As filed with the Securities and Exchange Commission on April 23, 2001
                                              Registration No. 333-_______
___________________________________________________________________________
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM S-1

          Registration Statement under the Securities Act of 1933

                  GOLDEN AMERICAN LIFE INSURANCE COMPANY
          (Exact name of registrant as specified in its charter)

           DELAWARE                 6355                   41-0991508
       (State or other        (Primary Standard         (I.R.S. Employer
       jurisdiction of            Industrial           Identification No.)
      incorporation or        Classification Code
        organization)              Number)

                            1475 Dunwoody Drive
                           West Chester, PA  19380
                              (610) 425-3400
 (Address and Telephone Number of registrant's principal executive office)

Marilyn Talman, Esq.                        Copy to:
Golden American Life Insurance Company      Stephen E. Roth, Esq.
1475 Dunwoody Drive                         Sutherland, Asbill & Brennan LLP
West Chester, PA  19380                     1275 Pennsylvania Avenue, N.W.
(610) 425-3516                              Washington, D.C.  20004-2415
(Name and Address of Agent for Service
            of Process)

     Approximate date of commencement of proposed sale to the public:
As soon as practical after the effective date of the Registration Statement

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, check the following box ...................................... [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ]..............

If this Form is post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering [ ].....................................

If this Form is post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering [ ].....................................

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box [ ]

Pursuant to Rule 429 under the Securities Act of 1933, the prospectus herein
relates to Registration Statement Number 333-40596 and 333-52320.
___________________________________________________________________________
                      Calculation of Registration Fee
<TABLE>
<CAPTION>
                                                              Proposed
Title of each class                       Proposed             maximum         Amount of
of securities to be Amount to be  maximum offering price  aggregate offering   registration
     registered      registered      price per unit(1)        price(1)           fee(2)

-------------------------------------------------------------------------------------------
<S>                 <C>                <C>                     <C>              <C>
Annuity Contracts
(Interests in       N/A                 N/A                    $1,300,000,000    $325,000
Fixed Account)

</TABLE>

(1) The maximum aggregate offering price is estimated solely for the
purpose of determining the registration fee.  The amount to be registered
and the proposed maximum offering price per unit are not applicable since
these securities are not issued in predetermined amounts or units.

(2) Amount previously registered in connection with File Nos. 333-40596
and 333-52320 were $378,787.88, $300,000,000, and $1,000,000,000 at
registration fees of $100, $79,200 and 264,000, respectively,
-----------------------------------------------------------------------------
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 this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>

                               PART I


           GUARANTEE ANNUITY PROFILE AND PROSPECTUS

<PAGE>


ING VARIABLE ANNUITIES

GOLDEN AMERICAN LIFE INSURANCE COMPANY

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

                                   PROFILE OF

                         GOLDENSELECT GUARANTEE ANNUITY

                  DEFERRED MODIFIED GUARANTEED ANNUITY CONTRACT


                                   MAY 1, 2001


     --------------------------------------------------------------------
     This Profile is a summary of some of the more important points that
     you should know and consider before purchasing the Contract. The
     Contract is more fully described in the full prospectus which
     accompanies this Profile. Please read the prospectus carefully.
     --------------------------------------------------------------------

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

1.   THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred modified guaranteed
annuity contract between you and Golden American Life Insurance Company. The
Contract provides a means for you to invest on a tax-deferred basis in a fixed
account of Golden American with guaranteed interest periods. We currently offer
guaranteed interest periods of 1, 3, 5, 6, 7, 8, 9 and 10 years in the fixed
account. We set the interest rates in the fixed account periodically. We may
credit a different interest rate for each interest period. The interest you earn
in the fixed account as well as your principal is guaranteed by Golden American
as long as you do not take your money out before the maturity date for the
applicable interest period. If you withdraw an amount in excess of the free
withdrawal amount more than 30 days before the applicable maturity date, we will
apply a surrender charge and market value adjustment. A market value adjustment
could increase or decrease your contract value and/or the amount you take out.

The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. The accumulation phase is the period
between the contract date and the date on which you start receiving the annuity
payments under your Contract. The amounts you accumulate during the accumulation
phase will determine the amount of annuity payments you will receive. The income
phase begins on the annuity start date, which is the date you start receiving
regular annuity payments from your Contract.

You determine (1) the amount of your premium payment, (2) the guarantee period,
(3) the type of annuity to be paid after the accumulation phase, (4) the
beneficiary who will receive the death benefits, and (5) the amount and
frequency of withdrawals.

GUARANTEE ANNUITY PROFILE                              PROSPECTUS BEGINS AFTER
109652                                                 PAGE 4 OF THIS PROFILE

2.   YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving on the
annuity start date. You may choose one of the following annuity payment options:
<PAGE>

     ---------------------------------------------------------------------------
                                 Annuity Options
     ---------------------------------------------------------------------------
     Option 1   Income for a        Payments are made for a specified number of
                fixed period        years to you or your beneficiary.
     ---------------------------------------------------------------------------
     Option 2   Income for life     Payments are made for the rest of your life
                with a period       or longer for a specified  period such as 10
                certain             or 20 years or until the total amount used
                                    to buy this option has been repaid.  This
                                    option comes with an added guarantee that
                                    payments will continue to your beneficiary
                                    for the remainder of such period if you
                                    should die during the period.
     ---------------------------------------------------------------------------
     Option 3   Joint life income   Payments are made for your life and the life
                                    of another person (usually your spouse).
     ---------------------------------------------------------------------------

You will also be able to choose any other annuitization plan that we choose to
offer on the annuity start date. Annuity payments under Options 1, 2 and 3 are
fixed. Annuity payments under other available options may be fixed or variable.
If variable and subject to the Investment Company Act of 1940, it will comply
with requirements of such Act. Once you elect an annuity option and begin to
receive payments, it cannot be changed.

3.   PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with a payment of $5,000 or more ($1,500 for a
qualified Contract) up to and including age 90. A premium payment that would
cause the contract value of all annuities that you maintain with us to exceed
$1,000,000 requires our prior approval.

Who may purchase this Contract? The Contract may be purchased by individuals as
part of a personal retirement plan (a "non-qualified Contract"), or as a
Contract that qualifies for special tax treatment when purchased as either an
Individual Retirement Annuity (IRA) or in connection with a qualified retirement
plan (each a "qualified Contract").

IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See
"Expenses" in this profile.

The Contract is designed for people seeking long-term tax-deferred accumulation
of assets, generally for retirement or other long-term purposes. The
tax-deferred feature is more attractive to people in high federal and state tax
brackets. You should not buy this Contract: (1) if you are looking for a
short-term investment; (2) if you cannot risk getting back less money than you
put in; or (3) your assets are in a plan which provides for tax-deferral and you
see no other reason to purchase this Contract.

4.   THE FIXED ACCOUNT
You can direct your money into the fixed account with guaranteed interest
periods of 1, 3, 5, 6, 7, 8, 9 or 10 years. Not all guarantee periods may be
available at all times. An investment in the fixed account earns a fixed
interest rate.

109652                            2                GUARANTEE ANNUITY PROFILE
<PAGE>

5.   EXPENSES
If you withdraw money from your Contract, or if you begin receiving annuity
payments, we may deduct a charge for premium tax of 0%-3.5% to pay to your
state.

We deduct a surrender charge and apply a market value adjustment if you
surrender your Contract or withdraw an amount exceeding the free withdrawal
amount. The free withdrawal amount is equal to the
prior 12 months' interest earned and not previously withdrawn. The surrender
charge varies by the length of the guarantee period selected, beginning with 8%
during year 1 and reducing by 1% per year to the earlier of the end of the
guarantee period or the 8th policy year. No surrender charge or market value
adjustment is imposed upon a surrender made during the 30-day period immediately
preceding the end of a guarantee period.

The surrender charge period resets at the beginning of each guarantee period.
Upon withdrawal, it is charged against the remaining contract value and is based
on the amount of the withdrawal. Upon surrender, a surrender charge and a market
value adjustment will be applied retroactively with respect to any free
withdrawal amount previously withdrawn within the same contract year as the
surrender. The following table shows the schedule of the surrender charge that
will apply.

     COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

6.   TAXES
Under a qualified Contract, your premium is generally a pre-tax contribution and
accumulates on a tax-deferred basis. Premium and earnings are generally taxed as
income when you make a withdrawal or begin receiving annuity payments,
presumably when you are in a lower tax bracket.


Under a non-qualified Contract, premiums are paid with after-tax dollars, and
any earnings will accumulate tax-deferred. You will generally be taxed on these
earnings, but not on premiums, when you make a withdrawal or begin receiving
annuity payments.


For owners of most qualified Contracts, when you reach age 70 1/2 (or, in some
cases, retire), you will be required by federal tax laws to begin receiving
payments from your annuity or risk paying a penalty tax. In those cases, we can
calculate and pay you the minimum required distribution amounts at your request.

If you are younger than 59 1/2 when you take money out, in most cases, you will
be charged a 10% federal penalty tax on the taxable earnings withdrawn.

7.   WITHDRAWALS
You can withdraw your money at any time during the accumulation phase. You may
elect in advance to take systematic withdrawals which are described on page 4.
Withdrawals above the free withdrawal amount taken more than 30 days before the
applicable maturity date may be subject to a surrender charge and market value
adjustment. Income taxes and a penalty tax may apply to amounts withdrawn.

8.   DEATH BENEFIT
The death benefit is payable when the first of the following persons dies before
the annuity start date: the contract owner, joint owner, or annuitant (if a
contract owner is not an individual). Assuming you are the contract owner, if
you die during the accumulation phase, your beneficiary will receive a death
benefit unless the beneficiary is your surviving spouse and elects to continue
the Contract. The death benefit value is calculated at the close of the business
day on which we receive written notice and due proof of death, as well as
required claim forms, at our Customer Service Center. If your beneficiary elects
to delay receipt of the death benefit until a date after the time of your death,
the amount of the benefit payable in the future may be affected. If you die
after the annuity start date and you are the annuitant, your beneficiary will
receive the death benefit you chose under the annuity option then in effect.

109652                            3                GUARANTEE ANNUITY PROFILE
<PAGE>

The death benefit is equal to the contract value as of the date we receive due
proof of death and any other paperwork we may require. The amount of the death
benefit could be reduced by premium taxes owed and withdrawals not previously
deducted. No surrender charge or market value adjustment is applied to the death
benefit.

9.   OTHER INFORMATION
     FREE LOOK. If you cancel the Contract within 10 days after you receive it,
you will receive a refund of the adjusted contract value. We determine your
contract value at the close of business on the day we receive your written
refund request. For purposes of the refund during the free look period, (i) we
adjust your contract value for any market value adjustment, and (ii) then we
include a refund of any charges deducted from your contract value. Because of
the potential positive or negative effect of the market value adjustment, the
contract value returned may be greater or less than the premium payment you
paid. Some states require us to return to you the amount of the paid premium
(rather than the adjusted contract value) in which case you will not be subject
to any market value adjustment risk during the free look period. Also, under
certain circumstances, you may be entitled to a longer free look period.

     TRANSFER OF CONTRACT VALUE. You may transfer your contract value to another
guarantee period during the 30-day period starting 30 days before the end of the
current guarantee period and ending upon the end of the current guarantee period
("Transfer Period") without application of a surrender charge or market value
adjustment. Keep in mind that no transfers are permitted other than during the
Transfer Period.

     NO PROBATE. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate. See
"Federal Tax Considerations -- Taxation of Death Benefit Proceeds" in the
prospectus for the Contract.

     SYSTEMATIC WITHDRAWALS. This Contract also offers systematic withdrawals.
During the accumulation phase, you can arrange to have money sent to you at
regular intervals throughout the year. Systematic withdrawals in excess of the
free withdrawal amount will be subject to surrender charge and market value
adjustment. Of course, any applicable income and penalty taxes will apply on
amounts withdrawn.

10.  INQUIRIES
If you need more information after reading this profile and the prospectus,
please contact us at:

     CUSTOMER SERVICE CENTER
     P.O. BOX 2700
     WEST CHESTER, PENNSYLVANIA 19380
     (800) 366-0066

or your registered representative.

109652                            4                GUARANTEE ANNUITY PROFILE
<PAGE>

--------------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY

                 DEFERRED MODIFIED GUARANTEED ANNUITY PROSPECTUS
                         GOLDENSELECT GUARANTEE ANNUITY
--------------------------------------------------------------------------------


                                                                     MAY 1, 2001


     This prospectus describes GoldenSelect Guarantee Annuity, a group and
individual deferred modified guaranteed annuity contract (the "Contract")
offered by Golden American Life Insurance Company (the "Company," "we" or
"our"). The Contract is available in connection with certain retirement plans
that qualify for special federal income tax treatment ("qualified Contracts") as
well as those that do not qualify for such treatment ("non-qualified
Contracts").

     The Contract provides a means for you to invest your single premium payment
in the fixed account with guaranteed interest periods. Your contract value will
vary to reflect interest credited. We will credit your contract value with a
fixed rate of interest. We set the interest rates periodically. You currently
may choose a guaranteed interest period of 1, 3, 5, 6, 7, 8, 9 and 10 years,
although we may not offer all these periods in the future or through all
broker-dealers. The interest earned on your money as well as your principal is
guaranteed as long as you hold them until the maturity date. If you take your
money out before the applicable maturity date, we will apply a market value
adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase
or decrease your contract value and/or the amount you take out. You bear the
risk that you may receive less than your principal if we take a Market Value
Adjustment. For Contracts sold in some states, not all guaranteed interest
periods are available. You have a right to return a Contract within 10 days
after you receive it for a refund of the adjusted contract value (which may be
more or less than the premium payment you paid), or, if required by your state,
the original amount of your premium payment. Longer free look periods apply in
some states and in certain situations.

     This prospectus provides information that you should know before investing
and should be kept for future reference.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

AN INVESTMENT IN THIS CONTRACT IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY ANY BANK OR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.

GA-109652
<PAGE>

--------------------------------------------------------------------------------
                                TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                            PAGE

Index of Special Terms......................................................   1
Fees and Expenses...........................................................   2
Financial Statements........................................................   2
Golden American Life Insurance Company......................................   2
The Fixed Account...........................................................   2
     Selecting a Guaranteed Interest Period.................................   3
     Guaranteed Interest Rates..............................................   3
     Renewal Interest Rates.................................................   3
     Withdrawals............................................................   3
     Market Value Adjustment................................................   4
The Annuity Contract........................................................   5
     Contract Date and Contract Year........................................   5
     Annuity Start Date.....................................................   5
     Contract Owner.........................................................   5
     Joint Owner............................................................   5
     Annuitant..............................................................   5
     Beneficiary............................................................   6
     Change of Contract Owner or Beneficiary................................   6
     Purchase and Availability of the Contract..............................   6
     Crediting of Premium Payment...........................................   6
     Administrative Procedures..............................................   7
     Contract Value.........................................................   7
     Cash Surrender Value...................................................   7
     Surrendering to Receive the Cash Surrender Value.......................   7
     The Fixed Account......................................................   7
     Other Important Provisions.............................................   8
Withdrawals     ............................................................   8
     Regular Withdrawals....................................................   8
     Systematic Withdrawals.................................................   8
          Fixed Dollar Systematic Withdrawal Feature........................   9
     IRA Withdrawals........................................................   9
Death Benefit   ............................................................  10
     Death Benefit During the Accumulation Phase............................  10
     Death Benefit During the Income Phase..................................  10
     Required Distributions upon Contract Owner's Death.....................  10
Charges and Fees............................................................  11
     Charges Deducted from the Contract Value...............................  11
          Surrender Charge..................................................  11
          Waiver of Surrender Charge for Extended Medical Coverage..........  12
          Free Withdrawal Amount............................................  12
          Surrender Charge for Excess Withdrawals...........................  12
          Premium Taxes.....................................................  12

GA-109652                            i
<PAGE>

--------------------------------------------------------------------------------
                          TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------

                                                                            PAGE

The Annuity Options.........................................................  12
     Annuitization of Your Contract.........................................  12
     Selecting the Annuity Start Date.......................................  13
     Frequency of Annuity Payments..........................................  13
     The Annuity Options....................................................  13
          Income for a Fixed Period.........................................  13
          Income for Life with a Period Certain.............................  14
          Joint Life Income.................................................  14
     Payment When Named Person Dies.........................................  14
Other Contract Provisions...................................................  14
     Reports to Contract Owners.............................................  14
     Suspension of Payments.................................................  14
     In Case of Errors in Your Application..................................  14
     Assigning the Contract as Collateral...................................  15
     Contract Changes-Applicable Tax Law....................................  15
     Free Look..............................................................  15
     Group or Sponsored Arrangements........................................  15
     Selling the Contract...................................................  15
Other Information...........................................................  16
     State Regulation.......................................................  16
     Legal Proceedings......................................................  16
     Legal Matters..........................................................  16
     Experts................................................................  16
Federal Tax Considerations..................................................  17

More Information About Golden American Life Insurance Company...............  21
Financial Statements of Golden American Life Insurance Company..............  41
Appendix A
     Market Value Adjustment Examples.......................................  A1
Appendix B
     Surrender Charge for Excess Withdrawals Example........................  B1

GA-109652                            ii
<PAGE>

--------------------------------------------------------------------------------
                             INDEX OF SPECIAL TERMS
--------------------------------------------------------------------------------

The following special terms are used throughout this prospectus. Refer to the
page(s) listed for an explanation of each term:

SPECIAL TERM                           PAGE
Annuitant                                5
Annuity Start Date                       5
Cash Surrender Value                     7
Contract Date                            5
Contract Owner                           5
Contract Value                           7
Contract Year                            5
Free Withdrawal Amount                  12
Market Value Adjustment                  4

The following terms as used in this prospectus have the same or substituted
meanings as the corresponding terms currently used in the Contract:

TERM USED IN THIS PROSPECTUS             CORRESPONDING TERM USED IN THE CONTRACT
Annuity Start Date                       Annuity Commencement Date
Contract Owner                           Owner or Certificate Owner
Contract Value                           Accumulation Value
Free Look Period                         Right to Examine Period
Guaranteed Interest Period               Guarantee Period
Withdrawals                              Partial Withdrawals

GA-109652                            1
<PAGE>

                    This page intentionally left blank.

<PAGE>

--------------------------------------------------------------------------------
                                FEES AND EXPENSES
--------------------------------------------------------------------------------

CONTRACT OWNER TRANSACTION EXPENSES*

     Surrender Charge:

     COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

     *    A Market Value Adjustment may apply to certain transactions. This may
          increase or decrease your contract value and/or your surrender amount.
          In addition, if you withdraw money from your Contract, or if you begin
          receiving annuity payments, we may deduct a premium tax charge of 0%
          to 3.5% to pay to your state.


FINANCIAL STATEMENTS
The audited consolidated financial statements of Golden American for the years
ended December 31, 2000, 1999, and 1998 are included in this prospectus.


--------------------------------------------------------------------------------
                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------

Golden American Life Insurance Company is a Delaware stock life insurance
company, which was originally incorporated in Minnesota on January 2, 1973.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. ("Equitable of Iowa"). Equitable of Iowa is a wholly owned subsidiary of
ING Groep N.V. ("ING"), a global financial services holding company based in The
Netherlands. Golden American is authorized to sell insurance and annuities in
all states, except New York, and the District of Columbia. In May 1996, Golden
American established a subsidiary, First Golden American Life Insurance Company
of New York, which is authorized to sell annuities in New York and Delaware.
Golden American's consolidated financial statements appear in this prospectus.

Equitable of Iowa is the holding company for Golden American, Directed Services,
Inc., the distributor of the Contracts, and other interests.

Our principal office is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380.

--------------------------------------------------------------------------------
                                THE FIXED ACCOUNT
--------------------------------------------------------------------------------

Assets supporting your contract value are invested in our Fixed Account. Your
premium payment (less withdrawals and less applicable premium taxes, if any)
will earn interest at the initial guarantee rate which is an annual effective
rate of interest. You may select the duration of your initial guarantee period
from among the durations offered by us. The duration you select will determine
your initial guarantee rate. We currently offer guaranteed interest periods of
1, 3, 5, 6, 7, 8, 9 and 10 years, although we may not offer all these periods in
the future or through all broker-dealers. We will credit your premium payment
with a guaranteed interest rate for the interest period you select, so long as
you do not withdraw money before the end of the guaranteed interest period. Each
guaranteed interest period ends on its maturity date which is the last day of
the last contract year in the guarantee period.

If you surrender, withdraw, or annuitize your investment before the 30 day
period prior to the end of the guaranteed interest period, we will apply a
Market Value Adjustment to the amount of the transaction in excess of the free
withdrawal amount. A Market Value Adjustment could increase or decrease the
amount you surrender, withdraw, or annuitize, depending on current interest
rates at the time of the transaction. You bear the risk that you may receive
less than your principal if we apply a Market Value Adjustment.

GA-109652                            2
<PAGE>

Assets supporting your contract value are available to fund the claims of all
classes of our customers, contract owners and other creditors. Interests under
your Contract are registered under the Securities Act of 1933, but the Fixed
Account is not registered under the 1940 Act.

SELECTING A GUARANTEED INTEREST PERIOD
A guaranteed interest period is the period that a rate of interest is guaranteed
to be credited to your contract value. We may at any time decrease or increase
the number of guaranteed interest periods offered.

Your contract value is the sum of your premium payment and the interest credited
as adjusted for any withdrawals (including any Market Value Adjustment applied
to such withdrawal) or other charges we may impose. Your contract value will be
credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium. We will credit
interest daily at a rate which yields the quoted guaranteed interest rate.

GUARANTEED INTEREST RATES
The interest rate to be credited to your contract value is guaranteed as long as
you do not take your money out until the period beginning 30 days before the
applicable maturity date. We do not have a specific formula for establishing the
guaranteed interest rates for the different guaranteed interest periods. We
determine guaranteed interest rates at our sole discretion. To find out the
current guaranteed interest rate for a guaranteed interest period you are
interested in, please contact our Customer Service Center or your registered
representative. The determination may be influenced by the interest rates on
fixed income investments in which we may invest with the amounts we receive
under the Contracts. We will invest these amounts primarily in investment-grade
fixed income securities (i.e., rated by Standard & Poor's rating system to be
suitable for prudent investors) although we are not obligated to invest
according to any particular strategy, except as may be required by applicable
law. You will have no direct or indirect interest in these investments. We will
also consider other factors in determining the guaranteed interest rates,
including regulatory and tax requirements, sales commissions and administrative
expenses borne by us, general economic trends and competitive factors. We cannot
predict the level of future interest rates.

We may from time to time at our discretion offer interest rate specials for new
premiums that are higher than the current base interest rate. Renewal rates for
such rate specials will be based on the base interest rate and not on the
special rates initially declared.

RENEWAL INTEREST RATES
Unless you elect to surrender your contract, a subsequent guarantee period will
automatically begin at the end of a guarantee period. We may not offer the same
guarantee interest periods for renewal as for initial periods. If offered at the
time of your renewal, each subsequent guarantee period will be of the same
duration as the previous guarantee period unless you elect in writing, on any
day within the 30 day period preceding the end of the current guarantee period,
a guarantee period of a different duration from among those offered by us at
that time. At least 30 calendar days before the maturity date of the current
guarantee period, or earlier if required by state law, we will send you a notice
of the guaranteed interest periods that are available. If you do not elect a
different guarantee period, and your current guaranteed interest period is not
available as a renewal period or would go beyond the annuity start date, we will
transfer your contract value to the next shortest guaranteed interest period
which does not go beyond the annuity start date. Your contract value will then
earn interest at a guarantee rate that we have declared for that duration. The
guarantee rate for the guarantee period automatically applied in these
circumstances may be higher or lower than the guarantee rate for longer
durations.

The contract value at the beginning of any renewal guarantee period will be
equal to the contract value at the end of the guarantee period just ending. This
contract value, less withdrawals made after the beginning of the subsequent
guarantee period, will earn interest compounded annually at the renewal
guarantee rate.

WITHDRAWALS
During the accumulation phase, you may withdraw a portion of your contract
value. Beginning 28 days after the contract date, you may make systematic
withdrawals of only the interest earned during the prior month,

GA-109652                            3
<PAGE>

quarter or year, depending on the frequency chosen, under our systematic
withdrawal option. A withdrawal may be subject to a Market Value Adjustment and,
in some cases, a surrender charge (see "Charges and Fees"). Be aware that
withdrawals may have federal income tax consequences, including a 10% penalty
tax.

MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on your
contract value. We will apply a Market Value Adjustment to amounts in excess of
the free withdrawal amount (i) whenever you withdraw money (unless made within
the 30 day period before the maturity date of the applicable guaranteed interest
period) and (ii) if on the annuity start date a guaranteed interest period does
not end on or within 30 days of the annuity start date. The Market Value
Adjustment resets at the start of each guarantee period.

We determine the Market Value Adjustment by multiplying the amount you withdraw
or apply to an income plan by the following factor:

                                            N/365
                         ((1+I)/(1+J+.0050))      -1*

     where:

     "I"  is the Index Rate (as defined below), determined at the beginning of
          the current guarantee period;

     "J"  is the Index Rate, determined at the time of surrender or withdrawal
          for a security with time to maturity equal to the number of years
          (fractional years rounded up to the next full year) remaining in the
          guarantee period from the date of surrender or withdrawal; and

     "N"  is the number of days from the date of surrender or withdrawal to the
          end of the current guarantee period.
          ----------------

          *    For contracts issued in Florida, the factor is
                                  N/365
               [(1+I)/(1+J+.0025)]      -1.

