date. If you do not, we will select
Option 2 below on your behalf unless prohibited by applicable law. During the
income phase, all of the annuity options under this contract are fixed annuity
options. GENERALLY, ONCE THE ANNUITY PAYMENTS BEGIN, THE ANNUITY OPTION CANNOT
BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.

   If the annuitant dies or assigns the contract, and the new annuitant is older
than the original annuitant, then the annuity date will be based on the new
annuitant's age. If the annuitant dies or assigns the contract, and the new
annuitant is younger than the original annuitant, then the annuity date will
remain unchanged. In no event, however, may an original or revised annuity date
be later than the contract anniversary next following the annuitant's 95th
birthday.

OPTION 1
ANNUITY PAYMENTS FOR A FIXED PERIOD

Under this option, we will make equal payments for the period chosen, up to 25
years (but no less than 5 years). The annuity payments may be made monthly,
quarterly, semi-annually, or annually for as long as the annuitant is alive. If
the annuitant dies during the income phase, a lump sum payment generally will be
made to the beneficiary. The amount of the lump sum payment is determined by
calculating the present value of the unpaid future payments. This is done by
using the interest rate used to compute the actual payments. The interest rate
used will always be at least 3.0% a year.

OPTION 2
LIFE ANNUITY WITH 120 PAYMENTS (10 YEARS)

Under this option, we will make annuity payments monthly, quarterly,
semi-annually, or annually as long as the annuitant is alive. If the annuitant
dies before we have made 10 years worth of payments, we will pay the beneficiary
the present value of the remaining annuity payments in one lump sum unless we
were specifically instructed that the remaining annuity payments continue to be
paid to the beneficiary. The present value of the remaining annuity payments is
calculated by using the interest rate used to compute the amount of the original
payments. The interest rate used will always be at least 3.0% a year.

OPTION 3
INTEREST PAYMENT OPTION

Under this option, we will credit interest on the adjusted contract value until
you request payment of all or part of the adjusted contract value. We can make
interest payments on a monthly, quarterly, semiannual, or annual basis or allow
the interest to accrue on your contract assets. Under this option, we will pay
you interest at an effective rate of at least 1.50% a year. This option is not
available if you hold your contract in an IRA.

                                                                              11
3:

WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
CONTINUED
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

OPTION 4
OTHER ANNUITY OPTIONS

We currently offer a variety of other annuity options not described above. At
the time annuity payments are chosen, we may make available to you any of the
fixed annuity options that are offered at your annuity date.

TAX CONSIDERATIONS

If your contract is held under a tax-favored plan, as discussed on page 19, you
should consider the minimum distribution requirements mentioned on page 22 when
selecting your annuity option.

   For certain contracts held in connection with "qualified" retirement plans
(such as a Section 401(k) plan), please note that if you are married at the time
your payments commence, you may be required by federal law to choose an income
option that provides at least a 50 percent joint and survivor annuity to your
spouse, unless your spouse waives that right. Similarly, if you are married at
the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. For more information, consult the terms of your retirement
arrangement.

 12
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        4:

WHAT IS THE

        DEATH BENEFIT?
--------------------------------------------------------------------------------

THE DEATH BENEFIT FEATURE PROTECTS THE VALUE OF THE CONTRACT FOR THE
BENEFICIARY.

BENEFICIARY

The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued, unless you
change it at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before the owner or last surviving owner
dies.

CALCULATION OF THE DEATH BENEFIT

If the owner (or first to die of the owner and joint owner) dies during the
accumulation phase, we will, upon receiving appropriate proof of death and any
other needed documentation ("due proof of death"), pay a death benefit to the
beneficiary designated by the contract owner. If the contract is owned by an
entity (e.g., a corporation or trust), rather than by an individual, then we
will pay the death benefit upon the death of the annuitant. We require due proof
of death to be submitted promptly. The beneficiary will receive a death benefit
equal to the contract value as of the date that due proof of death is received
in good order at the Prudential Annuity Service Center.

   Instead of asking us to pay a death benefit, the surviving spouse may opt to
continue the contract, as discussed below. Generally, we impose no withdrawal
charge or market value adjustment when we pay the death benefit.

JOINT OWNERSHIP RULES

   If the contract has an owner and a joint owner and they are spouses, then
upon the first to die of the owner and joint owner, the surviving spouse has the
choice of the following:

-  The contract can continue, with the surviving spouse as the sole owner of the
   contract; or

-  The surviving spouse can receive the death benefit and the contract will end.
   If the surviving spouse wishes to receive the death benefit, he or she must
   make that choice within the first 60 days following our receipt of due proof
   of death. Otherwise, the contract will continue with the surviving spouse as
   the sole owner.

   If the contract has an owner and a joint owner, and they are not spouses, the
contract will not continue. Instead, the beneficiary will receive the death
benefit.

   The payout options are:

   Choice 1. Lump sum.

   Choice 2. Payment of the entire death benefit within 5 years of the date of
             death of the first to die. Under this choice, we will impose
             withdrawal charges and a market value adjustment upon any
             withdrawal made during the 5 year period (unless the withdrawal is
             made during the 30 day period immediately preceding the end of a
             guarantee period).

   Choice 3. Payment under an annuity or settlement option over the lifetime of
             the beneficiary or over a period not extending beyond the life
             expectancy of the beneficiary with distribution beginning within
             one year of the date of death of the first to die.

   This contract is subject to special tax rules that govern the required
distributions upon the death of the owner or joint owner. See "What are the Tax
Considerations Associated with the Strategic Partners MVA Contract?" section
beginning on page 18.

                                                                              13
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        5:

HOW CAN I PURCHASE A STRATEGIC PARTNERS

        MVA CONTRACT?
--------------------------------------------------------------------------------

PURCHASE PAYMENT

A purchase payment is the amount of money you give us to purchase the contract.
The minimum initial purchase payment is $5,000. You must get our prior approval
for any purchase payment over $5 million. You can allocate subsequent purchase
payments to a guarantee period only during the 30 day period immediately
preceding the end of a guarantee period, provided that any such purchase payment
is at least $1,000.

   Generally, your initial purchase payment consists of a single sum. However,
with respect to an exchange or roll-over, your purchase payment can consist of
multiple sums that you identify at the time of application. With respect to the
latter:

-  we will aggregate each sum for purposes of computing the amount of any
   additional interest that we pay on each sum; and

-  each sum will earn interest only from the business day on which it is
   received in good order at the Prudential Annuity Service Center until the end
   of the guarantee period.

   We will sell you a contract only if the eldest of the owner, any joint owner,
annuitant, and any co-annuitant is 85 or younger on the date that the
application is signed.

ALLOCATION OF PURCHASE PAYMENT

When you purchase a contract, we will allocate your invested purchase payment to
the guarantee period of your choosing, provided that we are offering that
guarantee period at the time.

 14
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

        6:

WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC

PARTNERS MVA CONTRACT?
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THERE ARE CHARGES ASSOCIATED WITH THE CONTRACT THAT MAY REDUCE THE RETURN ON
YOUR INVESTMENT. THESE CHARGES AND EXPENSES ARE DESCRIBED BELOW.

WITHDRAWAL CHARGE

The withdrawal charge is for the payment of the expenses involved in selling and
distributing the contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature and other
promotional activities.

   You may surrender your contract in whole or in part while the guarantee
period remains in effect. If you do so, however, you will be subject to (a) a
possible withdrawal charge, (b) a market value adjustment (which we discussed in
Section 2 above) and (c) possible tax penalties. After the first contract year,
you may withdraw, without the imposition of any withdrawal charge or market
value adjustment, an amount equal to the interest earned under your contract
during the immediately preceding contract year. When we calculate the withdrawal
charge and market value adjustment, we first take into account any available
charge-free amount. We impose a withdrawal charge and market value adjustment
only after that amount has been exhausted. In addition, we do not impose either
a withdrawal charge or a market value adjustment on amounts you withdraw to
satisfy Internal Revenue Service minimum distribution requirements.

   If you make a full withdrawal, we will deduct the withdrawal charge from the
proceeds that we pay to you. If you make a partial withdrawal, we will deduct
the withdrawal charge from the contract value remaining in the guarantee period.
We calculate the withdrawal charge after we have given effect to any market
value adjustment.

   The withdrawal charge that we impose is equal to a specified percentage of
the contract value withdrawn that is in excess of the charge-free amount
described above, and is based on the number of contract anniversaries that have
elapsed since the contract date. These withdrawal charges also apply to a
withdrawal you make from your first, renewal guarantee period, and the contract
anniversaries set out in the table below also refer to contract anniversaries
within the first, renewal guarantee period. No withdrawal charges apply to any
guarantee period that you choose subsequent to your first, renewal guarantee
period. Moreover, we impose no withdrawal charge on withdrawals from any one
year guarantee period. The withdrawal charge is equal to the following:
NUMBER OF CONTRACT
ANNIVERSARIES SINCE
 PURCHASE PAYMENT    WITHDRAWAL CHARGE
-------------------  -----------------
0                  7%
         1                  7%
         2                  7%
         3                  6%
         4                  5%
         5                  5%
         6                  4%
         7                  3%
         8                  2%
         9                  1%
        10                  0%
Some or all of the guarantee periods that we offer at any given time will be
shorter than the time periods indicated immediately above. As such, the length
of the guarantee period that you have selected, in and of itself, may prevent
you from taking advantage of the decreasing withdrawal charges depicted above.
If a withdrawal is effective on the day before a contract anniversary, the
withdrawal charge percentage will be that as of the next following contract
anniversary.

WAIVER OF WITHDRAWAL CHARGE FOR CRITICAL CARE

We will allow you to withdraw money from the contract, and will waive any
withdrawal charge and market value adjustment, if the owner or joint owner (if
applicable) becomes confined to an eligible nursing home or hospital for a
period of at least three consecutive months after the contract was purchased.
You would need to provide us with proof of the confinement. If a physician has
certified that the owner or joint owner is terminally ill (has twelve months or
less to live) there will

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WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS MVA CONTRACT?
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

be no charge imposed for withdrawals nor any market value adjustment. Critical
Care Access is not available in all states.

TAXES ATTRIBUTABLE TO PREMIUM

There are federal, state and local premium based taxes applicable to your
purchase payment. We are responsible for the payment of these taxes and may make
a deduction from the value of the contract to pay some or all of these taxes.
Some of these taxes are due when the contract is issued, others are due when the
annuity payments begin. It is our current practice not to deduct a charge for
state premium taxes until annuity payments begin. In the states that impose a
premium tax, the current rates range up to 3.5%. It is also our current practice
not to deduct a charge for the federal deferred acquisition costs paid by us
that are based on premium received. However, we reserve the right to charge the
contract owner in the future for any such deferred acquisition costs and any
federal, state or local income, excise, business or any other type of tax
measured by the amount of premium received by us.

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PART II
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        7:

HOW CAN I ACCESS

        MY MONEY?
--------------------------------------------------------------------------------

You can take money out at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if the withdrawal is prior to
your attaining age 59 1/2, an additional tax penalty. You will need our consent
to make a partial withdrawal if the requested withdrawal is less than $250.
During the accumulation phase, we generally have the right to terminate your
contract and pay you the contract value if the current contract value is less
than $2,000 and certain other conditions apply.

   INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS
PROSPECTUS.

AUTOMATED WITHDRAWALS

We offer an automated withdrawal feature. This feature enables you to receive
periodic withdrawals in monthly, quarterly, semiannual, or annual intervals. We
will process your withdrawal at the end of the business day at the intervals you
specify. We will continue at these intervals until you tell us otherwise. We
reserve the right to cease paying automated withdrawals if paying any such
withdrawal would cause the contract value to be less than $2,000.

   The minimum automated withdrawal amount you can make is $100. Withdrawal
charges, and a market value adjustment, may apply to any automated withdrawal
you make.

   INCOME TAXES, TAX PENALTIES, AND CERTAIN RESTRICTIONS MAY APPLY TO AUTOMATED
WITHDRAWALS. FOR A MORE COMPLETE DISCUSSION, SEE SECTION 8 OF THIS PROSPECTUS.

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        8:

WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS MVA
CONTRACT?
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The tax considerations associated with the Strategic Partners MVA contract vary
depending on whether the contract is (i) owned by an individual and not
associated with a tax-favored retirement plan, or (ii) held under a tax-favored
retirement plan. We discuss the tax considerations for these categories of
contracts below. The discussion is general in nature and describes only federal
income tax law (not state or other tax laws). It is based on current law and
interpretations, which may change. It is not intended as tax advice. A tax
adviser should be consulted for complete information and advice.

CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX FAVORED RETIREMENT
PLANS)

TAXES PAYABLE BY YOU

We believe the contract is an annuity contract for tax purposes. Accordingly, as
a general rule, you should not pay any tax until you receive money under the
contract.

   Generally, annuity contracts issued by the same company (and affiliates) to
you during the same calendar year must be treated as one annuity contract for
purposes of determining the amount subject to tax under the rules described
below.

TAXES ON WITHDRAWALS AND SURRENDER

If you make a withdrawal from your contract or surrender it before annuity
payments begin, the amount you receive will be taxed as ordinary income, rather
than as return of purchase payments, until all gain has been withdrawn. You will
generally be taxed on any withdrawal from a contract while you are alive even if
the withdrawal is paid to someone else.

   If you assign or pledge all or part of your contract as collateral for a
loan, the part assigned will be treated as a withdrawal. Also, if you elect the
interest payment option, you will be treated, for tax purposes, as surrendering
your contract.

   If you transfer your contract for less than full consideration, such as by
gift, you will trigger tax on the gain in the contract. This rule does not apply
if you transfer the contract to your spouse or under most circumstances if you
transfer the contract incident to divorce.

TAXES ON ANNUITY PAYMENTS

A portion of each annuity payment you receive will be treated as a partial
return of your purchase payments and will not be taxed. The remaining portion
will be taxed as ordinary income. Generally, the nontaxable portion is
determined by multiplying the annuity payment you receive by a fraction, the
numerator of which is your purchase payments (less any amounts previously
received tax-free) and the denominator of which is the total expected payments
under the contract.

   After the full amount of your purchase payments have been recovered tax-free,
the full amount of the annuity payments will be taxable. If annuity payments
stop due to the death of the annuitant before the full amount of your purchase
payments have been recovered, a tax deduction may be allowed for the unrecovered
amount.

TAX PENALTY ON WITHDRAWALS AND ANNUITY PAYMENTS

Any taxable amount you receive under your contract may be subject to a 10
percent tax penalty. Amounts are not subject to this tax penalty if:

-  the amount is paid on or after you reach age 59 1/2 or die;

-  the amount received is attributable to your becoming disabled;

-  the amount paid or received is in the form of level annuity payments not less
   frequently than annually under a lifetime annuity; and

-  the amount received is paid under an immediate annuity contract (in which
   annuity payments begin within one year of purchase).

   If you modify the lifetime annuity payment stream (other than as a result of
death or disability) before you reach age 59 1/2 (or before the end of the five
year period beginning with the first payment and ending after you reach age
59 1/2), your tax for the year of modification will be increased by the penalty
tax that

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

would have been imposed without the exception, plus interest for the deferral.

TAXES PAYABLE BY BENEFICIARIES

The death benefit is subject to income tax to the extent the distribution
exceeds the adjusted basis in the contract and the full value of the death
benefit is included in the owner's estate.

   Generally, the same tax rules apply to amounts received by your beneficiary
as those set forth above with respect to you. The election of an annuity payment
option instead of a lump sum death benefit may defer taxes. Certain minimum
distribution requirements apply upon your death, as discussed further below.

REPORTING AND WITHHOLDING ON DISTRIBUTIONS

Taxable amounts distributed from your annuity contracts are subject to federal
and state income tax reporting and withholding. In general, we will withhold
federal income tax from the taxable portion of such distribution based on the
type of distribution. In the case of an annuity or similar periodic payment, we
will withhold as if you are a married individual with 3 exemptions unless you
designate a different withholding status. In the case of all other
distributions, we will withhold at a 10% rate. You may generally elect not to
have tax withheld from your payments. An election out of withholding must be
made on forms that we provide.

   State income tax withholding rules vary and we will withhold based on the
rules of your State of residence. Special tax rules apply to withholding for
nonresident aliens, and we generally withhold income tax for nonresident aliens
at a 30% rate. A different withholding rate may be applicable to a nonresident
alien based on the terms of an existing income tax treaty between the United
States and the nonresident alien's country.

   Regardless of the amount withheld by us, you are liable for payment of
federal and state income tax on the taxable portion of annuity distributions.
You should consult with your tax advisor regarding the payment of the correct
amount of these income taxes and potential liability if you fail to pay such
taxes.

ANNUITY QUALIFICATION

   REQUIRED DISTRIBUTIONS UPON YOUR DEATH -- Upon your death (or the death of a
joint owner, if earlier), certain distributions must be made under the contract.
The required distributions depend on whether you die on or before you start
taking annuity payments under the contract or after you start taking annuity
payments under the contract.

   If you die on or after the annuity date, the remaining portion of the
interest in the contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death.

   If you die before the annuity date, the entire interest in the contract must
be distributed within 5 years after the date of death. However, if an annuity
payment option is selected by your designated beneficiary and if annuity
payments begin within 1 year of your death, the value of the contract may be
distributed over the beneficiary's life or a period not exceeding the
beneficiary's life expectancy. Your designated beneficiary is the person to whom
benefit rights under the contract pass by reason of death, and must be a natural
person in order to elect an annuity payment option based on life expectancy or a
period exceeding five years.

   If any portion of the contract is payable to (or for the benefit of) your
surviving spouse, such portion of the contract may be continued with your spouse
as the owner.

   CHANGES IN THE CONTRACT -- We reserve the right to make any changes we deem
necessary to assure that the contract qualifies as an annuity contract for tax
purposes. Any such changes will apply to all contractowners and you will be
given notice to the extent feasible under the circumstances.

ADDITIONAL TAX CONSIDERATIONS

For additional information about the requirements of federal tax law applicable
to tax favored plans, see the "IRA Disclosure Statement" on page 84.

CONTRACTS HELD BY TAX FAVORED PLANS

Currently, the contract may be purchased for use in connection with individual
retirement accounts and

                                                                              19
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

annuities ("IRAs") which are subject to Sections 408(a), 408(b) and 408A of the
Internal Revenue Code of 1986, as amended (Code). At some future time we may
allow the contract to be purchased in connection with other retirement
arrangements which are also entitled to favorable federal income tax treatment
("tax favored plans"). These other tax favored plans include:

-  Simplified employee pension plans ("SEPs") under Section 408(k) of the Code;

-  Saving incentive match plans for employees-IRAs ("SIMPLE-IRAs") under Section
   408(p) of the Code; and

-  Tax-deferred annuities ("TDAs") under Section 403(b) of the Code.

   This description assumes that (i) we will be offering this to both IRA and
non-IRA tax favored plans, and (ii) you have satisfied the requirements for
eligibility for these products.

   YOU SHOULD BE AWARE THAT TAX FAVORED PLANS SUCH AS IRAS GENERALLY PROVIDE TAX
DEFERRAL REGARDLESS OF WHETHER THEY INVEST IN ANNUITY CONTRACTS. THIS MEANS THAT
WHEN A TAX FAVORED PLAN INVESTS IN AN ANNUITY CONTRACT, IT GENERALLY DOES NOT
RESULT IN ANY ADDITIONAL TAX DEFERRAL BENEFITS.

TYPES OF TAX FAVORED PLANS

   IRAs If you buy a contract for use as an IRA, we will provide you a copy of
the prospectus and the contract. The "IRA Disclosure Statement" on page 84
contains information about eligibility, contribution limits, tax particulars and
other IRA information. In addition to this information (some of which is
summarized below), the IRS requires that you have a "free look" after making an
initial contribution to the contract. During this time, you can cancel the
contract by notifying us in writing, and we will refund all of the purchase
payments under the contract (or, if greater, the amount credited under the
contract, calculated as of the date that we receive this cancellation notice).

   Contributions Limits/Rollovers: Because of the way the contract is designed,
you may only purchase a contract for an IRA in connection with a "rollover" of
amounts from a qualified retirement plan or transfer from another IRA. The
minimum payment under the contract ($5,000) is greater than the maximum amount
of the annual contribution currently allowed by law for an IRA. For 2002 to
2004, the IRA contribution limit is $3,000; increasing for 2005 to 2007, to
$4,000; and for 2008, $5,000. After 2008 the contribution amount will be indexed
for inflation. The tax law also provides for a catch-up provision for
individuals who are age 50 and above. These taxpayers will be permitted to
contribute an additional $500 in years 2002 to 2005 and an additional $1,000 in
2006 and years thereafter). The "rollover" rules under the Code are fairly
technical; however, an individual (or his or her surviving spouse) may generally
"roll over" certain distributions from tax favored retirement plans (either
directly or within 60 days from the date of these distributions) if he or she
meets the requirements for distribution. Once you buy the contract, you can make
regular IRA contributions under the contract (to the extent permitted by law).
However, if you make such regular IRA contributions, you should note that you
will not be able to treat the contract as a "conduit IRA," which means that you
will not retain possible favorable tax treatment if you subsequently "roll over"
the contract funds originally derived from a qualified retirement plan or TDA
into another Section 401(a) plan or TDA.

   Required Provisions: Contracts that are IRAs (or endorsements that are part
of the contract) must contain certain provisions:

-  You, as owner of the contract, must be the "annuitant" under the contract
   (except in certain cases involving the division of property under a decree of
   divorce);

-  Your rights as owner are non-forfeitable;

-  You cannot sell, assign or pledge the contract, other than to Pruco Life;

-  The annual premium you pay cannot be greater than the maximum amount allowed
   by law, including catch-up contributions if applicable (which does not
   include any rollover amounts);

-  The date on which annuity payments must begin cannot be later than the April
   1st of the calendar year after the calendar year you turn age 70 1/2; and

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

-  Death and annuity payments must meet "minimum distribution requirements"
   (described below).

   Usually, the full amount of any distribution from an IRA (including a
distribution from this contract) which is not a rollover is taxable. As taxable
income, these distributions are subject to the general tax withholding rules
described earlier. In addition to this normal tax liability, you may also be
liable for the following, depending on your actions:

-  A 10% "early distribution penalty" (described below);

-  Liability for "prohibited transactions" if you, for example, borrow against
   the value of an IRA; or

-  Failure to take a minimum distribution (also generally described below).

   SEPs SEPs are a variation on a standard IRA, and contracts issued to a SEP
must satisfy the same general requirements described under IRAs (above). There
are, however, some differences:

-  If you participate in a SEP, you generally do not include in income any
   employer contributions made to the SEP on your behalf up to the lesser of (a)
   $40,000 in 2002 or (b) 25% of the employee's earned income (not including the
   employer contribution amount as "earned income" for these purposes). However,
   for these purposes, compensation in excess of certain limits established by
   the IRS will not be considered. In 2002, this limit is $200,000.

-  SEPs must satisfy certain participation and nondiscrimination requirements
   not generally applicable to IRAs; and

-  Some SEPs for small employers permit salary deferrals up to $11,000 in 2002
   with the employer making these contributions to the SEP. However, no new
   "salary reduction" or "SAR-SEPs" can be established after 1996. Individuals
   participating in a SARSEP who are age 50 or above by the end of the year will
   be permitted to contribute an additional $1,000 in 2002, increasing in $1,000
   increments per year until reaching $5,000 in 2006. Thereafter the amount is
   indexed for inflation.

   You will also be provided the same information, and have the same "free look"
period, as you would have if you were purchasing the contract for a standard
IRA.

   SIMPLE-IRAs SIMPLE-IRAs are another variation on the standard IRA, available
to small employers (under 100 employees, on a "controlled group" basis) that do
not offer other tax favored plans. SIMPLE-IRAs are also subject to the same
basic IRA requirements with the following exceptions:

-  Participants in a SIMPLE-IRA may contribute up to $7,000 in 2002, as opposed
   to the usual IRA contribution limit, and employer contributions may also be
   provided as a match (up to 3% of your compensation); and

-  Beginning in 2002, individuals age 50 or above by the end of the year will be
   permitted to contribute an additional $500 in 2002, increasing in $500
   increments per year until reaching $2,500 in 2006. Thereafter the amount is
   indexed for inflation.

-  SIMPLE-IRAs are not subject to the SEP nondiscrimination rules.

   ROTH IRAs Congress amended the Code in 1997 to add a new Section 408A,
creating the "Roth IRA" as a new type of individual retirement plan. Like
standard IRAs, income within a Roth IRA accumulates tax-deferred, and
contributions are subject to specific limits. Roth IRAs have, however, the
following differences:

-  Contributions to a Roth IRA cannot be deducted from your gross income;

-  "Qualified distributions" (generally, held for 5 tax years and payable on
   account of death, disability, attainment of age 59 1/2, or first
   time-homebuyer) from Roth IRAs are excludable from your gross income; and

-  If eligible, you may make contributions to a Roth IRA after attaining age
   70 1/2, and distributions are not required to begin upon attaining such age
   or at any time thereafter.

   The annual contribution allowed by law for Roth IRAs increases in the same
manner as the increases for traditional IRAs as described on page 20). The Code
permits persons who meet certain income limitations

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

(generally, adjusted gross income under $100,000), and who receive certain
qualifying distributions from such non-Roth IRAs, to directly rollover or make,
within 60 days, a "rollover" of all or any part of the amount of such
distribution to a Roth IRA which they establish. This conversion triggers
current taxation (but is not subject to a 10% early distribution penalty). Once
the contract has been purchased, regular Roth IRA contributions will be accepted
to the extent permitted by law.

   TDAs You may own TDAs generally if you are either an employer or employee of
a tax-exempt organization (as defined under Code Section 501(c)(3)) or a public
educational organization. You may make contributions to a TDA so long as the
employee's rights to the annuity are nonforfeitable. Contributions to a TDA, and
any earnings, are not taxable until distribution. You may also make
contributions to a TDA under a salary reduction agreement, generally up to a
maximum of $11,000 in 2002. Individuals participating in a TDA who are age 50 or
above by the end of the year will be permitted to contribute an additional
$1,000 in 2002, increasing in $1,000 increments per year until reaching $5,000
in 2006. Thereafter the amount is indexed for inflation. Further, you may roll
over TDA amounts to another TDA or an IRA. Beginning in 2002, TDA amounts may
also be rolled over to a qualified retirement plan, a SEP and a 457 government
plan.

   A contract may only qualify as a TDA if distributions (other than
"grandfathered" amounts held as of December 31, 1988) may be made only on
account of:

-  Your attainment of age 59 1/2;

-  Your severance of employment;

-  Your death;

-  Your total and permanent disability; OR

-  Hardship (under limited circumstances, and only related to salary deferrals
   and any earnings attributable to these amounts).

In any event, you must begin receiving distributions from your TDA by April 1st
of the calendar year after the calendar year you turn age 70 1/2 or retire,
whichever is later.

   These distribution limits do not apply either to transfers or exchanges of
investments under the contract, or to any "direct transfer" of your interest in
the contract to another TDA or to a mutual fund "custodial account" described
under Code Section 403(b)(7).

   Employer contributions to TDAs are subject to the same general contribution,
nondiscrimination, and minimum participation rules applicable to "qualified"
retirement plans.

MINIMUM DISTRIBUTION REQUIREMENTS AND PAYMENT OPTION

If you hold the contract under an IRA (or other tax-favored plan), IRS minimum
distribution requirements must be satisfied. This means that payments must start
by April 1 of the year after the year you reach age 70 1/2 and must be made for
each year thereafter. The amount of the payment must at least equal the minimum
required under the IRS rules. Several choices are available for calculating the
minimum amount, permitted under IRS regulations released in April 2002. More
information on the mechanics of this calculation is available on request. Please
contact us a reasonable time before the IRS deadline so that a timely
distribution is made. Please note that there is a 50% IRS penalty tax on the
amount of any minimum distribution not made in a timely manner.

   You can use the Minimum Distribution option to satisfy the IRS minimum
distribution requirements for this contract without either beginning annuity
payments or surrendering the contract. We will send you a check for this minimum
distribution amount, less any other partial withdrawals that you made during the
year. Please note that the Minimum Distribution option may need to be modified
to satisfy recently announced changes in IRS rules.

PENALTY FOR EARLY WITHDRAWALS

You may owe a 10% tax penalty on the taxable part of distributions received from
an IRA, SEP, SIMPLE-IRA (which may increase to 25%), Roth IRA, TDA or qualified
retirement plan before you attain age 59 1/2.

 22
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

There are only limited exceptions to this tax, and you should consult your tax
adviser for further details.

WITHHOLDING

Unless a distribution is an eligible rollover distribution that is "directly"
rolled over into another qualified plan, IRA (including the IRA variations
described above) SEP, 457 government plan, or TDA, we will withhold at the rate
of 20%. This 20% withholding does not apply to distributions from IRAs and Roth
IRAs. For all other distributions, unless you elect otherwise, we will withhold
federal income tax from the taxable portion of such distribution at an
appropriate percentage. The rate of withholding on annuity payments where no
mandatory withholding is required is determined on the basis of the withholding
certificate that you file with us. If you do not file a certificate, we will
automatically withhold federal taxes on the following basis:

-  For any annuity payments not subject to mandatory withholding, you will have
   taxes withheld by us as if you are a married individual, with 3 exemptions;
   and

-  For all other distributions, we will withhold at a 10% rate.

   We will provide you with forms and instructions concerning the right to elect
that no amount be withheld from payments in the ordinary course. However, you
should know that, in any event, you are liable for payment of federal income
taxes on the taxable portion of the distributions, and you should consult with
your tax advisor to find out more information on your potential liability if you
fail to pay such taxes.

ERISA DISCLOSURE/REQUIREMENTS

ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevents a fiduciary and other "parties in interest" with respect to a plan
(and, for these purposes, an IRA would also constitute a "plan") from receiving
any benefit from any party dealing with the plan, as a result of the sale of the
contract. Administrative exemptions under ERISA generally permit the sale of
insurance/annuity products to plans, provided that certain information is
disclosed to the person purchasing the contract. This information has to do
primarily with the fees, charges, discounts and other costs related to the
contract, as well as any commissions paid to any agent selling the contract.

   Information about any applicable fees, charges, discounts, penalties or
adjustments may be found under "What Are the Expenses Associated with the
Strategic Partners Select Contract" starting on page 15.

   Information about sales representatives and commissions may be found under
"Other Information" and "Sale and Distribution of the Contract" on page 25.

   In addition, other relevant information required by the exemptions is
contained in the contract and accompanying documentation. Please consult your
tax advisor if you have any additional questions.

SPOUSAL CONSENT RULES FOR RETIREMENT PLANS--QUALIFIED CONTRACTS

If you are married at the time your payments commence, you may be required by
federal law to choose an income option that provides survivor annuity income to
your spouse, unless your spouse waives that right. Similarly, if you are married
at the time of your death, federal law may require all or a portion of the death
benefit to be paid to your spouse, even if you designated someone else as your
beneficiary. A brief explanation of the applicable rules follows. For more
information, consult the terms of your retirement arrangement.

   Defined Benefit Plans, Money Purchase Pension Plans, and ERISA 403(b)
Annuities.  If you are married at the time your payments commence, federal law
requires that benefits be paid to you in the form of a "qualified joint and
survivor annuity" ("QJSA"), unless you and your spouse waive that right, in
writing. Generally, this means that you will receive a reduced payment during
your life and, upon your death, your spouse will receive at least one-half of
what you were receiving for life. You may elect to receive another income option
if your spouse consents to the election and waives his or her right to receive
the QJSA. If your

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

spouse consents to the alternative form of payment, your spouse may not receive
any benefits from the plan upon your death. Federal law also requires that the
plan pay a death benefit to your spouse if you are married and die before you
begin receiving your benefit. This benefit must be available in the form of an
annuity for your spouse's lifetime and is called a "qualified pre-retirement
survivor annuity" ("QPSA"). If the plan pays death benefits to other
beneficiaries, you may elect to have a beneficiary other than your spouse
receive the death benefit, but only if your spouse consents to the election and
waives his or her right to receive the QPSA. If your spouse consents to the
alternate beneficiary, your spouse will receive no benefits from the plan upon
your death. Any QPSA waiver prior to your attaining age 35 will become null and
void on the first day of the calendar year in which you attain age 35, if still
employed.

   Defined Contribution Plans (including 401(k) Plans). Spousal consent to a
distribution is generally not required. Upon your death, your spouse will
receive the entire death benefit, even if you designated someone else as your
beneficiary, unless your spouse consents in writing to waive this right. Also,
if you are married and elect an annuity as a periodic income option, federal law
requires that you receive a QJSA (as described above), unless you and your
spouse consent to waive this right.

   IRAs, non-ERISA 403(b) Annuities, and 457 Plans. Spousal consent to a
distribution is not required. Upon your death, any death benefit will be paid to
your designated beneficiary.

ADDITIONAL INFORMATION

For additional information about the requirements of federal tax law applicable
to tax favored plans, see the "IRA Disclosure Statement" on page 84. The
following additional tax considerations also may be of interest.

ENTITY OWNERS.

Where a contract is held by a non-natural person (e.g., a corporation), other
than as an agent or nominee for a natural person (or in other limited
circumstances), the contract will not be taxed as an annuity and increases in
the value of the contract will be subject to tax.

PURCHASE PAYMENTS MADE BEFORE AUGUST 14, 1982.

If your contract was issued in exchange for a contract containing purchase
payments made before August 14, 1982, favorable tax rules may apply to certain
withdrawals from the contract. Generally, withdrawals are treated as a recovery
of your investment in the contract first until purchase payments made before
August 14, 1982 are withdrawn. Moreover, any income allocable to purchase
payments made before August 14, 1982, is not subject to the 10% tax penalty.

GENERATION-SKIPPING TRANSFERS.

If you transfer your contract to a person two or more generations younger than
you (such as a grandchild or grandniece) or to a person that is more than 37 1/2
years younger than you, there may be generation-skipping transfer tax
consequences.

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PRUCO LIFE INSURANCE COMPANY

Pruco Life Insurance Company ("Pruco Life") is a stock life insurance company,
organized in 1971 under the laws of the State of Arizona. It is licensed to sell
life insurance and annuities in the District of Columbia, Guam, and in all
states except New York. Pruco Life's primary competitors are other insurers that
sell fixed and variable insurance products. Pruco Life currently has no
employees.

   Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company
of America ("Prudential"), a New Jersey stock life insurance company that has
been doing business since 1875. Prudential is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey
insurance holding company. As Pruco Life's ultimate parent, Prudential Financial
exercises significant influence over the operations and capital structure of
Pruco Life and Prudential. However, neither Prudential Financial, Prudential,
nor any other related company has any legal responsibility to pay amounts that
Pruco Life may owe under the contract.

   Pruco Life publishes annual and quarterly reports that are filed with the
SEC. These reports contain financial information about Pruco Life that is
annually audited by independent accountants. Pruco's Life annual report for the
year ended December 31, 2001, together with subsequent periodic reports that
Pruco Life files with the SEC, are incorporated by reference into this
prospectus. You can obtain copies, at no cost, of any and all of this
information, including the Pruco Life annual report that is not ordinarily
mailed to contractholders, the more current reports and any subsequently filed
documents at no cost by contacting us at the address or telephone number listed
on the cover. You may read and copy any filings made by Pruco Life with the SEC
at the SEC's Public Reference Room at 450 Fifth Street, Washington, D.C. 20549.
You can obtain information on the operation of the Public Reference Room by
calling 1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC at http://www.sec.gov.

SALE AND DISTRIBUTION OF THE CONTRACT

Prudential Investment Management Services LLC ("PIMS"), 100 Mulberry Street,
Newark, New Jersey 07102-4077, acts as the distributor of the contracts under a
"best efforts" underwriting agreement with Pruco Life under which PIMS is
reimbursed for its costs and expenses. PIMS is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. and is a limited liability corporation
organized under Delaware law in 1996. It is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. We pay the broker-dealer whose registered
representatives sell the contract either:

-  a commission of up to 3.0% of your purchase payments; or

-  a combination of a commission on purchase payments and a "trail"
   commission -- which is a commission determined as a percentage of your
   contract value that is paid periodically over the life of your contract.

The commission amount quoted above is the maximum amount which is paid. In most
circumstances, the registered representative who sold the contract will receive
significantly less. The broker-dealer who sells a contract to you will deliver
or make available to you a copy of the prospectus for the Strategic Partners
MVA.

   From time to time, Prudential or its affiliates may offer and pay non-cash
compensation to registered representatives who sell the contract. For example,
Prudential or an affiliate may pay for a training and education meeting that is
attended by registered representatives of both Prudential-affiliated broker-
dealers and independent broker-dealers. Prudential and its affiliates retain
discretion as to which broker-dealers to offer non-cash (and cash) compensation
arrangements, and will comply with NASD rules and other pertinent laws in making
such offers and payments. Our payment of cash or non-cash

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compensation in connection with sales of the contract does not result directly
in any additional charge to you.

ASSIGNMENT

You can assign the contract at any time during your lifetime. We will not be
bound by the assignment until we receive written notice. We will not be liable
for any payment or other action we take in accordance with the contract if that
action occurs before we receive notice of the assignment. An assignment, like
any other change in ownership, may trigger a taxable event.

   If the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your financial professional.

HOUSEHOLDING

To reduce costs, we now send only a single copy of prospectuses and shareholder
reports to each consenting household, in lieu of sending a copy to each
contractholder that resides in the household. If you are a member of such a
household, you should be aware that you can revoke your consent to householding
at any time, and begin to receive your own copy of prospectuses and shareholder
reports, by calling 1-877-778-5008.

LITIGATION

We are subject to legal and regulatory actions in the ordinary course of our
businesses, including class actions. Pending legal and regulatory actions
include proceedings specific to our practices and proceedings generally
applicable to business practices in the industries in which we operate. In
certain of these lawsuits, large and/or indeterminate amounts are sought,
including punitive or exemplary damages.

   Beginning in 1995, regulatory authorities and customers brought significant
regulatory actions and civil litigation against Pruco Life and Prudential
involving individual life insurance sales practices. In 1996, Prudential, on
behalf of itself and many of its life insurance subsidiaries, including Pruco
Life, entered into settlement agreements with relevant insurance regulatory
authorities and plaintiffs in the principal life insurance sales practices class
action lawsuit covering policyholders of individual permanent life insurance
policies issued in the United States from 1982 to 1995. Pursuant to the
settlements, the companies agreed to various changes to their sales and business
practices controls, to a series of fines, and to provide specific forms of
relief to eligible class members. Virtually all claims by class members filed in
connection with the settlements have been resolved and virtually all aspects of
the remediation program have been satisfied.

   As of December 31, 2001 Prudential and/or Pruco Life remained a party to
approximately 44 individual sales practices actions filed by policyholders who
"opted out" of the class action settlement relating to permanent life insurance
policies issued in the United States between 1982 and 1995. In addition, there
were 19 sales practices actions pending that were filed by policyholders who
were members of the class and who failed to "opt out" of the class action
settlement. Prudential and Pruco Life believed that those actions are governed
by the class settlement release and expects them to be enjoined and/or
dismissed. Additional suits may be filed by class members who "opted out" of the
class settlements or who failed to "opt out" but nevertheless seek to proceed
against Prudential and/or Pruco Life. A number of the plaintiffs in these cases
seek large and/or indeterminate amounts, including punitive or exemplary
damages. Some of these actions are brought on behalf of multiple plaintiffs. It
is possible that substantial punitive damages might be awarded in any of these
actions and particularly in an action involving multiple plaintiffs.

   Prudential has indemnified Pruco Life for any liabilities incurred in
connection with sales practices litigation covering policyholders of individual
permanent life insurance policies issued in the United States from 1982 to 1995.

   Pruco Life's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted. It is possible that the
results of operations or the cash flow of Pruco Life in a particular quarterly
or annual period could be materially affected by an ultimate unfavorable
resolution of

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pending litigation and regulatory matters. Management believes, however, that
the ultimate outcome of all pending litigation and regulatory matters should not
have a material adverse effect on Pruco Life's financial position.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATIONS

The following analysis should be read in conjunction with the Notes to
Consolidated Financial Statements.

   Pruco Life (the "Company") sells interest-sensitive individual life insurance
and variable life insurance, term life insurance, individual variable and fixed
annuities, and a non-participating guaranteed interest contract ("GIC") called
Prudential Credit Enhanced ("PACE") primarily through Prudential's sales force
in the United States. These markets are subject to regulatory oversight with
particular emphasis placed on company solvency and sales practices. These
markets are also subject to increasing competitive pressure as the legal
barriers, which have historically segregated the markets of the financial
services industry, have been changed through both legislative and judicial
processes. Regulatory changes have opened the insurance industry to competition
from other financial institutions, particularly banks and mutual funds that are
positioned to deliver competing investment products through large, stable
distribution channels. The Company also marketed individual life insurance
through its branch office in Taiwan. The Taiwan branch was transferred to an
affiliated Company on January 31, 2001, as described in the Notes to the
Financial Statements.

   Generally, policyholders who purchase the Company's products have the option
of investing in the Separate Accounts, segregated funds for which investment
risks are borne by the customer, or the Company's portfolio, referred to as the
General Account. The Company earns its profits through policy fees charged to
Separate Account annuity and life policyholders and through the interest spread
for the GIC and General Account annuity and life products. Policy charges and
fee income consist mainly of three types, sales charges or loading fees on new
sales, mortality and expense charges ("M&E") assessed on fund balances, and
mortality and related charges based on total life insurance in-force business.
Policyholder fund values are affected by net sales (sales less withdrawals),
changes in interest rates and investment returns. The interest spread represents
the difference between the investment income earned by the Company on its
investment portfolio and the amount of interest credited to the policyholders'
accounts. Products that generate spread income primarily include the GIC
product, general account life insurance products, fixed annuities and the
fixed-rate option of variable annuities. The majority of the fund balances and
new sales, except for the GIC product, are in the Separate Accounts.

   In accordance with a profit sharing agreement with Prudential that was in
effect through December 31, 2000, the Company received fee income from
policyholder account balances invested in the Prudential Series Funds ("PSF").
PSF are a portfolio of mutual fund investments related to the Company's Separate
Account products. These revenues were recorded as "Asset management fees" in the
Consolidated Statements of Operations and Comprehensive Income. The Company was
charged an asset management fee by Prudential Global Asset Management ("PGAM")
and Jennison Associates LLC ("Jennison") for managing the PSF portfolio. These
fees were a component of "general, administrative and other expenses."

   On September 29, 2000, the Board of Directors for the Prudential Series Fund,
Inc. ("PSFI") adopted resolutions to terminate the existing management agreement
between PSFI and Prudential, and has appointed another subsidiary of Prudential
as the fund manager for the PSF. The change was approved by the shareholders of
PSFI during early 2001 and was effective as of January 1, 2001. Therefore as of
January 1, 2001, the Company no longer receives fees associated with the PSF or
incurs asset management expenses from PGAM and Jennison associated with the PSF.
This transaction resulted in a decrease in net income from the prior year of
$34.2 million.

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   On January 31, 2001, the Company transferred all of its assets and
liabilities associated with the Company's Taiwan branch including Taiwan's
insurance book of business to an affiliated Company, Prudential Life Insurance
Company of Taiwan Inc. ("Prudential of Taiwan"), a wholly owned subsidiary of
Prudential.

   The mechanism used to transfer this block of business in Taiwan is referred
to as a "full acquisition and assumption" transaction. Under this mechanism, the
Company is jointly liable with Prudential of Taiwan for two years from the
giving of notice to all obligees for all matured obligations and for two years
after the maturity date of not-yet-matured obligations. Prudential of Taiwan is
also contractually liable, under indemnification provisions of the transaction,
for any liabilities that may be asserted against the Company. The transfer of
the insurance related assets and liabilities was accounted for as a
long-duration coinsurance transaction under accounting principles generally
accepted in the United States. Under this accounting treatment, the insurance
related liabilities remain on the books of the Company and an offsetting
reinsurance recoverable is established.

   As part of this transaction, the Company made a capital contribution to
Prudential of Taiwan in the amount of the net equity of the Company's Taiwan
branch as of the date of transfer. In July 2001, the Company dividended its
interest in Prudential of Taiwan totaling $45.8 million to Prudential.

   Beginning February 1, 2001 Taiwan's net income is not included in the
Company's results of operations. The Taiwan branch had net income of $1.8
million ($97.8 million in revenues and $96.0 million in expenses) in 2000.

   On December 28, 2001, the Company paid to Prudential an extraordinary
dividend which was approved by the Insurance Department of Arizona. The dividend
was $108 million and was paid with cash of $26 million and fixed maturities of
$82 million.

   In connection with Prudential's demutualization, qualified annuity contract
holders were given increases to their policy values in the form of policy
credits. The policy credits of $128.0 million are reflected as a reduction of
retained earnings.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires the application of accounting policies
that often involve a significant degree of judgment. Management, on an ongoing
basis, reviews critical estimates and assumptions. If management determines, as
a result of its consideration of facts and circumstances, that modifications in
assumptions and estimates are appropriate, results of operations and financial
position as reported in the Consolidated Financial Statements may change
significantly.

   The following sections discuss accounting policies applied in preparing our
financial statements that Management believes are most dependent on the
application of estimates and assumptions.

VALUATION OF INVESTMENTS

The major portion of our investments are recorded at fair value in the statement
of financial position. Fair values are based on quoted market prices or
estimates from independent pricing services, when available. However, when such
information is not available, for example, with respect to private placement
fixed maturity securities, fair value is estimated, typically by using a
discounted cash flow model, which considers current market credit spreads for
publicly traded issues with similar terms by companies of comparable credit
quality. Consequently, changes in estimated future cash flows or in our
assessment of the issuer 's credit quality will result in changes in carrying
value. For fixed maturities and equity securities classified as available for
sale, the impact of such changes is recorded in "Accumulated other comprehensive
income (loss)," a separate component of equity. However, the carrying value of
these securities is written down to estimated fair value when a decline in value
is considered to be other than temporary, and we record the corresponding
impairment loss in "Realized investment losses, net," in the Consolidated
Statements of Operations and Comprehensive Income. The factors we consider to

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determine if an impairment loss is warranted are discussed more fully in Note 2
to the Consolidated Financial Statements. The level of impairment losses can be
expected to increase when economic conditions worsen and decrease when economic
conditions improve.

POLICYHOLDER LIABILITIES AND DEFERRED POLICY ACQUISITION COSTS

The liability for future policy benefits is primarily comprised of the present
value of estimated future payments to holders of life insurance and annuity
products where the timing and amount of payment depends on policyholder
mortality surrender or retirement experience. For life insurance and annuity
products, expected mortality is generally based on the Company 's historical
experience or standard industry tables. Interest rate assumptions are based on
factors such as market conditions and expected investment returns. Although
mortality and interest rate assumptions are "locked-in" upon the issuance of new
insurance or annuity business with fixed and guaranteed terms, significant
changes in experience or assumptions may require us to provide for expected
future losses on a product by establishing premium deficiency reserves.

   Our liability for Unpaid claims and claim adjustment expenses includes
estimates of claims that we believe have been incurred, but have not yet been
reported ("IBNR"), as of the balance sheet date. These estimates, and estimates
of the amounts of loss we will ultimately incur on reported claims, which are
based in part on our historical experience, are regularly adjusted to reflect
actual claims experience. When actual experience differs from our previous
estimate, the resulting difference will be included in our reported results for
the period of the change in estimate.

   For most life insurance and annuity products that we sell, we defer costs
that vary with and are related primarily to the production of new business to
the extent these costs are deemed recoverable from future profits, and we record
these costs as an asset known as deferred policy acquisition costs or "DAC" in
the statements of financial position. We amortize this DAC asset over the
expected lives of the contracts, based on the level and timing of either
estimated profits or premiums, depending on the type of contract. For products
with amortization based on future premiums, the amortization rate is locked-in
when the product is sold. However, for products with amortization based on
estimated profits, the amortization rate is periodically updated to reflect
current period experience or changes in assumptions that affect future
profitability, such as lapse rates, investment returns, mortality experience,
expense margins and surrender charges. These changes result in adjustments to
DAC balances in the period that we change our assumptions as well as changes in
prospective DAC amortization. For example, adverse market conditions in 2001
resulted in declines in the market values of assets supporting our variable life
insurance and annuity products, which in turn resulted in lower expectations
regarding our estimated future gross profits from fee-based income. As a result,
we recorded a higher level of DAC amortization in 2001 for these products. DAC
is also subject to periodic recoverability testing.

RESERVES FOR CONTINGENCIES AND LITIGATION

A contingency is an existing condition that involves a degree of uncertainty
that will ultimately be resolved upon the occurrence of future events. Under
GAAP, reserves for contingencies are required to be established when the future
event is probable and its impact can be reasonably estimated. An example is the
establishment of a reserve for losses in connection with an unresolved legal
matter. The initial reserve reflects management 's best estimate of the probable
cost of ultimate resolution of the matter and is revised accordingly as facts
and circumstances change and, ultimately, when the matter is brought to closure.
In situations in which the Company is to be indemnified by Prudential, as with
the sales practices actions, a reserve for contingencies would not need to be
established in the Company's financial statements.

OTHER SIGNIFICANT ESTIMATES

In addition to the items discussed above, the application of GAAP requires
management to make other

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estimates and assumptions. One example is the recognition of deferred tax
assets, which depends on management's assumption that future earnings will be
sufficient to realize the deferred benefit. This is discussed in Note 8 to the
Consolidated Financial Statements.

   The Company's Changes in Financial Position and Results of Operations are
described below.

CHANGES IN FINANCIAL POSITION

2001 VERSUS 2000

From December 31, 2000 to December 31, 2001 there was a decrease of $966 million
in total assets from $23.059 billion to $22.093 billion, the majority of which
relates to a $1.310 billion decrease in Separate Accounts primarily from stock
market declines, as described below. The fixed maturity portfolio increased $139
million resulting from unrealized appreciation from declining interest rates and
from positive cash inflows. The transfer of the Company's Taiwan branch
accounted for using coinsurance accounting required the establishment of
reinsurance recoverable of $260.6 million, and the inclusion of the Taiwan
branch future policy reserve liabilities on the Company's balance sheet. The
Company also reclassified held-to-maturity securities, amounting to $324.5
million at January 1, 2001 to the available-for-sale category.