The Index Rate is the average of the Ask Yields for U.S. Treasury Strips as
quoted by a national quoting service for a period equal to an applicable
guaranteed interest period. The average currently is based on the period
starting from the 22nd day of the calendar month two months prior to the month
of the Index Rate determination and ending the 21st day of the calendar month
immediately before the month of determination. We currently calculate the Index
Rate once each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at least 28 days.
If the Ask Yields are no longer available, we will determine the Index Rate by
using a suitable and approved, if required, replacement method.

A Market Value Adjustment may be positive, negative or result in no change. In
general, if interest rates are rising, you bear the risk that any Market Value
Adjustment will likely be negative and reduce your contract value. On the other
hand, if interest rates are falling, it is more likely that you will receive a
positive Market Value Adjustment that increases your contract value. In the
event of a full surrender or annuitization, we will add or subtract any Market
Value Adjustment from the amount surrendered or annuitized. In the event of a
partial withdrawal or annuitization, we will add or subtract any Market Value
Adjustment from the total amount withdrawn or annuitized in order to provide the
amount requested. If a negative Market Value Adjustment exceeds your contract
value, we will consider your request to be a full surrender or annuitization.

Several examples which illustrate how the Market Value Adjustment works are
included in Appendix A.

GA-109652                            4
<PAGE>

--------------------------------------------------------------------------------
                              THE ANNUITY CONTRACT
--------------------------------------------------------------------------------

The Contract described in this prospectus is a deferred fixed annuity contract.
The Contract provides a means for you to invest in the Fixed Account of the
Company.

CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date. Each 12-month
period following the contract date is a contract year.

ANNUITY START DATE
The annuity start date is the date you start receiving annuity payments under
your Contract. The Contract, like all deferred annuity contracts, has two
phases: the accumulation phase and the income phase. The accumulation phase is
the period between the contract date and the annuity start date. The income
phase begins when you start receiving regular annuity payments from your
Contract on the annuity start date.

CONTRACT OWNER
You are the contract owner. You are also the annuitant unless another annuitant
is named in the application. You have the rights and options described in the
Contract. One or more persons may own the Contract.

The death benefit becomes payable when you die. In the case of a sole contract
owner who dies before the income phase begins, we will pay the beneficiary the
death benefit then due. The sole contract owner's estate will be the beneficiary
if no beneficiary has been designated or the beneficiary has predeceased the
contract owner. In the case of a joint owner of the Contract dying before the
income phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary designation.

If the contract owner is a trust and a beneficial owner of the trust has been
designated, the beneficial owner will be treated as the contract owner for
determining the death benefit. If a beneficial owner is changed or added after
the contract date, this will be treated as a change of contract owner for
determining the death benefit.

JOINT OWNER. For non-qualified Contracts only, joint owners may be named in a
written request before the Contract is in effect. Joint owners may independently
exercise transfers and other transactions allowed under the Contract. All other
rights of ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights of a joint
owner end at death of that owner if the other joint owner survives. The entire
interest of the deceased joint owner in the Contract will pass to the surviving
joint owner.

ANNUITANT
The annuitant is the person designated by you to be the measuring life in
determining annuity payments. The annuitant's age determines when the income
phase must begin and the amount of the annuity payments to be paid. You are the
annuitant unless you choose to name another person. The annuitant may not be
changed after the Contract is in effect.

The contract owner will receive the annuity benefits of the Contract if the
annuitant is living on the annuity start date. If the annuitant dies before the
annuity start date, and a contingent annuitant has been named, the contingent
annuitant becomes the annuitant (unless the contract owner is not an individual,
in which case the death benefit becomes payable).

If there is no contingent annuitant when the annuitant dies before the annuity
start date, the contract owner will become the annuitant. The contract owner may
designate a new annuitant within 60 days of the death of the annuitant.

If there is no contingent annuitant when the annuitant dies before the annuity
start date and the contract owner is not an individual, we will pay the
designated beneficiary the death benefit then due. If a beneficiary

GA-109652                            5
<PAGE>

has not been designated, or if there is no designated beneficiary living,
the contract owner will be the beneficiary. If the annuitant was the
sole contract owner and there is no beneficiary designation, the
annuitant's estate will be the beneficiary.

Regardless of whether a death benefit is payable, if the annuitant dies and any
contract owner is not an individual, distribution rules under federal tax law
will apply. You should consult your tax advisor for more information if you are
not an individual.

BENEFICIARY
The beneficiary is named by you in a written request. The beneficiary is the
person who receives any death benefit proceeds and who becomes the successor
contract owner if the contract owner (or the annuitant if the contract owner is
other than an individual) dies before the annuity start date. We pay death
benefits to the primary beneficiary (unless there are joint owners, in which
case death proceeds are payable to the surviving owner(s)).

If the beneficiary dies before the annuitant or the contract owner, the death
benefit proceeds are paid to the contingent beneficiary, if any. If there is no
surviving beneficiary, we pay the death benefit proceeds to the contract owner's
estate.

One or more persons may be a beneficiary or contingent beneficiary. In the case
of more than one beneficiary, we will assume any death benefit proceeds are to
be paid in equal shares to the surviving beneficiaries.

You have the right to change beneficiaries during the annuitant's lifetime
unless you have designated an irrevocable beneficiary. When an irrevocable
beneficiary has been designated, you and the irrevocable beneficiary may have to
act together to exercise some of the rights and options under the Contract.

CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime, you
may transfer ownership of a non-qualified Contract. You may also change the
beneficiary. All requests for changes must be in writing and submitted to our
Customer Service Center in good order. The change will be effective as of the
day you sign the request. The change will not affect any payment made or action
taken by us before recording the change.


A change of owners may have tax consequences.


PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract owner are
not older than age 90. The single premium payment must be $5,000 or more ($1,500
for qualified Contracts). Under certain circumstances, we may waive the minimum
premium payment requirement. We may also change the minimum initial premium
requirement for certain group or sponsored arrangements. Any premium payment
that would cause the contract value of all annuities that you maintain with us
to exceed $1,000,000 requires our prior approval.

IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See "Fees
and Expenses" in this prospectus.

CREDITING OF PREMIUM PAYMENT
We will process your premium payment within 2 business days after receipt, if
the application and all information necessary for processing the Contract are
complete. In certain states we also accept premium payments by wire order. Wire
transmittals must be accompanied by sufficient electronically transmitted data.
We may retain your premium payment for up to 5 business days while attempting to
complete an incomplete application. If the application cannot be completed
within this period, we will inform you of the reasons for the delay. We will
also return the premium payment immediately unless you direct us to hold the
premium payment until the application is completed.

GA-109652                            6
<PAGE>

If your premium payment was transmitted by wire order from your broker-dealer,
we will follow one of the following two procedures after we receive and accept
the wire order and investment instructions. The procedure we follow depends on
state availability and the procedures of your broker-dealer.

     (1)  If either your state or broker-dealer do not permit us to issue a
          Contract without an application, we reserve the right to rescind the
          Contract if we do not receive and accept a properly completed
          application or enrollment form within 5 days of the premium payment.
          If we do not receive the application or form within 5 days of the
          premium payment, we will refund the contract value plus any charges we
          deducted, and the Contract will be voided. Some states require that we
          return the premium paid, in which case we will comply.

     (2)  If your state and broker-dealer allow us to issue a Contract without
          an application, we will issue and mail the Contract to you or your
          representative, together with an Application Acknowledgement Statement
          for your execution. Until our Customer Service Center receives the
          executed Application Acknowledgement Statement, neither you nor the
          broker-dealer may execute any financial transactions on your Contract
          unless they are requested in writing by you. We may require additional
          information before complying with your request (e.g., signature
          guarantee).

ADMINISTRATIVE PROCEDURES
We may accept a request for Contract service in writing, by telephone, or other
approved electronic means, subject to our administrative procedures, which vary
depending on the type of service requested and may include proper completion of
certain forms, providing appropriate identifying information, and/or other
administrative requirements.

CONTRACT VALUE
We determine your contract value on a daily basis beginning on the contract
date. Your contract value is the sum of the premium payment plus credited
interest, minus any withdrawals (including any Market Value Adjustment applied
to such withdrawal), contract fees, and premium taxes. If you surrender your
contract during the 30-day period preceding a maturity date, you will receive
the contract value.

CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender the
Contract, other than during the 30-day period prior to a maturity date. The cash
surrender value will fluctuate daily based on the interest credited to the
contract value and any Market Value Adjustment. We do not guarantee any minimum
cash surrender value. On any date during the accumulation phase, we calculate
the cash surrender value as follows: we start with your contract value, then we
adjust for any Market Value Adjustment, then we deduct any surrender charge, any
charge for premium taxes, and any other charges incurred but not yet deducted.

SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is living and
before the annuity start date. A surrender will be effective on the date your
written request and the Contract are received at our Customer Service Center. We
will determine and pay the cash surrender value after receipt of all paperwork
required in order for us to process your surrender. Once paid, all benefits
under the Contract will be terminated. You may receive the cash surrender value
in a single sum payment or apply it under one or more annuity options. We will
usually pay the cash surrender value within 7 days.

Consult your tax advisor regarding the tax consequences associated with
surrendering your Contract. A surrender made before you reach age 59 1/2 may
result in a 10% tax penalty. See "Federal Tax Considerations" for more details.

THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the assets that
support a contract owner's contract value. See "The Fixed Account" for more
information.

GA-109652                            7
<PAGE>

OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Death Benefit," "Charges and Fees," "The Annuity Options"
and "Other Contract Provisions" in this prospectus for information on other
important provisions in your Contract.

--------------------------------------------------------------------------------
                                   WITHDRAWALS
--------------------------------------------------------------------------------

Any time during the accumulation phase and before the death of the owner, you
may withdraw all or part of your money. Keep in mind that your contract value
after the withdrawal must equal or exceed $1,000 or we will treat the withdrawal
request as a request to surrender the Contract. We deduct a surrender charge if
you surrender your Contract or withdraw an amount exceeding the free withdrawal
amount. The free withdrawal amount is equal to the prior 12 months' interest
earned and not previously withdrawn. The surrender charge varies by the length
of the guarantee period selected, beginning with 8% during year 1 and reducing
by 1% per year to the end of the guarantee period. No surrender charge is
imposed upon a surrender made during the 30-day period immediately preceding the
end of a guarantee period. The surrender charge period resets at the beginning
of each guarantee period. It is charged against the contract value and is based
on the amount of the withdrawal.

We will apply a Market Value Adjustment to any withdrawal in excess of the free
withdrawal amount taken prior to the 30-day period before the maturity date.
Definitive guidance on the proper federal tax treatment of the market value
adjustment has not been issued. You may want to discuss the potential tax
consequences of a market value adjustment with your tax adviser. We will
determine the contract value as of the close of business on the day we receive
your withdrawal request at our Customer Service Center. The contract value may
be more or less than the premium payment made.

Upon surrender, surrender charges and a Market Value Adjustment will be applied
retroactively with respect to any free withdrawal amount previously withdrawn
within the same contract year as the surrender.

We offer the following three withdrawal options:

REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each withdrawal
must be a minimum of $100. We will apply a surrender charge and Market Value
Adjustment to any regular withdrawal in excess of the free withdrawal amount
that is taken prior to the 30 day period before the maturity date.

SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawal payments. Systematic
withdrawals are limited to interest earnings during the prior month, quarter, or
year, depending on the frequency you chose. Systematic withdrawals are not
subject to a Market Value Adjustment, unless you have added the Fixed Dollar
Systematic Withdrawal Feature discussed below and the payments exceed the free
withdrawal amount. Systematic withdrawals under the Fixed Dollar Systematic
Withdrawal Feature are available only in connection with Section 72(q) or 72(t)
distributions.

Systematic withdrawals may be taken monthly, quarterly or annually. You decide
when you would like systematic payments to start as long as they start at least
28 days after your contract date. You also select the date on which the
systematic withdrawals will be made, but this date cannot be later than the 28th
day of the month. If you have elected to receive systematic withdrawals but have
not chosen a date, we will make the withdrawals on the same calendar day of each
month as your contract date. If your contract date is after the 28th , your
systematic withdrawal will be made on the 28th day of each month.

Each systematic withdrawal amount must be a minimum of $100. The amount of your
systematic withdrawal can either be (1) a fixed dollar amount, or (2) an amount
based on a percentage of the interest earned and not previously withdrawn, but
in either case is limited to interest earnings. If your systematic withdrawal is
a fixed dollar amount and the amount to be withdrawn would exceed the applicable
free

GA-109652                            8
<PAGE>

withdrawal amount on any withdrawal date, we will automatically reduce the
amount withdrawn so that it equals such free withdrawal amount. Thus, your fixed
dollar systematic withdrawals will never exceed the free withdrawal amount. If
you want fixed dollar systematic withdrawals to exceed the free withdrawal
amount and are willing to incur associated surrender charges, consider the Fixed
Dollar Systematic Withdrawal Feature which you may add to your regular
systematic withdrawal program.

You may change the amount or percentage of your systematic withdrawal once each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal date. The systematic withdrawal option may commence in a contract
year where a regular withdrawal has been taken but you may not change the amount
or percentage of your withdrawals in any contract year during which you have
previously taken a regular withdrawal. You may not elect the systematic
withdrawal option if you are taking IRA withdrawals.

FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar
Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal
program. This feature allows you to receive a systematic withdrawal in a fixed
dollar amount regardless of any surrender charges or Market Value Adjustments.
Systematic withdrawals under the Fixed Dollar Systematic Withdrawal Feature are
available only in connection with Section 72(q) or 72(t) distributions. You
choose the amount of the fixed systematic withdrawals. We will assess a
surrender charge and Market Value Adjustment on the withdrawal date if the
withdrawal exceeds the free withdrawal amount on the withdrawal date. We will
apply the surrender charge and any Market Value Adjustment directly to your
contract value (rather than to the systematic withdrawal) so that the amount of
each systematic withdrawal remains fixed.

Flat dollar systematic withdrawals which are intended to satisfy the
requirements of Section 72(q) or 72(t) of the Tax Code may exceed the free
withdrawal amount. Such withdrawals are subject to surrender charges and Market
Value Adjustment when they exceed the applicable free withdrawal amount.

IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the
current calendar year, you may elect to have distributions made to you to
satisfy requirements imposed by Federal tax law. IRA withdrawals provide payout
of amounts required to be distributed by the Internal Revenue Service rules
governing mandatory distributions under qualified plans. We will send you a
notice before your distributions commence. You may elect to take IRA withdrawals
at that time, or at a later date. You may not elect IRA withdrawals and
participate in systematic withdrawals at the same time. If you do not elect to
take IRA withdrawals, and distributions are required by Federal tax law,
distributions adequate to satisfy the requirements imposed by Federal tax law
may be made. Thus, if you are participating in systematic withdrawals,
distributions under that option must be adequate to satisfy the mandatory
distribution rules imposed by federal tax law.

You may choose to receive IRA withdrawals on a monthly, quarterly or annual
basis. Under this option, you may elect payments to start as early as 28 days
after the contract date. You select the day of the month when the withdrawals
will be made, but it cannot be later than the 28th day of the month. If no date
is selected, we will make the withdrawals on the same calendar day of the month
as the contract date.

You may request that we calculate for you the amount that is required to be
withdrawn from your Contract each year based on the information you give us and
various choices you make. For information regarding the calculation and choices
you have to make, see the Statement of Additional Information. Or, we will
accept your written instructions regarding the calculated amount required to be
withdrawn from your Contract each year. The minimum dollar amount you can
withdraw is $100. When we determine the required IRA withdrawal amount for a
taxable year based on the frequency you select, if that amount is less than
$100, we will pay $100. At any time where the IRA withdrawal amount is greater
than the contract value, we will cancel the Contract and send you the amount of
the cash surrender value.

You may change the payment frequency of your IRA withdrawals once each contract
year or cancel this option at any time by sending us satisfactory notice to our
Customer Service Center at least 7 days before the next scheduled withdrawal
date.

GA-109652                            9
<PAGE>

An IRA withdrawal in excess of the amount allowed under systematic withdrawals
will be subject to a Market Value Adjustment.

CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING
WITHDRAWALS. You are responsible for determining that withdrawals comply with
applicable law. A withdrawal made before
the taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See "Federal
Tax Considerations" for more details.

--------------------------------------------------------------------------------
                                  DEATH BENEFIT
--------------------------------------------------------------------------------

DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either, the
contract owner or the first of joint owners dies, or the annuitant dies (when a
contract owner is not an individual). Assuming you are the contract owner, your
beneficiary will receive a death benefit unless the beneficiary is your
surviving spouse and elects to continue the Contract. The death benefit is equal
to the contract value. The death benefit value is calculated at the close of the
business day on which we receive written notice and due proof of death, as well
as any required paperwork, at our Customer Service Center. Amounts could be
reduced by a charge for premium taxes owed and withdrawals not previously
deducted.

If your beneficiary elects to delay receipt of the death benefit until a date
after the time of death, the amount of the benefit payable in the future may be
affected. The proceeds may be received in a single sum or applied to any of the
annuity options. If we do not receive a request to apply the death benefit
proceeds to an annuity option, we will make a single sum distribution. We will
generally pay death benefit proceeds within 7 days after our Customer Service
Center has received sufficient information to make the payment. For information
on required distributions under federal income tax laws, you should see
"Required Distributions upon Contract Owner's Death."

The death benefit applies on the first person to die of the contract owner,
joint owner, or annuitant (if a contract owner is not an individual). Assuming
you are the contract owner, if you die during the accumulation phase, your
beneficiary will receive a death benefit unless the beneficiary is the surviving
spouse and elects to continue the Contract.

DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start date, we
will pay the beneficiary any certain benefit remaining under the annuity in
effect at the time.

REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.

If any owner of a non-qualified contract dies before the annuity start date, the
death benefit payable to the beneficiary will be distributed as follows: (a) the
death benefit must be completely distributed within 5 years of the contract
owner's date of death; or (b) the beneficiary may elect, within the 1-year
period after the contract owner's date of death, to receive the death benefit in
the form of an annuity from us, provided that (i) such annuity is distributed in
substantially equal installments over the life of such beneficiary or over a
period not extending beyond the life expectancy of such beneficiary; and (ii)
such distributions begin not later than 1 year after the contract owner's date
of death.

Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is
the deceased owner's surviving spouse, then such spouse may elect to continue
the Contract under the same terms as before the contract owner's death. Upon
receipt of such election from the spouse at our Customer Service Center: (1) all
rights of the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become the owner
of the Contract and will also be treated as the contingent annuitant, if none
has been named and only if the deceased owner was the annuitant; and (3) all
rights and privileges

GA-109652                            10
<PAGE>

granted by the Contract or allowed by Golden American will
belong to the spouse as contract owner of the Contract. This election will be
deemed to have been made by the spouse if such spouse fails to make a timely
election as described in this paragraph. If the owner's beneficiary is a
nonspouse, the distribution provisions described in subparagraphs (a) and (b)
above, will apply even if the annuitant and/or contingent annuitant are alive at
the time of the contract owner's death.

If we do not receive an election from a nonspouse owner's beneficiary within the
1-year period after the contract owner's date of death, then we will pay the
death benefit to the owner's beneficiary in a cash payment within five years
from date of death. We will determine the death benefit as of the date we
receive proof of death. We will make payment of the proceeds on or before the
end of the 5-year period starting on the owner's date of death. Such cash
payment will be in full settlement of all our liability under the Contract.

If the contract owner dies after the annuity start date, we will continue to
distribute any benefit payable at least as rapidly as under the annuity option
then in effect. All of the contract owner's rights granted under the Contract or
allowed by us will pass to the contract owner's beneficiary.

If the Contract has joint owners we will consider the date of death of the first
joint owner as the death of the contract owner and the surviving joint owner
will become the contract owner of the Contract.

--------------------------------------------------------------------------------
                                CHARGES AND FEES
--------------------------------------------------------------------------------

We deduct the Contract charges described below to cover our cost and expenses,
services provided and risks assumed under the Contracts. We incur certain costs
and expenses for distributing and administering the Contracts, including
compensation and expenses paid in connection with sales of the Contracts, for
paying the benefits payable under the Contracts and for bearing various risks
associated with the Contracts. The amount of a Contract charge will not always
correspond to the actual costs associated with the charge. For example, the
surrender charge collected may not fully cover all of the distribution expenses
incurred by us with the service or benefits provided. In the event there are any
profits from fees and charges deducted under the Contract, we may use such
profits to finance the distribution of Contracts.

CHARGES DEDUCTED FROM THE CONTRACT VALUE
We deduct the following charges from your contract value:

     SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a
"surrender charge") if you surrender your Contract or if you take a withdrawal
in excess of the free withdrawal amount during the guarantee period. The free
withdrawal amount is equal to the prior 12 months' interest earned and not
previously withdrawn. The surrender charge is charged against the contract value
and is based on the amount of the withdrawal. This charge is intended to cover
sales expenses that we have incurred. We may in the future reduce or waive the
surrender charge in certain situations and will never charge more than the
maximum surrender charges. The percentage deducted at the time of surrender or
excess withdrawal depends on the number of complete years that have elapsed
since the beginning of the guarantee period.

The surrender charge varies by the length of the guarantee period selected,
beginning with 8% during year 1 and reducing by 1% per year to the earlier of
the end of the guarantee period or the 8th policy year. No surrender charge is
imposed upon a surrender made during the 30-day period immediately preceding the
end of a guarantee period.

The surrender charge period resets at the beginning of each guarantee period.
Upon withdrawal, it is charged against the remaining contract value and is based
on the amount of the withdrawal. Upon surrender, a surrender charge and a Market
Value Adjustment will be applied retroactively with respect to any free
withdrawal amount previously withdrawn within the same contract year as the
surrender. The following table shows the schedule of the surrender charge that
will apply.

GA-109652                            11
<PAGE>

     COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

     WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the
surrender charge in most states in the following events: (i) you begin receiving
qualified extended medical care on or after the first contract anniversary for
at least 45 days during a 60-day period and your request for the surrender or
withdrawal, together with all required documentation is received at our Customer
Service Center during the
term of your care or within 90 days after the last day of your care; or (ii) you
are first diagnosed by a qualifying medical professional, on or after the first
contract anniversary, as having a qualifying terminal illness. We have the right
to require an examination by a physician of our choice. If we require such an
examination, we will pay for it. You are required to send us satisfactory
written proof of illness. See your Contract for more information. The waiver of
surrender charge may not be available in all states.

     FREE WITHDRAWAL AMOUNT. No surrender charge or Market Value Adjustment
applies to withdrawals made during the 30-day period prior to the end of a
guarantee interest period. The interest earned during the prior 12 months and
not previously withdrawn may be withdrawn without surrender charge or Market
Value Adjustment.

     SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge
for excess withdrawals. We consider a withdrawal to be an "excess withdrawal"
when the amount you withdraw in any contract year exceeds the free withdrawal
amount. Where you are receiving systematic withdrawals, any combination of
regular withdrawals taken and any systematic withdrawals expected to be received
in a contract year will be included in determining the amount of the excess
withdrawal. Such a withdrawal will be considered a partial surrender of the
Contract and we will impose a surrender charge and any associated premium tax.
ANY EXCESS WITHDRAWAL MORE THAN 30 DAYS BEFORE A MATURITY DATE WILL TRIGGER A
MARKET VALUE ADJUSTMENT.

     PREMIUM TAXES. We may make a charge for state and local premium taxes
depending on your state of residence. The tax can range from 0% to 3.5% of the
premium payment. We have the right to change this amount to conform with changes
in the law or if you change your state of residence.

We deduct the premium tax from your contract value on the annuity start date.
However, some jurisdictions impose a premium tax at the time that premiums are
paid, regardless of when the annuity payments begin. In those states we may
defer collection of the premium taxes from your contract value and deduct it
when you surrender the Contract, when you take an excess withdrawal, or on the
annuity start date.

--------------------------------------------------------------------------------
                               THE ANNUITY OPTIONS
--------------------------------------------------------------------------------

ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start date, we
will begin making payments to the contract owner under an income plan. We will
make these payments under the annuity option chosen. You may change your annuity
option by making a written request to us at least 30 days before the annuity
start date. The amount of the payments will be determined by applying your
contract value adjusted for any applicable market value adjustment on the
annuity start date in accordance with the annuity option you chose.

You may also elect an annuity option on surrender of the Contract for its cash
surrender value or you may choose one or more annuity options for the payment of
death benefit proceeds while it is in effect and before the annuity start date.
If, at the time of the contract owner's death or the annuitant's death (if the
contract owner is not an individual), no option has been chosen for paying death
benefit proceeds, the beneficiary may choose an annuity option within 60 days.
In all events, payments of death benefit proceeds must comply with the
distribution requirements of applicable federal tax law.

GA-109652                            12
<PAGE>

The minimum monthly annuity income payment that we will make is $20. We may
require that a single sum payment be made if the contract value is less than
$2,000 or if the calculated monthly annuity income payment is less than $20.

For each annuity option we will issue a separate written agreement putting the
annuity option into effect. Before we pay any annuity benefits, we require the
return of your Contract. If your Contract has been lost, we will require that
you complete and return the applicable lost Contract form. Various factors will
affect the level of annuity benefits, such as the annuity option chosen and the
applicable payment rate used.

Our current annuity options provide only for fixed payments. Fixed annuity
payments are regular payments, the amount of which is fixed and guaranteed by
us. Some fixed annuity options provide fixed payments either for a specified
period of time or for the life of the annuitant. The amount of life income
payments will depend on the form and duration of payments you chose, the age of
the annuitant or beneficiary (and gender, where appropriate under applicable
law), the total contract value applied, and the applicable payment rate.

Our approval is needed for any option where:

     (1)  The person named to receive payment is other than the contract owner
          or beneficiary;

     (2)  The person named is not a natural person, such as a corporation; or

     (3)  Any income payment would be less than the minimum annuity income
          payment allowed.