   During the year, liabilities decreased by $784 million from $21.226 billion
to $20.442 billion. Separate account liabilities decreased $1.310 billion as a
result of net investment losses of $1.388 billion, expense disbursements and
other changes of $244 million offset by net sales of $322 million. Current year
net sales of $322 million ($1.540 billion of contributions less $1.218 billion
of surrenders and withdrawals) are $918 million lower than the same period prior
year sales of $1.240 billion ($2.376 billion of contributions less $1.136
billion of surrenders and withdrawals). The primary reason for the decrease is
declines in Discovery Select annuity product ("Discovery Select") exchange sales
resulting from the discontinuation of the Exchange Program on May 1, 2000. The
Exchange Program had provided the contract holders of older Prudential or Pruco
Life annuity products an opportunity to convert to the Discovery Select product.
Annuity product net sales declined $1.118 billion while variable life insurance
sales grew $200 million from the prior year.

   Policyholder account balances increased by $301 million from interest
credited and positive cash inflows for the PACE product and the general account
life and annuity products. Future policy benefit liabilities increased by $105
million resulting from sales of term insurance, additional extended term
insurance, and increases to Taiwan branch reserves. Other liabilities increased
by $108 million as a result of policy credits granted to Separate Account
qualified annuity contract holders related to the demutualization.

   Total equity declined $181 million from $1.832 billion at December 31, 2000
to $1.651 billion at December 31, 2001. The largest factor in this decrease is
the payment of two dividends, which are discussed above, to Prudential totaling
$153.8 million. One dividend consisted of an extraordinary dividend approved by
the Insurance Department of Arizona for $108 million. The other dividend of
$45.8 million represented the Company's net investment in its Taiwan branch,
which was contributed to a sister company, Prudential Life Insurance Company of
Taiwan, and subsequently dividended to Prudential. Refer to Note 14 for more
information on the Taiwan dividend. Equity was also reduced by $128.0 million
for policy credits to be made to eligible policyholders. In connection with
Prudential's demutualization, qualified annuity contract holders were given
increases to their policy values in the form of policy credits. In addition,
equity was increased by net income of $67.6 million, net unrealized investment
gains of $30.0 million and net foreign currency translation adjustments of $3.2
million.

2000 VERSUS 1999

Total assets increased from $21.768 billion at December 31, 1999 to $23.059
billion at December 31, 2000, an increase of $1.291 billion, primarily from
increases in investments and cash and cash equivalents of $945 million, and
Separate Accounts of $198 million. Investments increased due to

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positive insurance cash inflows and unrealized appreciation of fixed maturities.
A discussion of Separate Account balances and net sales follows.

   Although there were positive Separate Account net sales of $1.240 billion
(contributions of $2.376 billion less withdrawals of $1.136 billion), growth in
the Separate Accounts was minimized by expense disbursements and other changes
of $384 million, and in particular, investment losses from stock value declines
of $658 million. This was in contrast to the prior year which experienced
investment gains of $2.164 billion. However, the average Separate Account fund
value during the current year, which is more indicative of fee income, was
approximately $3 billion higher than the prior year, due to beginning of the
year 2000 balances being substantially higher than the prior year. The majority
of the net sales were from the Discovery Select annuity product ("Discovery
Select"), which had net sales of $1.115 billion. This was significantly lower
than net sales of Discovery Select of $2.646 billion in 1999 due primarily to
the termination of the Exchange program in May 2000. Surrenders also increased
due to the aging of the business and since exchange assets are not subject to
surrender charges.

   Total liabilities increased from $20.099 billion at December 31, 1999 to
$21.226 billion at December 31, 2000, an increase of $1.127 billion. The
increase was primarily due to increases to policyholder account balances of $522
million, securities lending liabilities of $181 million, Separate Account
liabilities of $198 million, and an increase to future policy reserves of $73
million. The increase in policyholders' account balances from $3.125 billion at
December 31, 1999 to $3.647 billion at December 31, 2000 was primarily due to
increases of $315 million from sales of the PACE product, and an increase of
$175 million, mainly due to exchanges and sales of the Discovery Select product
for the General Account. Future policy benefits increased by $73 million from
$630 million at December 31, 1999 to $703 million at December 31, 2000 primarily
the result of increased sales and in-force business at the Taiwan branch.

RESULTS OF OPERATIONS

2001 VERSUS 2000

NET INCOME

Consolidated net income was $35.9 million lower for the year ended December 31,
2001 than for the year ended December 31, 2000. Economic and market downturns
resulted in increased realized investment losses for impairments and sales of
fixed maturities of $39.8 million. In addition, there was increased amortization
of deferred policy acquisition costs ("DAC") of $35.2 million for domestic life
and annuity products, resulting from a decline in expected future profits. Net
asset management fee revenue declined $34.2 million ($63.3 million in revenues
less $29.1 million of expenses). The Company ceased receiving fee income or
paying asset management fee expenses related to the Prudential Series Fund
("PSF") as of January 1, 2001, as described in the Notes to Consolidated
Financial Statements. Policyholder benefits were $8.0 million higher as
increases to domestic individual life product reserves, death benefits, and
surrender benefits offset decreases in the Taiwan branch's policyholder
benefits. Tax expense for the current year is lower than the prior year by $79.7
million due to reduced income from operations before income taxes and a
refinement of the estimated benefits from nontaxable investment income.

REVENUES

Consolidated revenues decreased by $110.6 million, from $987.7 million to $877.1
million. As discussed above, the elimination of PSF asset management fees
reduced revenues by $63.3 million. Premiums decreased by $31.0 million from the
prior year. The ceding of premiums pursuant to the transfer of the Company's
Taiwan branch caused an $80.6 million decline in premiums. This was partially
offset by higher term insurance sales of the Term Essential and Term Elite
products, as those products were not launched until late 2000, and an increase
in premiums related to extended term policy conversions. As an option in the
event of a lapse, individual variable life insurance policies provide
policyholders with additional extended

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term or reduced paid-up life insurance based on the amount that can be purchased
with the remaining cash value of the contract (if the policyholder does not
elect to receive the remaining cash value as a cash distribution). The
application of the remaining cash value to purchase such coverage is recorded as
premium revenue in the Statement of Operations. Future policy benefit reserves
are also increased by the amount of these premiums.

   Realized investment losses increased by $39.8 million from the prior year as
recognized writedowns on fixed maturities with other than temporary impairments
increased by $41.2 million in 2001. In addition, a realized loss of $29.2
million was recorded on the sale of Enron fixed maturities in 2001. Partially
offsetting these investment declines were gains on sales of fixed maturities of
$21.8 million in 2001(excluding Enron) compared to losses of $22.3 million in
2000 as interest rates declined in 2001 increasing the fair value of the bonds.
The sales in 2000 were made in the early part of the year before rates
substantially declined. Derivative instruments and other investment gains were
$13.5 million less than in 2000. This was mainly the result of the Company's net
short position in futures during 2001, versus a net long position in 2000, as
interest rates were generally declining in both years.

   These decreases were partially offset by increases in policy charges and fee
income and net investment income. Policy charges and fee income, consisting
primarily of mortality and expense ("M&E"), loading and other insurance charges
assessed on General and Separate Account policyholder fund balances, increased
by $15.3 million. The increase was a result of a $29.0 million increase for
domestic individual life products offset by a $13.7 million decrease for annuity
products. Mortality and sales based loading charges for life products increased
as a result of growth in the in-force business and higher new sales. The
in-force business grew from $53.214 billion at December 31, 2000 to $58.743
billion at December 31, 2001, an increase of 10.3%. In contrast, annuity fees
are mainly asset based fees which are dependent on the fund balances which are
affected by net sales as well as asset depreciation or appreciation on the
underlying investment funds in which the customer has the option to invest.
Annuity fund balances have declined as a result of unfavorable valuation changes
in the securities market and lower sales due to the discontinuation of the
Exchange program.

   Net investment income increased by $5.7 million from the prior year as income
from fixed maturities rose as a result of a higher average asset base from
reinvestment of proceeds from GIC sales, and general account annuity life
deposits. Partially offsetting this increase was a decline in short term
investments and cash equivalent income mainly as a result of lower interest
rates.

   Other income increased $2.5 million due to an increase in the modal premium
charge for policyholders who pay other than annual premiums, as a result of the
growth of the term insurance business.

BENEFITS AND EXPENSES

Policyholder benefits increased by $8.0 million from increases in domestic
individual life product reserves, death benefits, and surrender benefits; offset
by decreases in Taiwan's policyholder benefits. Death benefits increased $29.0
million due mainly to the increased in force business, with $11.6 million of the
increase specifically related to the September 11 terrorist attacks. Domestic
individual life reserves increased $32.6 million as a result of sales of term
insurance and extended term premiums. There were also increased benefits paid on
surrenders of reduced paid up policies of $8.3 million. Offsetting these were
decreases in reserve provisions and benefits for the Company's Taiwan branch of
$61.6 million.

   Interest credited to policyholder account balances increased by $25.0 million
as policyholder account balances grew by $301.0 million from December 2000
mainly as a result of GIC and general account life and annuity sales, as
mentioned above.

   General, administrative, and other expenses decreased $28.0 million from the
prior year. Commission and distribution expenses after

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capitalization, excluding the Taiwan branch, are $33.2 million lower resulting
from a change in the allocation of distribution expenses to a market based
pricing arrangement as of April 1, 2000 and higher capitalization of commissions
from new sales. The elimination of asset management expenses lowered expenses by
$29.1 million. The transfer of the Company's Taiwan branch resulted in an
expense reduction of $25.2 million.

   Partially offsetting these decreases was an increase in DAC amortization of
domestic life and annuity products of $35.2 million from increases in deferrable
expenses as a result of sales, and increased amortization associated with a
decline in expected future profits from stock market declines. There was also an
additional $24.3 million of expenses, excluding the Taiwan branch, driven by
higher allocations charged to the Company for salary, consulting, and data
processing costs. The Company is assuming a larger share of allocated costs as
allocations are based on new sales of which the Company has a higher percentage
than in the previous year.

2000 VERSUS 1999

NET INCOME

Net income for the year ended December 31, 2000 was $103.5 million; an increase
of $47.9 million from $55.6 million earned in the year ended December 31, 1999.
The increase reflects a $168.2 million, or 20.5% increase in revenues, offset in
part by a $95.8 million, 13.1% increase in expenses. Income taxes increased by
$24.5 million corresponding with the income increase.

REVENUES

Policy charges and fee income increased by $60.4 million, to $474.9 million in
2000 from $414.4 million in 1999. In addition, asset management fees, primarily
representing fees collected from the Pru Series Funds ("PSF") increased by $10.8
million from the prior year. Although the Separate Account fund balances as of
December 31, 2000 are only slightly higher than the prior year end due to stock
market declines, (especially in the fourth quarter) the average fund balance
during the year was $3 billion higher than the prior year, as is described in
the "Changes In Financial Position" section. Strong securities market conditions
contributed to significant appreciation in Separate Account asset values during
1999 which had a carryover effect on 2000 income, as beginning of the year
balances were substantially higher than in the previous year. Policy charges for
annuity and life products were $37.4 million and $23.0 million higher,
respectively, than the prior year. Most of the annuity increase came from higher
M&E charges from Discovery Select, as net sales of this product were
approximately $1.1 billion. The increase in life policy fees is also due to a
higher average fund balance than in the previous year.

   Premiums increased $22.9 million to $121.9 million for the year ended
December 31, 2000. The increase was primarily due to continued growth at the
Company's Taiwan branch, which sells traditional life insurance products. New
sales for the Taiwan branch grew by 21% and gross insurance in force increased
by 17%. Premiums from annuitizations of Discovery Select contracts also
contributed somewhat to the growth in premiums.

   Net investment income increased by $61.1 million to $337.9 million in 2000.
The increase was primarily the result of higher income from fixed maturities of
$45.8 million, and $10.4 million from short-term and cash equivalents, as the
asset base increased. Investment of cash inflows from the PACE product was the
primary cause of the increase in the asset base.

   Realized investment losses, net were $20.7 million in 2000 compared to
realized losses of $32.5 million for the prior year. This improvement of $11.8
million came primarily from derivative gains in 2000 of $15.0 million versus
losses of $1.6 million in 1999. Partially offsetting this were realized losses
on fixed maturities that were $5.7 million higher than in 1999, as most of the
sales were made in early 2000, when interest rates were higher and writedowns
for impairments deemed other than temporary were $12.3 million, an increase of
$1.1 million from 1999.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

BENEFITS AND EXPENSES

Policyholders' benefits including changes in reserves were $248.1 million for
the year ended December 31, 2000, an increase of $43.0 million from the prior
year. Increases to reserves were $31.0 million higher than the prior year of
which $14.8 million is related to continued business expansion in the Company's
Taiwan branch. Discovery Select annuitizations of $7.7 million, and higher life
reserves for extended term insurance and disability reserves of $8.5 million
also contributed to the reserve increases. Policyholder benefits were $12.0
million higher mainly due to an increase in death claims of $9.8 million and
increased annuity and Taiwanese policyholder benefits due to the growth in
business.

   Interest credited to policyholder account balances for the year ended
December 31, 2000 was $171.0 million, an increase of $34.2 million from 1999.
Interest credited for the PACE product increased by $25.8 million as the PACE
policyholder account balances increased $315 million. Interest credited on
annuity products increased by $7.5 million as the General Account fund balances
increased and there were higher new money rates due to higher incentive rates
for Discovery Select.

   General, administrative and other expenses, net of capitalization increased
$18.6 million to $410.7 million in 2000. The largest factor in this increase is
amortization of deferred policy acquisition costs ("DAC") of $129.0 million,
which is $32.6 million higher than the prior year. Annuity DAC amortization
increased $39.3 million to $72.8 million, due to growth in profitability of
Discovery Select, and accelerated amortization associated with a decline in
expected future gross profits as a result of unfavorable market conditions in
2000. Amortization of life products declined by $10.2 million due to prior year
write-offs of DAC for policies that were rescinded as a result of the Company's
policyholder remediation program, as described in the Notes to the financial
statements. The Taiwan branch DAC amortization increased by $3.5 million due to
growth in the business.

   Commission and distribution expenses, net of capitalization are lower by $1.1
million due mainly to two offsetting factors. Growth in trail commissions on
Discovery Select exchanges, which are nondeferable, increased expenses by $8.0
million. This was offset by a change in the allocation of distribution expenses
to reflect a market based pricing arrangement. This decreased year over year
expenses (net of capitalization) by $8.9 million.

   Other general and administrative expenses were down $16.1 million from the
prior year due to decreases in consulting fees, salary expenses, and charges to
the reserve for unbeknownst modified endowment contracts ("UMEC"). Consulting
and external contracted services charges were lower in 2000 by $7.9 million as
the prior year had contracted external programmers for Year 2000 system
preparation and data integrity projects. Decreases in staffing levels from the
prior year resulted in reductions in salary expense and employee benefits of
$4.1 million. Provisions made to UMEC were $6.3 million in 2000 which is $3.9
million less than the prior year. Offsetting these decreases slightly was an
increase of $3.2 million for asset management fees, asset based charges for
managing Separate Account investment portfolios, due to the increase in the
average Separate Account balance.

INVESTMENT PORTFOLIO AND INVESTMENT STRATEGIES

The Company's investment portfolio supports its insurance and annuity
liabilities and other obligations to customers for which it assumes investment
related risks. The portfolio was comprised of total investments amounting to
$5.207 billion at December 31, 2001, versus $5.048 billion at December 31, 2000.
A diversified portfolio of publicly traded bonds, private placements, commercial
loans on real estate and equity investments is managed under strategies intended
to maintain a competitive asset mix consistent with current and anticipated cash
flow requirements of the related obligations. The risk tolerance reflects the
Company's aggregate capital position, exposure to business risk, liquidity and
rating agency considerations.

   The asset management strategy for the portfolio is in accordance with an
investment policy statement

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                                                                         PART II
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developed and coordinated within the Company by the Asset Liability and Risk
Management Group, agreed to by senior management, and approved by the Board of
Directors. In managing the investment portfolio, the long-term objective is to
generate favorable investment results through asset-liability management,
strategic and tactical asset allocation and asset manager selection. Asset
management strategies take into account the need to match asset structure to
product liabilities, considering the underlying income and return
characteristics of investment alternatives and seeking to closely approximate
the interest rate sensitivity of the asset portfolio with the estimated interest
rate sensitivity of the product liabilities. Asset management strategies also
include broad diversification across asset classes, issuers and sectors;
effective utilization of capital while maintaining liquidity believed to be
adequate to satisfy cash flow requirements; and achievement of competitive
performance. The major categories of invested assets, quality across the
portfolio, and recent activities to manage the portfolio are discussed below.

FIXED MATURITIES

The fixed maturity portfolio is diversified across maturities, sectors and
issuers. The Company has classified all publicly traded securities as available
for sale ("AFS"). As of December 31, 2001 all privately placed securities were
classified as AFS compared to approximately 78% in 2000. The remainder of
privately placed fixed maturities in 2000 was classified as held to maturity
("HTM"). AFS securities are carried in the Consolidated Statement of Financial
Position at fair value, with unrealized gains and losses (after certain related
adjustments) recognized by credits and charges to equity capital. HTM securities
are carried at amortized cost, and unrealized gains or losses on these
securities are not recognized in the financial statements. At December 31, 2001
the fixed maturities portfolio totaled $4.025 billion, an increase of $143
million, based on fair value, compared to December 31, 2000. This increase in
fixed maturities reflected growth in the overall portfolio due to positive cash
flow from insurance operations during 2000, appreciation arising from a lower
interest rate environment, as well as reinvestment of net investment income,
offset by dividends paid in the form of fixed maturities. The following table
displays a public/private breakout of this year's net unrealized appreciation in
the fixed income portfolio versus during 2001.
---------------------------------------------------------------------------------------------------------------------------------
2001                                      2000
                                               ----------------------------------------------------------------------------------
                                                                            NET                                      NET
                                               AMORTIZED    ESTIMATED    UNREALIZED   AMORTIZED    ESTIMATED     UNREALIZED
                                                  COST      FAIR VALUE     GAINS         COST      FAIR VALUE   GAINS(LOSSES)
FIXED MATURITIES (In Thousands)
---------------------------------------------------------------------------------------------------------------------------------
   Publicly traded                             $2,638,917   $2,695,135    $56,218     $2,385,108   $2,393,919      $8,811
   Privately placed                             1,296,555    1,329,758     33,203      1,491,682    1,488,236      (3,446)
---------------------------------------------------------------------------------------------------------------------------------
TOTAL                                          $3,935,472   $4,024,893    $89,421     $3,876,790   $3,882,155      $5,365
At December 31, 2001, the net unrealized capital gains/(losses) on the
"available for sale" fixed maturity portfolio totaled $89.4 million compared to
$9.3 million ($5.4 million including HTM) at December 31, 2000. The increase in
the net unrealized capital gain position is primarily due to the effect of lower
interest rates in 2001 versus 2000.

   Gross investment income on fixed maturities increased by $16.1 million from
2000 to 2001 as a result of a higher asset base in 2001, offset by reinvestment
and new purchases at lower rates. Realized losses of $60.9 million were $26.3
million greater than December 31, 2000. This variance is attributed to higher
impairments taken in 2001 of $41.2 million, primarily relating to asset-backed
securities, and losses on sale of Enron holdings of $29.2 million, offset by
higher trading gains of

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                                                                         PART II
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$44.1 million, occurring mainly in the first half of the year.

   The table below summarizes fixed maturity investment results:
YEAR ENDED DECEMBER 31
                                       ---------------------------
                                          2001         2000
(IN THOUSANDS)
Gross Investment Income               $279,477     $263,325
  Yield(1)                                 7.32%        7.53%
  Realized Capital Losses               ($60,924)    ($34,812)
(1) YIELDS ARE DETERMINED BY DIVIDING GROSS INVESTMENT INCOME BY THE AVERAGE OF
    YEAR-END ASSET CARRYING VALUES, EXCLUDING UNREALIZED GAINS AND LOSSES, LESS
    ONE-HALF OF GROSS INVESTMENT INCOME.

CREDIT QUALITY

The following table describes the credit quality of the fixed maturity
portfolio, based on ratings assigned by the National Association of Insurance
Commissioners ("NAIC") or Moody's Corporation, an independent rating agency:
--------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001                           DECEMBER 31, 2000
                           -----------------------------------------------------------------------------------------
                           AMORTIZED             ESTIMATED             AMORTIZED             ESTIMATED
NAIC       MOODY'S            COST        %      FAIR VALUE     %         COST        %      FAIR VALUE     %
--------------------------------------------------------------------------------------------------------------------
(In Thousands)
1    AAA to AAA-          $1,889,567    48.0%   $1,930,014    48.0%   $1,811,068    46.7%   $1,835,642    47.3%
 2    BBB+ to BBB-          1,727,161    43.9%    1,778,254    44.2%    1,794,309    46.3%    1,784,694    46.0%
 3    BB+ to BB-              198,945     5.1%      201,466     5.0%      118,652     3.0%      117,793     3.1%
 4    B+ to B-                 81,558     2.1%       77,436     1.9%      113,050     2.9%      106,699     2.7%
 5    CCC or lower             20,782     0.5%       20,786     0.5%       22,093     0.6%       20,067     0.5%
 6    In or near default       17,459     0.4%       16,937     0.4%       17,618     0.5%       17,260     0.4%
--------------------------------------------------------------------------------------------------------------------
      TOTAL                $3,935,472   100.0%   $4,024,893   100.0%   $3,876,790   100.0%   $3,882,155   100.0%
The fixed maturity portfolio consists largely of investment grade assets
(rated "1" or "2" by the NAIC). Based on fair value, these investments accounted
for 92% and 93% of the portfolio as of December 31, 2001 and 2000, respectively.
As of December 31, 2001 and 2000, less than 1% of the fixed maturities portfolio
was rated "6" by the NAIC, defined as public and private placement securities
which are currently non-performing or believed to be subject to default in the
near-term.

   The Company maintains separate monitoring processes for public and private
fixed maturities and create watch lists to highlight securities, which require
special scrutiny and management. Our public fixed maturity asset managers
formally review all public fixed maturity holdings on a monthly basis and more
frequently when necessary to identify potential credit deterioration whether due
to ratings downgrades, unexpected price variances, and/or industry specific
concerns. We classify public fixed maturity securities of issuers that have
defaulted as loans not in good standing and all other public watch list assets
as closely monitored.

   Our private fixed maturity asset managers conduct specific servicing tests on
each investment on an ongoing basis to determine whether the investment is in

 36
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compliance or should be placed on the watch list or assigned an early warning
classification. We assign early warning classification to those issuers that
have failed a servicing test or experienced a minor covenant default, and we
continue to monitor them for improvement or deterioration. We assign closely
monitored status to those investments that have been recently restructured or
for which a restructuring is a possibility due to substantial credit
deterioration or material covenant defaults. We classify as not in good standing
securities of issuers that are in more severe conditions, for example,
bankruptcy or payment default.
-------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001           DECEMBER 31, 2000
                                                              -----------------------------------------------------
(IN THOUSANDS)                                                BOOK VALUE   % OF TOTAL   BOOK VALUE   % OF TOTAL
-------------------------------------------------------------------------------------------------------------------
Performing                                                    $3,903,871     99.2%      $3,799,529      98.0%
Watch List
  Closely monitored                                               26,230      0.7%          56,513       1.5%
  Not in good standing                                             5,371      0.1%          20,748       0.5%
-------------------------------------------------------------------------------------------------------------------
TOTAL                                                         $3,935,472    100.0%      $3,876,790     100.0%
Writedowns for impairments of fixed maturities which were deemed to be other
than temporary were $53.5 million, $12.3 million and $11.2 million for the years
2001, 2000 and 1999 respectively.

PORTFOLIO DIVERSITY

The fixed maturity portfolio is broadly diversified by type and industry of
issuer. As of December 31, 2001, the greatest industry concentrations within the
public portfolio were finance, utilities, and manufacturing. The greatest

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industry concentrations within the private portfolio were asset-backed
securities, manufacturing and service. The fixed maturities portfolio is
summarized below by issuer category:
---------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001                      DECEMBER 31, 2000
                                                  -------------------------------------------------------------------------------
                                                  AMORTIZED    ESTIMATED    % OF FAIR    AMORTIZED    ESTIMATED    % OF FAIR
                 (IN THOUSANDS)                      COST      FAIR VALUE     VALUE         COST      FAIR VALUE     VALUE
---------------------------------------------------------------------------------------------------------------------------------
United States Government Securities and
  Obligations                                     $  303,606   $  303,453       7.5%     $  309,609   $  317,479       8.2%
Mortgage Backed Securities                            10,148       10,247       0.3%         31,479       31,809       0.8%
Asset Backed Securities(1)                           577,528      590,245      14.7%        544,447      541,315      14.0%
Foreign Government Securities                         27,331       29,454       0.7%        136,133      143,706       3.7%
Manufacturing                                        782,944      803,155      19.9%        791,609      788,188      20.3%
Utilities                                            646,628      663,645      16.5%        634,671      628,657      16.2%
Retail and Wholesale                                 223,373      230,162       5.7%        230,303      229,162       5.9%
Energy                                                 5,223        5,173       0.1%          1,304        1,359         0%
Finance                                              688,064      711,932      17.7%        519,690      528,020      13.6%
Services                                             557,311      565,654      14.1%        548,729      544,555      14.0%
Transportation                                       106,687      104,716       2.6%        122,655      121,565       3.1%
Other                                                  6,629        7,057       0.2%          6,161        6,340       0.2%
---------------------------------------------------------------------------------------------------------------------------------
TOTAL                                             $3,935,472   $4,024,893     100.0%     $3,876,790   $3,882,155     100.0%
(1) Asset backed securities are primarily backed by credit card receivables,
    home equity loans, trade receivables and auto loans.

COMMERCIAL LOANS ON REAL ESTATE

As of December 31, 2001, the Company's portfolio of commercial loans on real
estate portfolio totaled $8.2 million, a reduction of $1.1 million from December
31, 2000, reflecting maturities and prepayments. The portfolio is comprised of
commercial loans on real estate, with diversification by property type and
geographic location. Refer to Footnote 3 in the Notes to Consolidated Financial
Statements. Mortgage investment income is $0.9 million, which is $0.1 million
lower than the prior year due to a lower asset base.

   The Company evaluates its loans on a quarterly basis for watch list status
based on compliance with various financial ratios and other covenants set forth
in the loan agreements, borrower credit quality, property condition and other
factors. The Company may place loans on early warning status in cases where it
detects that the physical condition of the property, the financial situation of
the borrower or tenant, or other factors could lead to a loss of principal or
interest. The Company classifies as closely monitored those loans that have
experienced material covenant defaults or substantial credit or collateral
deterioration. Not in good standing loans are those for which there is a high
probability of loss of principal, such as when the borrower is in bankruptcy or
the loan is in foreclosure. An experienced staff of workout professionals
actively manages the loans in the closely monitored and not in good standing
categories.

EQUITY SECURITIES

The Company's equity securities are comprised of common and non-redeemable
preferred stock and are carried at estimated fair value on the Statement of
Financial Position. Based on fair value, equity securities totaled $0.4 million
in 2001 compared to $10.8 million in 2000. At December 31, 2001, the unrealized
capital gains on the equity portfolio totaled $0.2 million compared to $2.6
million of losses at December 31, 2000. The equity securities' asset base
declined due to the transfer of stocks in connection with the transfer of the
Taiwan branch.

SHORT-TERM INVESTMENTS

Short-term investments include liquid debt instruments that have maturities
between 3-12 months from date of

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

purchase. These securities are carried at amortized cost, which approximates
fair value. As of December 31, 2001, the Company's short-term investments
totaled $215.6 million, an increase of $12.8 million compared to $202.8 million
at December 31, 2000. Short-term yields decreased due to lower rates in 2001,
partially offset by greater spread income earned on securities lending activity.

DERIVATIVES

The Company uses derivatives primarily to alter mismatches between the duration
of assets in its portfolios and the duration of insurance and annuity
liabilities supported by those assets. These derivative contracts do not qualify
for hedge accounting and, consequently, we recognize the changes in fair value
of such contracts from period to period in current earnings. During 2001, $2.9
million of gains were realized in swaps versus a gain of $5.6 million in 2000.
This was due to favorable 2001 and 2000 trends in exchange rates and spreads.
During 2001, $4.3 million of losses were realized from futures versus gains of
$9.4 million in 2000. This was the result of the Company's net short position in
futures during 2001, versus a net long position in 2000, as interest rates were
generally declining in both years.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity requirements include the payment of sales commissions,
other underwriting expenses and the funding of its contractual obligations for
the life insurance and annuity contracts in-force. The Company has developed and
utilizes a cash flow projection system and regularly performs asset/liability
duration matching in the management of its asset and liability portfolios. The
Company anticipates funding all its cash requirements utilizing cash from
operations, normal investment maturities and anticipated calls and repayments or
through short term borrowing from its affiliate Prudential Funding Corporation
(refer to Footnote 14 in the Notes to Consolidated Financial Statements). As of
December 31, 2001, the Company's assets included $3.0 billion of cash and cash
equivalents, short-term investments and investment grade publicly traded fixed
maturity securities that could be liquidated if funds were required.

   In order to continue to market life insurance and annuity products, the
Company must meet or exceed the statutory capital and surplus requirements of
the insurance departments of the states in which it conducts business. Statutory
accounting practices differ from generally accepted accounting principles
("GAAP") in two major respects. First, under statutory accounting practices, the
acquisition costs of new business are charged to expense, while under GAAP they
are initially deferred and amortized over a period of time. Second, under
statutory accounting practices, the required additions to statutory reserves for
new business in some cases may initially exceed the statutory revenues
attributable to such business. These practices result in a reduction of
statutory income and surplus at the time of recording new business.

   Insurance companies are subject to Risk-Based Capital ("RBC") guidelines,
monitored by insurance regulatory authorities, that measure the ratio of the
Company's statutory surplus with certain adjustments ("Adjusted Capital") to its
required capital, based on the risk characteristics of its insurance liabilities
and investments. Required capital is determined by statutory formulae that
consider risks related to the type and quality of invested assets,
insurance-related risks associated with the Company's products, interest rate
risks, and general business risks. The RBC calculations are intended to assist
regulators in measuring the adequacy of the Company's statutory capitalization.

   The Company considers RBC implications in its asset/liability management
strategies. Each year, the Company conducts a thorough review of the adequacy of
statutory insurance reserves and other actuarial liabilities. The review is
performed to ensure that the Company's statutory reserves are computed in
accordance with accepted actuarial standards, reflect all contractual
obligations, meet the requirements of state laws and regulations and include
adequate provisions for any other actuarial liabilities that need to be
established. All significant reserve changes are reviewed by the Board of
Directors and are subject to

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approval by the Arizona Department of Insurance and the New Jersey Department of
Banking and Insurance (the "Insurance Departments"). The Company believes that
its statutory capital is adequate for its currently anticipated levels of risk
as measured by regulatory guidelines.

   In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles guidance ("Codification"), which replaces the current Accounting
Practices and Procedures manual as the NAIC's primary guidance on statutory
accounting as of January 1, 2001. The Codification provides guidance for areas
where statutory accounting has been silent and changes current statutory
accounting in certain areas. Certain of the standards could have an impact on
the measurement of statutory capital, which, in turn, could affect RBC ratios of
insurance companies. The Company has adopted the Codification guidance effective
January 1, 2001. As a result of these changes, the Company reported an increase
to statutory surplus of $88 million, primarily as a result of the recognition of
deferred tax assets.

REGULATORY ENVIRONMENT

The Company is subject to the laws of the Insurance Departments. A detailed
financial statement in the prescribed form (the "Annual Statement") is filed
with the Insurance Departments each year covering the Company's operations for
the preceding year and its financial position as of the end of that year.
Regulation by the Insurance Departments includes periodic examinations to verify
the accuracy of contract liabilities and reserves. The Company's books and
accounts are subject to review by the Insurance Departments at all times. A full
examination of the Company's operations is conducted periodically by the
Insurance Departments and under the auspices of the NAIC.

   The Company is subject to regulation under the insurance laws of all
jurisdictions in which it operates. The laws of the various jurisdictions
establish supervisory agencies with broad administrative powers with respect to
various matters, including licensing to transact business, overseeing trade
practices, licensing agents, approving contract forms, establishing reserve
requirements, fixing maximum interest rates on life insurance contract loans and
minimum rates for accumulation of surrender values, prescribing the form and
content of required financial statements and regulating the type and amounts of
investments permitted. The Company is required to file the Annual Statement with
supervisory agencies in each of the jurisdictions in which it does business, and
its operations and accounts are subject to examination by these agencies at
regular intervals.

   The NAIC has adopted several regulatory initiatives designed to improve the
surveillance and financial analysis regarding the solvency of insurance
companies in general. These initiatives include the development and
implementation of a risk-based capital formulae as described in the Liquidity
and Capital Resources disclosure. The implementation of these standards has not
had a significant impact on the Company.

   Although the federal government generally does not directly regulate the
business of insurance, federal initiatives often have an impact on the business
in a variety of ways. Certain insurance products of the Company are subject to
various federal securities laws and regulations. In addition, current and
proposed federal measures which may significantly affect the insurance business
include regulation of insurance company solvency, employee benefit regulation,
removal of barriers preventing banks from engaging in the insurance business,
tax law changes affecting the taxation of insurance companies and the tax
treatment of insurance products and its impact on the relative desirability of
various personal investment vehicles.

EFFECTIVE NEW ACCOUNTING PRONOUNCEMENTS

Refer to Footnote 2, "Summary of Significant Accounting Policies," of the Notes
to Consolidated Financial Statements.

 40
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

RISK MANAGEMENT, MARKET RISK, AND DERIVATIVE FINANCIAL INSTRUMENTS

As a wholly-owned subsidiary of Prudential, the Company benefits from the risk
management strategies implemented by its parent. Risk management includes the
identification and measurement of various forms of risk, establishment of
acceptable risk thresholds, and creation of processes intended to maintain risks
within these thresholds while optimizing returns on the underlying assets or
liabilities. Prudential considers risk management an integral part of its core
businesses.

   The risks inherent in the Company's operations include market risk, product
risk, credit risk, and operating risk.

   MARKET RISK is the risk of change in the value of financial instruments as a
result of absolute or relative changes in interest rates, foreign currency
exchange rates or equity or commodity prices. To varying degrees, the investment
activities supporting all of the Company's products and services generate market
risks. Market risks incurred and the strategies for managing these risks vary by
product.

   With respect to non-variable life insurance products, fixed rate annuities
and the fixed rate options in our variable life insurance and annuity products,
the Company incurs market risk primarily in the form of interest rate risk. The
Company manages this risk through asset/liability management strategies that
seek to match the interest rate sensitivity of the assets to that of the
underlying liabilities. The Company's overall objective in these strategies is
to limit the net change in value of assets and liabilities arising from interest
rate movements. While it is more difficult to measure the interest sensitivity
of the Company's insurance liabilities than that of the related assets, to the
extent the Company can measure such sensitivities the Company believes that
interest rate movements will generate asset value changes that substantially
offset changes in the value of the liabilities relating to the underlying
products.

   For variable annuities and variable life insurance products, excluding the
fixed rate options in these products, the Company's main exposure is the risk
that asset management fees may decrease as a result of declines in assets under
management due to changes in prices of securities. The Company is also exposed
to the risk that asset management fees calculated by reference to performance
could be lower. For variable annuity and variable life insurance products with
minimum guaranteed death benefits, the Company also faces the indirect risk that
declines in the value of underlying investments as a result of changes in
securities prices may increase the Company's net exposure to death benefits
under these contracts. The Company does not believe that these indirect risks
add significantly to the Company's overall risk. The Company manages its
exposure to equity price risk primarily by seeking to match the risk profile of
equity investments against risk-adjusted equity market benchmarks. The Company
measures benchmark risks level in terms of price volatility in relation to the
market in general.

   The Company's exposure to market risk results from "other than trading"
activities in its insurance businesses. Market risks in the Company's insurance
business are managed through an investment process that incorporates
asset/liability management techniques and other risk management policies and
limits. Derivatives, as discussed further below, are used to alter interest rate
or currency exposures arising from mismatches between assets and liabilities.
These include sensitivity and Value-at-Risk measures, positions and other limits
based on type of risk, and various hedging methods.

INSURANCE ASSET/LIABILITY MANAGEMENT

The Company's asset/liability management strategies seek to match the interest
rate sensitivity of the assets to that of the underlying liabilities and to
construct asset mixes consonant with product features, such as interest
crediting strategies. The Company also considers risk-based capital implications
in its asset/liability management strategies. The Company seeks to

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

maintain interest rate and equity exposures within established ranges, which are
periodically adjusted based on market conditions and the design of related
insurance products sold to customers. The Company's risk managers, who work with
portfolio and asset managers but under separate management, establish investment
risk limits for exposures to any issuer, or type of security and oversee efforts
to manage risk within policy constraints set by management and approved by the
Board of Directors.

   The Company uses duration and convexity analyses to estimate the price
sensitivity of assets and liabilities to interest rate changes. Duration is an
estimate of the sensitivity of the fair value of a financial instrument relative
to changes in interest rates. Convexity is an estimate of the rate of change of
duration with respect to changes in interest rate, and is commonly used for
managing assets with prepayment risk, such as mortgage backed securities. The
Company seeks to manage its interest rate exposure by matching the relative
sensitivity of asset and liability values to interest rate changes, or
controlling "duration mismatch" of assets and liabilities. The Company has a
target duration mismatch level of plus or minus 0.6 years. As of December 31,
2001, the difference between the pre-tax duration of assets and the target
duration of liabilities in the Company's duration managed portfolio was 0.2
years.

   The Company also performs portfolio stress testing as part of its regulatory
cash flow testing. In this testing, the Company evaluates the impact of altering
its interest-sensitive assumptions under various moderately adverse interest
rate environments. These interest-sensitive assumptions relate to the timing and
amounts of redemptions and pre-payments of fixed-income securities and lapses
and surrenders of insurance products. The Company evaluates any shortfalls that
this cash flow testing reveals to determine if there is a need to increase
statutory reserves or adjust portfolio management strategies.

MARKET RISK RELATED TO INTEREST RATES

Assets that subject the Company to interest rate risk include fixed maturities,
commercial loans on real estate, and policy loans. In the aggregate, the
carrying value of these assets represented 68% of consolidated assets, other
than assets that are held in Separate Accounts, as of December 31, 2001 and 70%
as of December 31, 2000. With respect to liabilities, the Company is exposed to
interest rate risk through policyholder account balances relating to life
insurance and annuity investment type contracts.

   The Company assesses interest rate sensitivity for its financial assets,
financial liabilities and derivatives using hypothetical test scenarios which
assume both upward and downward 100 basis point parallel shifts in the yield
curve from prevailing interest rates. The following tables set forth the
potential loss in fair value from a hypothetical 100 basis point upward shift at
December 31, 2001 and 2000, because this scenario results in the greatest net
exposure to interest rate risk of the hypothetical scenarios tested at those
dates. While the test scenario is for illustrative purposes only and does not
reflect management's expectations regarding future interest rates or the
performance of fixed income markets, it is a near-term, reasonably possible
hypothetical change that illustrates the potential impact of such events. These
test scenarios do not measure the changes in value that could result from
non-parallel shifts in the yield curve, which would be expected to produce
different changes in discount rates for different maturities. As a result, the
actual loss in fair value from a 100 basis point change in interest rates could
be different from that indicated by these calculations.

   This presentation does not include $2.753 billion and $2.587 billion of
insurance reserves and deposit liabilities at December 31, 2001 and 2000,
respectively. The Company believes that the interest rate sensitivities of these
insurance liabilities offset, in large measure,

 42
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

the interest rate risk of the financial assets set forth in the following
tables.
-----------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001                      DECEMBER 31, 2000
                                    ----------------------------------------------------------------------------
                                                              FAIR VALUE
                                                              AFTER + 100
                                                              BASIS POINT HYPOTHETICAL
                                      NOTIONAL     ESTIMATED   PARALLEL    CHANGE IN     NOTIONAL     ESTIMATED
                                        VALUE        FAIR     YIELD CURVE     FAIR         VALUE        FAIR
(IN MILLIONS)                       (DERIVATIVES)    VALUE       SHIFT       VALUE     (DERIVATIVES)    VALUE
----------------------------------------------------------------------------------------------------------------
Financial Assets and Liabilities
  with Interest Rate Risk:
    Financial Assets:
    Fixed Maturities:
      Available for Sale                   --       $ 4,025     $ 3,902      $(123)          --        $ 3,562
      Held to Maturity                     --            --          --         --           --            321
    Commercial Loans on Real
    Estate                                 --            10          10         --           --             11
    Policy Loans                           --           934         880        (54)          --            883
  Derivatives:
    Futures                              (128)           --           6          6          202              2
    Swaps                                   9             1           1         --            9             .3
  Financial Liabilities:
    Investment Contracts                   --        (2,053)     (2,028)        25           --         (1,785)
----------------------------------------------------------------------------------------------------------------
      TOTAL ESTIMATED POTENTIAL
      LOSS                                                                   $(146)
DECEMBER 31, 2000
                                    ------------------------
                                    FAIR VALUE
                                    AFTER + 100
                                    BASIS POINT HYPOTHETICAL
                                     PARALLEL    CHANGE IN
                                    YIELD CURVE     FAIR
(IN MILLIONS)                          SHIFT       VALUE
----------------------------------  ------------------------
Financial Assets and Liabilities
  with Interest Rate Risk:
    Financial Assets:
    Fixed Maturities:
      Available for Sale              $ 3,468     $   (94)
      Held to Maturity                    313          (8)
    Commercial Loans on Real
    Estate                                 10          (1)
    Policy Loans                          838         (45)
  Derivatives:
    Futures                                 1          (1)
    Swaps                                  .1         (.2)
  Financial Liabilities:
    Investment Contracts               (1,760)         25
----------------------------------  ------------------------
      TOTAL ESTIMATED POTENTIAL
      LOSS                                        $(124.2)
The estimated changes in fair values of the financial assets shown above
relate to assets invested in support of the Company's insurance liabilities, but
do not include assets associated with products for which investment risk is
borne primarily by the contract holders rather than the Company.

MARKET RISK RELATED TO EQUITY PRICES

The Company actively manages equity price risk relative to benchmarks in
respective markets. Equity holdings are benchmarked against a blend of leading
market indices, mainly the Standard & Poor's ("S&P") 500 and Russell 2000, and
targets price sensitivities that approximate those of the benchmark indices. The
Company estimates its equity price risk from a hypothetical 10% decline in
equity benchmark market levels and measures this risk in terms of the decline in
the fair value of the equity securities it holds. Using this methodology, the
Company's estimated equity price risk at December 31, 2001 was $.038 million,
representing a hypothetical decline in fair market value of equity securities
held by the Company at that date from $.375 million to $.338 million. The
Company's estimated equity price risk using this methodology at December 31,
2000 was $1.1 million, representing a hypothetical decline in fair market value
of equity securities the Company held at that date from $10.8 million to $9.7
million. These amounts exclude equity securities relating to products for which
investment risk is borne primarily by the contract holder rather than by the
Company. While these scenarios are for illustrative purposes only and do not
reflect management's expectations regarding future performance of equity markets
or of the Company's equity portfolio, they represent near term reasonably
possible hypothetical changes that illustrate the potential impact of such
events.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

MARKET RISK RELATED TO FOREIGN CURRENCY EXCHANGE RATES

The Company is exposed to foreign currency exchange risk in its investment
portfolio and through its operations in Taiwan. The Company generally hedges
substantially all foreign currency-denominated fixed-income investments
supporting its U.S. insurance operations into U.S. dollars, using foreign
exchange currency swaps, in order to mitigate the risk that the fair value of
these investments fluctuates as a result of changes in foreign exchange rates.
The Company generally does not hedge all of the foreign currency risk of its
equity investments in unaffiliated foreign entities.

   Foreign currency exchange risk is actively managed within specified limits at
the enterprise (Prudential) level using Value-at-Risk ("VaR") analysis. This
statistical technique estimates, at a specified confidence level, the potential
pretax loss in portfolio market value that could occur over an assumed time
horizon due to adverse market movements. This calculation utilizes a
variance/covariance approach.

   The Company calculates VaR estimates of exposure to loss from volatility in
foreign currency exchange for a one month time period. The Company's estimated
VaR at December 31, 2001 for foreign currency assets not hedged to U.S. dollars,
measured at the 95% confidence level and using a one month time horizon, was
$0.8 million, representing a hypothetical decline in fair market value of these
foreign currency assets from $17.6 million to $16.8 million. The Company's
estimated VaR at December 31, 2000 for foreign currency assets not hedged to
U.S. dollars, measured at the 95% confidence level and using a one month time
horizon, was $2.3 million, representing a hypothetical decline in fair market
value of these foreign currency assets from $133.2 million to $130.9 million.
These calculations use historical price volatilities and correlation data at a
95% confidence level.

   The Company's average monthly VaR from foreign currency exchange rate
movements measured at the 95% confidence level over a one month time horizon was
$1.33 million during 2001 and $2.3 million during 2000.

LIMITATIONS OF VAR MODELS

Although VaR models represent a recognized tool for risk management, they have
inherent limitations, including reliance on historical data that may not be
indicative of future market conditions or trading patterns. Accordingly VaR
models should not be viewed as a predictor of future results. The Company may
incur losses that could be materially in excess of the amounts indicated by the
model on a particular trading day or over a period of time. A VaR model does not
estimate the greatest possible loss. The Company uses these models together with
other risk management tools, including stress testing. The results of these
models and analysis thereof are subject to the judgment of the Company's risk
management personnel.

DERIVATIVES

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, various financial indices, or the value of
securities or commodities. Derivative financial instruments can be
exchange-traded or contracted in the over-the-counter market and include swaps,
futures, options and forwards contracts. See Footnote 11 of the Notes to
Consolidated Financial Statements as to the Company's derivative positions at
December 31, 2001 and 2000. Under insurance statutes the Company may only use
derivative securities in activities intended to offset changes in the market
value of assets held, obligations, and anticipated transactions. These statutes
prohibit the use of derivatives for speculation. The Company uses derivative
financial instruments to manage market risk from changes in interest rates or
foreign currency exchange rates, and to alter interest rate or currency
exposures arising from mismatches between assets and liabilities.

   PRODUCT RISK is the risk of adverse results due to deviation of experience
from expected levels reflected in pricing. Products are priced to reflect the
expected levels of benefits and expense while allowing a margin for adverse
deviation. The level of margin varies with product design and pricing strategy
with respect to the targeted market. The Company seeks to maintain

 44
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

underwriting standards so that premium charged is consistent with risk assumed
on an overall basis. Additionally, most of the Company's policies and contracts
allow the Company to adjust credits (via interest crediting rates) and/or
charges (in contracts where elements such as mortality and expense charges are
not guaranteed), allowing the Company some flexibility to respond to changes in
actuarial experience. The Company also considers the competitive environment in
determining pricing elements including premiums, crediting rates, and
non-guaranteed charges.

   Mortality risks, generally inherent in most of the Company's life insurance
and annuity products, are incorporated in pricing based on the Company's
experience (if available and relevant) and/or industry experience. Mortality
studies are performed periodically to compare the actual incidence of death
claims in relation to business in force, to levels assumed in pricing and to
industry experience. Expense risk is the risk that actual expenses exceed those
assumed in pricing relates to all products and varies by volume of business as
well as general price level changes. Persistency risk represents the risk that
the pattern of policy surrenders will deviate from assumed levels so that
policies do not remain in force long enough to allow the Company to recover its
acquisition costs. Certain products are designed, by use of surrender charges
and other features, to discourage early surrenders and thus mitigate this risk
to the Company. Periodic studies are performed to compare actual surrender
experience to pricing assumptions and industry experience.

   For fee-based products in which investment risk is borne by the client, the
Company retains the risk that fees charged may not adequately cover
administrative expenses. The ability to earn a spread between these fees and the
associated costs is dependent upon the competitive environment, product
performance, the ability to attract clients and assets, and the Company's
control of expense levels.

   CREDIT RISK is the risk that counterparties or issuers may default or fail to
fully honor contractual obligations and is inherent in investment portfolio
asset positions including corporate bonds and commercial loans on real estate,
private placements and other lending-type products, certain derivative
transactions, and various investment operations functions. In derivative
transactions, the Company follows an established credit approval process which
includes risk control limits and monitoring procedures. The Company is also
exposed to credit risk resulting from reinsurance transactions. Limits of
exposure by counterparty, are in place at the portfolio level, and counterparty
concentration risk is also reviewed at the enterprise level. Credit
concentration risks are limited based on credit quality, and enterprise-level
concentrations are reviewed on a quarterly basis. Business group credit analysis
units evaluate creditworthiness of counterparties and assign internal credit
ratings based on data from independent rating agencies and their own fundamental
analysis.

   OPERATING RISK is the risk of potential loss from internal or external events
such as mismanagement, fraud, systems breakdowns, business interruption, or
failure to satisfy legal or fiduciary responsibilities. Like other financial
institutions, the Company is exposed to the risk of misconduct by employees that
are contrary to the internal controls the Company designed to manage those
risks. Legal risk may arise from inadequate control over contract documentation,
marketing processes, or other operations. The Company is subject to internal
controls established by Prudential to manage regulatory, legal, credit, asset
management and other risks at the business unit level for specific lines of
business and at the enterprise level for company-wide processes. Business unit
management personnel, internal auditors and an enterprise level Management
Internal Control unit monitor the Company's controls. The Company's controls are
subject to regulatory review in certain instances.

   Another aspect of operating risk relates to the Company's ability to conduct
transactions electronically and to gather, process, and disseminate information
and maintain data integrity and uninterrupted operations given the possibility
of unexpected or unusual events. The Company has implemented a business
continuation initiative to address these concerns.

                                                                              45
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

DIRECTORS AND OFFICERS

The directors and major officers of Pruco Life, listed with their principal
occupations during the past 5 years, are shown below.

DIRECTORS OF PRUCO LIFE

   JAMES J. AVERY, JR., Vice Chairman and Director -- President, Prudential
Individual Life Insurance since 1998; prior to 1998: Senior Vice President,
Chief Actuary and CFO, Prudential Individual Insurance Group.