SELECTING THE ANNUITY START DATE
You select the annuity start date, which is the date on which the annuity
payments commence. The annuity start date must be at least 1 year from the
contract date but before the month immediately following the annuitant's 90th
birthday, or 10 years from the contract date, if later. If, on the annuity start
date, a surrender charge remains, the elected annuity option must include a
period certain of at least 5 years.

If you do not select an annuity start date, it will automatically begin in the
month following the annuitant's 90th birthday, or 10 years from the contract
date, if later.

If the annuity start date occurs when the annuitant is at an advanced age, such
as over age 85, it is possible that the Contract will not be considered an
annuity for federal tax purposes. See "Federal Tax Considerations." For a
Contract purchased in connection with a qualified plan, other than a Roth IRA,
distributions must commence not later than April 1st of the calendar year
following the calendar year in which you attain age 70 1/2 or, in some case,
retire. Distributions may be made through annuitization or withdrawals. You
should consult your tax adviser for tax advice.

FREQUENCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be monthly,
quarterly, semi-annually or annually. If we do not receive written notice from
you, we will make the payments monthly. There may be certain restrictions on
minimum payments that we will allow.

THE ANNUITY OPTIONS
We offer the 3 annuity options shown below. Payments under Options 1, 2 and 3
are fixed. The contract value can be applied to any other annuitization plan
that we choose to offer on the annuity start date. Annuity payments under other
available options may be fixed and/or variable.

     OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly
payments in equal installments for a fixed number of years based on the contract
value on the annuity start date. We guarantee that each monthly payment will be
at least the amount stated in your Contract. If you prefer, you may request that
payments be made in annual, semi-annual or quarterly installments. We will
provide you with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may apply to
the taxable portion of each income payment until the contract owner reaches age
59 1/2.

GA-109652                            13
<PAGE>

     OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made for the
life of the annuitant in equal monthly installments and guaranteed for at least
a period certain such as 10 or 20 years. Other periods certain may be available
to you on request. You may choose a refund period instead. Under this
arrangement, income is guaranteed until payments equal the amount applied. If
the person named lives beyond the guaranteed period, payments continue until his
or her death. We guarantee that each payment will be at least the amount
specified in the Contract corresponding to the person's age on his or her last
birthday before the annuity start date. Amounts for ages not shown in the
Contract are available if you ask for them.

     OPTION 3. JOINT LIFE INCOME. This option is available when there are 2
persons named to determine annuity payments. At least one of the persons named
must be either the contract owner or beneficiary of the Contract. We guarantee
monthly payments will be made as long as at least one of the named persons is
living. There is no minimum number of payments. Monthly payment amounts are
available if you ask for them.

The contract value can be applied to any other annuitization plan that we choose
to offer on the annuity start date. Annuity payments under other available
options may be fixed and/or variable. If variable and subject to the Investment
Company Act of 1940 it will comply with requirements of such Act.

PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any amounts still due
as provided in the annuity agreement between you and Golden American. The
amounts we will pay are determined as follows:

     (1)  For Option 1, or any remaining guaranteed payments under Option 2, we
          will continue payments. Under Options 1 and 2, the discounted values
          of the remaining guaranteed payments may be paid in a single sum. This
          means we deduct the amount of the interest each remaining guaranteed
          payment would have earned had it not been paid out early. The discount
          interest rate is never less than 3% for Option 1 and for Option 2 per
          year. We will, however, base the discount interest rate on the
          interest rate used to calculate the payments for Options 1 and 2 if
          such payments were not based on the tables in the Contract.

     (2)  For Option 3, no amounts are payable after both named persons have
          died.

For other available options, the annuity option agreement will state the amount
we will pay, if any.

--------------------------------------------------------------------------------
                            OTHER CONTRACT PROVISIONS
--------------------------------------------------------------------------------

REPORTS TO CONTRACT OWNERS
We will send you an annual report within 31 days after the end of each contract
year. The report will show the contract value, cash surrender value, and the
death benefit as of the end of the contract year. The report will also show the
amounts deducted from or added to the contract value since the last report. You
have 30 days to notify our Customer Service Center of any errors or
discrepancies contained in the report or in any confirmation notices. We will
also send you any other reports, notices or documents we are required by law to
furnish to you.

SUSPENSION OF PAYMENTS
The Company reserves the right to delay payment for up to 6 months.

IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is misstated, the
amounts payable or benefits provided by the Contract shall be those that the
premium payment would have bought at the correct age or sex.

GA-109652                            14
<PAGE>

ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a loan but
you should understand that your rights and any beneficiary's rights may be
subject to the terms of the assignment. An assignment may have federal tax
consequences. You must give us satisfactory written notice at our Customer
Service Center in order to make or release an assignment. We are not responsible
for the validity of any assignment.

CONTRACT CHANGES -- APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to qualify the
Contract as an annuity under applicable federal tax law. You will be given
advance notice of such changes.

FREE LOOK
You may cancel your Contract within your 10-day free look period. We deem the
free look period to expire 15 days after we mail the Contract to you. Some
states may require a longer free look period. To cancel, you need to send your
Contract to our Customer Service Center or to the agent from whom you purchased
it. We will refund the contract value. For purposes of the refund during the
free look period, (i) we adjust your contract value for any Market Value
Adjustment, and (ii) then we include a refund of any charges deducted from your
contract value. Because of the potential positive or negative effect of the
Market Value Adjustment, the contract value returned may be greater or less than
the premium payment you paid. Some states require us to return to you the amount
of the paid premium (rather than the adjusted contract value) in which case you
will not be subject to investment risk during the free look period. Your
Contract is void as of the day we receive your Contract and cancellation
request. We determine your contract value at the close of business on the day we
receive your written request.

GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce any surrender
charges. We may also change the minimum premium payment requirement, or offer an
alternative or reduced death benefit.


SELLING THE CONTRACT
Directed Services, Inc. is the principal underwriter and distributor of the
Contract as well as for other contracts issued through Separate Account B and
other separate accounts of Golden American. The principal address of Directed
Services is 1475 Dunwoody Drive, West Chester, Pennsylvania 19380. Directed
Services is a corporation organized under the laws of New York and is a wholly
owned subsidiary of Equitable of Iowa. Directed Services is registered as a
broker-dealer with the SEC under the Securities Exchange Act of 1934, as well as
with securities commissions in the states in which it operates, and is a member
of the National Association of Securities Dealers, Inc. ("NASD").

Directed Services has the authority to enter into selling agreements with other
firms. Directed Services has entered into selling agreements with broker-dealers
to sell the Contracts through registered representatives. Those representatives
are registered with the NASD, and if applicable, also with the states in which
they do business. They also are licensed as insurance agents in the states in
which they do business.

We pay sales commissions to Directed Services for the sale of the Contracts.
Directed Services passes through the entire amount of the sales commission to
the broker-dealer whose registered representative sold the Contract. The maximum
sales commission payable will be approximately 5.5% of the premium payment.


GA-109652                            15
<PAGE>

This commission may be returned if the Contract is not continued through the
first Contract Year.

   --------------------------------------------------------------------------
                          UNDERWRITER COMPENSATION
   --------------------------------------------------------------------------
      NAME OF PRINCIPAL              AMOUNT OF                   OTHER
         UNDERWRITER           COMMISSION TO BE PAID         COMPENSATION
   --------------------------------------------------------------------------
   Directed Services, Inc.         Maximum of 5%         Reimbursement of any
                                         of                covered expenses
                                  premium payment              incurred
                                    except when             by registered
                                      combined              representatives
                                with commissions on          in connection
                               renewal of a guarantee           with the
                                  period or annual           distribution
                                 trail commissions.        of the Contracts.
   --------------------------------------------------------------------------

Certain sales agreements may provide for a combination of a certain percentage
of commission at the time of sale, upon the start of a new guarantee period or
an annual trail commission (which when combined could exceed 5% of total premium
payments).


We may make additional cash payments to broker-dealers for marketing and
educational expenses and for the reimbursement of certain expenses incurred by
registered representatives in connection with the distribution of the Contracts.

We do not pay any additional commissions on the sale or exercise of any of the
optional benefit riders offered in this prospectus.


--------------------------------------------------------------------------------
                                OTHER INFORMATION
--------------------------------------------------------------------------------

STATE REGULATION
We are regulated by the Insurance Department of the State of Delaware. We are
also subject to the insurance laws and regulations of all jurisdictions where we
do business. The Contract offered by this prospectus has been approved where
required by those jurisdictions. We are required to submit annual statements of
our operations, including financial statements, to the Insurance Departments of
the various jurisdictions in which we do business to determine solvency and
compliance with state insurance laws and regulations.

LEGAL PROCEEDINGS
The Company, like other insurance companies, may be involved in lawsuits,
including class action lawsuits. In some class action and other lawsuits
involving insurers, substantial damages have been sought and/or material
settlement payments have been made. We believe that currently there are no
pending or threatened lawsuits that are reasonably likely to have a materially
adverse impact on the Company.

LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R. Tashman, Esquire,
Executive Vice President, General Counsel and Assistant Secretary of Golden
American. Sutherland Asbill & Brennan LLP of Washington, D.C. has provided
advice on certain matters relating to federal securities laws.


EXPERTS
The audited financial statements of Golden American appearing in this prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing in this prospectus and
in the Registration Statement and are included or


GA-109652                            16
<PAGE>

incorporated by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

--------------------------------------------------------------------------------
                           FEDERAL TAX CONSIDERATIONS
--------------------------------------------------------------------------------

The following summary provides a general description of the federal income tax
considerations associated with this Contract and does not purport to be complete
or to cover all tax situations. This discussion is not intended as tax advice.
You should consult your counsel or other competent tax advisers for more
complete information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations as to the
likelihood of continuation of the present federal income tax laws or as to how
they may be interpreted by the IRS.

TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or purchased on a
tax-qualified basis. Qualified Contracts are designed for use by individuals
whose premium payments are comprised solely of proceeds
from and/or contributions under retirement plans that are intended to qualify as
plans entitled to special income tax treatment under Sections 401(a), 403(b),
408, or 408A of the Code. The ultimate effect of federal income taxes on the
amounts held under a Contract, or annuity payments, depends on the type of
retirement plan, on the tax and employment status of the individual concerned,
and on our tax status. In addition, certain requirements must be satisfied in
purchasing a qualified Contract with proceeds from a tax-qualified plan and
receiving distributions from a qualified Contract in order to continue receiving
favorable tax treatment. Some retirement plans are subject to distribution and
other requirements that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contract comply with applicable law. Therefore, you should seek
competent legal and tax advice regarding the suitability of a Contract for your
particular situation. The following discussion assumes that qualified Contracts
are purchased with proceeds from and/or contributions under retirement plans
that qualify for the intended special federal income tax treatment.

TAX STATUS OF THE CONTRACTS
     REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for
federal income tax purposes, the Code requires any nonqualified Contract to
contain certain provisions specifying how your interest in the Contract will be
distributed in the event of your death. The non-qualified Contracts contain
provisions that are intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We intend to
review such provisions and modify them if necessary to assure that they comply
with the applicable requirements when such requirements are clarified by
regulation or otherwise.

Other rules may apply to Qualified Contracts.

The following discussion assumes that the Contracts will qualify as annuity
contracts for federal income tax purposes.

TAX TREATMENT OF ANNUITIES
     IN GENERAL. We believe that if you are a natural person you will generally
not be taxed on increases in the value of a Contract until a distribution occurs
or until annuity payments begin. (For these purposes, the agreement to assign or
pledge any portion of the contract value, and, in the case of a qualified
Contract, any portion of an interest in the qualified plan, generally will be
treated as a distribution.)

TAXATION OF NON-QUALIFIED CONTRACTS
     NON-NATURAL PERSON. The owner of any annuity contract who is not a natural
person generally must include in income any increase in the excess of the
contract value over the "investment in the contract" (generally, the premiums or
other consideration you paid for the contract less any nontaxable withdrawals)

GA-109652                            17
<PAGE>

during the taxable year. There are some exceptions to this rule and a
prospective contract owner that is not a natural person may wish to discuss
these with a tax adviser. The following discussion generally applies to
Contracts owned by natural persons.

     WITHDRAWALS. When a withdrawal from a non-qualified Contract occurs, the
amount received will be treated as ordinary income subject to tax up to an
amount equal to the excess (if any) of the contract value (unreduced by the
amount of any surrender charge) immediately before the distribution over the
contract owner's investment in the Contract at that time. The tax treatment of
Market Value Adjustments is uncertain. You should consult a tax adviser if you
are considering taking a withdrawal from your Contract in circumstances where a
Market Value Adjustment would apply.

In the case of a surrender under a non-qualified Contract, the amount received
generally will be taxable only to the extent it exceeds the contract owner's
investment in the Contract.

     PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution from a
non-qualified Contract, there may be imposed a federal tax penalty equal to 10%
of the amount treated as income. In general, however, there is no penalty on
distributions:

     o    made on or after the taxpayer reaches age 59 1/2;

     o    made on or after the death of a contract owner;

     o    attributable to the taxpayer's becoming disabled; or

     o    made as part of a series of substantially equal periodic payments for
          the life (or life expectancy) of the taxpayer.

Other exceptions may be applicable under certain circumstances and special rules
may be applicable in connection with the exceptions enumerated above. A tax
adviser should be consulted with regard to exceptions from the penalty tax.

     ANNUITY PAYMENTS. Although tax consequences may vary depending on the
payment option elected under an annuity contract, a portion of each annuity
payment is generally not taxed and the remainder is taxed as ordinary income.
The non-taxable portion of an annuity payment is generally determined in a
manner that is designed to allow you to recover your investment in the Contract
ratably on a tax-free basis over the expected stream of annuity payments, as
determined when annuity payments start. Once your investment in the Contract has
been fully recovered, however, the full amount of each annuity payment is
subject to tax as ordinary income.

     TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a
Contract because of your death or the death of the annuitant. Generally, such
amounts are includible in the income of recipient as follows: (i) if distributed
in a lump sum, they are taxed in the same manner as a surrender of the Contract,
or (ii) if distributed under a payment option, they are taxed in the same way as
annuity payments.

     TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT. A
transfer or assignment of ownership of a Contract, the designation of an
annuitant, or payee other than an owner, the selection of certain dates for
commencement of the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A contract owner
contemplating any such transfer, assignment, designation or exchange, should
consult a tax advisor as to the tax consequences.

     WITHHOLDING. Annuity distributions are generally subject to withholding for
the recipient's federal income tax liability. Recipients can generally elect,
however, not to have tax withheld from distributions.

     MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts that are
issued by us (or our affiliates) to the same contract owner during any calendar
year are treated as one non-qualified deferred annuity contract for purposes of
determining the amount includible in such contract owner's income when a taxable
distribution occurs.

GA-109652                            18
<PAGE>

TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified plans. The
tax rules applicable to participants in these qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from: contributions in excess
of specified limits; distributions before age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; and in other specified circumstances. Therefore, no
attempt is made to provide more than general information about the use of the
Contracts with the various types of qualified retirement plans. Contract owners,
annuitants, and beneficiaries are cautioned that the rights of any person to any
benefits under these qualified retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contract, but we shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the Contract, unless the Company
consents.

     DISTRIBUTIONS. Annuity payments are generally taxed in the same manner as
under a non-qualified Contract. When a withdrawal from a qualified Contract
occurs, a pro rata portion of the amount received is taxable, generally based on
the ratio of the contract owner's investment in the Contract (generally, the
premiums or other consideration paid for the Contract) to the participant's
total accrued benefit balance
under the retirement plan. For qualified Contracts, the investment in the
Contract can be zero. For Roth IRAs, distributions are generally not taxed,
except as described below. For qualified plans under Section 401(a) and 403(b),
the Code requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) (i) reaches age 70 1/2 or (ii) retires, and
must be made in a specified form or manner. If the plan participant is a "5
percent owner" (as defined in the Code), distributions generally must begin no
later than April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the contract
owner (or plan participant) reaches age 701/2. Roth IRAs under Section 408A do
not require distributions at any time before the contract owner's death.

     WITHHOLDING. Distributions from certain qualified plans generally are
subject to withholding for the contract owner's federal income tax liability.
The withholding rates vary according to the type of distribution and the
contract owner's tax status. The contract owner may be provided the opportunity
to elect not to have tax withheld from distributions. "Eligible rollover
distributions" from section 401(a) plans and section 403(b) tax-sheltered
annuities are subject to a mandatory federal income tax withholding of 20%. An
eligible rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the Code or
distributions in a specified annuity form. The 20% withholding does not apply,
however, if the contract owner chooses a "direct rollover" from the plan to
another tax-qualified plan or IRA.

Brief descriptions of the various types of qualified retirement plans in
connection with a Contract follow. We will endorse the Contract as necessary to
conform it to the requirements of such plan.

CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish various
types of retirement plans for employees, and permits self-employed individuals
to establish these plans for themselves and their employees. These retirement
plans may permit the purchase of the Contracts to accumulate retirement savings
under the plans. Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or transferred
to any individual as a means to provide benefit payments, unless the plan
complies with all legal requirements applicable to such benefits before transfer
of the Contract. Employers intending to use the Contract with such plans should
seek competent advice.

INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA." These IRAs are subject to limits on the amount that can be contributed,
the deductible amount of the contribution, the persons who may be eligible, and
the time when

GA-109652                            19
<PAGE>

distributions commence. Also, distributions from certain other
types of qualified retirement plans may be "rolled over" or transferred on a
tax-deferred basis into an IRA. There are significant restrictions on rollover
or transfer contributions from Savings Incentive Match Plans (SIMPLE), under
which certain employers may provide contributions to IRAs on behalf of their
employees, subject to special restrictions. Employers may establish Simplified
Employee Pension (SEP) Plans to provide IRA contributions on behalf of their
employees. Sales of the Contract for use with IRAs may be subject to special
requirements of the IRS.

ROTH IRA
Section 408A of the Code permits certain eligible individuals to contribute to a
Roth IRA. Contributions to a Roth IRA, which are subject to certain limitations,
are not deductible, and must be made in cash or as a rollover or transfer from
another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth
IRA may be subject to tax, and other special rules may apply. Distributions from
a Roth IRA generally are not taxed, except that, once aggregate distributions
exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply
to distributions made (1) before age 59 1/2 (subject to certain exceptions) or
(2) during the five taxable years starting with the year in which the first
contribution is made to any Roth IRA. A 10% penalty tax may apply to amounts
attributable to a conversion from an IRA if they are distributed during the five
taxable years beginning with the year in which the conversion was made.

TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section 501(c)(3)
organizations and public schools to exclude from their gross income the premium
payments made, within certain limits, on a Contract that will provide an annuity
for the employee's retirement. These premium payments may be subject to FICA
(Social Security) tax. Distributions of (1) salary reduction contributions made
in years beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings on amounts held as of the last year beginning before January 1,
1989, are not allowed prior to age 59 1/2, separation from service, death or
disability. Salary reduction contributions may also be distributed upon
hardship, but would generally be subject to penalties.

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

POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is always the
possibility that the tax treatment of the Contracts could change by legislation
or other means. It is also possible that any change could be retroactive (that
is, effective before the date of the change). You should consult a tax adviser
with respect to legislative developments and their effect on the Contract.

GA-109652                            20
<PAGE>

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          MORE INFORMATION ABOUT GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------

SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for Golden American should be read in
conjunction with the financial statements and notes thereto included in this
prospectus.

On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable of Iowa"), according to a merger agreement among Equitable of Iowa,
PFHI and ING Groep N.V. (the "ING acquisition"). On August 13, 1996, Equitable
of Iowa acquired all of the outstanding capital stock of BT Variable, Inc., then
the parent of Golden American (the "Equitable acquisition"). For financial
statement purposes, the ING acquisition was accounted for as a purchase
effective October 25, 1997 and the Equitable acquisition was accounted for as a
purchase effective August 14, 1996. As a result, the financial data presented
below for periods after October 24, 1997, are presented on the Post-Merger new
basis of accounting, for the period August 14, 1996 through October 24, 1997,
are presented on the Post-Acquisition basis of accounting, and for August 13,
1996 and prior periods are presented on the Pre-Acquisition basis of accounting.

<TABLE>
<CAPTION>
                                                             SELECTED GAAP BASIS FINANCIAL DATA
                                                                       (IN THOUSANDS)

                                                                         POST-MERGER
                                                 -------------------------------------------------------------
                                                                                                For the Period
                                                 For the Year    For the Year    For the Year     October 25,
                                                    Ended           Ended           Ended        1997 through
                                                 December 31,    December 31,    December 31,    December 31,
                                                     2000            1999            1998            1997
                                                 -----------     -----------     -----------     -----------
<S>                                              <C>             <C>             <C>             <C>
Annuity and Interest
   Sensitive Life  Product Charges .........     $   144,877     $    82,935     $    39,119     $     3,834
Net Income (Loss) before  Federal Income Tax     $    32,862     $    19,737     $    10,353     $      (279)
Net Income (Loss) ..........................     $    19,180     $    11,214     $     5,074     $      (425)
Total Assets ...............................     $11,852,677     $ 9,392,857     $ 4,754,623     $ 2,446,395
Total Liabilities ..........................     $11,235,540     $ 8,915,008     $ 4,400,729     $ 2,219,082
Total Stockholder's Equity .................     $   617,137     $   477,849     $   353,894     $   227,313
</TABLE>

<TABLE>
<CAPTION>
                                                       POST-ACQUISITION           PRE-ACQUISITION
                                               ---------------------------------  ---------------
                                               For the Period     For the Period  For the Period
                                               January 1,1997       August 14,      January 1,
                                                   through         1996 through    1996 through
                                                 October 24,       December 31,     August 13,
                                                    1997              1996             1996
                                               --------------     --------------  ---------------
<S>                                              <C>               <C>              <C>
Annuity and Interest
   Sensitive Life  Product Charges .........     $   18,288        $    8,768       $   12,259
Net Income (Loss) before  Federal Income Tax     $     (608)       $      570       $    1,736
Net Income (Loss) ..........................     $      729        $      350       $    3,199
Total Assets ...............................            N/A        $1,677,899              N/A
Total Liabilities ..........................            N/A        $1,537,415              N/A
Total Stockholder's Equity .................            N/A        $  140,484              N/A
</TABLE>

GA-109652                            21
<PAGE>

BUSINESS ENVIRONMENT
The current business and regulatory environment presents many challenges to the
insurance industry. The variable annuity competitive environment remains intense
and is dominated by a number of large highly rated insurance companies.
Increasing competition from traditional insurance carriers as well as banks and
mutual fund companies offers consumers many choices. However, overall demand for
variable insurance products remains strong for several reasons including: low
levels of inflation, moderate interest rate levels, a growing U.S. economy; an
aging U.S. population that is increasingly concerned about retirement, estate
planning, and maintaining their standard of living in retirement; and potential
reductions in government and employer-provided benefits at retirement, as well
as lower public confidence in the adequacy of those benefits.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
The purpose of this section is to discuss and analyze Golden American Life
Insurance Company's ("Golden American") consolidated results of operations. In
addition, some analysis and information regarding financial condition and
liquidity and capital resources is provided. This analysis should be read
jointly with the consolidated financial statements, related notes, and the
Cautionary Statement Regarding Forward-Looking Statements, which appear
elsewhere in this report. Golden American reports financial results on a
consolidated basis. The consolidated financial statements include the accounts
of Golden American and its wholly owned subsidiary, First Golden American Life
Insurance Company of New York ("First Golden," and collectively with Golden
American, the "Companies").

                              RESULTS OF OPERATION

2000 COMPARED TO 1999

PREMIUMS
                                             PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31       2000      CHANGE     CHANGE        1999
                                     ----    ----------   ------        ----
                                              (Dollars in millions)
Variable annuity premiums:
   Separate account ...........   $  1,307.3   (48.0)%  $ (1,204.4)  $  2,511.7
   Fixed account ..............        793.1     2.9          22.4        770.7
                                  ----------   -----    ----------   ----------
Total variable annuity premiums      2,100.4   (36.0)     (1,182.0)     3,282.4
Variable life premiums ........          1.6   (81.8)         (7.0)         8.6
                                  ----------   -----    ----------   ----------
Total premiums ................   $  2,102.0   (36.1)%  $ (1,189.0)  $  3,291.0
                                  ==========   =====    ==========   ==========

For the Companies' variable insurance contracts, premiums collected are not
reported as revenues, but as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment spread and
product charges.

Variable annuity separate account premiums decreased 48.0% in 2000. Excluded
from the variable annuity separate account premiums above are $1,787.9 million
and $97.9 million for the years ended December 31, 2000 and 1999, respectively,
related to modified coinsurance agreements. The fixed account portion of the
Companies' variable annuity premiums increased 2.9% in 2000. Excluding the
effect of the modified coinsurance agreements, the increase in premiums resulted
from increased sales of existing annuity products and from the introduction of a
new annuity product during 2000 called GoldenSelect Guarantee Annuity.

Variable life premiums decreased 81.8% in 2000. In August 1999, Golden American
discontinued offering variable life products, but the Companies continue to
accept additional premiums from existing policyholders.

GA-109652                            22
<PAGE>

Premiums, net of reinsurance, for variable products from a significant
broker/dealer having at least ten percent of total sales for the year ended
December 31, 2000, totaled $235.3 million, or 11% of total net premiums compared
to $918.4 million, or 28%, from two significant broker/dealers for the year
ended December 31, 1999. Gross premiums for variable products from two
significant broker/dealers having at least ten percent of total sales for the
year ended December 31, 2000, totaled $831.0 million, or 21% of total gross
premiums compared to $1,018.9 million, or 30%, from two significant
broker/dealers for the year ended December 31, 1999.