   VIVIAN L. BANTA, President, Chairman, and Director -- Executive Vice
President, Individual Financial Services, U.S. Consumer Group since 2000; 1998
to 1999: Consultant, Individual Financial Services; prior to 1998: Consultant,
Morgan Stanley.

   RICHARD J. CARBONE, Director -- Senior Vice President and Chief Financial
Officer since 1997.

   HELEN M. GALT, Director -- Company Actuary, Prudential since 1993.

   JEAN D. HAMILTON, Director -- Executive Vice President, Prudential
Institutional since 1998; prior to 1998: President, Diversified Group.

   RONALD P. JOELSON, Director -- Senior Vice President, Prudential Asset,
Liability and Risk Management since 1999; prior to 1999: President, Guaranteed
Products, Prudential Institutional.

   DAVID R. ODENATH, JR., Director -- President, Prudential Investments since
1999; prior to 1999: Senior Vice President and Director of Sales, Investment
Consulting Group, PaineWebber.

OFFICERS WHO ARE NOT DIRECTORS

   SHAUN M. BYRNES, Senior Vice President -- Senior Vice President, Director of
Mutual Funds, Annuities and UITs, Prudential Investments since 2001; 2000 to
2001: Senior Vice President, Director of Research, Prudential Investments; 1999
to 2000: Senior Vice President, Director of Mutual Funds, Prudential
Investments; prior to 1999: Vice President, Mutual Funds, Prudential
Investments.

   C. EDWARD CHAPLIN, Treasurer -- Senior Vice President and Treasurer,
Prudential since 2000; prior to 2000, Vice President and Treasurer, Prudential.

   THOMAS F. HIGGINS, Senior Vice President -- Vice President, Annuity Services,
Prudential Individual Financial Services since 1999; 1998 to 1999: Vice
President, Mutual Funds, Prudential Individual Financial Services; prior to
1998: Principal, Mutual Fund Operations, The Vanguard Group.

   CLIFFORD E. KIRSCH, Chief Legal Officer and Secretary -- Chief Counsel,
Variable Products, Prudential Law Department since 1995.

   ANDREW J. MAKO, Executive Vice President -- Vice President, Finance, U.S.
Consumer Group since 1999; prior to 1999: Vice President, Business Performance
Management Group.

   ESTHER H. MILNES, Senior Vice President -- Vice President and Chief Actuary,
Prudential Individual Life Insurance since 1999; prior to 1999: Vice President
and Actuary, Prudential Individual Insurance Group.

   JAMES M. O'CONNOR, Senior Vice President and Actuary -- Vice President,
Guaranteed Products since 2001; 1998 to 2000: Corporate Vice President,
Guaranteed Products; prior to 1998: Corporate Actuary, Prudential Investments.

   SHIRLEY H. SHAO, Senior Vice President and Chief Actuary -- Vice President
and Associate Actuary, Prudential since 1996.

   WILLIAM J. ECKERT, IV, Vice President and Chief Accounting Officer -- Vice
President and IFS Controller, Prudential Enterprise Financial Management since
2000; 1999 to 2000: Vice President and Individual Life Controller, Prudential
Enterprise Financial Management; prior to 1999: Vice President, Accounting,
Enterprise Financial Management.

   The business address of all directors and officers of Pruco Life is 213
Washington Street, Newark, New Jersey 07102-2992.

   Pruco Life directors and officers are elected annually.

   VIVIAN L. BANTA, Pruco Life Insurance Company's president, also serves as
director of the following entities, each of which is under the ultimate control
of Prudential Financial, Inc.: Pruco Life Insurance Company of New Jersey,
Prudential Securities Group, Prudential Select Life Insurance Company of
America,

 46
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

Prudential Select Holdings, Inc. and Prudential P&C Holdings, Inc.

   JAMES B. O'CONNOR, Pruco Life Insurance Company's senior vice president and
actuary, also serves as director of The Prudential Assigned Settlement Services
Corp., which is under the ultimate control of Prudential Financial, Inc.

   C. EDWARD CHAPLIN, Pruco Life Insurance Company's treasurer, also serves as
director of the following entities, each of which is under the ultimate control
of Prudential Financial, Inc.: Bree Investments Limited, Gibraltar Properties,
Inc., Gateway Holdings, Inc., PIM Warehouse, Inc., PRUCO, Inc., Prudential Human
Resources Management Company, Inc., Prudential Global Funding, Inc., Prudential
Resources Management Asia Limited, Prudential Funding, LLC and Prudential
Holdings, LLC.

   RICHARD J. CARBONE and RONALD P. JOELSON are an executive officer of one or
more of such Prudential Financial, Inc. entities.

   Officers of Pruco Life Insurance Company receive salary and other
compensation from The Prudential Insurance Company of America, rather than from
Pruco Life. Each such officer provides services to Pruco Life Insurance Company
pursuant to a service agreement between Prudential and Pruco Life. Prudential
allocates to Pruco Life a portion of its compensation costs for these Pruco Life
officers. No director or officer of Pruco Life, nor the Pruco Life directors and
officers collectively, own more than 1% of any class of equity security of
Prudential Financial, Inc.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

EXECUTIVE COMPENSATION

The following table shows the 2001 annual compensation, paid by Prudential, and
allocated based on time devoted to the duties as an executive of Pruco Life
Insurance Company for services provided to Pruco Life Insurance Company:
-------------------------------------------------------------------------
                                                             OTHER ANNUAL
NAME AND PRINCIPAL POSITION      YEAR   SALARY     BONUS     COMPENSATION
-------------------------------------------------------------------------
Vivian L. Banta, President       2001   $35,084   $213,904     $      0
Esther H. Milnes, President      2000    21,533      3,132            0
Esther H. Milnes, President      1999    20,782     23,238            0
SELECTED FINANCIAL DATA
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY
                                                                                FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)                                             2001          2000          1999          1998          1997
---------------------------------------------------------------------------------------------------------------------------
Revenues
  Premiums and other revenue                            $   593,912   $   670,445   $   575,190   $   473,975   $   435,547
  Realized investment (losses) gains, net                   (60,476)      (20,679)      (32,545)       44,841        10,974
  Net investment income                                     343,638       337,919       276,821       261,430       259,634
                                                        -------------------------------------------------------------------
Total revenues                                              877,074       987,685       819,466       780,246       706,155
                                                        -------------------------------------------------------------------
Benefits and Expenses
  Policyholders' benefits and interest credited to
    policyholders' account balances                         452,046       419,073       341,894       312,731       310,352
  Other expenses                                            382,701       410,684       392,041       231,320       227,561
                                                        -------------------------------------------------------------------
Total benefits and expenses                                 834,747       829,757       733,935       544,051       537,913
                                                        -------------------------------------------------------------------
Income before income tax provision                           42,327       157,928        85,531       236,195       168,242
Income tax (benefit) provision                              (25,255)       54,432        29,936        84,233        61,868
                                                        -------------------------------------------------------------------
Net income                                              $    67,582   $   103,496   $    55,595   $   151,962   $   106,374
                                                        -------------------------------------------------------------------
Total assets at year end                                $22,093,412   $23,059,009   $21,768,508   $16,812,781   $12,851,467
                                                        -------------------------------------------------------------------
Separate Account liabilities at year end                $14,920,584   $16,230,264   $16,032,449   $11,490,751   $ 7,948,788
                                                        -------------------------------------------------------------------
48
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

                         COMPANY FINANCIAL INFORMATION

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2001 AND 2000 (IN THOUSANDS)
---------------------------------------------------------------------------------------
                                                                 2001          2000
                                                              -----------   -----------
ASSETS
Fixed maturities
  Available for sale, at fair value (amortized cost, 2001:
    $3,935,472; 2000: $3,552,244)                             $ 4,024,893   $ 3,561,521
  Held to maturity, at amortized cost (fair value, 2000:
    $320,634)                                                          --       324,546
Equity securities -- available for sale, at fair value
  (cost, 2001: $173; 2000: $13,446)                                   375        10,804
Commercial loans on real estate                                     8,190         9,327
Policy loans                                                      874,065       855,374
Short-term investments                                            215,610       202,815
Other long-term investments                                        84,342        83,738
                                                              -----------   -----------
        Total investments                                       5,207,475     5,048,125
Cash and cash equivalents                                         374,185       453,071
Deferred policy acquisition costs                               1,159,830     1,132,653
Accrued investment income                                          77,433        82,297
Reinsurance recoverable                                           300,697        31,568
Receivables from affiliates                                        33,074        51,586
Other assets                                                       20,134        29,445
Separate Account assets                                        14,920,584    16,230,264
                                                              -----------   -----------
TOTAL ASSETS                                                  $22,093,412   $23,059,009
                                                              ===========   ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policyholders' account balances                               $ 3,947,690   $ 3,646,668
Future policy benefits and other policyholder liabilities         808,230       702,862
Cash collateral for loaned securities                             190,022       185,849
Securities sold under agreements to repurchase                     80,715       104,098
Income taxes payable                                              266,096       235,795
Other liabilities                                                 228,596       120,891
Separate Account liabilities                                   14,920,584    16,230,264
                                                              -----------   -----------
TOTAL LIABILITIES                                              20,441,933    21,226,427
                                                              -----------   -----------
CONTINGENCIES (SEE FOOTNOTE 12)
STOCKHOLDER'S EQUITY
Common stock, $10 par value;
    1,000,000 shares, authorized; 250,000 shares, issued and
    outstanding                                                     2,500         2,500
Paid-in-capital                                                   466,748       466,748
Retained earnings                                               1,147,665     1,361,924
Accumulated other comprehensive income (loss):
    Net unrealized investment gains                                34,718         4,730
    Foreign currency translation adjustments                         (152)       (3,320)
                                                              -----------   -----------
Accumulated other comprehensive income                             34,566         1,410
                                                              -----------   -----------
TOTAL STOCKHOLDER'S EQUITY                                      1,651,479     1,832,582
                                                              -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                    $22,093,412   $23,059,009
                                                              ===========   ===========
See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)
------------------------------------------------------------------------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
REVENUES
Premiums                                                      $ 90,868   $121,921   $ 98,976
Policy charges and fee income                                  490,185    474,861    414,425
Net investment income                                          343,638    337,919    276,821
Realized investment losses, net                                (60,476)   (20,679)   (32,545)
Asset management fees                                            7,897     71,160     60,392
Other income                                                     4,962      2,503      1,397
                                                              --------   --------   --------
TOTAL REVENUES                                                 877,074    987,685    819,466
                                                              --------   --------   --------
BENEFITS AND EXPENSES
Policyholders' benefits                                        256,080    248,063    205,042
Interest credited to policyholders' account balances           195,966    171,010    136,852
General, administrative and other expenses                     382,701    410,684    392,041
                                                              --------   --------   --------
TOTAL BENEFITS AND EXPENSES                                    834,747    829,757    733,935
                                                              --------   --------   --------
Income from operations before income taxes                      42,327    157,928     85,531
                                                              --------   --------   --------
Income tax (benefit) provision                                 (25,255)    54,432     29,936
                                                              --------   --------   --------
NET INCOME                                                      67,582    103,496     55,595
                                                              --------   --------   --------
Other comprehensive income (loss), net of tax:
  Unrealized gains (losses) on securities, net of
    reclassification adjustment                                 29,988     33,094    (38,266)
  Foreign currency translation adjustments                       3,168       (993)      (742)
                                                              --------   --------   --------
Other comprehensive income (loss)                               33,156     32,101    (39,008)
                                                              --------   --------   --------
TOTAL COMPREHENSIVE INCOME                                    $100,738   $135,597   $ 16,587
                                                              ========   ========   ========
See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------------
                                                                                                ACCUMULATED
                                                                                                   OTHER           TOTAL
                                                              COMMON   PAID-IN-    RETAINED    COMPREHENSIVE   STOCKHOLDER'S
                                                              STOCK    CAPITAL     EARNINGS    INCOME (LOSS)      EQUITY
                                                              ------   --------   ----------   -------------   -------------
BALANCE, JANUARY 1, 1999                                      $2,500   $439,582   $1,202,833       $8,317       $1,653,232
Net income                                                       --          --       55,595           --           55,595
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --         (742)            (742)
Change in net unrealized investment losses, net of
  reclassification adjustment and taxes                          --          --           --      (38,266)         (38,266)
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 1999                                    2,500     439,582    1,258,428      (30,691)       1,669,819
Net income                                                       --          --      103,496           --          103,496
Contribution from Parent                                         --      27,166           --           --           27,166
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --         (993)            (993)
Change in net unrealized investment losses, net of
  reclassification adjustment and taxes                          --          --           --       33,094           33,094
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 2000                                    2,500     466,748    1,361,924        1,410        1,832,582
Net income                                                       --          --       67,582           --           67,582
Policy credits issued to eligible policyholders                  --          --     (128,025)          --         (128,025)
Dividends to Parent                                              --          --     (153,816)          --         (153,816)
Change in foreign currency translation adjustments, net of
  taxes                                                          --          --           --        3,168            3,168
Change in net unrealized investment gains, net of
  reclassification adjustment and taxes                          --          --           --       29,988           29,988
                                                              ------   --------   ----------     --------       ----------
BALANCE, DECEMBER 31, 2001                                    $2,500   $466,748   $1,147,665      $34,566       $1,651,479
                                                              ======   ========   ==========     ========       ==========
See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (IN THOUSANDS)
-----------------------------------------------------------------------------------------------------
                                                                 2001          2000          1999
                                                              -----------   -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                    $    67,582   $   103,496   $    55,595
Adjustments to reconcile net income to net cash (used in)
  provided by operating activities:
  Policy charges and fee income                                   (54,970)      (72,275)      (83,961)
  Interest credited to policyholders' account balances            195,966       171,010       136,852
  Realized investment losses, net                                  60,476        20,679        32,545
  Amortization and other non-cash items                           (49,594)      (48,141)       75,037
  Change in:
    Future policy benefits and other policyholders'
     liabilities                                                  105,368        73,340       100,743
    Accrued investment income                                       4,864       (13,380)       (7,803)
    Receivable from/Payable to affiliate                           18,512       (24,907)      (66,081)
    Policy loans                                                  (40,645)      (63,022)      (25,435)
    Deferred policy acquisition costs                            (100,281)      (69,868)     (201,072)
    Income taxes payable/receivable                                38,839        90,195       (47,758)
    Other, net                                                    (38,114)       51,011        18,974
                                                              -----------   -----------   -----------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                    208,003       218,138       (12,364)
                                                              -----------   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale/maturity of:
    Fixed maturities:
      Available for sale                                        2,653,798     2,273,789     3,076,848
      Held to maturity                                                 --        64,245        45,841
    Equity securities                                                 482         1,198         5,209
    Commercial loans on real estate                                 1,137         1,182         6,845
    Other long-term investments                                        --        15,039           385
  Payments for the purchase of:
    Fixed maturities:
      Available for sale                                       (2,961,861)   (2,782,541)   (3,452,289)
      Held to maturity                                                 --            --       (24,170)
    Equity securities                                                (184)      (11,134)       (5,110)
    Other long-term investments                                      (130)       (6,917)      (39,094)
  Cash collateral for loaned securities, net                        4,174        98,513        14,000
  Securities sold under agreement to repurchase, net              (23,383)       82,947       (28,557)
  Short-term investments, net                                     (12,766)     (118,418)       92,199
                                                              -----------   -----------   -----------
CASH FLOWS USED IN INVESTING ACTIVITIES                          (338,733)     (382,097)     (307,893)
                                                              -----------   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Policyholders' account deposits                               1,456,668     2,409,399     3,457,158
  Policyholders' account withdrawals                           (1,313,300)   (1,991,363)   (3,091,565)
  Cash dividend to Parent                                         (26,048)           --            --
  Cash provided to affiliate                                      (65,476)           --            --
                                                              -----------   -----------   -----------
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES                     51,844       418,036       365,593
                                                              -----------   -----------   -----------
  Net increase in cash and cash equivalents                       (78,886)      254,077        45,336
  Cash and cash equivalents, beginning of year                    453,071       198,994       153,658
                                                              -----------   -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                        $   374,185   $   453,071   $   198,994
                                                              ===========   ===========   ===========
SUPPLEMENTAL CASH FLOW INFORMATION
  Income taxes (received) paid                                $   (46,021)  $   (14,832)  $    55,144
                                                              -----------   -----------   -----------
NON-CASH TRANSACTIONS DURING THE YEAR
  Dividend paid with fixed maturities                         $    81,952   $        --   $        --
                                                              -----------   -----------   -----------
  Taiwan branch dividend paid with net assets/liabilities     $    45,816   $        --   $        --
                                                              -----------   -----------   -----------
  Policy credits issued to eligible policyholders             $   128,025   $        --   $        --
                                                              -----------   -----------   -----------
  Contribution from Parent                                    $        --   $    27,166   $        --
                                                              -----------   -----------   -----------
See Notes to Consolidated Financial Statements

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS

Pruco Life Insurance Company ("the Company") is a stock life insurance company,
organized in 1971 under the laws of the state of Arizona. The Company is
licensed to sell individual life insurance, variable life insurance, term life
insurance, variable and fixed annuities, and a non-participating guaranteed
interest contract ("GIC") called Prudential Credit Enhanced GIC ("PACE") in the
District of Columbia, Guam and in all states and territories except New York.
The Company also had marketed individual life insurance through its branch
office in Taiwan. The branch office was transferred to an affiliated Company on
January 31, 2001, as described in Footnote 14.

   The Company has one wholly owned subsidiary, Pruco Life Insurance Company of
New Jersey ("PLNJ"). PLNJ is a stock life insurance company organized in 1982
under the laws of the state of New Jersey. It is licensed to sell individual
life insurance, variable life insurance, term life insurance, fixed and variable
annuities only in the states of New Jersey and New York. Another wholly owned
subsidiary, The Prudential Life Insurance Company of Arizona ("PLICA") was
dissolved on September 30, 2000. All assets and liabilities were transferred to
the Company. PLICA had no new business sales in 2000 or 1999.

   The Company is a wholly owned subsidiary of The Prudential Insurance Company
of America ("Prudential"), an insurance company founded in 1875 under the laws
of the state of New Jersey. On December 18, 2001 ("the date of demutualization")
Prudential converted from a mutual life insurance company to a stock life
insurance company and became an indirect wholly owned subsidiary of Prudential
Financial, Inc. (the "Holding Company"). The demutualization was completed in
accordance with Prudential's Plan of Reorganization, which was approved by the
Commissioner of the New Jersey Department of Banking and Insurance in October
2001.

   Prudential intends to make additional capital contributions to the Company,
as needed, to enable it to comply with its reserve requirements and fund
expenses in connection with its business. Generally, Prudential is under no
obligation to make such contributions and its assets do not back the benefits
payable under the Company's policyholder contracts. During 2000, a capital
contribution of $27.2 million resulted from the forgiveness of an intercompany
receivable.

   The Company is engaged in a business that is highly competitive because of
the large number of stock and mutual life insurance companies and other entities
engaged in marketing insurance products, and individual and group annuities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). The Company has extensive transactions and relationships with
Prudential and other affiliates, as more fully described in Footnote 14. Due to
these relationships, it is possible that the terms of these transactions are not
the same as those that would result from transactions among wholly unrelated
parties.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, in particular deferred policy acquisition costs ("DAC")
and future policy benefits, and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.

INVESTMENTS

FIXED MATURITIES classified as "available for sale" are carried at estimated
fair value. Fixed maturities that the Company has both the intent and ability to
hold to maturity are stated at amortized cost and classified as "held to
maturity". The amortized cost of fixed maturities is written down to estimated
fair value if a decline in value is considered to be other than temporary.
Unrealized gains and losses on fixed maturities "available for sale", including
the effect on deferred policy acquisition costs and policyholders' account
balances that would result from the realization of unrealized gains and losses
are included in a separate component of equity, "Accumulated other comprehensive
income (loss)", net of income taxes.

EQUITY SECURITIES, available for sale, comprised of common and non-redeemable
preferred stock, are carried at estimated fair value. The associated unrealized
gains and losses, the effects on deferred policy acquisition costs and on
policyholders' account balances that would result from the realization of
unrealized gains and losses, are included in a separate component of equity,
"Accumulated other comprehensive income (loss)", net of income taxes.

COMMERCIAL LOANS ON REAL ESTATE are stated primarily at unpaid principal
balances, net of unamortized discounts and an allowance for losses. The
allowance for losses includes a loan specific reserve for impaired loans and a
portfolio reserve for incurred but not specifically identified losses. Impaired
loans include those loans for which it is probable that all amounts due
according to the contractual terms of the loan agreement will not be collected.
Impaired loans are measured at the present value of expected future cash flows
discounted at the loan's effective interest rate, or at the fair value of the
collateral if the loan is collateral dependent. Interest received on impaired
loans, including loans that were previously modified in a troubled debt
restructuring, is either applied against the principal or reported as revenue,
according to management's judgment as to the collectibility of principal.
Management discontinues accruing interest on impaired loans after the loans are
90 days delinquent as to principal or interest, or earlier when management has
serious doubts about collectibility. When a loan is recognized as impaired, any
accrued but uncollectible interest is reversed against interest income of the
current period. Generally, a loan is restored to accrual status only after all
delinquent interest and principal are brought current and, in the case of loans
where the payment of interest has been interrupted for a substantial period, a
regular payment performance has been established. The portfolio reserve for
incurred but not specifically identified losses considers the Company's past
loan loss experience, the current credit composition of the portfolio,
historical credit migration, property type diversification, default and loss
severity statistics and other relevant factors.

POLICY LOANS are carried at unpaid principal balances.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SHORT-TERM INVESTMENTS, consisting of highly liquid debt instruments other than
those held in "Cash and cash equivalents," with a maturity of twelve months or
less when purchased, are carried at amortized cost, which approximates fair
value.

OTHER LONG-TERM INVESTMENTS represent the Company's investments in joint
ventures and partnerships in which the Company does not exercise control,
derivatives held for purposes other than trading, and investments in the
Company's own Separate Accounts. Joint ventures and partnerships are recorded
using the equity method of accounting, reduced for other than temporary declines
in value. The Company's investment in the Separate Accounts is carried at
estimated fair value. The Company's net income from investments in joint
ventures and partnerships is generally included in "Net investment income."

REALIZED INVESTMENT LOSSES, NET are computed using the specific identification
method. Costs of fixed maturity and equity securities are adjusted for
impairments considered to be other than temporary. Impairment adjustments are
included in "Realized investment gains (losses), net." Factors considered in
evaluating whether a decline in value is other than temporary are: 1) whether
the decline is substantial; 2) the Company's ability and intent to retain the
investment for a period of time sufficient to allow for an anticipated recovery
in value; 3) the duration and extent to which the market value has been less
than cost; and 4) the financial condition and near-term prospects of the issuer.

CASH AND CASH EQUIVALENTS include cash on hand, amounts due from banks, money
market instruments, and other debt issues with a maturity of three months or
less when purchased.

DEFERRED POLICY ACQUISITION COSTS

The costs that vary with and that are related primarily to the production of new
insurance and annuity business are deferred to the extent that they are deemed
recoverable from future profits. Such costs include commissions, costs of policy
issuance and underwriting, and variable field office expenses. Deferred policy
acquisition costs are subject to recognition testing at the time of policy issue
and recoverability and premium deficiency testing at the end of each accounting
period. Deferred policy acquisition costs, for certain products, are adjusted
for the impact of unrealized gains or losses on investments as if these gains or
losses had been realized, with corresponding credits or charges included in
"Accumulated other comprehensive income (loss)."

   Policy acquisition costs related to interest-sensitive and variable life
products and certain investment-type products are deferred and amortized over
the expected life of the contracts (periods ranging from 25 to 30 years) in
proportion to estimated gross profits arising principally from investment
results, mortality and expense margins, and surrender charges based on
historical and anticipated future experience, which is updated periodically. The
effect of changes to estimated gross profits on unamortized deferred acquisition
costs is reflected in "General and administrative expenses" in the period such
estimated gross profits are revised.

   Deferred policy acquisition costs related to non-participating term insurance
are amortized over the expected life of the contracts in proportion to premium
income. For guaranteed investment contracts, acquisition costs are expensed as
incurred.

                                                                              55
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   Prudential and the Company have offered programs under which policyholders,
for a selected product or group of products, can exchange an existing policy or
contract issued by Prudential or the Company for another form of policy or
contract. These transactions are known as internal replacements. If the new
policies have terms that are substantially similar to those of the earlier
policies, the DAC is retained with respect to the new policies and amortized
over the life of the new policies. If the terms of the new policies are not
substantially similar to those of the former policy, the unamortized DAC on the
surrendered policies is immediately charged to expense.

SECURITIES LOANED

Securities loaned are treated as financing arrangements and are recorded at the
amount of cash received as collateral. The Company obtains collateral in an
amount equal to 102% and 105% of the fair value of the domestic and foreign
securities, respectively. The Company monitors the market value of securities
loaned on a daily basis with additional collateral obtained as necessary.
Non-cash collateral received is not reflected in the consolidated statements of
financial position because the debtor typically has the right to redeem the
collateral on short notice. Substantially all of the Company's securities loaned
are with large brokerage firms.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are treated as financing
arrangements and are carried at the amounts at which the securities will be
subsequently reacquired, including accrued interest, as specified in the
respective agreements. Assets to be repurchased are the same, or substantially
the same, as the assets transferred and the transferor, through right of
substitution, maintains the right and ability to redeem the collateral on short
notice. The market value of securities to be repurchased is monitored and
additional collateral is obtained, where appropriate, to protect against credit
exposure.