<TABLE>
<CAPTION>
REVENUES
                                                          PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31                  2000        CHANGE      CHANGE       1999
                                                ----      ----------    ------       ----
                                                          (Dollars in millions)
<S>                                           <C>           <C>        <C>         <C>
Annuity and interest sensitive life product
   charges ................................   $  144.9        74.7%    $   62.0    $   82.9
Management fee revenue ....................       23.0       106.4         11.9        11.1
Net investment income .....................       64.1         8.4          4.9        59.2
Realized gains (losses) on investments ....       (6.6)     (124.2)        (3.7)       (2.9)
                                              --------      ------     --------    --------
                                              $  225.4        50.0%    $   75.1    $  150.3
                                              ========      ======     ========    ========
</TABLE>

Total revenues increased 50.0%, or $75.1 million, to $225.4 million in 2000.
Annuity and interest sensitive life product charges increased 74.7%, or $62.0
million, to $144.9 million in 2000, primarily due to additional fees earned from
the increasing block of business in the separate accounts.

Golden American provides certain managerial and supervisory services to Directed
Services, Inc. ("DSI"), a wholly owned subsidiary of EIC. The fee paid to Golden
American for these services, which is calculated as a percentage of average
assets in the variable separate accounts, was $21.3 million for 2000 and $10.1
million for 1999. This increase is due to the increasing assets in the separate
accounts and renegotiation of the fee paid by DSI to Golden American.

Net investment income increased 8.4%, or $4.9 million, to $64.1 million in 2000
from $59.2 million in 1999, due to increasing investment yields, as well as a
larger average amount of assets backing the fixed account options within the
variable products.

During 2000, the Companies had net realized losses on investments of $6.6
million, mainly due to sales of fixed maturities, including a $142,000 write
down of an impaired fixed maturity. In 1999, the Companies had net realized
losses on investments of $2.9 million, including a $1.6 million write down of
two impaired fixed maturities.

GA-109652                            23
<PAGE>

<TABLE>
<CAPTION>
EXPENSES
                                                                    PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31                          2000          CHANGE      CHANGE       1999
                                                        ----        ----------    ------       ----
                                                                      (Dollars in millions)
<S>                                                   <C>            <C>         <C>         <C>
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances .......   $  195.1          11.3%    $   19.8    $  175.3
      Benefit claims incurred in excess of
         account balances .........................        4.9         (22.4)        (1.4)        6.3
   Underwriting, acquisition, and insurance
      expenses:
      Commissions .................................      213.7          13.4         25.3       188.4
      General expenses ............................       84.9          41.1         24.7        60.2
      Insurance taxes, state licenses, and fees ...        4.5          12.5          0.5         4.0
      Policy acquisition costs deferred ...........     (168.4)        (51.4)       178.0      (346.4)
      Expenses and charges reimbursed under
         modified coinsurance agreements ..........     (225.8)      2,341.7       (216.6)       (9.2)
      Amortization:
         Deferred policy acquisition costs ........       55.2          66.5         22.1        33.1
         Value of purchased insurance in force ....        4.8         (23.0)        (1.4)        6.2
         Goodwill .................................        3.8          --           --           3.8
                                                      --------       -------     --------    --------
                                                      $  172.7          41.9%    $   51.0    $  121.7
                                                      ========       =======     ========    ========
</TABLE>

Total insurance benefits and expenses increased 41.9%, or $51.0 million, in 2000
from $121.7 million in 1999. Interest credited to account balances increased
11.3%, or $19.8 million, in 2000 from $175.3 million in 1999. The premium credit
on the Premium Plus variable annuity product increased $8.2 million to $132.0
million at December 31, 2000. The remaining increase in interest credited
relates to higher average account balances and higher average credited rates
associated with the Companies' fixed account options within the variable
products.

Commissions increased 13.4%, or $25.3 million, in 2000 from $188.4 million in
1999 due to increased sales of the fixed and separate account options in 2000.
Insurance taxes, state licenses, and fees increased 12.5%, or $0.5 million, in
2000 from $4.0 million in 1999. Changes in commissions and insurance taxes,
state licenses, and fees are generally related to changes in the level and
composition of variable product sales. Most costs incurred as the result of
sales have been deferred, thus having very little impact on current earnings.

General expenses increased 41.1%, or $24.7 million, in 2000 from $60.2 million
in 1999. Management expects general expenses to continue to increase in 2001 as
a result of the emphasis on expanding the salaried wholesaler distribution
network and the growth in sales. The Companies use a network of wholesalers to
distribute products, and the salaries and sales bonuses of these wholesalers are
included in general expenses. The portion of these salaries and related expenses
that varies directly with production levels is deferred thus having little
impact on current earnings. The increase in general expenses was partially
offset by reimbursements received from DSI, Equitable Life Insurance Company of
Iowa ("Equitable Life"), an affiliate, ING Mutual Funds Management Co., LLC, an
affiliate, Security Life of Denver Insurance Company, an affiliate, Southland
Life Insurance Company, an affiliate, and United Life & Annuity Insurance
Company, an affiliate, for certain advisory, computer, and other resources and
services provided by Golden American.

The Companies' previous balances of deferred policy acquisition costs ("DPAC"),
value of purchased insurance in force ("VPIF"), and unearned revenue reserve
were eliminated and a new asset of $44.3 million representing VPIF was
established for all policies in force at the merger date. During 2000, VPIF
established at the merger date of the Companies' Parent and ING, was adjusted to
reduce amortization by $1.6 million to reflect changes in the assumptions
related to the timing of estimated gross profits. During 1999, VPIF was adjusted
to increase amortization by $0.7 million to reflect changes in the assumptions
related to the timing of future gross profits. Amortization of DPAC increased
$22.1 million, or 66.5%, in 2000. This increase

GA-109652                            24
<PAGE>

resulted from a growth in
deferred policy acquisition costs generated by expenses associated with the
large sales volume experienced since December 31, 1999. Deferred policy
acquisition costs decreased $178.0 million or 51.4% for the year ended December
31, 2000. This decrease was due to a modified coinsurance agreement which was
entered into during the second quarter of 2000, and which resulted in a $223.7
million decrease in deferred policy acquisition costs. Based on current
conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF as
of December 31, 2000, is $3.9 million in 2001, $3.6 million in 2002, $3.0
million in 2003, $2.4 million in 2004, and $1.9 million in 2005. Actual
amortization may vary based upon changes in assumptions and experience.

Expenses and charges reimbursed under modified coinsurance agreements increased
by $216.6 million to $225.8 million during 2000 as compared to the year ended
December 31, 1999. This was primarily due to a modified coinsurance agreement
which was entered into during the second quarter of 2000, with an affiliate,
Equitable Life, covering a part of the business issued after January 1, 2000.
This reinsurance agreement contributed $218.8 million to expenses and charges
reimbursed under modified coinsurance agreements during the year ended December
31, 2000. This was offset by a corresponding decrease in deferred policy
acquisition costs and reimbursement of non-deferrable costs related to policies
reinsured under this agreement.

Interest expense increased 123.4%, or $11.0 million, in 2000 from $8.9 million
in 1999. Interest expense on a $25 million surplus note issued December 1996 and
expiring December 2026 was $2.1 million for the year ended December 31, 2000,
unchanged from the same period of 1999. Interest expense on a $60 million
surplus note issued in December 1998 and expiring December 2028 was $4.4 million
for the year ended December 31, 2000, unchanged from the same period of 1999.
Interest expense on a $75 million surplus note, issued September 30, 1999 and
expiring September 29, 2029 was $5.8 million for the year ended December 31,
2000, and $1.5 million for the year ended December 31, 1999. Interest expense on
a $50 million surplus note, issued December 1999 and expiring December 2029 was
$4.1 million for the year ended December 31, 2000. Interest expense on a $35
million surplus note issued December 1999 and expiring December 2029 was $3.0
million for the year ended December 31, 2000. Golden American also paid $0.4
million in 2000 and $0.8 million in 1999 to ING America Insurance Holdings, Inc.
("ING AIH") for interest on a reciprocal loan agreement. Interest expense on a
revolving note payable with SunTrust Bank, Atlanta was $0.1 million and $0.2
million for the years ended December 31, 2000 and 1999, respectively.

INCOME. Net income for 2000 was $19.2 million, an increase of $8.0 million from
$11.2 million for 1999.

Comprehensive income for 2000 was $24.3 million, an increase of $21.3 million
from comprehensive income of $3.0 million for 1999.

1999 COMPARED TO 1998

PREMIUMS
                                            PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31       1999     CHANGE      CHANGE        1998
                                     ----   ----------    ------        ----
                                              (Dollars in millions)
Variable annuity premiums:
   Separate account ...........   $  2,511.7    71.9%   $  1,050.5   $  1,461.2
   Fixed account ..............        770.7    30.9         182.0        588.7
                                  ----------   -----    ----------   ----------
Total variable annuity premiums      3,282.4    60.1       1,232.5      2,049.9
Variable life premiums ........          8.6   (37.8)         (5.2)        13.8
                                  ----------   -----    ----------   ----------
Total premiums ................   $  3,291.0    59.5%   $  1,227.3   $  2,063.7
                                  ==========   =====    ==========   ==========

For the Companies' variable insurance contracts, premiums collected are not
reported as revenues, but as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment spread and
product charges.

GA-109652                            25
<PAGE>

Variable annuity separate account premiums increased 71.9% in 1999. The fixed
account portion of the Companies' variable annuity premiums increased 30.9% in
1999. These increases resulted from increased sales of the Premium Plus variable
annuity product.

Variable life premiums decreased 37.8% in 1999. In August 1999, Golden American
discontinued offering variable life products.

Premiums, net of reinsurance, for variable products from two significant
broker/dealers each having at least ten percent of total sales for the year
ended December 31, 1999 totaled $918.4 million, or 28% of premiums compared to
$528.9 million, or 26%, from two significant broker/dealers for the year ended
December 31, 1998.

<TABLE>
<CAPTION>
REVENUES
                                                         PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31                  1999       CHANGE     CHANGE     1998
                                                ----     ----------   ------     ----
                                                           (Dollars in millions)
<S>                                           <C>           <C>      <C>        <C>
Annuity and interest sensitive life product
   charges ................................   $   82.9      112.0%   $  43.8    $  39.1
Management fee revenue ....................       11.1      131.2        6.3        4.8
Net investment income .....................       59.2       39.3       16.7       42.5
Realized gains (losses) on investments ....       (2.9)      96.1       (1.4)      (1.5)
                                              --------      -----    -------    -------
                                              $  150.3       77.0%   $  65.4    $  84.9
                                              ========      =====    =======    =======
</TABLE>

Total revenues increased 77.0%, or $65.4 million, to $150.3 million in 1999.
Annuity and interest sensitive life product charges increased 112.0%, or $43.8
million, to $82.9 million in 1999, primarily due to additional fees earned from
the increasing block of business in the separate accounts.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid to Golden American for these services, which is calculated as a
percentage of average assets in the variable separate accounts, was $10.1
million for 1999 and $4.8 million for 1998.

Net investment income increased 39.3%, or $16.7 million, to $59.2 million in
1999 from $42.5 million in 1998, due to growth in invested assets from December
31, 1998, increasing interest rates, and a relative increase in below investment
grade investments.

During 1999, the Company had net realized losses on investments of $2.9 million,
which includes a $1.6 million write down of two impaired fixed maturities,
compared to net realized losses on investments of $1.5 million in 1998 which
included a $1.0 million write down of two impaired fixed maturities.

GA-109652                            26
<PAGE>

<TABLE>
<CAPTION>
EXPENSES
                                                              PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31                       1999       CHANGE     CHANGE      1998
                                                     ----     ----------   ------      ----
                                                             (Dollars in millions)
<S>                                                <C>           <C>      <C>        <C>
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances ....   $  175.3       84.7%   $   80.4   $   94.9
      Benefit claims incurred in excess of
         account balances ......................        6.3      200.2         4.2        2.1
   Underwriting, acquisition, and insurance
      expenses:
      Commissions ..............................      188.4       55.5        67.2      121.2
      General expenses .........................       60.2       60.2        22.6       37.6
      Insurance taxes, state licenses, and fees         4.0       (4.0)       (0.1)       4.1
      Policy acquisition costs deferred ........     (346.4)      75.1      (148.6)    (197.8)
      Expenses and charges reimbursed under
         modified coinsurance agreements .......       (9.2)      64.3        (3.6)      (5.6)
      Amortization:
         Deferred policy acquisition costs .....       33.1      543.3        28.0        5.1
         Value of purchased insurance in force .        6.2       32.0         1.5        4.7
         Goodwill ..............................        3.8       --          --          3.8
                                                   --------      -----    --------   --------
                                                   $  121.7       73.6%   $   51.6   $   70.1
                                                   ========      =====    ========   ========
</TABLE>

Total insurance benefits and expenses increased 73.6%, or $51.6 million, in 1999
from $70.1 million in 1998. Interest credited to account balances increased
84.7%, or $80.4 million, in 1999 from $94.9 million in 1998. The premium credit
on the Premium Plus variable annuity product increased $69.3 million to $123.8
million at December 31, 1999. The bonus interest on the fixed account increased
$3.0 million to $10.9 million at December 31, 1999. The remaining increase in
interest credited relates to higher account balances associated with the
Companies' fixed account options within the variable products.

Commissions increased 55.5%, or $67.2 million, in 1999 from $121.2 million in
1998. Insurance taxes, state licenses, and fees decreased 4.0%, or $0.1 million,
in 1999 from $4.1 million in 1998. Changes in commissions and insurance taxes,
state licenses, and fees are generally related to changes in the level and
composition of variable product sales. Insurance taxes, state licenses, and fees
are impacted by several other factors, which include an increase in FICA taxes
primarily due to bonuses and expenses for the triennial insurance department
examination of Golden American, which were offset by a decrease in 1999 of
guaranty fund assessments paid. Most costs incurred as the result of sales have
been deferred, thus having very little impact on current earnings.

General expenses increased 60.2%, or $22.6 million, in 1999 from $37.6 million
in 1998. Management expects general expenses to continue to increase in 2000 as
a result of the emphasis on expanding the salaried wholesaler distribution
network and the growth in sales. The Companies use a network of wholesalers to
distribute products, and the salaries and sales bonuses of these wholesalers are
included in general expenses. The portion of these salaries and related expenses
that varies directly with production levels is deferred thus having little
impact on current earnings. The increase in general expenses was partially
offset by reimbursements received from DSI, Equitable Life, ING Mutual Funds
Management Co., LLC, an affiliate, Security Life of Denver Insurance Company, an
affiliate, Southland Life Insurance Company, an affiliate, and United Life &
Annuity Insurance Company, an affiliate, for certain advisory, computer, and
other resources and services provided by Golden American.

The Companies' previous balances of deferred policy acquisition costs ("DPAC"),
value of purchased insurance in force ("VPIF"), and unearned revenue reserve
were eliminated and a new asset of $44.3 million representing VPIF was
established for all policies in force at the merger date. During 1999, VPIF was
adjusted to increase amortization by $0.7 million to reflect changes in the
assumptions related to the timing of estimated gross profits. During 1998, VPIF
decreased $2.7 million to adjust the value of other receivables

GA-109652                            27
<PAGE>

and increased $0.2 million as a result of an adjustment to the merger costs.
During 1998, VPIF was adjusted to reduce amortization by $0.2 million to reflect
changes in the assumptions related to the timing of future gross profits.
Amortization of DPAC increased $28.0 million, or 543.3%, in 1999. This increase
resulted from growth in policy acquisition costs deferred from $197.8 million at
December 31, 1998 to $346.4 million at December 31, 1999, which was generated by
expenses associated with the large sales volume experienced since December 31,
1998. Based on current conditions and assumptions as to the impact of future
events on acquired policies in force, the expected approximate net amortization
relating to VPIF as of December 31, 1999 is $4.0 million in 2000, $3.6 million
in 2001, $3.3 million in 2002, $2.8 million in 2003, and $2.3 million in 2004.
Actual amortization may vary based upon changes in assumptions and experience.

Expenses and charges reimbursed under modified coinsurance agreements increased
by $3.6 million due primarily to income received under a modified reinsurance
agreement with an unaffiliated reinsurer.

Interest expense increased 102.6%, or $4.5 million, in 1999 from $4.4 million in
1998. Interest expense on a $25 million surplus note issued December 1996 and
expiring December 2026 was $2.1 million for the year ended December 31, 1999,
unchanged from the same period of 1998. Interest expense on a $60 million
surplus note issued in December 1998 and expiring December 2028 was $4.3 million
for the year ended December 31, 1999. Interest expense on a $75 million surplus
note, issued September 30, 1999 and expiring September 29, 2029 was $1.5 million
for the year ended December 31, 1999. Golden American also paid $0.8 million in
1999 and $1.8 million in 1998 to ING America Insurance Holdings, Inc. ("ING
AIH") for interest on a reciprocal loan agreement. Interest expense on a
revolving note payable with SunTrust Bank, Atlanta was $0.2 million and $0.3
million for the years ended December 31, 1999 and 1998, respectively. In
addition, Golden American incurred interest expense of $0.2 million in 1998 on a
line of credit with Equitable.

INCOME. Net income for 1999 was $11.2 million, an increase of $6.1 million from
$5.1 million for 1998.

Comprehensive income for 1999 was $3.0 million, a decrease of $0.9 million from
comprehensive income of $3.9 million for 1998.

                               FINANCIAL CONDITION

RATINGS. Currently, the Companies' ratings are A+ by A. M. Best Company, AA+ by
Fitch IBCA, Duff & Phelps Credit Rating Company, and AA+ by Standard & Poor's
Rating Services ("Standard & Poor's").

INVESTMENTS. The financial statement carrying value and amortized cost basis of
the Companies' total investments decreased slightly in 2000. All of the
Companies' investments, other than mortgage loans on real estate, are carried at
fair value in the Companies' financial statements. The decrease in the carrying
value of the Companies' investment portfolio was due to changes in unrealized
appreciation and depreciation of fixed maturities, offset by net sales. The
decrease in the cost basis of the Companies' investment portfolio resulted from
the sale of assets to support net transfers of policyholders from the Companies'
fixed account options to the separate account options, and a shift towards
short-term investments. The Companies manage the growth of insurance operations
in order to maintain adequate capital ratios. To support the fixed account
options of the Companies' variable insurance products, cash flow was invested
primarily in fixed maturities, short-term investments and mortgage loans on real
estate.

At December 31, 2000, the Companies investments had a yield of 6.7%. The
Companies estimate the total investment portfolio, excluding policy loans, had a
fair value approximately equal to 99.3% of amortized cost value at December 31,
2000.

Fixed Maturities: At December 31, 2000, the Companies had fixed maturities with
an amortized cost of $798.8 million and an estimated fair value of $792.6
million. The Companies classify 100% of securities as available for sale. Net
unrealized depreciation of fixed maturities of $6.2 million comprised of gross
appreciation of $5.8 million and gross depreciation of $12.0 million.
Depreciation of $1.5 million was included

GA-109652                            28
<PAGE>

in stockholder's equity at December 31, 2000 (net of adjustments of
$0.8 million to VPIF, $3.1 million to DPAC, and $0.8 million to deferred
taxes).

The individual securities in the Companies' fixed maturities portfolio (at
amortized cost) include investment grade securities, which include securities
issued by the U.S. government, its agencies, and corporations that are rated at
least A- by Standard & Poor's ($519.9 million or 65.1%), that are rated BBB+ to
BBB- by Standard & Poor's ($117.9 million or 14.7%), and below investment grade
securities, which are securities issued by corporations that are rated BB+ to B-
by Standard & Poor's ($53.5 million or 6.7%). Securities not rated by Standard &
Poor's had a National Association of Insurance Commissioners ("NAIC") rating of
1, 2, 3, 4, or 5 ($106.9 million or 13.4%) and investments with a rating of 6 on
which impairment writedowns have been recognized ($0.6 million or 0.1%). The
Companies' fixed maturity investment portfolio had a combined yield at amortized
cost of 6.8% December 31, 2000. Fixed maturities rated BBB+ to BBB- may have
speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to
make principal and interest payments than is the case with higher rated fixed
maturities.

At December 31, 2000, the amortized cost value of the Companies' total
investment in below investment grade securities, excluding mortgage-backed
securities, was $65.1 million, or 6.4%, of the Companies' investment portfolio.
The Companies intend to purchase additional below investment grade securities,
but do not expect the percentage of the portfolio invested in such securities to
exceed 10% of the investment portfolio. At December 31, 2000, the yield at
amortized cost on the Companies' below investment grade portfolio was 8.2%
compared to 6.6% for the Companies' investment grade corporate bond portfolio.
The Companies estimate the fair value of the below investment grade portfolio
was $60.2 million, or 92.6% of amortized cost value, at December 31, 2000.

Below investment grade securities have different characteristics than investment
grade corporate debt securities. Risk of loss upon default by the borrower is
significantly greater with respect to below investment grade securities than
with other corporate debt securities. Below investment grade securities are
generally unsecured and are often subordinated to other creditors of the issuer.
Also, issuers of below investment grade securities usually have higher levels of
debt and are more sensitive to adverse economic conditions, such as a recession
or increasing interest rates, than are investment grade issuers. The Companies
attempt to reduce the overall risk in the below investment grade portfolio, as
in all investments, through careful credit analysis, strict investment policy
guidelines, and diversification by company and by industry.

The Companies analyze the investment portfolio, including below investment grade
securities, at least quarterly in order to determine if the Companies' ability
to realize the carrying value on any investment has been impaired. For debt and
equity securities, if impairment in value is determined to be other than
temporary (i.e. if it is probable the Companies will be unable to collect all
amounts due according to the contractual terms of the security), the cost basis
of the impaired security is written down to fair value, which becomes the new
cost basis. The amount of the write-down is included in earnings as a realized
loss. Future events may occur, or additional or updated information may be
received, which may necessitate future write-downs of securities in the
Companies' portfolio. Significant write-downs in the carrying value of
investments could materially adversely affect the Companies' net income in
future periods.

In 2000, fixed maturities designated as available for sale with a combined
amortized cost of $211.3 million were sold, called, or repaid by their issuers.
In total, net pre-tax losses from sales, calls, and repayments of fixed
maturities amounted to $6.1 million in 2000, excluding the $142,000 pre-tax loss
recognized in June 2000 to reduce the carrying value of an impaired bond to its
net realizable value of $315,000.

Equity Securities: Equity securities at market represent 0.7% of the fair value
of the Companies' investment portfolio. At December 31, 2000, the Companies
owned equity securities with a cost of $8.6 million and an estimated fair value
of $6.8 million. Net unrealized depreciation of equity securities was comprised
entirely of gross depreciation of $1.8 million. Equity securities are primarily
comprised of investments in shares of the mutual funds underlying the Companies'
registered separate accounts.

Mortgage Loans on Real Estate: Mortgage loans on real estate represent 9.9% of
the Companies' investment portfolio. Mortgages outstanding at amortized cost
were $99.9 million at December 31, 2000 with an

GA-109652                            29
<PAGE>

estimated fair value of $100.5 million. The Companies' mortgage loan
portfolio includes 56 loans with an average size of $1.8 million and
average seasoning of 0.6 years if weighted by the number of loans.

The Companies' mortgage loans on real estate are typically secured by occupied
buildings in major metropolitan locations and not speculative developments and
are diversified by type of property and geographic location. Mortgage loans on
real estate have been analyzed by geographical location with concentrations by
state identified as California (15% in 2000 and 12% in 1999), and Utah (9% in
2000, 10% in 1999). There are no other concentrations of mortgage loans on real
estate in any state exceeding ten percent at December 31, 2000 and 1999.
Mortgage loans on real estate have also been analyzed by collateral type with
significant concentrations identified in office buildings (29% in 2000, 34% in
1999), industrial buildings (35% in 2000, 33% in 1999), retail facilities (18%
in 2000, 19% in 1999), and multi-family apartments (10% in 2000 and 10% in
1999). At December 31, 2000, the yield on the Companies' mortgage loan portfolio
was 7.3%.

At December 31, 2000, no mortgage loan on real estate was delinquent by 90 days
or more. The Companies' loan investment strategy is consistent with other life
insurance subsidiaries of ING in the United States. The Companies have
experienced a historically low default rate in their mortgage loan portfolios.

OTHER ASSETS. Reinsurance recoverables increased $19.1 million during 2000, due
largely to an increase of $14.6 million in reinsurance reserves from an
intercompany reinsurance agreement between Golden American and Security Life of
Denver International Limited. On December 28, 2000, effective January 1, 2000,
Golden American entered into a reinsurance agreement with Security Life of
Denver International Limited, an affiliate, covering variable annuity minimum
guaranteed death benefits and minimum guaranteed living benefits. The remainder
of the increase was mainly due to an increase in reinsurance receivable from
surrenders, and was consistent with an increase in ceded premiums from 1999 to
2000.

Amounts due from affiliates increased by $38.1 million during 2000 due mainly to
a capital contribution receivable of $35.0 million from the parent company at
December 31, 2000. The remainder of the increase was an increased receivable for
management fee revenues. The increase was due to higher management fees in the
current year as well as the timing of the receivable settlement.

Accrued investment income decreased $1.6 million during 2000, due to a shift
from long-term to short-term investments at December 31, 2000 as compared to
December 31, 1999.

DPAC represents certain deferred costs of acquiring new insurance business,
principally first year commissions and interest bonuses, premium credits, and
other expenses related to the production of new business after the merger. Any
expenses which vary directly with the sales of the Companies' products are
deferred and amortized. The Companies' previous balances of DPAC and VPIF were
eliminated as of the merger date, and an asset representing VPIF was established
for all policies in force at the merger date. VPIF is amortized into income in
proportion to the expected gross profits of in force acquired business in a
manner similar to DPAC amortization. At December 31, 2000, the Companies had
DPAC and VPIF balances of $635.1 million and $25.9 million, respectively, as
compared to DPAC and VPIF balances of $529.0 million and $31.7 million at
December 31, 1999.

Goodwill totaling $151.1 million, representing the excess of the acquisition
cost over the fair value of net assets acquired, was established at the merger
date. Accumulated amortization of goodwill as of December 31, 2000 was $11.9
million.

Other assets increased $29.5 million during 2000, due mainly to an increase in
the receivable for securities sold.

At December 31, 2000, the Companies had $9.8 billion of separate account assets
compared to $7.6 billion at December 31, 1999. The increase in separate account
assets resulted from sales of the Companies' variable annuity products, net of
redemptions and reinsurance, and from net policyholder transfers to the separate
account options from the fixed account options within the variable products. The
increase was partially offset by negative equity market returns.

At December 31, 2000, the Companies had total assets of $11.9 billion, a 26.2%
increase from December 31, 1999.

GA-109652                            30
<PAGE>

LIABILITIES. Future policy benefits for annuity and interest sensitive life
products increased $29.2 million, or 2.8%, to $1.1 billion reflecting mainly an
increase in reserves due to the introduction of minimum guaranteed living
benefits as new riders available to policyholders as of February, 2000 on
certain variable products. Sales, net of redemptions and reinsurance, and
increased transfer activity to the separate account options accounted for the
$2.2 billion, or 30.0%, increase in separate account liabilities to $9.8 billion
at December 31, 2000.

On December 30, 1999, Golden American issued a $50 million, 8.179% surplus note
to Equitable Life, which matures on December 29, 2029.

On December 8, 1999, Golden American issued a $35 million, 7.979% surplus note
to First Columbine Life Insurance Company, an affiliate, which matures on
December 7, 2029.

On September 30, 1999, Golden American issued a $75 million, 7.75% surplus note
to ING AIH, which matures on September 29, 2029. On December 30, 1999, ING AIH
assigned the surplus note to Equitable Life.

On December 30, 1998, Golden American issued a $60 million, 7.25% surplus note
to Equitable Life, which matures on December 29, 2028.

On December 17, 1996, Golden American issued a $25 million, 8.25% surplus note
to Equitable, which matures on December 17, 2026. As a result of the merger of
Equitable into EIC, the surplus note is now payable to EIC.

Amounts due to affiliates increased by $7.2 million from $12.7 million at
December 31, 1999 to $19.9 million at December 31, 2000. This was mainly due to
the overpayment of the cash settlement for the modified coinsurance agreement
with an affiliate.

Other liabilities increased $16.2 million from $53.2 million at December 31,
1999, due primarily to the timing of the settlement of account transfers, an
increase in outstanding checks, and an increased pension liability, partly
offset by a decrease in the payable for securities purchased.

In conjunction with the volume of variable annuity sales, the Companies' total
liabilities increased $2.3 billion, or 26.0%, during 2000 and totaled $11.2
billion at December 31, 2000.

The effects of inflation and changing prices on the Companies' financial
position are not material since insurance assets and liabilities are both
primarily monetary and remain in balance. An effect of inflation, which has been
low in recent years, is a decline in stockholder's equity when monetary assets
exceed monetary liabilities.

STOCKHOLDER'S EQUITY. Additional paid-in capital increased $115.0 million, or
24.5%, from December 31, 1999 to $583.6 million at December 31, 2000, due to
capital contributions from the Parent.

                         LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of the Companies to generate sufficient cash flows to
meet the cash requirements of operating, investing, and financing activities.
The Companies' principal sources of cash are variable annuity premiums and
product charges, investment income, maturing investments, proceeds from debt
issuance, and capital contributions made by the Parent. Primary uses of these
funds are payments of commissions and operating expenses, interest and premium
credits, investment purchases, repayment of debt, as well as withdrawals and
surrenders.

Net cash provided by operating activities was $72.7 million in 2000 compared to
net cash used by operating activities of $74.0 million in 1999. The Companies
have predominantly had negative cash flows from operating activities since
Golden American started issuing variable insurance products in 1989. These
negative operating cash flows result primarily from the funding of commissions
and other deferrable

GA-109652                            31
<PAGE>

expenses related to the continued growth in the sales of
variable annuity products. During 2000, these
negative cash flows were offset by the effects of a modified coinsurance
agreement entered into with an affiliate which resulted in the reimbursement of
policy acquisition costs incorporated in a net cash settlement of $218.8
million. This was partially offset also by the use of cash from increases in
reinsurance recoverable, due from affiliates and other assets.

Net cash provided by investing activities was $28.0 million during 2000 as
compared to net cash used in investing activities of $177.5 million in 1999.
This increase is primarily due to lower purchases of fixed maturities during
2000 than in 1999. Net sales of fixed maturities totaled $51.1 million in 2000
versus net purchases of $124.0 million in 1999. This change was mainly due to
the relatively constant level policyholder account balances in the fixed account
options during 2000 as compared to an increase during 1999, combined with a
shift toward short-term investments.

Net cash used by financing activities was $51.9 million during 2000 as compared
to net cash provided by financing activities of $259.2 million during the prior
year. In 2000, net cash provided by financing activities was positively impacted
by net fixed account deposits of $660.4 million compared to $627.1 million in
1999. This increase was more than offset by net reallocations to the Companies'
separate accounts, which increased to $825.9 million from $650.3 million during
the prior year. In 2000, another important source of cash provided by financing
activities was $115.0 million in capital contributions from the Parent compared
to $121.0 million in 1999. Another source of cash provided by financing
activities during 1999 was $160.0 million in proceeds from surplus notes. No
surplus notes were issued during 2000.

The Companies' liquidity position is managed by maintaining adequate levels of
liquid assets, such as cash or cash equivalents and short-term investments.
Additional sources of liquidity include borrowing facilities to meet short-term
cash requirements. Golden American maintains a $65.0 million reciprocal loan
agreement with ING AIH, which expires on December 31, 2007. In addition, the
Companies have established an $85.0 million revolving note facility with
SunTrust Bank, Atlanta, which expires on July 31, 2001. Management believes
these sources of liquidity are adequate to meet the Companies' short-term cash
obligations.

Based on current trends, the Companies expect to continue to use net cash in
operating activities, given the continued growth of the variable annuity sales.
It is anticipated that a continuation of capital contributions from the Parent,
the issuance of additional surplus notes, and/or the use of modified coinsurance
agreements will cover these net cash outflows. ING AIH is committed to the
sustained growth of Golden American. During 2001, ING AIH will maintain Golden
American's statutory capital and surplus at the end of each quarter at a level
such that: 1) the ratio of Total Adjusted Capital divided by Company Action
Level Risk Based Capital exceeds 300%; 2) the ratio of Total Adjusted Capital
(excluding surplus notes) divided by Company Action Level Risk Based Capital
exceeds 200%; and 3) Golden American's statutory capital and surplus exceeds the
"Amounts Accrued for Expense Allowances Recognized in Reserves" as disclosed on
page 3, Line 13A of Golden American's statutory statement.

During the first quarter of 1999, Golden American's operations were moved to a
new site in West Chester, Pennsylvania. Previously, Golden American's business
operations were housed in leased facilities located in Wilmington, Delaware and
leased facilities in Pennsylvania. During 2000, Golden American occupied 105,000
square feet of leased space; and an affiliate occupied 20,000 square feet in the
same facilities. Golden American's New York subsidiary is housed in leased space
in New York, New York. The Companies intend to spend approximately $3.9 million
on capital needs for 2001.

The ability of Golden American to pay dividends to its Parent is restricted.
Prior approval of insurance regulatory authorities is required for payment of
dividends to the stockholder which exceed an annual limit. During 2001, Golden
American cannot pay dividends to its Parent without prior approval of statutory
authorities.

Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder, Golden American,
unless a notice of its intent to declare a dividend and the amount of the
dividend has been filed with the New York Insurance Department at least thirty
days in advance of the proposed declaration. If the Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution, the Superintendent may disapprove the

GA-109652                            32
<PAGE>

distribution by giving written notice to First Golden within thirty days
after the filing. The management of First Golden does not anticipate paying
dividends to Golden American during 2001.

The NAIC's risk-based capital requirements require insurance companies to
calculate and report information under a risk-based capital formula. These
requirements are intended to allow insurance regulators to monitor the
capitalization of insurance companies based upon the type and mixture of risks
inherent in a company's operations. The formula includes components for asset
risk, liability risk, interest rate exposure, and other factors. The Companies
have complied with the NAIC's risk-based capital reporting requirements. Amounts
reported indicate that the Companies have total adjusted capital well above all
required capital levels.

Reinsurance: At December 31, 2000, Golden American had reinsurance treaties with
six unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. Golden American remains liable to the
extent its reinsurers do not meet their obligations under the reinsurance
agreements.

On June 30, 2000, effective January 1, 2000, Golden American entered into a
modified coinsurance agreement with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued on or after
January 1, 2000, excluding those with an interest rate guarantee.

On December 28, 2000, Golden American entered into a reinsurance agreement with
Security Life of Denver International Limited, an affiliate, covering variable
annuity minimum guaranteed death benefits and minimum guaranteed living benefits
of variable annuities issued on or after January 1, 2000. An irrevocable letter
of credit was obtained through Bank of New York in the amount of $10,500,000
related to this agreement.

On December 29, 2000, First Golden entered into a reinsurance treaty with London
Life Reinsurance Company of Pennsylvania, an unaffiliated reinsurer, covering
the minimum guaranteed death benefits of First Golden's variable annuities
issued on or after January 1, 2000.

                         MARKET RISK AND RISK MANAGEMENT

Asset/liability management is integrated into many aspects of the Companies'
operations, including investment decisions, product development, and crediting
rates determination. As part of the risk management process, different economic
scenarios are modeled, including cash flow testing required for insurance
regulatory purposes, to determine that existing assets are adequate to meet
projected liability cash flows. Key variables include contractholder behavior
and the variable separate accounts' performance.

Contractholders bear the majority of the investment risks related to the
variable insurance products. Therefore, the risks associated with the
investments supporting the variable separate accounts are assumed by
contractholders, not by the Companies (subject to, among other things, certain
minimum guarantees). The Companies' products also provide certain minimum death
and guaranteed living benefits that depend on the performance of the variable
separate accounts. Currently, the majority of death and living benefit risks are
reinsured, which protects the Companies from adverse mortality experience and
prolonged capital market decline.

A surrender, partial withdrawal, transfer, or annuitization made prior to the
end of a guarantee period from the fixed account may be subject to a market
value adjustment. As the majority of the liabilities in the fixed account are
subject to market value adjustment, the Companies do not face a material amount
of market risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can generate
predictable, steady rates of return. The portfolio management strategy for the
fixed account considers the assets available for sale. This enables the
Companies to respond to changes in market interest rates, changes in prepayment
risk, changes in relative values of asset sectors and individual securities and
loans, changes in credit quality outlook, and other relevant factors. The
objective of portfolio management is to maximize returns, taking into account
interest rate and credit risks, as well as other risks. The Companies'
asset/liability management discipline includes strategies to minimize exposure
to loss as interest rates and economic and market conditions change.

GA-109652                            33
<PAGE>

On the basis of these analyses, management believes there is no material
solvency risk to the Companies. With respect to a 10% drop in equity values from
year end 2000 levels, variable separate account funds, which represent 90% of
the in force, pass the risk in underlying fund performance to the contractholder
(except for certain minimum guarantees). With respect to interest rate movements
up or down 100 basis points from year end 2000 levels, the remaining 10% of the
in force are fixed account funds and almost all of these have market value
adjustments which provide significant protection against changes in interest
rates.

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Any forward-looking statement contained herein or in any other oral or written
statement by the Companies or any of their officers, directors, or employees is
qualified by the fact that actual results of the Companies may differ materially
from such statement, among other risks and uncertainties inherent in the
Companies' business, due to the following important factors:

     1.   Prevailing interest rate levels and stock market performance, which
          may affect the ability of the Companies to sell their products, the
          market value and liquidity of the Companies' investments, fee revenue,
          and the lapse rate of the Companies' policies, notwithstanding product
          design features intended to enhance persistency of the Companies'
          products.

     2.   Changes in the federal income tax laws and regulations, which may
          affect the tax status of the Companies' products.

     3.   Changes in the regulation of financial services, including bank sales
          and underwriting of insurance products, which may affect the
          competitive environment for the Companies' products.

     4.   Increasing competition in the sale of the Companies' products.

     5.   Other factors that could affect the performance of the Companies,
          including, but not limited to, market conduct claims, litigation,
          insurance industry insolvencies, availability of competitive
          reinsurance on new business, investment performance of the underlying
          portfolios of the variable products, variable product design, and
          sales volume by significant sellers of the Companies' variable
          products.

                                OTHER INFORMATION

SEGMENT INFORMATION. During the period since the acquisition by Bankers Trust,
September 30, 1992 to date of this Prospectus, Golden American's operations
consisted of one business segment, the sale of variable insurance products.
Golden American and its affiliate DSI are party to in excess of 620 sales
agreements with broker-dealers, seven of whom, Locust Street Securities, Inc.,
Vestax Securities Corporation, Compu Life Investors Services, Inc., IFG Network
Securities, Inc., Multi-Financial Securities Corporation, Primevest Financial
Services and Washington Square Securities, Inc. are affiliates of Golden
American. As of December 31, 2000, one broker-dealers produces 10% or more of
Golden American's product sales net of reinsurance.

RESERVES. In accordance with the life insurance laws and regulations under which
Golden American operates, it is obligated to carry on its books, as liabilities,
actuarially determined reserves to meet its obligations on outstanding
Contracts. Reserves, based on valuation mortality tables in general use in the
United States, where applicable, are computed to equal amounts which, together
with interest on such reserves computed annually at certain assumed rates, make
adequate provision according to presently accepted actuarial standards of
practice, for the anticipated cash flows required by the contractual obligations
and related expenses of Golden American.

COMPETITION. Golden American is engaged in a business that is highly competitive
because of the large number of stock and mutual life insurance companies and
other entities marketing insurance products
comparable to those of Golden American. There are over 2500 stock, mutual and
other types of insurers in the

GA-109652                            34
<PAGE>

life insurance business in the United States, a
substantial number of which are significantly larger than Golden American.

AGREEMENTS WITH AFFILIATES. Pursuant to a service agreement between Golden
American and Equitable Life, Equitable Life provides certain administrative,
financial and other services to Golden American. Equitable Life billed Golden
American and its subsidiary First Golden American Life Insurance Company of New
York ("First Golden"), $1.3 million and $1.3 million, for the years ended
December 31, 2000 and 1999, respectively, under this service agreement.

Golden American provides to DSI certain of its personnel to perform management,
administrative and clerical services and the use of certain facilities. Golden
American charges DSI for such expenses and all other general and administrative
costs, first on the basis of direct charges when identifiable, and the remainder
allocated based on the estimated amount of time spent by Golden American's
employees on behalf of DSI. In the opinion of management, this method of cost
allocation is reasonable. In 1995, the service agreement between DSI and Golden
American was amended to provide for a management fee from DSI to Golden American
for managerial and supervisory services provided by Golden American. This fee,
calculated as a percentage of average assets in the variable separate accounts,
was $21.3 million and $10.1 million for the years 2000 and 1999, respectively.

Since January 1, 1998, Golden American and First Golden have had an asset
management agreement with ING Investment Management LLC ("ING IM"), an
affiliate, in which ING IM provides asset management and accounting services for
a fee, based on assets under management and payable quarterly. For the years
ended December 31, 2000 and 1999, Golden American and First Golden incurred fees
of $2.5 million and $2.2 million, respectively, under this agreement.

Since 1997, Golden American has provided certain advisory, computer and other
resources and services to Equitable Life. Revenues for these services totaled
$6.2 million for 2000 and $6.1 million for 1999.

The Companies provide resources and services to DSI. Revenues for these services
totaled $0.2 million for 2000 and $0.4 of 1999.

Golden American provides resources and services to ING Mutual Funds Management
Co., LLC, an affiliate. Revenues for these services totaled $0.5 million for
2000 and $0.2 million for 1999.

Golden American provides resources and services to United Life & Annuity
Insurance Company, an affiliate. Revenues for these services, which reduce
general expenses incurred by Golden American, totaled $0.6 million and $0.5
million for the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Security Life of Denver
Insurance Company, an affiliate. Revenues for these services, which reduce
general expenses incurred by the Companies totaled $0.3 million and $0.2 million
for the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduce general
expenses incurred by the Companies totaled $0.1 million and $0.1 million for the
years ended December 31, 2000 and 1999, respectively.

Golden American has a guaranty agreement with Equitable Life, an affiliate. In
consideration of an annual fee, payable June 30, Equitable Life guarantees to
Golden American that it will make funds available, if needed, to Golden American
to pay the contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and nothing
contained therein or done pursuant thereto by Equitable Life shall be deemed to
constitute, a direct or indirect guaranty by Equitable Life of the payment of
any debt or other obligation, indebtedness, or liability of any kind or
character whatsoever, of Golden American. The agreement does not guarantee the
value of the underlying assets held in separate accounts in which funds of
variable life insurance and variable annuity policies have been invested. The
calculation of the annual fee is based on risk based capital. On June 30, 2000,
Golden American incurred a fee of $7,000, under this agreement. No annual fee
was paid in 1999.

GA-109652                            35
<PAGE>

DISTRIBUTION AGREEMENT. Under a distribution agreement, DSI acts as the
principal underwriter (as defined in the Securities Act of 1933 and the
Investment Company Act of 1940, as amended) of the variable insurance products
issued by Golden American which as of December 31, 2000, are sold through other
broker/dealer institutions. For the years 2000 and 1999, commissions paid by
Golden American to DSI (including commissions paid by First Golden) aggregated
$208.9 million and $181.5 million, respectively.

EMPLOYEES. Certain officers of Golden American are also officers of DSI, and
their salaries are allocated among both companies. Certain officers of Golden
American are also officers of other Equitable of Iowa subsidiaries. See
"Directors and Executive Officers."

PROPERTIES. Golden American's principal office is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380, where most of Golden American's records
are maintained. This office space is leased. Other records are maintained in Des
Moines and Atlanta at the offices of Equitable and ING, respectively.

STATE REGULATION. Golden American is subject to the laws of the State of
Delaware governing insurance companies and to the regulations of the Delaware
Insurance Department (the "Insurance Department"). A detailed financial
statement in the prescribed form (the "Annual Statement") is filed with the
Insurance Department each year covering Golden American's operations for the
preceding year and its financial condition as of the end of that year.
Regulation by the Insurance Department includes periodic examination to
determine contract liabilities and reserves so that the Insurance Department may
certify that these items are correct. Golden American's books and accounts are
subject to review by the Insurance Department at all times. A full examination
of Golden American's operations is conducted periodically by the Insurance
Department and under the auspices of the NAIC.

In addition, Golden American 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. Golden American 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 formula for determining adequate levels
of capital and surplus. Insurance companies are required to calculate their
risk-based capital in accordance with this formula and to include the results in
their Annual Statement. It is anticipated that these standards will have no
significant effect upon Golden American. For additional information about the
Risk-Based Capital adequacy monitoring system and Golden American, see
"Management's Discussion and Analysis Results of Operations."

In addition, many states regulate affiliated groups of insurers, such as Golden
American, and its affiliates, under insurance holding company legislation. Under
such laws, inter-company transfers of assets and dividend payments from
insurance subsidiaries may be subject to prior notice or approval, depending on
the size of the transfers and payments in relation to the financial positions of
the companies involved.

Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed (up to prescribed limits) for contract owner losses
incurred by other insurance companies which have become insolvent. Most of these
laws provide that an assessment may be excused or deferred if it would threaten
an insurer's own financial strength. For information regarding Golden American's
estimated liability for future guaranty fund assessments, see Note 10 of Notes
to Financial Statements.

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 Golden American 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

GA-109652                            36
<PAGE>

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.

DIRECTORS AND OFFICERS

NAME (AGE)                  POSITION(S) WITH THE COMPANY
--------------------------  ----------------------------------------------------
Robert C. Salipante (44)    Chief Executive Officer and Director
Chris D. Schreier (44)      President
Barnett Chernow (50)        President and CEO, Investment Products Group
Myles R. Tashman (57)       Executive Vice President, General Counsel
                            and Assistant Secretary
Wayne R. Huneke (49)        Director and Chief Financial Officer
Thomas J. McInerney (44)    Director
Mark A. Tullis (45)         Director
Phillip R. Lowery (48)      Director
Paula Cludray-Engelke (44)  Secretary
James R. McInnis (53)       Executive Vice President and Chief Marketing Officer
Stephen J. Preston (43)     Executive Vice President and Chief Actuary
E. Robert Koster (42)       Senior Vice President
David S. Pendergrass (41)   Vice President and Treasurer
David L. Jacobson (51)      Senior Vice President and Assistant Secretary
William L. Lowe (37)        Senior Vice President
Ronald R. Blasdell (47)     Senior Vice President
Steven G. Mandel (41)       Senior Vice President and Chief Information Officer
Gary F. Haynes (56)         Senior Vice President and Assistant Secretary
Andrew D. Chua (46 )        Senior Vice President

Each director is elected to serve for one year or until the next annual meeting
of shareholders or until his or her successor is elected. Some directors are
directors of insurance company subsidiaries of Golden American's parent,
Equitable of Iowa. Golden American's directors and senior executive officers and
their principal positions for the past five years are listed below:

Mr. Robert C. Salipante was elected Director and Chief Executive Officer of
Golden American in March, 2001. He has served as a Director of ReliaStar Life
Insurance Company from October, 1995 to the present. He served ReliaStar
Financial Corp. from February, 1996 to November, 1996 as Senior Vice President,
Individual Insurance Division and Technology and from November, 1996 to July,
1999 as Senior Vice President, Personal Financial Services. He was elected
President, Chief Operating Officer and Director of ReliaStar Financial Corp.
July, 1999 to August, 2000. He became General Manager and Chief Executive
Officer, US Retail Financial Services in September, 2000.

Mr. Chris D. Schreier was elected President of Golden American in March, 2001.
From January, 1994 to September, 1996 he served as Assistant Vice President and
Assistant Controller for ReliaStar Financial Corp. He was elected Second Vice
President of ReliaStar Financial Corp. and ReliaStar Life Insurance Company from
September, 1996 to January, 1999. He has served as Vice President and Controller
of ReliaStar Financial Corp. since January, 1999.

Mr. Barnett Chernow became President and CEO of Investment Products Group in
March 2001 and President of First Golden in April, 1998. From 1998 to 2001, Mr.
Chernow served as President of Golden American. From 1996 to 1998, Mr. Chernow
served as Executive Vice President of First Golden. From 1993 to 1998, Mr.
Chernow also served as Executive Vice President of Golden American. He was
elected to serve as a director of First Golden in June, 1996 and Golden American
in April, 1998.

Mr. Myles R. Tashman joined Golden American in August, 1994 as Senior Vice
President and was named Executive Vice President, General Counsel effective
January, 1996 and Assistant Secretary effective March, 2001. He served as a
Director of Golden American from January, 1998 to March, 2001. He also serves as
a Director, Executive Vice President, General Counsel and Secretary of First
Golden.

GA-109652                            37
<PAGE>

Mr. Wayne R. Huneke was elected Director, Senior Vice President and Chief
Financial Officer of Golden American in March, 2001. Since October, 1995 he has
served as a Director of ReliaStar Life Insurance Company. He served ReliaStar
Financial Corp. as Senior Vice President, Chief Financial Officer from August,
1994 to November, 1997, from November, 1997 to May, 1999 he served as Senior
Vice President, ReliaStar Financial Markets. He became Senior Executive Vice
President of ReliaStar Financial Corp. in May, 1999.

Mr. Thomas J. McInerney was elected as a Director of Golden American in March,
2001. He served Aetna U.S. Healthcare, Inc. as Vice President, National Accounts
from April, 1996 to March, 1997. From August, 1997 to the present he has served
as Director and from September, 1997 to the present he has served as President
of Aetna Life Insurance & Annuity Company. He has served as President and
Director of Aetna Insurance Company of America from September, 1997 to the
present.

Mr. Mark A. Tullis became a Director of Golden American and First Golden in
December 1999. He has served as Executive Vice President, Strategy and
Operations for ING Americas Region since September 1999. From June, 1994 to
August, 1999, he was with Primerica, serving as Executive Vice President at the
time of his departure.

Mr. Phillip R. Lowery became a Director of Golden American in April, 1999 and
First Golden in December, 1999. He has served as Executive Vice President and
Chief Actuary for ING Americas Region since 1990.

Ms. Paula Cludray-Engelke was elected Secretary of Golden American in March,
2001. From October, 1985 to October, 2000 Ms. Cludray-Engelke served with
ReliaStar Life Insurance Company (f/k/a Northwestern National Life Insurance
Company) in various compliance positions. From October, 2000 to the present she
has served as an Attorney with ING US Legal Services.

Mr. James R. McInnis joined Golden American and First Golden in December, 1997
as Executive Vice President. From 1982 through November, 1997, he held several
positions with the Endeavor Group and was President upon his departure.

Mr. E. Robert Koster was elected Senior Vice President of Golden American and
Senior Vice President and Chief Financial Officer of First Golden in September,
1998. From September, 1998 to March, 2001, he was also Chief Financial Officer
of Golden American. From August, 1984 to September, 1998 he has held various
positions with ING companies in The Netherlands.

Mr. David S. Pendergrass was elected Treasurer and Vice President of Golden
American in December, 2000. Since October, 1995 he has served as a Vice
President and Treasurer of ING North America Insurance Corporation.

Mr. David L. Jacobson joined Golden American in November, 1993 as Vice President
and Assistant Secretary and became Senior Vice President in December, 1993. He
was elected Senior Vice President and Assistant Secretary for First Golden in
June, 1996.