   Securities lending and securities repurchase agreements are used to generate
net investment income and facilitate trading activity. These instruments are
short-term in nature (usually 30 days or less). Securities loaned are
collateralized principally by U.S. Government and mortgage-backed securities.
Securities sold under repurchase agreements are collateralized principally by
cash. The carrying amounts of these instruments approximate fair value because
of the relatively short period of time between the origination of the
instruments and their expected realization.

SEPARATE ACCOUNT ASSETS AND LIABILITIES

Separate Account assets and liabilities are reported at estimated fair value and
represent segregated funds which are invested for certain policyholders and
other customers. The assets consist of common stocks, fixed maturities, real
estate related securities, and short-term investments. The assets of each
account are legally segregated and are not subject to claims that arise out of
any other business of the Company. Investment risks associated with market value
changes are borne by the customers, except to the extent of minimum guarantees
made by the Company with respect to certain accounts. The investment income and
gains or losses for Separate Accounts generally accrue to the policyholders and
are not included in the Consolidated Statements of Operations and Comprehensive
Income. Mortality, policy administration and surrender charges on the accounts
are included in "Policy charges and fee income".

 56
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   Separate Accounts represent funds for which investment income and investment
gains and losses accrue directly to, and investment risk is borne by, the
policyholders, with the exception of the Pruco Life Modified Guaranteed Annuity
Account. The Pruco Life Modified Guaranteed Annuity Account is a non-unitized
Separate Account, which funds the Modified Guaranteed Annuity Contract and the
Market Value Adjustment Annuity Contract. Owners of the Pruco Life Modified
Guaranteed Annuity and the Market Value Adjustment Annuity Contracts do not
participate in the investment gain or loss from assets relating to such
accounts. Such gain or loss is borne, in total, by the Company.

CONTINGENCIES

Amounts related to contingencies are accrued if it is probable that a liability
has been incurred and an amount is reasonably estimable. Management evaluates
whether there are incremental legal or other costs directly associated with the
ultimate resolution of the matter that are reasonably estimable and, if so, they
are included in the accrual.

INSURANCE REVENUE AND EXPENSE RECOGNITION

Premiums from insurance policies are generally recognized when due. Benefits are
recorded as an expense when they are incurred. For traditional life insurance
contracts, a liability for future policy benefits is recorded using the net
level premium method. For individual annuities in payout status, a liability for
future policy benefits is recorded for the present value of expected future
payments based on historical experience.

   Amounts received as payment for interest-sensitive life, individual annuities
and guaranteed investment contracts are reported as deposits to "Policyholders'
account balances". Revenues from these contracts reflected as "Policy charges
and fee income" consist primarily of fees assessed during the period against the
policyholders' account balances for mortality charges, policy administration
charges and surrender charges. Benefits and expenses for these products include
claims in excess of related account balances, expenses of contract
administration, interest credited and amortization of deferred policy
acquisition costs.

   Premiums, benefits and expenses are stated net of reinsurance ceded to other
companies. Estimated reinsurance recoverables and the cost of reinsurance are
recognized over the life of the reinsured policies using assumptions consistent
with those used to account for the underlying policies.

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

Assets and liabilities of the Taiwan branch are translated to U.S. dollars at
the exchange rate in effect at the end of the period. Revenues, benefits and
other expenses are translated at the average rate prevailing during the period.
Cumulative translation adjustments arising from the use of differing exchange
rates from period to period are charged or credited directly to "Other
comprehensive income (loss)." The cumulative effect of changes in foreign
exchange rates are included in "Accumulated other comprehensive income (loss)".

ASSET MANAGEMENT FEES

Through December 31, 2000, the Company received asset management fee income from
policyholder account balances invested in The Prudential Series Funds ("PSF"),
which are a portfolio of mutual fund investments related

                                                                              57
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

to the Company's Separate Account products (refer to Note 14). In addition, the
Company receives fees from policyholder account balances invested in funds
managed by companies other than Prudential. Asset management fees are recognized
as income as earned.

DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, financial indices, or the value of securities or
commodities. Derivative financial instruments used by the Company include swaps,
futures, forwards and option contracts and may be exchange-traded or contracted
in the over-the-counter market. See Note 11 for a discussion of the Company's
use of derivative financial instruments and the related accounting and reporting
treatment for such instruments.

INCOME TAXES

The Company and its subsidiary are members of the consolidated federal income
tax return of Prudential and file separate company state and local tax returns.
Pursuant to the tax allocation arrangement with Prudential, total federal income
tax expense is determined on a separate company basis. Members with losses
record tax benefits to the extent such losses are recognized in the consolidated
federal tax provision. Deferred income taxes are generally recognized, based on
enacted rates, when assets and liabilities have different values for financial
statement and tax reporting purposes. A valuation allowance is recorded to
reduce a deferred tax asset to that portion that is expected to be realized.

NEW ACCOUNTING PRONOUNCEMENTS

In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities -- a replacement of FASB Statement No. 125." The Company has adopted
the provisions of SFAS No. 140 relating to transfers and extinguishments of
liabilities which are effective for periods occurring after March 31, 2001. The
adoption did not have an effect on the results of operations of the Company.

   In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the
Company account for all business combinations in the scope of the statement
using the purchase method. SFAS No. 142 requires that an intangible asset
acquired either individually or with a group of other assets shall initially be
recognized and measured based on fair value. An intangible asset with a finite
life is amortized over its useful life to the reporting entity; an intangible
asset with an indefinite useful life, including goodwill, is not amortized. All
intangible assets shall be tested for impairment in accordance with the
statement. SFAS No. 142 is effective for fiscal years beginning after December
15, 2001; however, goodwill and intangible assets acquired after June 30, 2001
are subject immediately to the nonamortization and amortization provisions of
this statement. As of December 31, 2001, The Company does not have any goodwill
or intangible assets.

   In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 eliminated the requirement that
discontinued operations be measured at net realizable value

 58
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

or that entities include losses that have not yet occurred. SFAS No. 144
eliminated the exception to consolidation for a subsidiary for which control is
likely to be temporary. SFAS No. 144 requires that long-lived assets that are to
be disposed of by sale be measured at the lower of book value or fair value less
cost to sell. An impairment for assets that are not considered to be disposed of
is recognized only if the carrying amounts of long-lived assets are not
recoverable and exceed their fair values. Additionally, SFAS No. 144 expands the
scope of discontinued operations to include all components of an entity with
operations and cash flows that (1) can be distinguished from the rest of the
entity and (2) will be eliminated from the ongoing operations of the entity in a
disposal transaction. SFAS No. 144 is effective for financial statements issued
for fiscal years beginning after December 15, 2001 and, generally, its
provisions are to be applied prospectively.

RECLASSIFICATIONS

Certain amounts in the prior years have been reclassified to conform to the
current year presentation.

3. INVESTMENTS

FIXED MATURITIES AND EQUITY SECURITIES:

The following tables provide additional information relating to fixed maturities
and equity securities as of December 31:
---------------------------------------------------------------------------------------------------------------
                                                                                    2001
                                                              -------------------------------------------------
                                                                             GROSS        GROSS
                                                              AMORTIZED    UNREALIZED   UNREALIZED   ESTIMATED
                                                                 COST        GAINS        LOSSES     FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
FIXED MATURITIES AVAILABLE FOR SALE
U.S. Treasury Securities and Obligations of U.S. Government
  Corporations and Agencies                                   $  303,606    $  1,496     $ 1,648     $  303,454
Foreign Government Bonds                                          27,332       2,122          --         29,454
Corporate Securities                                           3,594,386     116,186      28,834      3,681,738
Mortgage-backed Securities                                        10,148         160          61         10,247
                                                              ----------    --------     -------     ----------
Total Fixed Maturities Available For Sale                     $3,935,472    $119,964     $30,543     $4,024,893
                                                              ==========    ========     =======     ==========
FIXED MATURITIES HELD TO MATURITY
Corporate Securities                                          $       --    $     --     $    --     $       --
                                                              ----------    --------     -------     ----------
Total Fixed Maturities Held To Maturity                       $       --    $     --     $    --     $       --
                                                              ==========    ========     =======     ==========
EQUITY SECURITIES AVAILABLE FOR SALE                          $      173    $    220     $    18     $      375
                                                              ==========    ========     =======     ==========
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)
2000
                                                              -------------------------------------------------
                                                                             GROSS        GROSS
                                                              AMORTIZED    UNREALIZED   UNREALIZED   ESTIMATED
                                                                 COST        GAINS        LOSSES     FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
FIXED MATURITIES AVAILABLE FOR SALE
U.S. Treasury Securities and Obligations of U.S. Government
  Corporations and Agencies                                   $  309,609    $ 7,888      $    17     $  317,480
Foreign Government Bonds                                         136,133      8,093          520        143,706
Corporate Securities                                           3,075,023     43,041       49,538      3,068,526
Mortgage-backed Securities                                        31,479        330            0         31,809
                                                              ----------    -------      -------     ----------
Total Fixed Maturities Available For Sale                     $3,552,244    $59,352      $50,075     $3,561,521
                                                              ==========    =======      =======     ==========
FIXED MATURITIES HELD TO MATURITY
Corporate Securities                                          $  324,546    $ 1,500      $ 5,412     $  320,634
                                                              ----------    -------      -------     ----------
Total Fixed Maturities Held To Maturity                       $  324,546    $ 1,500      $ 5,412     $  320,634
                                                              ==========    =======      =======     ==========
EQUITY SECURITIES AVAILABLE FOR SALE                          $   13,446    $   197      $ 2,839     $   10,804
                                                              ==========    =======      =======     ==========
The amortized cost and estimated fair value of fixed maturities, by
contractual maturities at December 31, 2001 is shown below:
AVAILABLE FOR SALE
                                                              ---------------------------
                                                              AMORTIZED    ESTIMATED FAIR
                                                                 COST          VALUE
                                                              ----------   --------------
                                                                    (IN THOUSANDS)
Due in one year or less                                       $  802,235     $  821,790
Due after one year through five years                          1,841,097      1,885,535
Due after five years through ten years                         1,026,709      1,045,693
Due after ten years                                              255,283        261,628
Mortgage-backed securities                                        10,148         10,247
                                                              ----------     ----------
Total                                                         $3,935,472     $4,024,893
                                                              ==========     ==========
Actual maturities may differ from contractual maturities because issuers have
the right to call or prepay obligations.

   Proceeds from the sale of fixed maturities available for sale during 2001,
2000, and 1999, were $2,380.4 million, $2,103.6 million, and $2,950.4 million,
respectively. Gross gains of $40.3 million, $15.3 million, $13.1 million, and
gross losses of $47.7 million, $33.9 million, and $31.1 million, were realized
on those sales during 2001, 2000, and 1999, respectively.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

   Proceeds from the maturity of fixed maturities available for sale during
2001, 2000, and 1999, were $273.4 million, $170.2 million, and $126.5 million,
respectively.

   Writedowns for impairments which were deemed to be other than temporary for
fixed maturities were $53.5 million, $12.3 million, and $11.2 million, for the
years 2001, 2000 and 1999, respectively.

   Due to the adoption of FAS 133, "Accounting for Derivative Instruments and
Hedging Activities", on January 1, 2001, the entire portfolio of fixed
maturities classified as held to maturity were transferred to the available for
sale category. The aggregate amortized cost of the securities was $324.5
million. Unrealized investment losses of $2.5 million, net of tax were recorded
in "Accumulated Other Comprehensive income (loss)" at the time of transfer.

   During 2000, certain securities classified as held to maturity were
transferred to the available for sale portfolio. These actions were taken as a
result of a significant deterioration in credit worthiness. The aggregate
amortized cost of the securities transferred was $6.6 million. Gross unrealized
investment losses of $0.3 million were recorded in "Accumulated Other
Comprehensive income (loss)" at the time of transfer. Prior to transfer,
impairments related to these securities, if any, were included in "realized
investment losses, net". During the year ended December 31, 1999, there were no
securities classified as held to maturity that were transferred. During the
years ended December 31, 2001, 2000, and 1999, there were no securities
classified as held to maturity that were sold.

COMMERCIAL LOANS ON REAL ESTATE

The Company's commercial loans on real estate were collateralized by the
following property types at December 31:
2001            2000
                                                              --------------  --------------
                                                                      (IN THOUSANDS)
Retail Stores                                                 $4,623   56.4%  $5,615   60.2%
Industrial Buildings                                           3,567   43.6%   3,712   39.8%
                                                              ------  ------  ------  ------
  Net Carrying Value                                          $8,190  100.0%  $9,327  100.0%
                                                              ==============  ==============
The concentration of commercial loans are in the states of Washington (47%),
New Jersey (44%), and North Dakota (9%).

SPECIAL DEPOSITS AND RESTRICTED ASSETS

Fixed maturities of $2.9 million and $8.0 million at December 31, 2001 and 2000,
respectively, were on deposit with governmental authorities or trustees as
required by certain insurance laws. Equity securities restricted as to sale were
$.2 million at December 31, 2001 and 2000, respectively.

OTHER LONG-TERM INVESTMENTS

The Company's "Other long-term investments" of $84.3 million and $83.7 million
as of December 31, 2001 and 2000, respectively, are comprised of joint ventures
and limited partnerships, the Company's investment in the Separate Accounts and
certain derivatives for other than trading. Joint ventures and limited
partnerships totaled

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

$35.8 million and $34.3 million at December 31, 2001 and 2000, respectively. The
Company's share of net income from the joint ventures was $1.6 million, $.9
million, and $.3 million, for the years ended December 31, 2001, 2000 and 1999,
respectively, and is reported in "Net investment income." The Company's
investment in the Separate Accounts was $44.0 million and $46.9 million at
December 31, 2001 and 2000, respectively.

INVESTMENT INCOME AND INVESTMENT GAINS AND LOSSES

Net investment income arose from the following sources for the years ended
December 31:
2001        2000        1999
                                                              ---------   ---------   ---------
                                                                       (IN THOUSANDS)
Fixed Maturities -- Available For Sale                        $279,477    $237,042    $188,236
Fixed Maturities -- Held To Maturity                                --      26,283      29,245
Equity Securities -- Available For Sale                             71          18          --
Commercial Loans On Real Estate                                    905       1,010       2,825
Policy Loans                                                    48,149      45,792      42,422
Short-Term Investments and Cash Equivalents                     24,253      29,582      19,208
Other                                                            6,021      16,539       4,432
                                                              --------    --------    --------
Gross Investment Income                                        358,876     356,266     286,368
  Less: Investment Expenses                                    (15,238)    (18,347)     (9,547)
                                                              --------    --------    --------
Net Investment Income                                         $343,638    $337,919    $276,821
                                                              ========    ========    ========
REALIZED INVESTMENT LOSSES, NET including charges for other than temporary
reductions in value, for the years ended December 31, were from the following
sources:
2001        2000        1999
                                                              ---------   ---------   ---------
                                                                       (IN THOUSANDS)
Fixed Maturities -- Available For Sale                        $(60,924)   $(34,600)   $(29,192)
Fixed Maturities -- Held To Maturity                                --        (212)        102
Equity Securities -- Available For Sale                            (56)        271         392
Derivatives                                                     (1,396)     15,039      (1,557)
Other                                                            1,900      (1,177)     (2,290)
                                                              --------    --------    --------
Realized Investment Losses, Net                               $(60,476)   $(20,679)   $(32,545)
                                                              ========    ========    ========
SECURITIES PLEDGED TO CREDITORS

The Company pledges investment securities it owns to unaffiliated parties
through certain transactions including securities lending, securities sold under
agreements to repurchase, and futures contracts. At December 31, 2001 and 2000,
the carrying value of fixed maturities available for sale pledged to third
parties as reported in the Consolidated Statements of Financial Position were
$265.2 million and $287.8 million, respectively.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)

NET UNREALIZED INVESTMENT GAINS (LOSSES)

Net unrealized investment gains (losses) on securities available for sale are
included in the Consolidated Statements of Financial Position as a component of
"Accumulated other comprehensive income (loss)." Changes in these amounts
include reclassification adjustments to exclude from "Other Comprehensive income
(loss)," those items that are included as part of "Net income" for a period that
also had been part of "Other Comprehensive income (loss)" in earlier periods.
The amounts for the years ended December 31, net of tax, are as follows:
ACCUMULATED
                                                                                                                   OTHER
                                                                                                               COMPREHENSIVE
                                                                                                               INCOME (LOSS)
                                                                DEFERRED                         DEFERRED      RELATED TO NET
                                               UNREALIZED        POLICY       POLICYHOLDERS'    INCOME TAX       UNREALIZED
                                             GAINS (LOSSES)    ACQUISITION       ACCOUNT        (LIABILITY)      INVESTMENT
                                             ON INVESTMENTS       COSTS          BALANCES         BENEFIT      GAINS (LOSSES)
                                             --------------    -----------    --------------    -----------    --------------
                                                                              (IN THOUSANDS)
BALANCE, JANUARY 1, 1999                       $  25,169        $(13,115)        $ 2,680         $ (4,832)        $  9,902
Net investment gains (losses) on
  investments arising during the period         (138,268)             --              --           47,785          (90,483)
Reclassification adjustment for gains
  (losses) included in net income                 28,698              --              --           (9,970)          18,728
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --          53,407              --          (16,283)          37,124
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --          (5,712)           2,077           (3,635)
                                               ---------        --------         -------         --------         --------
BALANCE, DECEMBER 31, 1999                       (84,401)         40,292          (3,032)          18,777          (28,364)
Net investment gains (losses) on
  investments arising during the period           56,707              --              --          (21,539)          35,168
Reclassification adjustment for gains
  (losses) included in net income                 34,329              --              --          (13,039)          21,290
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --         (39,382)             --           14,177          (25,205)
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --           2,877           (1,036)           1,841
                                               ---------        --------         -------         --------         --------
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENTS (CONTINUED)
ACCUMULATED
                                                                                                                   OTHER
                                                                                                               COMPREHENSIVE
                                                                                                               INCOME (LOSS)
                                                                DEFERRED                         DEFERRED      RELATED TO NET
                                               UNREALIZED        POLICY       POLICYHOLDERS'    INCOME TAX       UNREALIZED
                                             GAINS (LOSSES)    ACQUISITION       ACCOUNT        (LIABILITY)      INVESTMENT
                                             ON INVESTMENTS       COSTS          BALANCES         BENEFIT      GAINS (LOSSES)
                                             --------------    -----------    --------------    -----------    --------------
                                                                              (IN THOUSANDS)
BALANCE, DECEMBER 31, 2000                         6,635             910            (155)          (2,660)           4,730
Net investment gains (losses) on
  investments arising during the period           22,007              --              --           (7,922)          14,085
Reclassification adjustment for gains
  (losses) included in net income                 60,980              --              --          (21,953)          39,027
Impact of net unrealized investment gains
  (losses) on deferred policy acquisition
  costs                                               --         (41,223)             --           14,840          (26,383)
Impact of net unrealized investment gains
  (losses) on policyholders' account
  balances                                            --              --           5,092           (1,833)           3,259
                                               ---------        --------         -------         --------         --------
BALANCE, DECEMBER 31, 2001                     $  89,622        $(40,313)        $ 4,937         $(19,528)        $ 34,718
                                               =========        ========         =======         ========         ========
4. DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in deferred policy acquisition costs as of and for
the years ended December 31, are as follows:
2001          2000          1999
                                                              ----------    ----------    ----------
                                                                          (IN THOUSANDS)
Balance, Beginning of Year                                    $1,132,653    $1,062,785    $  861,713
Capitalization of Commissions, Sales and Issue Expenses          295,823       242,322       242,373
Amortization                                                    (156,092)     (129,049)      (96,451)
Change In Unrealized Investment (Gains) Losses                   (41,223)      (39,382)       53,407
Foreign Currency Translation                                       1,773        (4,023)        1,743
Transfer of Taiwan branch balance to an affiliated company       (73,104)           --            --
                                                              ----------    ----------    ----------
BALANCE, END OF YEAR                                          $1,159,830    $1,132,653    $1,062,785
                                                              ==========    ==========    ==========
64
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. POLICYHOLDERS' LIABILITIES

Future policy benefits and other policyholder liabilities at December 31, are as
follows:
2001        2000
                                                              --------    --------
                                                                 (IN THOUSANDS)
Life Insurance -- Domestic                                    $500,974    $429,825
Life Insurance -- Taiwan                                       260,632     226,272
Individual Annuities                                            32,423      31,817
Group Annuities                                                 14,201      14,948
                                                              --------    --------
                                                              $808,230    $702,862
                                                              ========    ========
Life insurance liabilities include reserves for death benefits. Annuity
liabilities include reserves for annuities that are in payout status.

   The following table highlights the key assumptions generally utilized in
calculating these reserves:
PRODUCT                                         MORTALITY                  INTEREST RATE              ESTIMATION METHOD
-------                           -------------------------------------   ---------------   -------------------------------------
Life Insurance -- Domestic        Generally rates guaranteed in           2.5% to 11.25%    Net level premium based on
Variable and Interest-Sensitive   calculating cash surrender values                         non-forfeiture interest rate
Life Insurance -- Domestic Term   Best estimate plus a provision for       6.5% to 6.75%    Net level premium plus a provision
Insurance                         adverse deviation                                         for adverse deviation
Life Insurance -- International   Generally the Taiwan standard table      6.25% to 7.5%    Net level premium plus a provision
                                  plus a provision for adverse                              for adverse deviation
                                  deviation
Individual Annuities              Mortality table varies based on the     6.25% to 11.0%    Present value of expected future
                                  issue year of the contract. Current                       payments based on historical
                                  table (for 1998 & later issues) is                        experience
                                  the Annuity 2000 Mortality Table with
                                  certain modifications
Group Annuities                   1950 & 1971 Group Annuity Mortality         14.75%        Present value of expected future
                                  Table with certain modifications                          payments based on historical
                                                                                            experience
Policyholders' account balances at December 31, are as follows:
2001         2000
                                                              ----------   ----------
                                                                  (IN THOUSANDS)
Interest-Sensitive Life Contracts                             $1,976,710   $1,886,714
Individual Annuities                                             976,237      859,996
Guaranteed Investment Contracts                                  994,743      899,958
                                                              ----------   ----------
                                                              $3,947,690   $3,646,668
                                                              ==========   ==========
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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. POLICYHOLDERS' LIABILITIES (CONTINUED)

   Policyholders' account balances for interest-sensitive life, individual
annuities, and guaranteed investment contracts are equal to policy account
values plus unearned premiums. The policy account values represent an
accumulation of gross premium payments plus credited interest less withdrawals,
expenses and mortality charges.

   Certain contract provisions that determine the policyholder account balances
are as follows:
PRODUCT                           INTEREST RATE                   WITHDRAWAL/SURRENDER CHARGES
-------                          ---------------  ------------------------------------------------------------
Interest Sensitive Life           3.0% to 6.75%   Various up to 10 years
Contracts
Individual Annuities              3.0% to 16.0%   0% to 7% for up to 9 years
Guaranteed Investment Contracts  4.32% to 8.03%   Subject to market value withdrawal provisions for any funds
                                                  withdrawn other than for benefit responsive and contractual
                                                  payments
6. REINSURANCE

The Company participates in reinsurance, with Prudential and other companies, in
order to provide greater diversification of business, provide additional
capacity for future growth and limit the maximum net loss potential arising from
large risks. Reinsurance ceded arrangements do not discharge the Company or the
insurance subsidiary as the primary insurer. Ceded balances would represent a
liability of the Company in the event the reinsurers were unable to meet their
obligations to the Company under the terms of the reinsurance agreements. The
likelihood of a material reinsurance liability reassumed by the Company is
considered to be remote. The affiliated reinsurance agreements, including the
Company's reinsurance of all its Taiwanese business, are described further in
Note 14.