Mr. Stephen J. Preston joined Golden American in December, 1993 as Senior Vice
President, Chief Actuary and Controller. He became an Executive Vice President
and Chief Actuary in June, 1998. He was elected Senior Vice President and Chief
Actuary of First Golden in June, 1996 and elected Executive Vice President in
June, 1998.

Mr. William L. Lowe joined Equitable Life as Vice President, Sales & Marketing
in January, 1994. He became a Senior Vice President, Sales & Marketing, of
Golden American in August, 1997. He was also President of Equitable of Iowa
Securities Network, Inc. until October, 1998.

Mr. Steven G. Mandel joined Golden American in October 1988 and became Senior
Vice President and Chief Information Officer in June, 1998.

Mr. Ronald R. Blasdell joined Golden American in February, 1994 and became
Senior Vice President, Project Implementation in June, 1998.

GA-109652                           38
<PAGE>

Mr. Gary Haynes rejoined Golden American in April, 1999 as Senior Vice
President, Operations. From August, 1995 to February, 1998 he was with F&G Life
Insurance Company; serving as Senior Vice President, Operations at the time of
his departure. He served as Senior Vice President, Operations with Golden
American from July, 1994 to August, 1995.

Mr. Andrew D. Chua joined Golden American as Vice President in June, 1998 and
became a Senior Vice President in February, 2000. From January, 1998 to May,
1998, Mr. Chua was employed by Transamerica Life & Annuity Company. From
January, 1993 to December, 1997, Mr. Chua was employed by National Actuarial
Network, Inc.

COMPENSATION TABLE AND OTHER INFORMATION
The following sets forth information with respect to the Chief Executive Officer
of Golden American as well as the annual salary and bonus for the next five
highly compensated executive officers for the fiscal year ended December 31,
2000. Certain executive officers of Golden American are also officers of DSI and
First Golden. The salaries of such individuals are allocated among Golden
American, DSI and First Golden pursuant to an arrangement among these companies.

EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual salary and
bonus for Golden American's Chief Executive Officer and the four other most
highly compensated executive officers for the fiscal year ended December 31,
2000.

<TABLE>
<CAPTION>
                                                                  LONG-TERM
                                     ANNUAL COMPENSATION         COMPENSATION
                                     -------------------    ----------------------
                                                            RESTRICTED  SECURITIES
NAME AND                                                   STOCK AWARDS UNDERLYING    ALL OTHER
PRINCIPAL POSITION      YEAR       SALARY         BONUS 1     OPTIONS     OPTIONS   COMPENSATION2
------------------      ----       ------         -------     -------     -------   -------------
<S>                     <C>      <C>            <C>             <C>        <C>        <C>
Barnett Chernow ...     2000     $  409,447     $  638,326                 10,200     $   26,887
President               1999     $  300,009     $  698,380                  6,950     $   20,464
                        1998     $  284,171     $  105,375      8,000

James R. McInnis ..     2000     $  337,543     $1,210,898                  5,200     $   19,487
Executive Vice          1999     $  250,007     $  955,646                  5,550     $   15,663
President               1998     $  250,004     $  626,245      2,000

William L. Lowe ...     2000     $  205,144     $  821,545                  3,500     $       81
Senior Vice             1999     $  191,589     $  737,933                            $    2,924
President               1998     $  165,816     $  528,299                            $      756

Stephen J. Preston      2000     $  230,170     $  426,994                  5,000     $   14,713
Executive Vice          1999     $  198,964     $  235,002                  2,050     $   12,564
President and Chief     1998     $  173,870     $   32,152      3,500
Actuary

Gary Haynes .......     2000     $  201,136     $  404,773                  3,000     $   14,735
Senior Vice             1999     $  159,030     $  50,000                             $    9,540
President
</TABLE>

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

1    The amount shown relates to bonuses paid in 2000, 1999 and 1998.

2    Other compensation for 2000 and 1999 includes a business allowance for each
     named executive which is required to be applied to specific business
     expenses of the named executive.

GA-109652                            39
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                               POTENTIAL
                                                                          REALIZABLE VALUE AT
                                   % OF TOTAL                                ASSUMED ANNUAL
                        NUMBER OF    OPTIONS                                 RATES OF STOCK
                        SECURITIES  GRANTED TO                             PRICE APPRECIATION
                        UNDERLYING  EMPLOYEES  EXERCISE                     FOR OPTION TERM 3
                         OPTIONS    IN FISCAL  OR BASE    EXPIRATION     -----------------------
NAME                    GRANTED 1     YEAR     PRICE 2       DATE            5%           10%
----                    ----------  ---------- --------   ----------     ---------     ---------
<S>                       <C>         <C>      <C>        <C>            <C>           <C>
Barnett Chernow .....     10,200      0.85%    $ 54.56    04/03/2010     $ 348,987     $ 886,937
James R. McInnis ....      5,200      0.43%    $ 54.56    04/03/2010     $ 178,425     $ 452,164
William L. Lowe .....      3,500      0.29%    $ 54.56    04/03/2010     $ 120,094     $ 304,341
Stephen J. Preston ..      5,000      0.42%    $ 54.56    04/03/2010     $ 171,562     $ 434,773
Gary Haynes .........      3,000      0.25%    $ 54.56    04/03/2010     $ 102,937     $ 260,864
</TABLE>

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

1    Stock appreciation rights granted in 2000 to the officers of Golden
     American have a three-year vesting period and an expiration date as shown.

2    The base price was equal to the fair market value of ING's stock on the
     date of grant.

3    Total dollar gains based on indicated rates of appreciation of share price
     over the total term of the rights.

GA-109652                            40
<PAGE>

--------------------------------------------------------------------------------
         FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholder
Golden American Life Insurance Company

We have audited the accompanying consolidated balance sheets of Golden American
Life Insurance Company as of December 31, 2000 and 1999, and the related
consolidated statements of operations, changes in stockholder's equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Golden American
Life Insurance Company at December 31, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.

                                        /s/ Ernst & Young LLP

Atlanta, Georgia
March 12, 2001

GA-109652                            41
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                              December 31,  December 31,
                                                                  2000          1999
                                                              -----------   -----------
<S>                                                           <C>           <C>
ASSETS

Investments:

   Fixed maturities, available for sale, at fair value
      (cost: 2000 - $798,751; 1999 - $858,052) ............   $   792,578   $   835,321

   Equity securities, at fair value (cost: 2000 - $8,611;
      1999 - $14,952) .....................................         6,791        17,330

   Mortgage loans on real estate ..........................        99,916       100,087

   Policy loans ...........................................        13,323        14,157

   Short-term investments .................................       106,775        80,191
                                                              -----------   -----------
Total investments .........................................     1,019,383     1,047,086

Cash and cash equivalents .................................        63,207        14,380

Reinsurance recoverable ...................................        19,331        14,834

Reinsurance recoverable from affiliates ...................        14,642            --

Due from affiliates .......................................        38,786           637

Accrued investment income .................................         9,606        11,198

Deferred policy acquisition costs .........................       635,147       528,957

Value of purchased insurance in force .....................        25,942        31,727

Current income taxes recoverable ..........................           511            35

Deferred income tax asset .................................         9,047        21,943

Property and equipment, less allowances for depreciation of
   $5,638 in 2000 and $3,229 in 1999 ......................        14,404        13,888

Goodwill, less accumulated amortization of $11,964 in 2000
   and $8,186 in 1999 .....................................       139,163       142,941

Other assets ..............................................        32,019         2,514

Separate account assets ...................................     9,831,489     7,562,717
                                                              -----------   -----------
Total assets ..............................................   $11,852,677   $ 9,392,857
                                                              ===========   ===========
</TABLE>

                             See accompanying notes.

GA-109652                            42
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                December 31,    December 31,
                                                                    2000            1999
                                                                ------------    ------------
<S>                                                             <C>             <C>
LIABILITIES AND STOCKHOLDER`S EQUITY

Policy liabilities and accruals:

   Future policy benefits:

      Annuity and interest sensitive life products ..........   $  1,062,891    $  1,033,701

      Unearned revenue reserve ..............................          6,817           6,300

   Other policy claims and benefits .........................             82               8
                                                                ------------    ------------
                                                                   1,069,790       1,040,009

Surplus notes ...............................................        245,000         245,000

Revolving note payable ......................................             --           1,400

Due to affiliates ...........................................         19,887          12,650

Other liabilities ...........................................         69,374          53,232

Separate account liabilities ................................      9,831,489       7,562,717
                                                                ------------    ------------
                                                                  11,235,540       8,915,008

Commitments and contingencies

Stockholder's equity:

   Common stock, par value $10 per share, authorized, issued,
      and outstanding 250,000 shares ........................          2,500           2,500

   Additional paid-in capital ...............................        583,640         468,640

   Accumulated other comprehensive loss .....................         (4,046)         (9,154)

   Retained earnings ........................................         35,043          15,863
                                                                ------------    ------------
Total stockholder's equity ..................................        617,137         477,849
                                                                ------------    ------------
Total liabilities and stockholder's equity ..................   $ 11,852,677    $  9,392,857
                                                                ============    ============
</TABLE>

                             See accompanying notes.

GA-109652                            43
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
Year Ended December 31                                  2000         1999         1998
                                                     ---------    ---------    ---------
REVENUES:
<S>                                                  <C>          <C>          <C>
   Annuity and interest sensitive life product
      charges ....................................   $ 144,877    $  82,935    $  39,119
   Management fee revenue ........................      22,982       11,133        4,771
   Net investment income .........................      64,140       59,169       42,485
   Realized losses on investments ................      (6,554)      (2,923)      (1,491)
                                                     ---------    ---------    ---------
                                                       225,445      150,314       84,884
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances ......     195,088      175,257       94,845
      Benefit claims incurred in excess of account
         balances ................................       4,943        6,370        2,123
Underwriting, acquisition and insurance  expenses:
   Commissions ...................................     213,719      188,383      121,171
   General expenses ..............................      84,936       60,205       37,612
   Insurance taxes, state licenses, and fees .....       4,528        3,976        4,140
   Policy acquisition costs deferred .............    (168,444)    (346,396)    (197,796)
   Amortization:
      Deferred policy acquisition costs ..........      55,154       33,119        5,148
      Value of purchased insurance in force ......       4,801        6,238        4,724
      Goodwill ...................................       3,778        3,778        3,778
   Expenses and charges reimbursed under
      modified coinsurance agreements ............    (225,787)      (9,247)      (5,604)
                                                     ---------    ---------    ---------
                                                       172,716      121,683       70,141

Interest expense .................................      19,867        8,894        4,390
                                                     ---------    ---------    ---------
                                                       192,583      130,577       74,531
                                                     ---------    ---------    ---------
Income before income taxes .......................      32,862       19,737       10,353


Income taxes .....................................      13,682        8,523        5,279
                                                     ---------    ---------    ---------

Net income .......................................   $  19,180    $  11,214    $   5,074
                                                     =========    =========    =========
</TABLE>

                             See accompanying notes.

GA-109652                            44
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                  Additional Accumulated Other  Retained       Total
                                      Common        Paid-in    Comprehensive    Earnings    Stockholder's
                                       Stock        Capital    Income (Loss)    (Deficit)      Equity
                                     --------------------------------------------------------------------
<S>                                  <C>           <C>           <C>            <C>           <C>
Balance at December 31, 1997 .....   $   2,500     $ 224,997     $     241      $    (425)    $ 227,313
   Comprehensive income:
      Net income .................          --            --            --          5,074         5,074
      Change in net unrealized
         investment gains (losses)          --            --        (1,136)            --        (1,136)
   Comprehensive income ..........       3,938
   Contribution of capital .......          --       122,500            --             --       122,500
   Other .........................          --           143            --             --           143
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 1998 .....       2,500       347,640          (895)         4,649       353,894
   Comprehensive income:
      Net income .................          --            --            --         11,214        11,214
      Change in net unrealized
         investment gains (losses)          --            --        (8,259)            --        (8,259)
   Comprehensive income ..........       2,955
   Contribution of capital .......          --       121,000            --             --       121,000
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 1999 .....   $   2,500     $ 468,640     $  (9,154)     $  15,863     $ 477,849
   Comprehensive income:
      Net income .................          --            --            --         19,180        19,180
      Change in net unrealized
         investment gains (losses)          --            --         5,108             --         5,108
   Comprehensive income ..........      24,288
   Contribution of capital .......          --       115,000            --             --       115,000
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 2000 .....   $   2,500     $ 583,640     $  (4,046)     $  35,043     $ 617,137
                                     =========     =========     =========      =========     =========
</TABLE>

                             See accompanying notes.

GA-109652                            45
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
Year Ended December 31                                     2000         1999         1998
                                                        ---------    ---------    ---------
<S>                                                     <C>          <C>          <C>
OPERATING ACTIVITIES
Net income ..........................................   $  19,180    $  11,214    $   5,074
Adjustments to reconcile net income to net
   cash provided by (used in) operations:
   Adjustments related to annuity and interest
      sensitive life products:
      Interest credited and other charges on interest
         sensitive products .........................     195,088      175,257       94,845
      Charges for mortality and administration ......        (313)         524         (233)
      Change in unearned revenues ...................         517        2,460        2,651
   Increase (decrease) in policy liabilities and
      accruals ......................................          74            8          (10)
   Decrease (increase) in accrued investment
      income ........................................       1,592       (1,553)      (3,222)
   Policy acquisition costs deferred ................    (168,444)    (346,396)    (197,796)
   Amortization of deferred policy acquisition costs       55,154       33,119        5,148
   Amortization of value of purchased insurance
      in force ......................................       4,801        6,238        4,724
   Change in other assets, due to/from affiliates,
      other liabilities and accrued income taxes ....     (63,840)      24,845        9,979
   Provision for depreciation and amortization ......       8,616        8,850        8,147
   Provision for deferred income taxes ..............      13,728        8,523        5,279
   Realized losses on investments ...................       6,554        2,923        1,491
                                                        ---------    ---------    ---------
Net cash provided by (used in) operating activities .      72,707      (73,988)     (63,923)
                                                        ---------    ---------    ---------

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
   Fixed maturities - available for sale ............     205,136      220,547      145,253
   Mortgage loans on real estate ....................      12,701        6,572        3,791
   Equity securities ................................       6,128           --           --
   Policy loans - net ...............................         834           --           --
                                                        ---------    ---------    ---------
                                                          224,799      227,119      149,044

Acquisition of investments:
   Fixed maturities - available for sale ............    (154,028)    (344,587)    (476,523)
   Equity securities ................................          --           --      (10,000)
   Mortgage loans on real estate ....................     (12,887)      (9,659)     (16,390)
   Policy loans - net ...............................          --       (2,385)      (2,940)
   Short-term investments - net .....................     (26,584)     (39,039)     (26,692)
                                                        ---------    ---------    ---------
                                                         (193,499)    (395,670)    (532,545)

Issuance of reciprocal loan agreement receivables ...     (16,900)          --           --
Receipt of repayment of reciprocal loan agreement
   receivables ......................................      16,900           --           --
Net purchase of property and equipment ..............      (3,285)      (8,968)      (6,485)
                                                        ---------    ---------    ---------
Net cash provided by (used in) investing activities .      28,015     (177,519)    (389,986)
</TABLE>

                             See accompanying notes.

GA-109652                            46
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
Year Ended December 31                                   2000         1999         1998
                                                      ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>
FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement
   borrowings .....................................   $ 178,900    $ 396,350    $ 500,722
Repayment of reciprocal loan agreement
   borrowings .....................................    (178,900)    (396,350)    (500,722)
Proceeds from revolving note payable ..............      67,200      220,295      108,495
Repayment of revolving note payable ...............     (68,600)    (218,895)    (108,495)
Proceeds from surplus note ........................          --      160,000       60,000
Repayment of line of credit borrowings ............          --           --       (5,309)
Receipts from annuity and interest sensitive
   life policies credited to account balances .....     801,793      773,685      593,428
Return of account balances on annuity
   and interest sensitive life policies ...........    (141,440)    (146,607)     (72,649)

Net reallocations to separate account .............    (825,848)    (650,270)    (239,671)
Contributions of capital by parent ................     115,000      121,000      103,750
                                                      ---------    ---------    ---------
Net cash provided by (used in) financing activities     (51,895)     259,208      439,549
                                                      ---------    ---------    ---------

Increase (decrease) in cash and cash
   equivalents ....................................      48,827        7,701      (14,360)

Cash and cash equivalents at beginning of
   period .........................................      14,380        6,679       21,039
                                                      ---------    ---------    ---------
Cash and cash equivalents at end of period ........   $  63,207    $  14,380    $   6,679
                                                      =========    =========    =========

SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION
Cash paid during the period for:
   Interest .......................................   $  22,444    $   6,392    $   4,305
   Income taxes ...................................         957           --           99
Non-cash financing activities:
   Non-cash adjustment to additional paid-in
      capital for adjusted merger costs ...........          --           --          143
   Contribution of capital from parent to
      repay line of credit borrowings .............          --           --       18,750
</TABLE>

                             See accompanying notes.

GA-109652                            47
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION
The consolidated financial statements include Golden American Life Insurance
Company ("Golden American") and its wholly owned subsidiary, First Golden
American Life Insurance Company of New York ("First Golden," and collectively
with Golden American, the "Companies"). All significant intercompany accounts
and transactions have been eliminated.

ORGANIZATION
Golden American, a wholly owned subsidiary of Equitable of Iowa Companies, Inc.,
offers variable insurance products and is licensed as a life insurance company
in the District of Columbia and all states except New York. First Golden is
licensed to sell insurance products in New York and Delaware. The Companies'
variable annuity products are marketed by broker/dealers, financial
institutions, and insurance agents. The Companies' primary customers are
consumers and corporations.

On October 24, 1997 ("the merger date"), PFHI Holding, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of Equitable of Iowa
Companies ("Equitable") according to the terms of an Agreement and Plan of
Merger dated July 7, 1997 among Equitable, PFHI, and ING Groep N.V. ("ING").
PFHI is a wholly owned subsidiary of ING, a global financial services holding
company based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously renamed Equitable of Iowa Companies,
Inc. ("EIC" or the "Parent"), a Delaware corporation.

INVESTMENTS
Fixed Maturities: The Companies account for their investments under the
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which requires fixed
maturities to be designated as either "available for sale," "held for
investment," or "trading." Sales of fixed maturities designated as "available
for sale" are not restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these securities are
included directly in stockholder's equity, after adjustment for related changes
in value of purchased insurance in force ("VPIF"), deferred policy acquisition
costs ("DPAC"), and deferred income taxes. At December 31, 2000 and 1999, all of
the Companies' fixed maturities are designated as available for sale, although
the Companies are not precluded from designating fixed maturities as held for
investment or trading at some future date.

Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value, which becomes the new cost basis by a
charge to realized losses in the Companies' Statements of Operations. Premiums
and discounts are amortized/accrued utilizing a method which results in a
constant yield over the securities' expected lives. Amortization/accrual of
premiums and discounts on mortgage and other asset-backed securities
incorporates a prepayment assumption to estimate the securities' expected lives.

Equity Securities: Equity securities are reported at estimated fair value if
readily marketable. The change in unrealized appreciation and depreciation of
marketable equity securities (net of related deferred income taxes, if any) is
included directly in stockholder's equity. Equity securities determined to have
a decline in value that is other than temporary are written down to estimated
fair value, which becomes the new cost basis by a charge to realized losses in
the Companies' Statements of Operations.

Mortgage Loans on Real Estate: Mortgage loans on real estate are reported at
cost adjusted for amortization of premiums and accrual of discounts. If the
value of any mortgage loan is determined to be impaired (i.e., when it is
probable the Companies will be unable to collect all amounts due according to
the contractual terms of the loan agreement), the carrying value of the mortgage
loan is reduced to the present value of expected future cash flows from the loan
discounted at the loan's effective interest rate, or to the loan's observable
market price, or the fair value of the underlying collateral. The carrying value
of impaired loans is

GA-109652                            48
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

reduced by the establishment of a valuation allowance, which is adjusted at each
reporting date for significant changes in the calculated value of the loan.
Changes in this valuation allowance are charged or credited to income.

Other Investments: Policy loans are reported at unpaid principal. Short-term
investments are reported at cost, adjusted for amortization of premiums and
accrual of discounts.

Realized Gains and Losses: Realized gains and losses are determined on the basis
of specific identification.

Fair Values: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market are estimated
using a third party pricing process. This pricing process uses a matrix
calculation assuming a spread over U.S. Treasury bonds based upon the expected
average lives of the securities. Estimated fair values of publicly traded fixed
maturities are reported by an independent pricing service. Fair values of
private placement bonds are estimated using a matrix that assumes a spread
(based on interest rates and a risk assessment of the bonds) over U.S. Treasury
bonds. Estimated fair values of equity securities, which consist of the
Companies' investment in its registered separate accounts, are based upon the
quoted fair value of the securities comprising the individual portfolios
underlying the separate accounts.

CASH AND CASH EQUIVALENTS
For purposes of the accompanying Statements of Cash Flows, the Companies
consider all demand deposits and interest-bearing accounts not related to the
investment function to be cash equivalents. All interest-bearing accounts
classified as cash equivalents have original maturities of three months or less.

DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally first year
commissions and interest bonuses, premium credit, and other expenses related to
the production of new business ($63.8 million during 2000, $153.0 million during
1999, and $73.4 million during 1998), have been deferred. Acquisition costs for
variable insurance products are being amortized generally in proportion to the
present value (using the assumed crediting rate) of expected future gross
profits. This amortization is adjusted retrospectively when the Companies revise
their estimate of current or future gross profits to be realized from a group of
products. DPAC is adjusted to reflect the pro forma impact of unrealized gains
and losses on fixed maturities the Companies have designated as "available for
sale" under SFAS No. 115.

VALUE OF PURCHASED INSURANCE IN FORCE
As a result of the merger, a portion of the purchase price was allocated to the
right to receive future cash flows from existing insurance contracts. This
allocated cost represents VPIF, which reflects the value of those purchased
policies calculated by discounting actuarially determined expected future cash
flows at the discount rate determined by the purchaser. Amortization of VPIF is
charged to expense in proportion to expected gross profits of the underlying
business. This amortization is adjusted retrospectively when the Companies
revise the estimate of current or future gross profits to be realized from the
insurance contracts acquired. VPIF is adjusted to reflect the pro forma impact
of unrealized gains and losses on available for sale fixed maturities.

PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements, office
furniture, certain other equipment, and capitalized computer software and are
not considered to be significant to the Companies' overall operations. Property
and equipment are reported at cost less allowances for depreciation.
Depreciation

GA-109652                            49
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

expense is computed primarily on the basis of the straight-line method
over the estimated useful lives of the assets.

GOODWILL
Goodwill was established as a result of the merger and is being amortized
over 40 years on a straight-line basis.

FUTURE POLICY BENEFITS
Future policy benefits for divisions of the variable products with fixed
interest guarantees are established utilizing the retrospective deposit
accounting method. Policy reserves represent the premiums received plus
accumulated interest, less mortality and administration charges. Interest
credited to these policies ranged from 3.00% to 14.00% during 2000, 3.00% to
11.00% during 1999, and 3.00% to 10.00% during 1998. The unearned revenue
reserve represents unearned distribution fees. These distribution fees have been
deferred and are amortized over the life of the contracts in proportion to
expected gross profits.

SEPARATE ACCOUNTS
Assets and liabilities of the separate accounts reported in the accompanying
Balance Sheets represent funds separately administered principally for variable
contracts. Contractholders, rather than the Companies, bear the investment risk
for the variable insurance products. At the direction of the contractholders,
the separate accounts invest the premiums from the sale of variable insurance
products in shares of specified mutual funds. The assets and liabilities of the
separate accounts are clearly identified and segregated from other assets and
liabilities of the Companies. The portion of the separate account assets equal
to the reserves and other liabilities of variable contracts cannot be charged
with liabilities arising out of any other business the Companies may conduct.

Variable separate account assets are carried at fair value of the underlying
investments and generally represent contractholder investment values maintained
in the accounts. Variable separate account liabilities represent account
balances for the variable contracts invested in the separate accounts; the fair
value of these liabilities is equal to their carrying amount. Net investment
income and realized and unrealized capital gains and losses related to separate
account assets are not reflected in the accompanying Statements of Operations.

Product charges recorded by the Companies from variable insurance products
consist of charges applicable to each contract for mortality and expense risk,
cost of insurance, contract administration, and surrender charges. In addition,
some variable annuity and all variable life contracts provide for a distribution
fee collected for a limited number of years after each premium deposit. Revenue
recognition of collected distribution fees is amortized over the life of the
contract in proportion to its expected gross profits. The balance of
unrecognized revenue related to the distribution fees is reported as an unearned
revenue reserve.

DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rate. Deferred tax assets or liabilities are adjusted to
reflect the pro forma impact of unrealized gains and losses on equity securities
and fixed maturities the Companies have designated as available for sale under
SFAS No. 115. Changes in deferred tax assets or liabilities resulting from this
SFAS No. 115 adjustment are charged or credited directly to stockholder's
equity. Deferred income tax expenses or credits reflected in the Companies'
Statements of Operations are based on the changes in the deferred tax asset or
liability from period to period (excluding the SFAS No. 115 adjustment).

GA-109652                            50
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DIVIDEND RESTRICTIONS
Golden American's ability to pay dividends to its Parent is restricted. Prior
approval of insurance regulatory authorities is required for payment of
dividends to the stockholder which exceed an annual limit. During 2001, Golden
American cannot pay dividends to its Parent without prior approval of statutory
authorities. Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its stockholder, Golden
American, unless a notice of its intent to declare a dividend and the amount of
the dividend has been filed with the New York Insurance Department at least
thirty days in advance of the proposed declaration. If the Superintendent of the
New York Insurance Department finds the financial condition of First Golden does
not warrant the distribution, the Superintendent may disapprove the distribution
by giving written notice to First Golden within thirty days after the filing.

SEGMENT REPORTING
The Companies manage their business as one segment, the sale of variable
insurance products designed to meet customer needs for tax-advantaged saving for
retirement and protection from death. Variable insurance products are sold to
consumers and corporations throughout the United States.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
affecting the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are: (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and value of purchased insurance in force, (4) fair values of
assets and liabilities recorded as a result of merger, (5) asset valuation
allowances, (6) guaranty fund assessment accruals, (7) deferred tax benefits
(liabilities), and (8) estimates for commitments and contingencies including
legal matters, if a liability is anticipated and can be reasonably estimated.
Estimates and assumptions regarding all of the preceding items are inherently
subject to change and are reassessed periodically. Changes in estimates and
assumptions could materially impact the financial statements.

PENDING ACCOUNTING STANDARDS: DERIVATIVE FINANCIAL INSTRUMENTS
During 1998, the Financial Accounting Standards Board issued Statement No. 133
("SFAS 133"), Accounting for Derivative Financial Instruments and Hedging
Activities. SFAS 133 requires that all derivative instruments, including certain
derivative instruments embedded in other contracts, be recorded on the balance
sheet and measured at its fair value. The change in a derivative's fair value is
generally to be recognized in current period earnings.

If certain conditions are met, a derivative may be specifically designated as a
hedge of an exposure to changes in fair value, variability of cash flows, or
certain foreign currency exposures. When designated as a hedge, the fair value
should be recognized currently in earnings or other comprehensive income,
depending on whether such designation is considered a fair value or as a cash
flow hedge. With respect to fair value hedges, the fair value of the derivative,
as well as changes in the fair value of the hedged item, are reported in
earnings. For cash flow hedges, changes in the derivatives fair value are
reported in other comprehensive income and subsequently reclassified into
earnings when the hedged item affects earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Companies

GA-109652                           51
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

adopted SFAS 133 on January 1, 2000. The cumulative effect of the
accounting change upon adoption was not material.

RECLASSIFICATIONS
Certain amounts in the 1999 and 1998 financial statements have been
reclassified to conform to the 2000 financial statement presentation.

2.   BASIS OF FINANCIAL REPORTING

The financial statements of the Companies differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of acquiring
new business are deferred and amortized over the life of the policies rather
than charged to operations as incurred; (2) an asset representing the present
value of future cash flows from insurance contracts acquired was established as
a result of the merger/acquisition and is amortized and charged to expense; (3)
future policy benefit reserves for divisions with fixed interest guarantees of
the variable insurance products are based on full account values, rather than
the greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts, for
these credits rather than presented net of these credits; (5) fixed maturity
investments are designated as "available for sale" and valued at fair value with
unrealized appreciation/depreciation, net of adjustments to value of purchased
insurance in force, deferred policy acquisition costs, and deferred income taxes
(if applicable), credited/charged directly to stockholder's equity rather than
valued at amortized cost; (6) the carrying value of fixed maturities is reduced
to fair value by a charge to realized losses in the Statements of Operations
when declines in carrying value are judged to be other than temporary, rather
than through the establishment of a formula-determined statutory investment
reserve (carried as a liability), changes in which are charged directly to
surplus; (7) deferred income taxes are provided for the difference between the
financial statement and income tax bases of assets and liabilities; (8) net
realized gains or losses attributed to changes in the level of interest rates in
the market are recognized when the sale is completed rather than deferred and
amortized over the remaining life of the fixed maturity security; (9) a
liability is established for anticipated guaranty fund assessments, net of
related anticipated premium tax credits, rather than capitalized when assessed
and amortized in accordance with procedures permitted by insurance regulatory
authorities; (10) revenues for variable insurance products consist of policy
charges applicable to each contract for the cost of insurance, policy
administration charges, amortization of policy initiation fees, and surrender
charges assessed rather than premiums received; (11) the financial statements of
Golden American's wholly owned subsidiary are consolidated rather than recorded
at the equity in net assets; (12) surplus notes are reported as liabilities
rather than as surplus; and (13) assets and liabilities are restated to fair
values when a change in ownership occurs, with provisions for goodwill and other
intangible assets, rather than continuing to be presented at historical cost.

The net loss for Golden American as determined in accordance with statutory
accounting practices was $71,134,000 in 2000, $85,578,000 in 1999, $68,002,000
in 1998. Total statutory capital and surplus was $406,923,000 and $368,928,000
at December 31, 2000 and 1999, respectively.

The National Association of Insurance Commissioners has revised the Accounting
Practices and Procedures Manual, the guidance that defines statutory accounting
principles. The revised manual will be effective January 1, 2001, and has been
adopted, at least in part, by the States of Delaware and New York, which are the
states of domicile for Golden American and First Golden, respectively. The
revised manual will result in changes to the accounting practices that the
Companies use to prepare their statutory-basis financial statements. Management
believes the impact of these changes to the Companies' statutory-basis capital
and surplus as of January 1, 2001 will not be significant.

GA-109652                           52
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS

INVESTMENT RESULTS
Major categories of net investment income are summarized below:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities ......................   $ 55,302       $ 50,352      $ 35,224
Equity securities .....................        248            515            --
Mortgage loans on real estate .........      7,832          7,074         6,616
Policy loans ..........................        516            485           619
Short-term investments ................      2,253          2,583         1,311
Other, net ............................        543            388           246
                                          --------       --------      --------
Gross investment income ...............     66,694         61,397        44,016
Less investment expenses ..............     (2,554)        (2,228)       (1,531)
                                          --------       --------      --------
Net investment income .................   $ 64,140       $ 59,169      $ 42,485
                                          ========       ========      ========

Realized losses on investments follows:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities, available for sale ..   $ (6,289)      $ (2,910)     $ (1,428)
Equity securities .....................       (213)            --            --
Mortgage loans on real estate .........        (52)           (13)          (63)
                                          --------       --------      --------
Realized losses on investments ........   $ (6,554)      $ (2,923)     $ (1,491)
                                          ========       ========      ========

The change in unrealized appreciation (depreciation) of securities at fair value
follows:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities, available for sale ..   $ 16,558       $(24,944)     $  1,100
Equity securities .....................     (4,198)         5,301        (2,390)
                                          --------       --------      --------
Unrealized appreciation (depreciation)
   of securities ......................   $ 12,360       $(19,643)     $ (1,290)
                                          ========       ========      ========

GA-109652                           53
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)

At December 31, 2000 and December 31, 1999, amortized cost, gross unrealized
gains and losses, and estimated fair values of fixed maturities, all of which
are designated as available for sale, follows:

                                                 Gross      Gross     Estimated
                                  Amortized   Unrealized  Unrealized    Fair
                                     Cost        Gains      Losses      Value
                                   --------    --------    --------    --------
                                              (Dollars in thousands)
December 31, 2000
-----------------
U.S. government and governmental
   agencies and authorities ....   $ 18,607    $    580    $    (16)   $ 19,171
Public utilities ...............     54,132         294      (1,600)     52,826
Corporate securities ...........    355,890       1,318      (8,006)    349,202
Other assets-backed securities .    223,787       2,166      (1,831)    224,122
Mortgage-backed securities .....    146,335       1,465        (543)    147,257
                                   --------    --------    --------    --------
Total ..........................   $798,751    $  5,823    $(11,996)   $792,578
                                   ========    ========    ========    ========

December 31, 1999
-----------------
U.S. government and governmental
   agencies and authorities ....   $ 21,363          --    $   (260)   $ 21,103
Public utilities ...............     53,754    $     25      (2,464)     51,315
Corporate securities ...........    396,494          53     (12,275)    384,272
Other assets-backed securities .    207,044         850      (4,317)    203,577
Mortgage-backed securities .....    179,397          39      (4,382)    175,054
                                   --------    --------    --------    --------
Total ..........................   $858,052    $    967    $(23,698)   $835,321
                                   ========    ========    ========    ========

Short-term investments with maturities of 30 days or less have been excluded
from the above schedules. Amortized cost approximates fair value for these
securities. At December 31, 2000, net unrealized investment loss on fixed
maturities designated as available for sale totaled $6,173,000. Depreciation of
$1,447,000 was included in stockholder's equity at December 31, 2000 (net of
adjustments of $801,000 to VPIF, $3,146,000 to DPAC, and $779,000 to deferred
income taxes). At December 31, 1999, net unrealized investment loss on fixed
maturities designated as available for sale totaled $22,731,000. Depreciation of
$6,955,000 was included in stockholder's equity at December 31, 1999 (net of
adjustments of $1,785,000 to VPIF, $10,246,000 to DPAC, and $3,745,000 to
deferred income taxes).

At December 31, 2000, net unrealized depreciation on equity securities was
comprised entirely of gross depreciation of $1,820,000. At December 31, 1999,
net unrealized appreciation on equity securities was comprised entirely of gross
appreciation of $2,378,000.

Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 2000 are shown
below. Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.

GA-109652                           54
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)
                                                      Amortized       Estimated
December 31, 2000                                       Cost          Fair Value
--------------------------------------------------------------------------------
                                                        (Dollars in thousands)
Due within one year .........................         $ 51,001         $ 50,836
Due after one year through five years .......          323,753          317,862
Due after five years through ten years ......           45,812           44,891
Due after ten years .........................            8,063            7,610
                                                      --------         --------
                                                       428,629          421,199
Other asset-backed securities ...............          223,787          224,122
Mortgage-backed securities ..................          146,335          147,257
                                                      --------         --------
Total .......................................         $798,751         $792,578
                                                      ========         ========

An analysis of sales, maturities, and principal repayments of the Companies'
fixed maturities portfolio follows:

<TABLE>
<CAPTION>
                                                              Gross       Gross        Proceeds
                                              Amortized     Realized     Realized        From
                                                 Cost         Gains       Losses         Sale
                                               --------     --------     --------      --------
                                                            (Dollars in thousands)
<S>                                            <C>          <C>          <C>           <C>
For the year ended December 31, 2000:
Scheduled principal repayments, calls, and
   tenders ...............................     $ 91,158     $    122     $     (1)     $ 91,279
Sales ....................................      120,125          285       (6,553)      113,857
                                               --------     --------     --------      --------
Total ....................................     $211,283     $    407     $ (6,554)     $205,136
                                               ========     ========     ========      ========

For the year ended December 31, 1999:
Scheduled principal repayments, calls, and
   tenders ...............................     $141,346     $    216         (174)     $141,388
Sales ....................................       80,472          141     $ (1,454)       79,159
                                               --------     --------     --------      --------
Total ....................................     $221,818     $    357     $ (1,628)     $220,547
                                               ========     ========     ========      ========

For the year ended December 31, 1998:
Scheduled principal repayments, calls, and
   tenders ...............................     $102,504     $     60     $     (3)     $102,561
Sales ....................................       43,204          518       (1,030)       42,692
                                               --------     --------     --------      --------
Total ....................................     $145,708     $    578     $ (1,033)     $145,253
                                               ========     ========     ========      ========
</TABLE>

Investment Valuation Analysis: The Companies analyze the investment portfolio at
least quarterly in order to determine if the carrying value of any investment
has been impaired. The carrying value of debt and equity securities is written
down to fair value by a charge to realized losses when an impairment in value
appears to be other than temporary.

GA-109652                          55
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)

During the second quarter of 2000, Golden American determined that the carrying
value of an impaired bond exceeded its estimated net realizable value. As a
result, on June 30, 2000, Golden American recognized a total pre-tax loss of
approximately $142,000 to reduce the carrying value of the bond to its net
realizable value of $315,000 at December 31, 2000.

During the fourth quarter of 1998, Golden American determined that the carrying
value of two bonds exceeded their estimated net realizable value. As a result,
at December 31, 1998, Golden American recognized a total pre-tax loss of
$973,000 to reduce the carrying value of the bonds to their combined net
realizable value of $2,919,000. During the second quarter of 1999, further
information was received regarding these bonds and Golden American determined
that the carrying value of the two bonds exceeded their estimated net realizable
value. As a result, at June 30, 1999, Golden American recognized a total pre-tax
loss of $1,639,000 to further reduce the carrying value of the bonds to their
combined net realizable value of $1,137,000. During the year 2000, these bonds
had no further reduction in carrying value.

Investments on Deposit: At December 31, 2000 and 1999, affidavits of deposits
covering bonds with a par value of $6,870,000 and $6,470,000, respectively, were
on deposit with regulatory authorities pursuant to certain statutory
requirements.

Investment Diversifications: The Companies' investment policies related to the
investment portfolio require diversification by asset type, company, and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at December
31, 2000 and December 31, 1999. Fixed maturities included investments in basic
industrials (29% in 2000, 29% in 1999), conventional mortgage-backed securities
(20% in 2000, 22% in 1999), financial companies (14% in 2000, 16% in 1999), and
other asset-backed securities (20% in 2000, 19% in 1999). Mortgage loans on real
estate have been analyzed by geographical location with concentrations by state
identified as California (15% in 2000, 12% in 1999) and Utah (9% in 2000, 10% in
1999). There are no other concentrations of mortgage loans on real estate in any
state exceeding ten percent at December 31, 2000 and 1999. Mortgage loans on
real estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (29% in 2000, 34% in 1999),
industrial buildings (35% in 2000, 33% in 1999), retail facilities (18% in 2000,
19% in 1999), and multi-family apartments (10% in 2000, 10% in 1999). Equity
securities are not significant to the Companies' overall investment portfolio.

No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceeded ten percent of stockholder's
equity at December 31, 2000.

4.   COMPREHENSIVE INCOME

Comprehensive income includes all changes in stockholder's equity during a
period except those resulting from investments by and distributions to the
stockholder. Total comprehensive income (loss) for the Companies includes
$606,000 for the year ended December 31, 2000 for First Golden and $(452,000)
and $1,015,000 for the years ended December 31, 1999 and 1998, respectively.
Other comprehensive income excludes net investment gains (losses) included in
net income, which merely represent transfers from unrealized to realized gains
and losses. These amounts total $(2,670,000), $(1,468,000) and $(2,133,000) in
the years ended December 31, 2000, 1999 and 1998, respectively. Such amounts,
which have been measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $(4,742,000), $(1,441,000) and $705,000 in
the years ended December 31, 2000, 1999 and 1998, respectively.

GA-109652                           56
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

5.   FAIR VALUES OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of estimated fair value of all financial instruments, including both
assets and liabilities recognized and not recognized in a company's balance
sheet, unless specifically exempted. SFAS No. 119, "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments," requires
additional disclosures about derivative financial instruments. Most of the
Companies' investments, investment contracts, and debt fall within the
standards' definition of a financial instrument. Fair values for the Companies'
insurance contracts other than investment contracts are not required to be
disclosed. In cases where quoted market prices are not available, estimated fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. Accounting, actuarial, and
regulatory bodies are continuing to study the methodologies to be used in
developing fair value information, particularly as it relates to such things as
liabilities for insurance contracts. Accordingly, care should be exercised in
deriving conclusions about the Companies' business or financial condition based
on the information presented herein.

The Companies closely monitor the composition and yield of invested assets, the
duration and interest credited on insurance liabilities, and resulting interest
spreads and timing of cash flows. These amounts are taken into consideration in
the Companies' overall management of interest rate risk, which attempts to
minimize exposure to changing interest rates through the matching of investment
cash flows with amounts expected to be due under insurance contracts. These
assumptions may not result in values consistent with those obtained through an
actuarial appraisal of the Companies' business or values that might arise in a
negotiated transaction.

The following compares carrying values as shown for financial reporting purposes
with estimated fair values:

<TABLE>
<CAPTION>
December 31                                           2000                      1999
                                             -----------------------   -----------------------
                                                           Estimated                Estimated
                                              Carrying       Fair       Carrying      Fair
                                                Value        Value        Value       Value
                                             ----------   ----------   ----------   ----------
                                                           (Dollars in thousands)
<S>                                          <C>          <C>          <C>          <C>
ASSETS
   Fixed maturities, available for sale ..   $  792,578   $  792,578   $  835,321   $  835,321
   Equity securities .....................        6,791        6,791       17,330       17,330
   Mortgage loans on real estate .........       99,916      100,502      100,087       95,524
   Policy loans ..........................       13,323       13,323       14,157       14,157
   Short-term investments ................      106,775      106,775       80,191       80,191
   Cash and cash equivalents .............       63,207       63,207       14,380       14,380
   Separate account assets ...............    9,831,489    9,831,489    7,562,717    7,562,717

LIABILITIES
   Annuity products ......................    1,047,932      962,810    1,017,105      953,546
   Surplus notes .........................      245,000      204,455      245,000      226,100
   Revolving note payable ................           --           --        1,400        1,400
   Separate account liabilities ..........    9,831,489    9,831,489    7,562,717    7,562,717
</TABLE>

GA-109652                           57
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

5.   FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)

The following methods and assumptions were used by the Companies in estimating
fair values.

Fixed maturities: Estimated fair values of conventional mortgage-backed
securities not actively traded in a liquid market and publicly traded securities
are estimated using a third party pricing process. This pricing process uses a
matrix calculation assuming a spread over U.S. Treasury bonds based upon the
expected average lives of the securities.

Equity securities: Estimated fair values of equity securities, which consist of
the Companies' investment in the portfolios underlying its separate accounts,
are based upon the quoted fair value of individual securities comprising the
individual portfolios. For equity securities not actively traded, estimated fair
values are based upon values of issues of comparable returns and quality.

Mortgage loans on real estate: Fair values are estimated by discounting expected
cash flows, using interest rates currently offered for similar loans.

Policy loans: Carrying values approximate the estimated fair value for policy
loans.

Short-term investments and cash and cash equivalents: Carrying values reported
in the Companies' historical cost basis balance sheet approximate estimated fair
value for these instruments due to their short-term nature.

Separate account assets: Separate account assets are reported at the quoted fair
values of the individual securities in the separate accounts.

Annuity products: Estimated fair values of the Companies' liabilities for future
policy benefits for the divisions of the variable annuity products with fixed
interest guarantees and for supplemental contracts without life contingencies
are stated at cash surrender value, the cost the Companies would incur to
extinguish the liability.

Surplus notes: Estimated fair value of the Companies' surplus notes were based
upon discounted future cash flows using a discount rate approximating the
current market value.

Revolving note payable: Carrying value reported in the Companies' historical
cost basis balance sheet approximates estimated fair value for this instrument,
as the agreement carries a variable interest rate provision.

Separate account liabilities: Separate account liabilities are reported at full
account value in the Companies' historical cost balance sheet. Estimated fair
values of separate account liabilities are equal to their carrying amount.

6.   VALUE OF PURCHASED IN FORCE

As a result of the merger, a portion of the purchase price was allocated to the
right to receive future cash flows from existing insurance contracts. This
allocated cost represents VPIF, which reflects the value of those purchased
policies calculated by discounting actuarially determined expected future cash
flows at the discount rate determined by the purchaser. Interest was accrued at
a rate of 7.32% during 2000 (7.33% during 1999, and 7.29% during 1998).

GA-109652                           58
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

6.   VALUE OF PURCHASED IN FORCE (continued)

A reconciliation of the change in the VPIF asset follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                     (Dollars in thousands)
Beginning balance .........................    $ 31,727    $ 35,977    $ 43,174
   Accretion of interest ..................       2,016       2,372       2,802
   Amortization of asset ..................      (6,817)     (8,610)     (7,526)
   Adjustment for unrealized gains (losses)        (984)      1,988        (203)
   Purchase price adjustment to opening
      balance sheet .......................          --          --      (2,270)
                                               --------    --------    --------
Ending balance ............................    $ 25,942    $ 31,727    $ 35,977
                                               ========    ========    ========

Based on current conditions and assumptions as to the impact of future events on
acquired policies in force, the expected approximate net amortization relating
to VPIF as of December 31, 2000, is $3.9 million in 2001, $3.6 million in 2002,
$3.0 million in 2003, $2.4 million in 2004, and $1.9 million in 2005. Actual
amortization may vary based upon changes in assumptions and experience.

7.   INCOME TAXES

Golden American files a consolidated federal income tax return. Under the
Internal Revenue Code, a newly acquired insurance company cannot file as part of
the Parent's consolidated tax return for 5 years.

At December 31, 2000, the Companies have net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $189,656,000.
Approximately $5,094,000, $3,354,000, $50,449,000, $94,078,000 and $36,681,000
of these NOL carryforwards are available to offset future taxable income of the
Companies through the years 2011, 2012, 2018, 2019 and 2020, respectively.

INCOME TAX EXPENSE (BENEFIT)
Income tax expense (benefit) included in the consolidated financial statements
follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                    (Dollars in thousands)
Current ...................................    $    (46)   $     --    $     --
Deferred ..................................      13,728       8,523       5,279
                                               --------    --------    --------
                                               $ 13,682    $  8,523    $  5,279
                                               ========    ========    ========

GA-109652                           59
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

7.   INCOME TAXES (continued)

The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                    (Dollars in thousands)

Income before income taxes ................    $ 32,862    $ 19,737    $ 10,353
                                               ========    ========    ========
Income tax at federal statutory rate ......    $ 11,502    $  6,908    $  3,624
Tax effect of:
    Goodwill amortization .................       1,322       1,322       1,322
    Meals and entertainment ...............         292         199         157
    Other items ...........................         566          94         176
                                               --------    --------    --------
Income tax expense ........................    $ 13,682    $  8,523    $  5,279
                                               ========    ========    ========

DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Companies' deferred
income tax assets and liabilities at December 31, 2000 and 1999 follows:

<TABLE>
<CAPTION>
December 31                                                                2000         1999
                                                                        ---------    ---------
                                                                        (Dollars in thousands)
<S>                                                                     <C>          <C>
Deferred tax assets:
   Net unrealized depreciation of securities at fair value ..........   $     637    $      --
   Net unrealized depreciation of available for sale fixed maturities         779        3,745
   Future policy benefits ...........................................     163,691      133,494
   Goodwill .........................................................      15,111       16,323
   Net operating loss carryforwards .................................      66,380       56,630
   Other ............................................................       1,333        1,333
                                                                        ---------    ---------
                                                                          247,931    $ 211,525
Deferred tax liabilities:
   Net unrealized appreciation of securities at fair value ..........          --         (832)
   Fixed maturity securities ........................................     (17,774)     (17,774)
   Deferred policy acquisition costs ................................    (184,743)    (154,706)
   Mortgage loans on real estate ....................................        (715)        (715)
   Value of purchased insurance in force ............................      (8,512)     (10,462)
   Other ............................................................     (25,724)      (1,348)
                                                                        ---------    ---------
                                                                         (237,468)    (185,837)
                                                                        ---------    ---------
Valuation allowance .................................................      (1,416)      (3,745)
                                                                        ---------    ---------
Deferred income tax asset ...........................................   $   9,047    $  21,943
                                                                        =========    =========
</TABLE>

At December 31, 2000, the Company reported, for financial statement purposes,
unrealized losses on certain investments, which have not been recognized for tax
purposes. Since it is uncertain as to whether these capital losses, if ever
realized, could be utilized to offset capital gains, a valuation allowance has
been established for the tax effect of the financial statement losses.

GA-109652                          60
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

8.   RETIREMENT PLANS AND EMPLOYEE STOCK COMPENSATION

DEFINED BENEFIT PLANS
In 2000, 1999 and 1998, the Companies were allocated their share of the pension
liability associated with their employees. The Companies' employees are covered
by the employee retirement plan of an affiliate, Equitable Life. Further,
Equitable Life sponsors a defined contribution plan that is qualified under
Internal Revenue Code Section 401(k).

The following tables summarize the benefit obligations and the funded status for
pension benefits over the two-year period ended December 31, 2000:

                                                            2000         1999
                                                           -------      -------
                                                          (Dollars in thousands)
Change in benefit obligation:
   Benefit obligation at January 1 ...............         $ 4,221      $ 4,454
   Service cost ..................................           1,569        1,500
   Interest cost .................................             554          323
   Actuarial (gain) loss .........................           1,562       (2,056)
                                                           -------      -------
   Benefit obligation at December 31 .............         $ 7,906      $ 4,221
                                                           =======      =======

Funded status:
   Funded status at December 31 ..................         $(7,906)     $(4,221)
   Unrecognized past service cost ................             141           --
   Unrecognized net loss .........................           1,627          210
                                                           -------      -------
   Net amount recognized .........................         $(6,138)     $(4,011)
                                                           =======      =======

The Companies' plan assets were held by Equitable Life, an affiliate. During
1998, the Equitable Life Employee Pension Plan began investing in an undivided
interest of the ING-NA Master Trust (the "Master Trust"). Boston Safe Deposit
and Trust Company holds the Master Trust's investment assets.

The weighted-average assumptions used in the measurement of the Companies'
benefit obligation follows:

December 31                                                  2000         1999
                                                            ------       ------
Discount rate ....................................           7.75%        8.00%
Expected return on plan assets ...................           9.25         9.25
Rate of compensation increase ....................           5.00         5.00

The following table provides the net periodic benefit cost for the fiscal years
2000, 1999, and 1998:

Year Ended December 31                              2000       1999       1998
                                                   ------     ------     ------
                                                      (Dollars in thousands)
Service cost ...............................       $1,569     $1,500     $1,138
Interest cost ..............................          554        323         97
                                                   ------     ------     ------
Net periodic benefit cost ..................       $2,123     $1,823     $1,235
                                                   ======     ======     ======

GA-109652                           61
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

8.   RETIREMENT PLANS AND EMPLOYEE STOCK COMPENSATION (continued)

There were no gains or losses resulting from curtailments or settlements during
2000, 1999, or 1998.

The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for pension plans with accumulated benefit obligations in excess
of plan assets were $7,906,000, $4,701,000, and $0, respectively, as of December
31, 2000 and $4,221,000, $2,488,000, and $0, respectively, as of December 31,
1999.