   Reinsurance amounts included in the Consolidated Statements of Operations and
Comprehensive Income for the year ended December 31, are as follows:
2001      2000      1999
                                                              --------   -------   -------
                                                                     (IN THOUSANDS)
Domestic:
Reinsurance premiums ceded -- affiliated                      $ (9,890)  $(7,641)  $(5,630)
Reinsurance premiums ceded -- unaffiliated                     (13,399)   (2,475)       --
Policyholders' benefits ceded                                   10,803     3,558     3,140
Taiwan after the transfer:
Reinsurance premiums ceded -- affiliated                       (82,433)       --        --
Policyholders' benefits ceded -- affiliated                     12,859        --        --
Taiwan before the transfer:
Reinsurance premiums ceded -- affiliated                          (107)   (1,573)   (1,252)
Reinsurance premiums ceded -- unaffiliated                        (167)   (2,830)   (1,745)
Policyholders' benefits ceded                                       71     1,914     1,088
Reinsurance premiums assumed                                       162     1,671     1,778
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PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. REINSURANCE (CONTINUED)

   Reinsurance recoverables, included in the Company's Consolidated Statements
of Financial Position at December 31, were as follows:
2001      2000
                                                              --------   -------
                                                                (IN THOUSANDS)
Domestic Life Insurance -- affiliated                         $ 11,014   $ 8,765
Domestic Life Insurance -- unaffiliated                         14,850     2,037
Other Reinsurance -- affiliated                                 14,201    14,948
Taiwan Life Insurance -- affiliated                            260,632        --
Taiwan Life Insurance -- unaffiliated                               --     5,818
                                                              --------   -------
                                                              $300,697   $31,568
                                                              ========   =======
The gross and net amounts of life insurance in force at December 31, were as
follows:
2001           2000           1999
                                                              ------------   ------------   ------------
                                                                            (IN THOUSANDS)
Life Insurance Face Amount In Force                           $ 84,317,628   $ 66,327,999   $ 54,954,680
Ceded To Other Companies                                       (25,166,264)    (7,544,363)    (2,762,319)
                                                              ------------   ------------   ------------
Net Amount of Life Insurance In Force                         $ 59,151,364   $ 58,783,636   $ 52,192,361
                                                              ============   ============   ============
7. EMPLOYEE BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT PLANS

The Company had a non-contributory defined benefit pension plan that covered
substantially all of its Taiwanese employees. The pension plan was transferred
to an affiliate on January 31, 2001 as described in Note 14. This plan was
established as of September 30, 1998 and the projected benefit obligation and
related expenses at December 31, 2000 were not material to the Consolidated
Statements of Financial Position or results of operations for the years
presented. All other employee benefit costs are allocated to the Company by
Prudential in accordance with the service agreement described in Footnote 14.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES

The components of income taxes for the years ended December 31, are as follows:
2001       2000       1999
                                                              ---------   -------   --------
                                                                      (IN THOUSANDS)
Current Tax Expense (Benefit):
  U.S.                                                        $(100,946)  $ 8,588   $(14,093)
  State and Local                                                 1,866        38        378
  Foreign                                                           124        35         15
                                                              ---------   -------   --------
  Total                                                         (98,956)    8,661    (13,700)
                                                              ---------   -------   --------
Deferred Tax Expense (Benefit):
  U.S.                                                           76,155    43,567     42,320
  State and Local                                                (2,454)    2,204      1,316
                                                              ---------   -------   --------
  Total                                                          73,701    45,771     43,636
                                                              ---------   -------   --------
Total Income Tax Expense                                      $ (25,255)  $54,432   $ 29,936
                                                              =========   =======   ========
The income tax expense for the years ended December 31, differs from the
amount computed by applying the expected federal income tax rate of 35% to
income from operations before income taxes for the following reasons:
2001      2000      1999
                                                              --------   -------   -------
                                                                     (IN THOUSANDS)
Expected Federal Income Tax Expense                           $ 14,814   $55,275   $29,936
  State and Local Income Taxes                                    (382)    1,457     1,101
  Non taxable investment income                                (38,693)   (6,443)   (1,010)
  Incorporation of Taiwan Branch                                (1,774)       --        --
  Other                                                            780     4,143       (91)
                                                              --------   -------   -------
Total Income Tax Expense                                      $(25,255)  $54,432   $29,936
                                                              ========   =======   =======
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PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES (CONTINUED)

   Deferred tax assets and liabilities at December 31, resulted from the items
listed in the following table:
2001       2000
                                                              --------   --------
                                                                (IN THOUSANDS)
Deferred Tax Assets
  Insurance Reserves                                          $ 43,317   $100,502
  State Net Operating Losses                                     5,642      1,400
  Other                                                          9,309      8,610
                                                              --------   --------
  Deferred Tax Assets                                           58,268    110,512
                                                              --------   --------
  Deferred Tax Liabilities
  Deferred Acquisition Costs                                   324,082    324,023
  Net Unrealized Gains on Securities                            32,264      2,389
  Investments                                                   20,644     19,577
                                                              --------   --------
  Deferred Tax Liabilities                                     376,990    345,989
                                                              --------   --------
Net Deferred Tax Liability                                    $318,722   $235,477
                                                              ========   ========
Management believes that based on its historical pattern of taxable income,
the Company and its subsidiary will produce sufficient income in the future to
realize its deferred tax assets. Adjustments to the valuation allowance will be
made if there is a change in management's assessment of the amount of the
deferred tax asset that is realizable. At December 31, 2001 and 2000, the
Company and its subsidiary had no federal operating loss carryforwards for tax
purposes. At December 31, 2001 and December 31, 2000, the Company had state
operating loss carryforwards for tax purposes of $369 million and $91 million,
which expire by 2021 and 2020, respectively.

   The Internal Revenue Service (the "Service") has completed all examinations
of the consolidated federal income tax returns through 1992. The Service has
examined the years 1993 through 1995. Discussions are being held with the
Service with respect to proposed adjustments. Management, however, believes
there are adequate defenses against, or sufficient reserves to provide for such
adjustments. The Service has completed its examination of 1996 and has begun its
examination of 1997 through 2000.

9. STATUTORY NET INCOME AND SURPLUS

The Company is required to prepare statutory financial statements in accordance
with accounting practices prescribed or permitted by the Arizona Department of
Insurance and the New Jersey Department of Banking and Insurance. Statutory
accounting practices primarily differ from GAAP by charging policy acquisition
costs to expense as incurred, establishing future policy benefit liabilities
using different actuarial assumptions and valuing investments, deferred taxes,
and certain assets on a different basis.

   Statutory net income (loss) of the Company amounted to $71.5 million, $(50.5)
million, and $(82.3) million for the years ended December 31, 2001, 2000, and
1999, respectively. Statutory surplus of the Company amounted to $728.7 million
and $849.6 million at December 31, 2001 and 2000, respectively.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. STATUTORY NET INCOME AND SURPLUS (CONTINUED)

   In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles guidance ("Codification"), which replaces the current Accounting
Practices and Procedures manual as the NAIC's primary guidance on statutory
accounting as of January 1, 2001. Codification provides guidance for areas where
statutory accounting has been silent and changes current statutory accounting in
certain areas. The Company has adopted the Codification guidance effective
January 1, 2001. As a result of these changes, the Company reported an increase
to statutory surplus of $88 million, primarily relating to the recognition of
deferred tax assets.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values presented below have been determined using available
market information and by applying valuation methodologies. Considerable
judgment is applied in interpreting data to develop the estimates of fair value.
Estimated fair values may not be realized in a current market exchange. The use
of different market assumptions and/or estimation methodologies could have a
material effect on the estimated fair values. The following methods and
assumptions were used in calculating the estimated fair values (for all other
financial instruments presented in the table, the carrying value approximates
estimated fair value).

FIXED MATURITIES AND EQUITY SECURITIES

Estimated fair values for fixed maturities and equity securities, other than
private placement securities, are based on quoted market prices or estimates
from independent pricing services. Generally, fair values for private placement
securities are estimated using a discounted cash flow model which considers the
current market spreads between the U.S. Treasury yield curve and corporate bond
yield curve, adjusted for the type of issue, its current credit quality and its
remaining average life. The estimated fair value of certain non-performing
private placement securities is based on amounts estimated by management.

COMMERCIAL LOANS ON REAL ESTATE

The estimated fair value of the portfolio of commercial loans on real estate is
primarily based upon the present value of the expected future cash flows
discounted at the appropriate U.S. Treasury rate, adjusted for the current
market spread for a similar quality loan.

POLICY LOANS

The estimated fair value of policy loans is calculated using a discounted cash
flow model based upon current U.S. Treasury rates and historical loan repayment
patterns.

INVESTMENT CONTRACTS

For guaranteed investment contracts, estimated fair values are derived using
discounted projected cash flows, based on interest rates being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued. For individual deferred annuities and other deposit
liabilities, fair value approximates carrying value.

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PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

DERIVATIVE FINANCIAL INSTRUMENTS

Refer to Note 11 for the disclosure of fair values on these instruments.

The following table discloses the carrying amounts and estimated fair values of
the Company's financial instruments at December 31:
2001                      2000
                                                              -----------------------   -----------------------
                                                               CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                                                VALUE      FAIR VALUE     VALUE      FAIR VALUE
                                                              ----------   ----------   ----------   ----------
                                                                               (IN THOUSANDS)
Financial Assets:
  Fixed Maturities: Available For Sale                        $4,024,893   $4,024,893   $3,561,521   $3,561,521
  Fixed Maturities: Held To Maturity                                  --           --      324,546      320,634
  Equity Securities                                                  375          375       10,804       10,804
  Commercial Loans on Real Estate                                  8,190       10,272        9,327       10,863
  Policy Loans                                                   874,065      934,203      855,374      883,460
  Short-Term Investments                                         215,610      215,610      202,815      202,815
  Cash and Cash Equivalents                                      374,185      374,185      453,071      453,071
  Separate Account Assets                                     14,920,584   14,920,584   16,230,264   16,230,264
Financial Liabilities:
  Investment Contracts                                         2,003,265    2,053,259    1,762,794    1,784,767
  Cash Collateral for Loaned Securities                          190,022      190,022      185,849      185,849
  Securities Sold Under Repurchase Agreements                     80,715       80,715      104,098      104,098
  Separate Account Liabilities                                14,920,584   14,920,584   16,230,264   16,230,264
11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS

ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 133

The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" as amended, on January 1, 2001. The adoption of this
statement did not have a material impact on the results of operations of the
Company.

ACCOUNTING FOR DERIVATIVES AND HEDGING ACTIVITIES

Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, financial indices, or the value of securities or
commodities. Derivative financial instruments used by the Company include swaps,
futures, forwards and option contracts and may be exchange-traded or contracted
in the over-the-counter market. Derivatives may be held for trading purposes or
held for purposes other than trading. All of the Company's derivatives are held
for purposes other than trading.

Derivatives held for purposes other than trading are used to seek to reduce
exposure to interest rates and foreign currency risks associated with assets
held or expected to be purchased or sold, and liabilities incurred or expected
to

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

be incurred. Other than trading derivatives are also used to manage the
characteristics of the Company's asset/liability mix, and to manage the interest
rate and currency characteristics of invested assets.

   Derivatives held for purposes other than trading are recognized on the
Consolidated Statements of Financial Position at their fair value. On the date
the derivative contract is entered into, the Company designates the derivative
as either (1) a hedge of the fair value of a recognized asset or liability or
unrecognized firm commitment ("fair value" hedge), (2) a hedge of a forecasted
transaction or the variability of cash flows to be received or paid related to a
recognized asset or liability ("cash flow" hedge), (3) a foreign currency or
cash flow hedge ("foreign currency" hedge), (4) a hedge of a net investment in a
foreign operation, or (5) a derivative that does not qualify for hedge
accounting. As of December 31, 2001, none of the Company's derivatives qualify
for hedge accounting treatment.

If a derivative does not qualify for hedge accounting, it is recorded at fair
value in "Other long-term investments" or "Other liabilities" in the
Consolidated Statements of Financial Position, and changes in fair value are
included in earnings without considering changes in fair value of the hedged
assets or liabilities. See "Types of Derivative Instruments" for further
discussion of the classification of derivative activity in current earnings.

TYPES OF DERIVATIVE INSTRUMENTS

INTEREST RATE SWAPS

The Company uses interest rate swaps to reduce market risk from changes in
interest rates and to manage interest rate exposures arising from mismatches
between assets and liabilities. Under interest rate swaps, the Company agrees
with other parties to exchange, at specified intervals, the difference between
fixed-rate and floating-rate interest amounts calculated by reference to an
agreed notional principal amount. Generally, no cash is exchanged at the outset
of the contract and no principal payments are made by either party. Cash is paid
or received based on the terms of the swap. These transactions are entered into
pursuant to master agreements that provide for a single net payment to be made
by one counterparty at each due date. The fair value of swap agreements is
estimated based on proprietary pricing models or market quotes.

   If the criteria for hedge accounting are not met, the swap agreements are
accounted for at fair value with changes in fair value reported in "Realized
investment losses, net" in the Consolidated Statement of Operations. During the
period that interest rate swaps are outstanding, net receipts or payments are
include in" Net investment income" in the Consolidated Statement of Operations.

FUTURES AND OPTIONS

The Company uses exchange-traded Treasury futures and options to reduce market
risk from changes in interest rates, and to manage the duration of assets and
the duration of liabilities supported by those assets. In exchange-traded
futures transactions, the Company agrees to purchase or sell a specified number
of contracts, the value of which are determined by the value of designated
classes of Treasury securities, and to post variation margin on a daily basis in
an amount equal to the difference in the daily market values of those contracts.
The Company enters into exchange-traded futures and options with regulated
futures commissions merchants who are members of a trading exchange. The fair
value of futures and options is based on market quotes.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

   Treasury futures move substantially in value as interest rates change and can
be used to either modify or hedge existing interest rate risk. This strategy
protects against the risk that cash flow requirements may necessitate
liquidation of investments at unfavorable prices resulting from increases in
interest rates. This strategy can be a more cost effective way of temporarily
reducing the Company's exposure to a market decline than selling fixed income
securities and purchasing a similar portfolio when such a decline is believed to
be over.

   If futures meet hedge accounting criteria, changes in their fair value are
deferred and recognized as an adjustment to the carrying value of the hedged
item. Deferred gains or losses from the hedges for interest-bearing financial
instruments are amortized as a yield adjustment over the remaining lives of the
hedged item. Futures that do not qualify as hedges are carried at fair value
with changes in value reported in "Realized investment losses, net."

   When the Company anticipates a significant decline in the stock market which
will correspondingly affect its diversified portfolio, it may purchase put index
options where the basket of securities in the index is appropriate to provide a
hedge against a decrease in the value of the equity portfolio or a portion
thereof. This strategy effects an orderly sale of hedged securities. When the
Company has large cash flows which it has allocated for investment in equity
securities, it may purchase call index options as a temporary hedge against an
increase in the price of the securities it intends to purchase. This hedge
permits such investment transactions to be executed with the least possible
adverse market impact.

   Option premium paid or received is reported as an asset or liability and
amortized into income over the life of the option. If options meet the criteria
for hedge accounting, changes in their fair value are deferred and recognized as
an adjustment to the hedged item. Deferred gains or losses from the hedges for
interest-bearing financial instruments are recognized as an adjustment to
interest income or expense of the hedged item. If the options do not meet the
criteria for hedge accounting, they are fair valued, with changes in fair value
reported in current period earnings.

CURRENCY DERIVATIVES

The Company uses currency swaps to reduce market risk from changes in currency
values of investments denominated in foreign currencies that the Company either
holds or intends to acquire and to manage the currency exposures arising from
mismatches between such foreign currencies and the US Dollar.

   Under currency swaps, the Company agrees with other parties to exchange, at
specified intervals, the difference between one currency and another at a
forward exchange rate and calculated by reference to an agreed principal amount.
Generally, the principal amount of each currency is exchanged at the beginning
and termination of the currency swap by each party. These transactions are
entered into pursuant to master agreements that provide for a single net payment
to be made by one counterparty for payments made in the same currency at each
due date.

   If currency swaps are effective as hedges of foreign currency translation and
transaction exposures, gains or losses are recorded in a manner similar to the
hedged item. If currency swaps do not meet hedge accounting criteria, gains or
losses from those derivatives are recognized in "Realized investment (losses)
gains, net."

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

The table below summarizes the Company's outstanding positions by derivative
instrument types as of December 31, 2001 and 2000. All amounts presented have
been classified as other than trading based on management's intent at the time
of contract and throughout the life of the contract.

                         OTHER THAN TRADING DERIVATIVES

                           DECEMBER 31, 2001 AND 2000

                                 (IN THOUSANDS)
2001                               2000
                                                              --------------------------------   --------------------------------
                                                                         ESTIMATED    CARRYING              ESTIMATED    CARRYING
                                                              NOTIONAL   FAIR VALUE    VALUE     NOTIONAL   FAIR VALUE    VALUE
                                                              --------   ----------   --------   --------   ----------   --------
NON-HEDGE ACCOUNTING
SWAP INSTRUMENTS
Interest Rate
  Asset                                                       $ 9,470      $  638      $  638    $  9,470     $  327      $  327
  Liability                                                        --          --          --          --         --          --
Currency
  Asset                                                        24,785       3,858       3,858          --         --          --
  Liability                                                        --          --          --          --         --          --
FUTURE CONTRACTS
US Treasury Futures
  Asset                                                        76,800         394         394     139,800      3,530       3,530
  Liability                                                    64,500         238         238      61,900      1,067       1,067
HEDGE ACCOUNTING
SWAP INSTRUMENTS
Currency
  Asset                                                            --          --          --      28,326      1,633       2,155
  Liability                                                        --          --          --          --         --          --
CREDIT RISK

The current credit exposure of the Company's derivative contracts is limited to
the fair value at the reporting date. Credit risk is managed by entering into
transactions with creditworthy counterparties and obtaining collateral where
appropriate and customary. The Company also attempts to minimize its exposure to
credit risk through the use of various credit monitoring techniques. All of the
net credit exposure for the Company from derivative contracts are with
investment grade counterparties. As of December 31, 2001, 86% of notional
consisted of interest rate derivatives, and 14% of notional consisted of foreign
currency derivatives.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. CONTINGENCIES AND LITIGATION

Prudential and the Company are subject to legal and regulatory actions in the
ordinary course of their businesses, including class actions. Pending legal and
regulatory actions include proceedings relating to aspects of the businesses and
operations that are specific to the Company and Prudential and that are typical
of the businesses in which the Company and Prudential operate. Some of these
proceedings have been brought on behalf of various alleged classes of
complainants. In certain of these matters, the plaintiffs are seeking large
and/or indeterminate amounts, including punitive or exemplary damages.

   Beginning in 1995, regulatory authorities and customers brought significant
regulatory actions and civil litigation against the Company and Prudential
involving individual life insurance sales practices. In 1996, Prudential, on
behalf of itself and many of its life insurance subsidiaries including the
Company entered into settlement agreements with relevant insurance regulatory
authorities and plaintiffs in the principal life insurance sales practices class
action lawsuit covering policyholders of individual permanent life insurance
policies issued in the United States from 1982 to 1995. Pursuant to the
settlements, the companies agreed to various changes to their sales and business
practices controls, to a series of fines, and to provide specific forms of
relief to eligible class members. Virtually all claims by class members filed in
connection with the settlements have been resolved and virtually all aspects of
the remediation program have been satisfied. While the approval of the class
action settlement is now final, Prudential and the Company remain subject to
oversight and review by insurance regulators and other regulatory authorities
with respect to its sales practices and the conduct of the remediation program.
The U.S. District Court has also retained jurisdiction as to all matters
relating to the administration, consummation, enforcement and interpretation of
the settlements.

   As of December 31, 2001, Prudential and/or the Company remained a party to
approximately 44 individual sales practices actions filed by policyholders who
"opted out" of the class action settlement relating to permanent life insurance
policies issued in the United States between 1982 and 1995. In addition, there
were 19 sales practices actions pending that were filed by policyholders who
were members of the class and who failed to "opt out" of the class action
settlement. Prudential and the Company believe that those actions are governed
by the class settlement release and expects them to be enjoined and/or
dismissed. Additional suits may be filed by class members who "opted out" of the
class settlements or who failed to "opt out" but nevertheless seek to proceed
against Prudential and/or the Company. A number of the plaintiffs in these cases
seek large and/or indeterminate amounts, including punitive or exemplary
damages. Some of these actions are brought on behalf of multiple plaintiffs. It
is possible that substantial punitive damages might be awarded in any of these
actions and particularly in an action involving multiple plaintiffs.

   Prudential has indemnified the Company for any liabilities incurred in
connection with sales practices litigation covering policyholders of individual
permanent life insurance policies issued in the United States from 1982 to 1995.

   The Company's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted. It is possible that the
results of operations or the cash flow of the Company in a particular quarterly
or annual period could be materially affected by an ultimate unfavorable
resolution of pending litigation

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. CONTINGENCIES AND LITIGATION (CONTINUED)

and regulatory matters. Management believes, however, that the ultimate outcome
of all pending litigation and regulatory matters should not have a material
adverse effect on the Company's financial position.

13. DIVIDENDS

The Company is subject to Arizona law which limits the amount of dividends that
insurance companies can pay to stockholders. The maximum dividend which may be
paid in any twelve month period without notification or approval is limited to
the lesser of 10% of statutory surplus as of December 31 of the preceding year
or the net gain from operations of the preceding calendar year. Cash dividends
may only be paid out of surplus derived from realized net profits. Based on
these limitations, the Company would not be permitted a dividend distribution
until December 29, 2002.

   During 2001, the Company received approval from the Arizona Department of
Insurance to pay an extraordinary dividend to Prudential of $108 million.

14. RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential and
other affiliates. It is possible that the terms of these transactions are not
the same as those that would result from transactions among wholly unrelated
parties.

EXPENSE CHARGES AND ALLOCATIONS

All of the Company's expenses are allocations or charges from Prudential or
other affiliates. These expenses can be grouped into the following categories:
general and administrative expenses, retail distribution expenses and asset
management fees.

   The Company's general and administrative expenses are charged to the Company
using allocation methodologies based on business processes. Management believes
that the methodology is reasonable and reflects costs incurred by Prudential to
process transactions on behalf of the Company. Prudential and the Company
operate under service and lease agreements whereby services of officers and
employees (except for those agents employed directly by the Company in Taiwan),
supplies, use of equipment and office space are provided by Prudential. The
Company is allocated estimated distribution expenses from Prudential's retail
agency network for both its domestic life and annuity products. The Company has
capitalized the majority of these distribution expenses as deferred policy
acquisition costs. Beginning April 1, 2000, Prudential and the Company agreed to
revise the estimate of allocated distribution expenses to reflect a market based
pricing arrangement.

   In accordance with a profit sharing agreement with Prudential that was in
effect through December 31, 2000, the Company received fee income from
policyholder account balances invested in the Prudential Series Funds ("PSF").
These revenues were recorded as "Asset management fees" in the Consolidated
Statements of Operations and Comprehensive Income. The Company was charged an
asset management fee by Prudential Global Asset Management ("PGAM") and Jennison
Associates LLC ("Jennison") for managing the PSF portfolio. These fees are a
component of "general, administrative and other expenses."

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. RELATED PARTY TRANSACTIONS (CONTINUED)

   On September 29, 2000, the Board of Directors for the Prudential Series Fund,
Inc. ("PSFI") adopted resolutions to terminate the existing management agreement
between PSFI and Prudential, and has appointed another subsidiary of Prudential
as the fund manager for the PSF. The change was approved by the shareholders of
PSF during early 2001 and effective January 1, 2001. The Company no longer
receives fees associated with the PSF. In addition, the Company will no longer
incur the asset management expense from PGAM and Jennison associated with the
PSF.

CORPORATE OWNED LIFE INSURANCE

The Company has sold three Corporate Owned Life Insurance ("COLI") policies to
Prudential. The cash surrender value included in Separate Accounts was $647.2
million and $685.9 million at December 31, 2001 and December 31, 2000,
respectively. The fees received related to the COLI policies were $7.0 million
and $9.6 million for the years ending December 31, 2001 and 2000.

REINSURANCE

The Company currently has four reinsurance agreements in place with Prudential
and affiliates. Specifically, the Company has a reinsurance Group Annuity
Contract, whereby the reinsurer, in consideration for a single premium payment
by the Company, provides reinsurance equal to 100% of all payments due under the
contract. In addition, there are two yearly renewable term agreements in which
the Company may offer and the reinsurer may accept reinsurance on any life in
excess of the Company's maximum limit of retention. The Company is not relieved
of its primary obligation to the policyholder as a result of these reinsurance
transactions. These agreements had no material effect on net income for the
periods ended December 31, 2001 or 2000. The fourth agreement, which is new for
2001, is described in the following paragraphs.

   On January 31, 2001, the Company transferred all of its assets and
liabilities associated with the Company's Taiwan branch including Taiwan's
insurance book of business to an affiliated Company, Prudential Life Insurance
Company of Taiwan Inc. ("Prudential of Taiwan"), a wholly owned subsidiary of
the Holding Company.

   The mechanism used to transfer this block of business in Taiwan is referred
to as a "full acquisition and assumption" transaction. Under this mechanism, the
Company is jointly liable with Prudential of Taiwan for two years from the
giving of notice to all obligees for all matured obligations and for two years
after the maturity date of not-yet-matured obligations. Prudential of Taiwan is
also contractually liable, under indemnification provisions of the transaction,
for any liabilities that may be asserted against the Company. The transfer of
the insurance related assets and liabilities was accounted for as a
long-duration coinsurance transaction under accounting principles generally
accepted in the United States. Under this accounting treatment, the insurance
related liabilities remain on the books of the Company and an offsetting
reinsurance recoverable is established.

   As part of this transaction, the Company made a capital contribution to
Prudential of Taiwan in the amount of the net equity of the Company's Taiwan
branch as of the date of transfer. In July 2001, the Company dividended its
interest in Prudential of Taiwan to Prudential.

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. RELATED PARTY TRANSACTIONS (CONTINUED)

   Premiums and benefits ceded for the period ending December 31, 2001 from the
Taiwan coinsurance agreement were $82.4 million and $12.9 million, respectively.

DEBT AGREEMENTS

In July 1998, the Company established a revolving line of credit facility of up
to $500 million with Prudential Funding LLC, a wholly owned subsidiary of
Prudential. There is no outstanding debt relating to this credit facility as of
December 31, 2001 or December 31, 2000.

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STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDER OF
PRUCO LIFE INSURANCE COMPANY

In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Pruco
Life Insurance Company (a wholly-owned subsidiary of The Prudential Insurance
Company of America) and its subsidiary at December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
February 21, 2002

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

EXPERTS

The consolidated financial statements of Pruco Life and its subsidiary as of
December 31, 2001 and 2000 and for each of the three years in the period ended
December 31, 2001 have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants given on the authority of
said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP's
principal business address is 1177 Avenue of the Americas, New York, New York
10036.

INDEMNIFICATION

Pruco Life, in conjunction with certain affiliates, maintains insurance on
behalf of any person who is or was a trustee, director, officer, employee, or
agent of Pruco Life, or who is or was serving at the request of Pruco Life as a
trustee, director, officer, employee or agent of such other affiliated trust or
corporation, against any liability asserted against and incurred by him or her
arising out of his or her position with such trust or corporation.

   Arizona, being the state of organization of Pruco Life, permits entities
organized under its jurisdiction to indemnify directors and officers with
certain limitations. The relevant provisions of Arizona law permitting
indemnification can be found in Section 10-850 et. seq. of the Arizona Statutes
Annotated. The text of Pruco Life's By-law, Article VIII, which relates to
indemnification of officers and directors, is incorporated by reference to
Exhibit 3(ii) to its form 10-Q filed August 15, 1997.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of Pruco
Life pursuant to the foregoing provisions or otherwise, Pruco Life has 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 Pruco Life of expenses incurred or
paid by a director, officer or controlling person of Pruco Life in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Pruco Life will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

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MARKET-VALUE
        ADJUSTMENT FORMULA
--------------------------------------------------------------------------------

MARKET-VALUE ADJUSTMENT FORMULA

With respect to residents of states, other than Pennsylvania, in which Strategic
Partners MVA is being offered.

The formula under which Pruco Life calculates the market value adjustment
applicable to a full or partial surrender, annuitization, or settlement under
Strategic Partners MVA is set forth below. The market value adjustment is
expressed as a multiplier factor. That is, the Contract Value after the market
value adjustment ("MVA"), but before any surrender charge, is as follows:
Contract Value (after MVA) = Contract Value (before MVA) X (1 + MVA). The MVA
itself is calculated as follows:
                               1 + I
                    MVA = (-----------)to the N/12 power -1
                     1 + J + .0025
where:  I   =    the guaranteed credited interest rate
                 (annual effective) for the given
                 contract at the time of withdrawal or
                 annuitization or settlement.
        J   =    the current credited interest rate
                 offered on new money at the time of
                 withdrawal or annuitization or
                 settlement for a guarantee period of
                 equal length to the number of whole
                 years remaining in the Contract's
                 current guarantee period plus one
                 year.
        N   =    equals the remaining number of months
                 in the contract's current guarantee
                 period (rounded up) at the time of
                 withdrawal or annuitization or
                 settlement.
We use the same MVA formula with respect to contracts issued in Pennsylvania,
except that "J" in the formula above uses an interpolated rate as the current
credited interest rate. Specifically, "J" is the interpolated current credited
interest rate offered on new money at the time of withdrawal, annuitization, or
settlement. The interpolated value is calculated using the following formula:

            m/365 X (n + 1) year rate + (365 - m)/365 X n year rate,

where "n" equals the number of whole years remaining in the Contract's current
guarantee period, and "m" equals the number of days remaining in year "n" of the
current guarantee period.
MARKET VALUE ADJUSTMENT EXAMPLE

(ALL STATES EXCEPT PENNSYLVANIA)

The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.

Positive market value adjustment

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 4 years (the number of whole years remaining plus 1) is 5%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.
N =  38
    I =  6% (0.06)
    J =  5% (0.05)
The MVA factor calculation would be: [(1.06)/(1.05 + .0025)](38/12) -1 =
    0.02274

                                                                              81
MARKET-VALUE ADJUSTMENT FORMULA CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                          $10,527.11 X 0.02274 = $239.39

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 + $239.39 = $10,766.50

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,766.50 + $600.00 = $11,366.50

The MVA may not always be positive. Here is an example where it is negative.

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 4 years (the number of whole years remaining plus 1) is 7%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.
N =  38
    I =  6% (0.06)
    J =  7% (0.07)
The MVA factor calculation would be: [(1.06)/(1.07+.0025)](38/12) -1 =
   -0.03644

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                         $10,527.11 X -0.03644 = -$383.61

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 - $383.61 = $10,143.50

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,143.50 + $600.00 = $10,743.50

MARKET VALUE ADJUSTMENT EXAMPLE

(PENNSYLVANIA)

The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.

Positive market value adjustment

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 3 years (the number of whole years remaining) is 4%, and for a
   guarantee period of 4 years (the number of whole years remaining plus 1) is
   5%.
    The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment factor.
N =  38
    I =  6% (0.06)
    J =  [(60/365) X 0.05] + [((365-60)/365) X 0.04] =
         0.0416
The MVA factor calculation would be: [(1.06)/(1.0416 + .0025)](38/12) -1 =
0.04902

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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                          $10,527.11 X 0.04902 = $516.04

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                        $10,527.11 + $ 516.04 = $11,043.15

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $11,043.15 + $600.00 = $11,643.15

The MVA may not always be positive. Here is an example where it is negative.

-  Suppose a contract owner made an invested purchase payment of $10,000 on July
   1, 2000 and received a guaranteed interest rate of 6% for 5 years. A request
   to surrender the contract is made on May 1, 2002. At the time, the Contract
   Value has accumulated to $11,127.11. The number of whole years remaining in
   the guarantee period is 3.

-  On May 1, 2002 the interest rate declared by Pruco Life for a guarantee
   period of 3 years (the number of whole years remaining) is 7%, and for a
   guarantee period of 4 years (the number of whole years remaining plus 1) is
   8%.

The following computations would be made:

1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
   credited in the contract in the previous contract year. This amount is
   $600.00. It is not subject to a Market Value Adjustment.

2) Subtract the Charge Free Amount from the Contract Value. The result is the
   amount subject to a Market Value Adjustment (MVA).

                         $11,127.11 - $600.00 = $10,527.11

3) Determine the Market Value Adjustment Factor.
N =  38
    I =  6% (0.06)
    J =  [(60/365) X 0.08] + [((365 - 60)/365) X 0.07] =
         0.0716
The MVA Factor calculation would be: [(1.06)/(1.0716 + .0025)](38/12) -1 =
-0.04098

4) Multiply the amount subject to a Market Value Adjustment by the factor
   calculated in Step 3.

                         $10,527.11 X -0.04098 = -$431.40

5) Add together the Market Value Adjustment and the amount subject to the MVA.

                         $10,527.11 - $431.40 = $10,095.71

6) Add back the Charge Free Amount to get the total Contract Surrender Value.

                         $10,095.71 + $600.00 = $10,695.71

                                                                              83
PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

IRA DISCLOSURE STATEMENT
--------------------------------------------------------------------------------

This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your Roth IRA,
your simplified employee pension IRA (SEP) for employer contributions, your
Savings Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase
for your spouse. You can obtain more information regarding your IRA either from
your sales representative or from any district office of the Internal Revenue
Service. Those are federal tax law rules; state tax laws may vary.

FREE LOOK PERIOD

The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund within 10 days (or whatever period is
required by applicable state law) after it is delivered. This is a more liberal
provision than is required in connection with IRAs. To exercise this "free-look"
provision, return the contract to the representative who sold it to you or to
the Prudential Annuity Service Center at the address shown on the first page of
this prospectus.

ELIGIBILITY REQUIREMENTS

IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally, if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.

CONTRIBUTIONS AND DEDUCTIONS

Contributions to your IRA will be deductible if you are not an "active
participant" in an employer maintained qualified retirement plan or you have
"Adjusted Gross Income" (as defined under Federal tax laws) which does not
exceed the "applicable dollar limit." IRA (or SEP) contributions must be made by
no later than the due date for filing your income tax return for that year,
excluding extensions (generally by April 15th). For a single taxpayer, the
applicable dollar limitation is $34,000 in 2002, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $34,000 -- $44,000. For married couples filing jointly, the
applicable dollar limitation is $54,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$54,000-$64,000. There is no deduction allowed for IRA contributions when
Adjusted Gross Income reaches $44,000 for individuals and $64,000 for married
couples filing jointly. Income limits are scheduled to increase until 2006 for
single taxpayers and 2007 for married taxpayers.

   Contributions made by your employer to your SEP are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEP will be entitled to
elect to have their employer make contributions to their SEP on their behalf or
to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEP are limited to $11,000 in 2002 with a permitted catch-up contribution of
$1,000 for individuals age 50 and above. Contribution and catch-up contribution
limits are scheduled to increase through 2006 and are indexed for inflation
thereafter. Salary-reduction SEPs (also called "SARSEPs") are available only if
at least 50% of the employees elect to have amounts contributed to the SARSEP
and if the employer has 25 or fewer employees at all times during the preceding
year. New SARSEPs may not be established after 1996.

   The IRA maximum annual contribution and your tax deduction is limited to the
lesser of: (1) the maximum amount allowed by law, including catch-up
contributions if applicable, or (2) 100% of your earned compensation.
Contributions in excess of these limits may be subject to penalty. See below.

   Under a SEP agreement, the maximum annual contribution which your employer
may make on your behalf to a SEP contract that is excludable from your income is
the lesser of 25% of your salary or $40,000 in 2002. An employee who is a
participant in a SEP

 84
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

agreement may make after-tax contributions to the SEP contract, subject to the
contribution limits applicable to IRAs in general. Those employee contributions
will be deductible subject to the deductibility rules described above.

   The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) the maximum amount allowed
by law, including catch-up contributions if applicable or (2) 100% of taxable
alimony.

   If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEP, the excess amount will be considered an "excess
contribution." You are permitted to withdraw an excess contribution from your
IRA or SEP before your tax filing date without adverse tax consequences. If,
however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.

   Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See PREMATURE DISTRIBUTIONS below for penalties imposed on
withdrawal when the contribution exceeds the maximum amount allowed by law,
including catch-up contributions if applicable.)

IRA FOR NON-WORKING SPOUSE

If you establish an IRA for yourself, you may also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and, if your
non-working spouse has compensation, his/her compensation must be less than your
compensation for the year. Contributions of up to the maximum amount allowed by
law, including catch-up contributions if applicable may be made to your IRA and
the spousal IRA if the combined compensation of you and your spouse is at least
equal to the amount contributed. If requirements for deductibility (including
income levels) are met, you will be able to deduct an amount equal to the least
of (i) the amount contributed to the IRAs; (ii) twice the maximum amount allowed
by law, including catch-up contributions if applicable; or (iii) 100% of your
combined gross income.

   Contributions in excess of the contribution limits may be subject to penalty.
See above under "Contributions and Deductions." If you contribute more than the
allowable amount, the excess portion will be considered an excess contribution.
The rules for correcting it are the same as discussed above for regular IRAs.

   Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.

ROLLOVER CONTRIBUTION

Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEP and reinvest it in another IRA or bond. Withdrawals may also be made
from other IRAs and contributed to this contract. This transfer of funds from
one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.

   A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. Unless you were a self-employed
participant in the distributing plan, you may later roll over such a
contribution to another qualified retirement plan as long as you have not mixed
it with IRA (or SEP) contributions you have deducted from your income. (You may
roll less than all of a qualified distribution into an IRA, but any part of it
not rolled over will be currently includable in your income without any capital
gains treatment.) Beginning in 2002, the rollover options increase. Funds can be
rolled over from an IRA or SEP to another IRA or SEP or to another qualified
retirement plan or 457

                                                                              85
IRA DISCLOSURE STATEMENT CONTINUED
--------------------------------------------------------------------------------

                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

government plan even if additional contributions have been made to the account.

DISTRIBUTIONS

(a) PREMATURE DISTRIBUTIONS

At no time can your interest in your IRA or SEP be forfeited. To insure that
your contributions will be used for retirement, the federal tax law does not
permit you to use your IRA or SEP as security for a loan. Furthermore, as a
general rule, you may not sell or assign your interest in your IRA or SEP to
anyone. Use of an IRA (or SEP) as security or assignment of it to another will
invalidate the entire annuity. It then will be includable in your income in the
year it is invalidated and will be subject to a 10% tax penalty if you are not
at least age 59 1/2 or totally disabled. (You may, however, assign your IRA or
SEP without penalty to your former spouse in accordance with the terms of a
divorce decree.)

   You may surrender any portion of the value of your IRA (or SEP). In the case
of a partial surrender which does not qualify as a rollover, the amount
withdrawn will be includable in your income and subject to the 10% penalty if
you are not at least age 59 1/2 or totally disabled unless you comply with
special rules requiring distributions to be made at least annually over your
life expectancy.

   The 10% penalty tax does not apply to the withdrawal of an excess
contribution as long as the excess is withdrawn before the due date of your tax
return. Withdrawals of excess contributions after the due date of your tax
return will generally be subject to the 10% penalty unless the excess
contribution results from erroneous information from a plan trustee making an
excess rollover contribution or unless you are over age 59 1/2 or are disabled.

(b) DISTRIBUTION AFTER AGE 59 1/2

Once you have attained age 59 1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEP) regardless of when you
actually retire. In addition, you must commence distributions from your IRA by
April 1 following the year you attain age 70 1/2. You may elect to receive the
distribution under any one of the periodic payment options available under the
contract. The distributions from your IRA under any one of the periodic payment
options or in one sum will be treated as ordinary income as you receive them to
the degree that you have made deductible contributions. If you have made both
deductible and nondeductible contributions, the portion of the distribution
attributable to the nondeductible contribution will be tax-free.

(c) INADEQUATE DISTRIBUTIONS--50% TAX

Your IRA or SEP is intended to provide retirement benefits over your lifetime.
Thus, federal tax law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70 1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse/beneficiary.) The calculation is revised
under the IRS final regulations for distributions beginning in 2003 and are
optional for distributions in 2002. If the payments are not sufficient to meet
these requirements, an excise tax of 50% will be imposed on the amount of any
underpayment.

(d) DEATH BENEFITS

If you, (or your surviving spouse) die before receiving the entire value of your
IRA (or SEP), the remaining interest must be distributed to your beneficiary (or
your surviving spouse's beneficiary) in one lump-sum by December 31st of the
fifth year after your (or your surviving spouse's death, or applied to purchase
an immediate annuity for the beneficiary. This annuity must be payable over the
life expectancy of the beneficiary beginning by December 31 of the year
following the year after your or your spouse's death. If your spouse is the
designated beneficiary, he or she is treated as the owner of the IRA. If minimum
required distributions have begun and no designated beneficiary is identified by
September 30 of the year following the year of death, the entire amount must be
distributed

 86
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                                                                         PART II
STRATEGIC PARTNERS MVA PROSPECTUS  SECTIONS 1-9

based on the life expectancy of the owner using the owner's age prior to death.
A distribution of the balance of your IRA upon your death will not be considered
a gift for federal tax purposes, but will be included in your gross estate for
purposes of federal estate taxes.

ROTH IRAS

Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a "Roth IRA." Contributions may be made to a Roth IRA by taxpayers
with adjusted gross incomes of less than $160,000 for married individuals filing
jointly and less than $110,000 for single individuals. Married individuals
filing separately are not eligible to contribute to a Roth IRA. The maximum
amount of contributions allowable for any taxable year to all Roth IRAs
maintained by an individual is generally the lesser of the maximum amount
allowed by law and 100% of compensation for that year (the maximum amount
allowed by law is phased out for incomes between $150,000 and $160,000 for
married and between $95,000 and $110,000 for singles). The contribution limit is
reduced by the amount of any contributions made to a non-Roth IRA. Contributions
to a Roth IRA are not deductible.

   For taxpayers with adjusted gross income of $100,000 or less, all or part of
amounts in a non-Roth IRA may be converted, transferred or rolled over to a Roth
IRA. Some or all of the IRA value will typically be includable in the taxpayer's
gross income. If such a rollover, transfer or conversion occurred before January
1, 1999, the portion of the amount includable in gross income must be included
in income ratably over the next four years beginning with the year in which the
transaction occurred. Provided a rollover contribution meets the requirements of
IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth IRA
to another Roth IRA.

   UNDER SOME CIRCUMSTANCES, IT MAY NOT BE ADVISABLE TO ROLL OVER, TRANSFER OR
CONVERT ALL OR PART OF A NON-ROTH IRA TO A ROTH IRA. PERSONS CONSIDERING A
ROLLOVER, TRANSFER OR CONVERSION SHOULD CONSULT THEIR OWN TAX ADVISOR.

   "Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements: (1)
the distribution must be made (a) after the owner of the IRA attains age 59 1/2;
(b) after the owner's death; (c) due to the owner's disability; or (d) for a
qualified first time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that
is at least five tax years after the first year for which a contribution was
made to any Roth IRA established for the owner or five years after a rollover,
transfer, or conversion was made from a non-Roth IRA to a Roth IRA.
Distributions from a Roth IRA that are not qualified distributions will be
treated as made first from contributions and then from earnings, and taxed
generally in the same manner as distributions from a non-Roth IRA.

   Distributions from a Roth IRA need not commence at age 70 1/2. However, if
the owner dies before the entire interest in a Roth IRA is distributed, any
remaining interest in the contract must be distributed under the same rules
applied to traditional IRAs where death occurs before the required beginning
date.

REPORTING TO THE IRS

Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments),
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your federal income tax return for the tax year in which the penalty
applies. Normal contributions and distributions must be shown on your income tax
return for the year to which they relate.

                                                                              87
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

REGISTRATION FEES

Pruco Life is registering $500 million of interests in the market value adjusted
annuity contracts described in this registration statement. Pruco Life will pay
$46,000 to the SEC for the registration fees required under the Securities Act
of 1933.

FEDERAL TAXES

Pruco Life Insurance Company estimates the federal tax effect associated wit the
deferred acquisition costs attributable to receipt of $500 million of purchase
payments over a two year period to be approximately $4 million.

STATE TAXES

Pruco Life estimates that approximately $14,000 in premium taxes will be owed
upon receipt of purchase payments under the contracts, and that additional
premium taxes in the approximate amount of $773,000 would be owed if the full
$500 million of purchase payments were applied to annuity options.

PRINTING COSTS

Pruco Life estimates that the cost of printing prospectuses for the amount of
securities registered herein will be approximately $30,000.

LEGAL COSTS

This registration statement was prepared by Prudential attorneys whose time is
allocated to Pruco Life.

ACCOUNTING COSTS

PricewaterhouseCooper LLC, the independent public accountant that audits Pruco
Life's financial statements, charges approximately $4,000 in connection with
each filing of this registration statement with the Commission.

PREMIUM PAID TO INDEMNIFY OFFICERS

Officers and Directors of Pruco Life Insurance Company are indemnified under a
policy that also covers officers and directors of other entities controlled by
Prudential Financial, Inc. A portion of the cost of that policy is attributed to
Pruco Life.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant, in connection with certain affiliates, maintains various
insurance coverages under which the underwriter and certain affiliated persons
may be insured against liability which may be incurred in such capacity, subject
to the terms, conditions and exclusions of the insurance policies.

Arizona, being the state of organization of Pruco Life Insurance Company
("Pruco"), permits entities organized under its jurisdiction to indemnify
directors and officers with certain limitations. The relevant provisions of
Arizona law permitting indemnification can be found in Section 10-850, et seq.
of the

                                      II-1
Arizona Statutes Annotated. The text of Pruco's By-law, Article VIII which
relates to indemnification of officers and directors, is incorporated by
reference to Exhibit 3(ii) to its Form 10-Q, filed August 15, 1997.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

Not Applicable

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

(1)    Form of a Distribution Agreement between Prudential Investment
         Management Services, Inc., ("PIMS") (Principal Underwriter) and Pruco
         Life Insurance Company (Depositor). (Note 2)

(1A)   Amendment No. 1 to Distribution Agreement between PIMS and Pruco Life
       Insurance Company. (To be filed by pre-effective amendment)

(3A)   Articles of Incorporation of Pruco Life Insurance Company, as amended
       October 19, 1993. (Note 6)

(3B)   By-Laws of Pruco Life Insurance Company, as amended May 6, 1997. (Note
       7)

(4)    Contract (To be filed by pre-effective amendment)

(4)(a) Application (To be filed by pre-effective amendment)

23(A)  Written consent of PricewaterhouseCoopers LLP, independent accountants.
       (Note 1)

23(B)  Opinion of Counsel as to the legality of the securities being
       registered. (To be filed by pre-effective amendment)

(24)   Powers of Attorney:

       (a)      Vivian L. Banta, Richard J. Carbone, Helen M. Galt and Jean D.
                Hamilton (Note 3)

       (b)      James J. Avery, Jr. (Note 4)

       (c)      David R. Odenath, Jr., William J. Eckert and Ronald P. Joelson
                (Note 5)

(Note 1) Filed herewith.

(Note 2) Incorporated by reference to Post Effective Amendment No. 4 on Form
S-1, Registration No. 33-61143, filed April 15, 1999, on behalf the Pruco Life
Insurance Company.

                                      II-2
(Note 3) Incorporated by reference to Post-Effective Amendment No. 5 to Form
S-6, Registration No. 333-85115, filed on or about June 28, 2001 on behalf of
the Pruco Life Variable Universal Account.

(Note 4) Incorporated by reference to Post-Effective Amendment No. 2 to Form
S-6, Registration No. 333-07451, filed June 25, 1997 on behalf of the Pruco Life
Variable Appreciable Account.

(Note 5) Incorporated by reference to initial Registration on Form N-4,
Registration No. 333-52754, filed December 26, 2000 on behalf of the Pruco Life
Flexible Premium Variable Annuity Account.

(Note 6) Incorporated by reference to Form S-6, Registration No. 333-07451,
filed July 2, 1996, on behalf of the Pruco Life Variable Appreciable Account.

(Note 7) Incorporated by reference to Form 10-Q, Registration No. 033-37587,
filed August 15, 1997, on behalf of the Pruco Life Insurance Company.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

         (i)      To include any prospectus required by section 10 (a)(3) of the
                  Securities Act of 1933;

         (ii)     To reflect in the prospectus any facts or events arising after
                  the effective date of the registration statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information in the registration statement

         (iii)    To include any material information with respect to the plan
                  of distribution not previously disclosed in the registration
                  statement or any material change to such information in the
                  registration statement;

(2)      That, for the purpose of determining any liability under the Securities
         Act of 1933, each such post-effective amendment shall be deemed to be a
         new registration statement relating to the securities offered therein,
         and the offering of such securities at that time shall be deemed to be
         the initial bona fide offering thereof.

(3)      To remove from registration by means of a post-effective amendment any
         of the securities being registered which remain unsold at the
         termination of the offering.

(4)      Insofar as indemnification for liabilities arising under the Securities
         Act of 1933 may be permitted to directors, officers and controlling
         persons of the registrant pursuant to the foregoing provisions, or
         otherwise, the registrant has been advised that in the opinion of the
         Securities and Exchange Commission such indemnification is against
         public policy as expressed in the Act and is, therefore, unenforceable.
         In the event that a claim for indemnification against such liabilities
         (other than the payment by the registrant of expenses incurred or paid
         by a director, officer or controlling person of the registrant in the
         successful defense of any action, suit or proceeding) is asserted by
         such director, officer or controlling person in connection with the
         securities being registered, the registrant will, unless in the opinion
         of its counsel the matter has been settled by controlling precedent,
         submit to a court of appropriate jurisdiction the question whether such
         indemnification by it is against public policy as expressed in the Act
         and will be governed by the final adjudication of such issue.

                                      II-3
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Newark, State of New
Jersey, on this 31st day of May 2002.

                                                  PRUCO LIFE INSURANCE COMPANY

                                                  (Registrant)
                                                  By: /s/ ANDREW J. MAKO
                                                  ------------------------------
                                                  ANDREW J. MAKO
                                                  EXECUTIVE VICE PRESIDENT

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

                               SIGNATURE AND TITLE
/s/*                                                May 31, 2002
          ----------------------------------------------------
                 VIVIAN L. BANTA
                 PRESIDENT AND CHAIRMAN

             /s/*                                                *By: /s/ C. CHRISTOPHER SPRAGUE
          ---------------------------------------------------    -------------------------------
                 WILLIAM J. ECKERT, IV                           C. CHRISTOPHER SPRAGUE
                 VICE PRESIDENT AND CHIEF                        (ATTORNEY-IN-FACT)
                 ACCOUNTING OFFICER,(PRINCIPAL
                 FINANCIAL OFFICER

             /s/*
          ----------------------------------------------------
                 RONALD P. JOELSON
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 RICHARD J. CARBONE
                 DIRECTOR

             /s/*
           ----------------------------------------------------
                 HELEN M. GALT
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 JEAN D. HAMILTON
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 JAMES J. AVERY, JR.
                 VICE CHAIRMAN OF THE BOARD AND
                 DIRECTOR

             /s/*
          ----------------------------------------------------
                 DAVID R. ODENATH, JR.
                 DIRECTOR
II-4
EXHIBIT INDEX

(23A) Written Consent of PricewaterhouseCoopers LLC, independent accountants