PHANTOM STOCK OPTION PLAN
The Phantom Stock Option Plan (the "Phantom Plan"), which covers certain key
employees, is similar to a standard stock option plan; however, the phantom
share option entitles the holder to a cash benefit in Dutch Guilders linked to
the rise in value of ING ordinary shares on the Amsterdam Stock Exchange. The
plan participants are entitled to any appreciation in the value of ING ordinary
shares over the Phantom Plan option price (strike price) of 53.85 Euros for
options issued on July 1, 1999, 140.40 Dutch Guilders for options issued on May
26, 1998, and 85.10 Dutch Guilders for options issued on May 23, 1997, not the
ordinary shares themselves.

Options are granted at fair value on the date of grant. Options in the Phantom
Plan are subject to forfeiture to ING should the individuals terminate their
relationship with ING before the three-year initial retention period has
elapsed. All options expire five years from the date of grant.

On July 1, 1999, ING issued 34,750 options to employees of Golden American
related to this plan at a strike price of 53.85 Euros.

On May 26, 1998, ING issued 42,400 options related to this plan at a strike
price of 140.40 Dutch Guilders. Since the strike price at December 31, 1998 was
higher than the ING share price, there was no compensation expense related to
these options in 1998.

On May 23, 1997, ING issued 3,500 options related to this plan at a strike price
of 85.10 Dutch Guilders. Since the strike price was lower than the ING share
price at December 31, 1998, Golden American incurred $46,000 of compensation
expense related to these options during 1998.

No expense was recognized in 1999 related to the above options. As of December
31, 1999, 58,250 options remain outstanding.

During 2000, the Phantom Plan liability was transferred to ING. As of December
31, 2000, the Companies held no liabilities under the Phantom Plan. There were
no expenses incurred related to this plan during the year ended December 31,
2000.

9.   RELATED PARTY TRANSACTIONS

Operating Agreements: Directed Services, Inc. ("DSI"), an affiliate, acts as the
principal underwriter (as defined in the Securities Act of 1933 and the
Investment Company Act of 1940, as amended) and distributor of the variable
insurance products issued by the Companies. DSI is authorized to enter into
agreements with broker/dealers to distribute the Companies' variable insurance
products and appoint representatives of the broker/dealers as agents. For the
years ended December 31, 2000, 1999 and 1998, the Companies paid commissions to
DSI totaling $208,883,000, $181,536,000, and $117,470,000, respectively.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid by DSI for these services is calculated as a percentage of average
assets in the variable separate accounts. For the years ended December 31, 2000,
1999 and 1998, the fee was $21,296,000, $10,136,000, and $4,771,000,
respectively.

GA-109652                           62
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Effective January 1, 1998, the Companies have an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM provides
asset management and accounting services. Under the agreement, the Companies
record a fee based on the value of the assets under management. The fee is
payable quarterly. For the years ended December 31, 2000, 1999 and 1998, the
Companies incurred fees of $2,521,000, $2,227,000 and $1,504,000, respectively,
under this agreement.

Golden American has a guaranty agreement with Equitable Life Insurance Company
of Iowa ("Equitable Life"), an affiliate. In consideration of an annual fee,
payable June 30, Equitable Life guarantees to Golden American that it will make
funds available, if needed, to Golden American to pay the contractual claims
made under the provisions of Golden American's life insurance and annuity
contracts. The agreement is not, and nothing contained therein or done pursuant
thereto by Equitable Life shall be deemed to constitute, a direct or indirect
guaranty by Equitable Life of the payment of any debt or other obligation,
indebtedness, or liability, of any kind or character whatsoever, of Golden
American. The agreement does not guarantee the value of the underlying assets
held in separate accounts in which funds of variable life insurance and variable
annuity policies have been invested. The calculation of the annual fee is based
on risk based capital. On June 30, 2000, Golden American incurred a fee of
$7,000 under this agreement. No annual fee was paid in 1999.

Golden American provides certain advisory, computer, and other resources and
services to Equitable Life. Revenues for these services, which reduced general
expenses incurred by Golden American, totaled $6,193,000, $6,107,000 and
$5,833,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

The Companies have a service agreement with Equitable Life in which Equitable
Life provides administrative and financial related services. Under this
agreement, the Companies incurred expenses of $1,270,000, $1,251,000 and
$1,058,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

First Golden provided resources and services to DSI. Revenues for these
services, which reduce general expenses incurred by the Companies, totaled
$223,000, $387,000, and $75,000 for the years ended December 31, 2000, 1999 and
1998, respectively.

Golden American provides resources and services to ING Mutual Funds Management
Co., LLC, an affiliate. Revenues for these services, which reduced general
expenses incurred by Golden American, totaled $455,000 and $244,000 for the
years ended December 31, 2000 and 1999, respectively.

Golden American provides resources and services to United Life & Annuity
Insurance Company, an affiliate. Revenues for these services, which reduced
general expenses incurred by Golden American, totaled $593,000 and $460,000 for
the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Security Life of Denver
Insurance Company, an affiliate. Revenues for these services, which reduced
general expenses incurred by the Companies, totaled $261,000 and $216,000 for
the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduce general
expenses incurred by the Companies, totaled $115,000 and $103,000 for the years
ended December 31, 2000 and 1999, respectively.

GA-109652                          63
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

In 2000, 1999, and 1998, the Companies received 11.3%, 10.0%, and 9.6% of total
premiums, net of reinsurance, for variable products sold through eight
affiliates as noted in the following table:

Year Ended December 31                            2000        1999        1998
                                                -------     -------     -------
                                                    (Dollars in thousands)
LSSI .......................................    $ 127.0     $ 168.5     $ 122.9
Vestax Securities Corporation ..............       47.2        88.1        44.9
DSI ........................................        1.4         2.5        13.6
Multi-Financial Securities Corporation .....       38.6        44.1        13.4
IFG Network Securities, Inc. ...............       23.1        25.8         3.7
Washington Square ..........................       44.6          --          --
Primevest ..................................        6.2          --          --
Compulife ..................................        2.7          --          --
                                                -------     -------     -------
Total ......................................    $ 290.8     $ 329.0     $ 198.5
                                                =======     =======     =======

Modified Coinsurance Agreement: On June 30, 2000, effective January 1, 2000,
Golden American entered into a modified coinsurance agreement with Equitable
Life, an affiliate, covering a considerable portion of Golden American's
variable annuities issued on or after January 1, 2000, excluding those with an
interest rate guarantee. The financial statements are presented net of the
effects of the agreement.

Under this agreement, Golden American received a net reimbursement of expenses
and charges of $218.8 million. This was offset by a decrease in deferred
acquisition costs of $223.7 million. As at December 31, 2000, Golden American
also had a payable to Equitable Life of $16.3 million due to the overpayment by
Equitable Life of the cash settlement for the modified coinsurance agreement.

Reinsurance Agreement Covering Minimum Guaranteed Benefits: On December 28,
2000, Golden American entered into a reinsurance agreement with Security Life of
Denver International Limited, an affiliate, covering variable annuity minimum
guaranteed death benefits and minimum guaranteed living benefits of variable
annuities issued on or after January 1, 2000. An irrevocable letter of credit
was obtained through Bank of New York in the amount of $10,500,000 related to
this agreement. Under this agreement, Golden American recorded a reinsurance
recoverable of $14.6 million at December 31, 2000.

Reciprocal Loan Agreement: Golden American maintains a reciprocal loan agreement
with ING America Insurance Holdings, Inc. ("ING AIH"), a Delaware corporation
and affiliate, to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Under this agreement, which became effective
January 1, 1998 and expires December 31, 2007, Golden American and ING AIH can
borrow up to $65,000,000 from one another. Prior to lending funds to ING AIH,
Golden American must obtain the approval from the Department of Insurance of the
State of Delaware. Interest on any Golden American borrowings is charged at the
rate of ING AIH's cost of funds for the interest period plus 0.15%. Interest on
any ING AIH borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a similar duration.
Under this agreement, Golden American incurred interest expense of $481,000,
$815,000 and $1,765,000 for the years ended December 31, 2000, 1999 and 1998,
respectively. At December 31, 2000, 1999 and 1998, Golden American did not have
any borrowings or receivables from ING AIH under this agreement.

GA-109652                          64
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Line of credit: Golden American maintained a line of credit agreement with
Equitable to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Under this agreement, which became effective December 1, 1996
and expired December 31, 1997, Golden American could borrow up to $25,000,000.
Interest on any borrowings was charged at the rate of Equitable's monthly
average aggregate cost of short-term funds plus 1.00%. Under this agreement,
Golden American incurred interest expense of $211,000 for the year ended
December 31, 1998. The outstanding balance was paid by a capital contribution
and with funds borrowed from ING AIH.

Surplus Notes: On December 30, 1999, Golden American issued an 8.179% surplus
note in the amount of $50,000,000 to Equitable Life. The note matures on
December 29, 2029. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary claims,
as well as debts owed to all other classes of debtors, other than surplus note
holders, of Golden American. Any payment of principal and/or interest made is
subject to the prior approval of the Delaware Insurance Commissioner. Under this
agreement, Golden American incurred interest expense of $4,112,000 for the year
ended December 31, 2000. Golden American incurred no interest expense during the
year ended December 31, 1999.

On December 8, 1999, Golden American issued a 7.979% surplus note in the amount
of $35,000,000 to First Columbine Life Insurance Company ("First Columbine"), an
affiliate. The note matures on December 7, 2029. Payment of the note and related
accrued interest is subordinate to payments due to policyholders, claimant and
beneficiary claims, as well as debts owed to all other classes of debtors, other
than surplus note holders, of Golden American. Any payment of principal and/or
interest made is subject to the prior approval of the Delaware Insurance
Commissioner. Under this agreement, Golden American incurred interest expense of
$2,961,000 and $0 for the years ended December 31, 2000 and 1999, respectively.

On September 30, 1999, Golden American issued a 7.75% surplus note in the amount
of $75,000,000 to ING AIH. The note matures on September 29, 2029. Payment of
the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of Golden American.
Any payment of principal and/or interest made is subject to the prior approval
of the Delaware Insurance Commissioner. Under this agreement, Golden American
incurred interest expense of $5,813,000 in 2000 and $1,469,000 in 1999. On
December 30, 1999, ING AIH assigned the note to Equitable Life.

On December 30, 1998, Golden American issued a 7.25% surplus note in the amount
of $60,000,000 to Equitable Life. The note matures on December 29, 2028. Payment
of the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of Golden American.
Any payment of principal and/or interest made is subject to the prior approval
of the Delaware Insurance Commissioner. Under this agreement, Golden American
incurred interest expense of $4,350,000 in 2000 and 1999. Golden American
incurred no interest in 1998.

On December 17, 1996, Golden American issued an 8.25% surplus note in the amount
of $25,000,000 to Equitable. The note matures on December 17, 2026. Payment of
the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors of Golden American. Any payment of principal made is
subject to the prior approval of the Delaware Insurance Commissioner. Golden
American incurred interest totaling $2,063,000 in 2000, unchanged from 1999 and
1998. On December 17, 1996, Golden American contributed the $25,000,000 to First
Golden acquiring 200,000 shares of common stock (100% of outstanding stock).

GA-109652                           65
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Stockholder's Equity: During 2000, 1999 and 1998, Golden American received
capital contributions from its Parent of $80,000,000, $121,000,000 and
$122,500,000, respectively. As at December 31, 2000, Golden American also had a
receivable of $35,000,000 from capital contributions made by its Parent.

10.  COMMITMENTS AND CONTINGENCIES

Reinsurance: At December 31, 2000, the Companies had reinsurance treaties with
six unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. Golden American remains liable to the
extent reinsurers do not meet their obligations under the reinsurance
agreements. Reinsurance ceded in force for life mortality risks were
$105,334,000, and $119,575,000 at December 31, 2000 and 1999, respectively. At
December 31, 2000 and 1999, the Companies have a net receivable of $33,973,000
and $14,834,000, respectively, for reserve credits, reinsurance claims, or other
receivables from these reinsurers comprised of $16,462,000 and $493,000,
respectively, for claims recoverable from reinsurers, $4,007,000 and $1,201,000,
respectively, for a payable for reinsurance premiums, and $21,518,000 and
$15,542,000, respectively, for a receivable from an unaffiliated reinsurer.
Included in the accompanying financial statements, excluding the modified
coinsurance agreements, are net considerations to reinsurers of $21,655,000,
$9,883,000 and $4,797,000 and net policy benefits recoveries of $8,927,000,
$3,059,000 and $2,170,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.

On June 30, 2000, effective January 1, 2000, Golden American entered into a
modified coinsurance agreement with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued on or after
January 1, 2000, excluding those with an interest rate guarantee. At December
31, 2000, Golden American had received a total settlement of $218.8 million
under this agreement. The carrying value of the separate account liabilities
covered under this agreement represent 17.6% of total separate account
liabilities outstanding at December 31, 2000. Golden American remains liable to
the extent Equitable Life does not meet its obligations under the agreement. The
accompanying statement of operations, statement of changes in stockholder's
equity and statement of cash flows are presented net of the effects of the
agreement.

On December 28, 2000, Golden American entered into a reinsurance agreement with
Security Life of Denver International Limited, an affiliate, covering variable
annuity minimum guaranteed death benefits and guaranteed living benefits of
variable annuities issued on or after January 1, 2000. An irrevocable letter of
credit was obtained through Bank of New York in the amount of $10,500,000
related to this agreement.

On December 29, 2000, First Golden entered into a reinsurance treaty with London
Life Reinsurance Company of Pennsylvania, an unaffiliated reinsurer, covering
the minimum guaranteed death benefits of First Golden's variable annuities
issued on or after January 1, 2000.

Effective June 1, 1994, Golden American entered into a modified coinsurance
agreement with an unaffiliated reinsurer. The accompanying financial statements
are presented net of the effects of the treaty which increased income by
$736,000, $1,729,000, $1,022,000 for the years ended December 31, 2000, 1999 and
1998, respectively.

Guaranty Fund Assessments: Assessments are levied on the Companies by life and
health guaranty associations in most states in which the Companies are licensed
to cover losses of policyholders of insolvent or rehabilitated insurers. In some
states, these assessments can be partially recovered through a reduction in
future premium taxes. The Companies cannot predict whether and to what extent
legislative initiatives may affect the right to offset. The associated cost for
a particular insurance company can vary significantly based upon its fixed
account premium volume by line of business and state premiums as well as its
potential for

GA-109652                           66
<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

10.  COMMITMENTS AND CONTINGENCIES (continued)

premium tax offset. The Companies have established an undiscounted reserve to
cover such assessments, review information regarding known failures, and revise
estimates of future guaranty fund assessments. Accordingly, the Companies
accrued and charged to expense an additional $3,000, $3,000 and $1,123,000 for
the years ended December 31, 2000, 1999 and 1998, respectively. At December 31,
2000 and 1999, the Companies have an undiscounted reserve of $2,430,000, and
$2,444,000, respectively, to cover estimated future assessments (net of related
anticipated premium tax credits) and have established an asset totaling
$733,000, and $618,000, respectively, for assessments paid which may be
recoverable through future premium tax offsets. The Companies believe this
reserve is sufficient to cover expected future guaranty fund assessments based
upon previous premiums and known insolvencies at this time.

Litigation: The Companies, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits and
arbitrations. In some class action and other actions involving insurers,
substantial damages have been sought and/or material settlement or award
payments have been made. The Companies currently believe no pending or
threatened lawsuits or actions exist that are reasonably likely to have a
material adverse impact on the Companies.

Vulnerability from Concentrations: The Companies have various concentrations in
the investment portfolio (see Note 3 for further information). The Companies'
asset growth, net investment income, and cash flow are primarily generated from
the sale of variable insurance products and associated future policy benefits
and separate account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme fluctuations in
interest rates or stock market returns, which may result in higher lapse
experience than assumed, could cause a severe impact to the Companies' financial
condition. A broker/dealer, having at least ten percent of total net premiums,
generated 11% of the Companies' sales in 2000 (28% and 26% by two broker/dealers
during 1999 and 1998, respectively). Two broker dealers, having at least ten
percent of total gross premiums, generated 21% of the Companies' sales in 2000
(30% and 27% by two broker/dealers during 1999 and 1998, respectively). The
Premium Plus product generated 71% of the Companies' sales during 2000 (79%
during 1999 and 63% during 1998).

Leases: The Companies lease their home office space, certain other equipment,
and capitalized computer software under operating leases which expire through
2020. During the years ended December 31, 2000, 1999 and 1998, rent expense
totaled $2,874,000, $2,273,000, and $1,241,000, respectively. At December 31,
2000, minimum rental payments due under all non-cancelable operating leases with
initial terms of one year or more are: 2001 - $3,790,000; 2002 - $3,257,000;
2003 - $2,611,000; 2004 - $2,419,000; 2005 - $2,419,000, and 2006 and thereafter
- $38,700,000.

Revolving Note Payable: To enhance short-term liquidity, the Companies
established a revolving note payable with SunTrust Bank, Atlanta (the "Bank")
which expires July 30, 2001. The note was approved by the Boards of Directors of
Golden American and First Golden on August 5, 1998 and September 29, 1998,
respectively. The total amount the Companies may have outstanding is
$85,000,000, of which Golden American and First Golden have individual credit
sublimits of $75,000,000 and $10,000,000, respectively. The note accrues
interest at an annual rate equal to: (1) the cost of funds for the Bank for the
period applicable for the advance plus 0.225% or (2) a rate quoted by the Bank
to the Companies for the advance. The terms of the agreement require the
Companies to maintain the minimum level of Company Action Level Risk Based
Capital as established by applicable state law or regulation. During the years
ended December 31, 2000, 1999 and 1998, the Companies incurred interest expense
of $87,000, $198,000 and $352,000, respectively. At December 31, 2000, there
were no amounts outstanding under this agreement. At December 31, 1999, the
Companies had a $1,400,000 note payable to the Bank under this agreement.

GA-109652                           67
<PAGE>


                    This page intentionally left blank.


<PAGE>

                                   APPENDIX A

                        MARKET VALUE ADJUSTMENT EXAMPLES

EXAMPLE #1: FULL SURRENDER -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT

     Assume a single premium payment of $100,000 with a guaranteed interest
period of 10 years, a guaranteed interest rate of 7.5%, an initial Index Rate
("I") of 7%; that a full surrender is requested 3 years into the guaranteed
interest period; that the then Index Rate for a 7 year guaranteed interest
period ("J") is 8%; and that no prior transfers or withdrawals affecting the
contract value have been made.

CALCULATE THE MARKET VALUE ADJUSTMENT

     1.   The contract value on the date of surrender is
                                    3
          $124,230 ($100,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0850)           -1 ] = $11,535

     Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $112,695 ($124,230 - $11,535 ).

  EXAMPLE #2: FULL SURRENDER -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT

     Assume $100,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate ("I") of 7%;
that a full surrender is requested 3 years into the guaranteed interest period;
that the then Index Rate for a 7 year guaranteed interest period ("J") is 6%;
and that no prior transfers or withdrawals affecting the contract value have
been made. Calculate the Market Value Adjustment

     1.   The contract value on the date of surrender is
                                    3
          $124,230 ($100,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Market Value Adjustment =
                                     2,555/365
          $124,230 x [( 1.07/1.0650 )           -1 ]= $4,141

     Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $128,371 ($124,230 + $4,141 ).

EXAMPLE #3: WITHDRAWAL -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT

     Assume $200,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate ("I") of 7%;
that a withdrawal of $112,695 is requested 3 years into the guaranteed interest
period; that the then Index Rate ("J") for a 7 year guaranteed interest period
is 8%; and that no prior transfers or withdrawals affecting the contract value
have been made.

GA-109652                           A1
<PAGE>

     First calculate the amount that must be withdrawn to provide the amount
requested.

     1.   The contract value on the date of withdrawal is
          $248,459 ( $200,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Amount that must be withdrawn =
                                    2,555/365
          [ $112,695 / (1.07/1.0850)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0850)           -1 ] = $11,535

     Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $112,695, as requested. The contract value will be reduced by the
amount of the withdrawal, $112,695, and also reduced by the Market Value
Adjustment of $11,535, for a total reduction in the contract value of $124,230.

EXAMPLE #4: WITHDRAWAL -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT

     Assume $200,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate of 7%; that a
withdrawal of $128,371 requested 3 years into the guaranteed interest period;
that the then Index Rate ("J") for a 7 year guaranteed interest period is 6%;
and that no prior transfers or withdrawals affecting the contract value have
been made.

     First calculate the amount that must be withdrawn to provide the amount
requested.

     1.   The contract value on the date of surrender is
                                     3
          $248,459 ( $200,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Amount that must be withdrawn =
                                    2,555/365
          [ $128,371 / (1.07/1.0650)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0650)           -1 ] = $$4,141

     Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $128,371, as requested. The contract value will be reduced by the
amount of the withdrawal, $128,371, but increased by the Market Value Adjustment
of $4,141, for a net reduction in the contract value of $124,230.

GA-109652                              A2
<PAGE>

                                   APPENDIX B

                            SURRENDER CHARGE EXAMPLES

EXAMPLE #1: SURRENDER CHARGES -- PARTIAL WITHDRAWAL IN EXCESS OF FREE WITHDRAWAL
AMOUNT

The following assumes you made an initial single premium payment of $100,000
into the 10 year guarantee period with an interest rate of 7.50%. It also
assumes a withdrawal at the beginning of the fifth contract year of 20% of the
contract value. The accumulation value as of the beginning of the fifth contract
year is $133,546.91. The interest earned in the last 12 months as of the
beginning of the fifth contract year is $9,317.23.

In this example, $9,317.23 (last 12 months' interest earnings) is the maximum
free withdrawal amount that you may withdraw during the contract year without a
surrender charge. The total withdrawal would be $26,709.39 ($133,546.91 x .20).
Therefore, $17,392.16 ($26,709.39 - $9,317.23) is considered an excess
withdrawal and would be subject to a 4% surrender charge of $695.69 ($17,392.16
x .04).

This example does not take into account any Market Value Adjustment or deduction
of any premium taxes.

EXAMPLE #2: SURRENDER CHARGES -- FREE PARTIAL WITHDRAWAL FOLLOWED BY FULL
SURRENDER

The following assumes you made an initial single premium payment of $100,000
into the 10 year guarantee period with an interest rate of 6.00%. It also
assumes a free partial withdrawal at the beginning of the fifth contract year of
$7,146.10, followed by a full surrender 183 days later.

The accumulation value as of the beginning of the fifth contract year is
$126,247.70. The interest earned in the last 12 months as of the beginning of
the fifth contract year is $7,146.10. In this example, $7,146.10 (last 12
months' interest earnings) is the maximum free withdrawal amount that you may
withdraw during the contract year without a surrender charge. The accumulation
value immediately after the partial withdrawal is $119,101.60.

Assume that 183 days later the policy is surrendered. The accumulation value has
grown to $122,632.40 ($119,101.60 x (1.06(183/365))). On full surrender,
surrender charges are applied to all amounts withdrawn in that contract year.
The cash surrender value is calculated as follows.

1.   The surrender charge on the free partial withdrawal amount is $297.75
     ($7146.10 x (1/(1-.04) -1)).

2.   The adjusted accumulation value is $122,334.65 ($122,632.40 - $297.75).

3.   The surrender charge upon surrender is $4,893.39 ($122,334.65 x .04).

4.   The cash surrender value is $117,441.26 ($122,334.65 - $4,893.39).

This example does not take into account any Market Value Adjustment or deduction
of any premium taxes.

GA-109652                           B1
<PAGE>



                             ING VARIABLE ANNUITIES

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled in Delaware.

--------------------------------------------------------------------------------
Guarantee Annuity  109652                                             05/01/2001


<PAGE>

                             PART II
             INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Not applicable.

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

The following provisions regarding the Indemnification of
Directors and Officers of the Registrant are applicable:

     INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
     INCORPORATORS

     Delaware General Corporation Law, Title 8, Section 145
     provides that corporations incorporated in Delaware may
     indemnify their officers, directors, employees or agents
     for threatened, pending or past legal action by reason
     of the fact he/she is or was a director, officer, employee
     or agent.  Such indemnification is provided for under the
     Company's By-Laws under Article VI. Indemnification
     includes all liability and loss suffered and expenses
     (including attorneys' fees) reasonably incurred by such
     indemnitee.  Prepayment of expenses is permitted, however,
     reimbursement is required if it is ultimately determined
     that indemnification should not have been given.

     DIRECTORS' AND OFFICERS' INSURANCE

     The directors, officers, and employees of the
     registrant, in addition to the indemnifications
     described above, are indemnified through the blanket
     liability insurance policy of Registrant's ultimate
     parent, ING Groep N.V., or directly by Equitable of
     Iowa Companies, Inc. for liabilities not covered through
     the indemnification provided under the By-Laws.

     SECURITIES AND EXCHANGE COMMISSION POSITION ON
     INDEMNIFICATION

     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.

<PAGE>

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  EXHIBITS.

     1     Distribution Agreement Between Golden American and
           Directed Services, Inc. (1)

     3(a)  Certificate of Amendment of the Restated Articles of
           Incorporation of Golden American, dated (03/01/95). (1)

     3(b)  By-Laws of Golden American, dated (01/07/94). (1)

     3(c)  Resolution of Board of Directors for Powers of
           Attorney, dated (04/23/99). (1)

     4(a)  Single Premium Deferred Modified Guaranteed
           Annuity Contract. (1)

     4(b)  Single Premium Deferred Modified Guaranteed
           Annuity Master Contract. (2)

     4(c)  Single Premium Deferred Modified Guaranteed
           Annuity Certificate. (2)

     4(d)  Individual Retirement Annuity Rider Page. (1)

     4(e)  Single Premium Deferred Modified Guaranteed
           Annuity Application. (2)

     4(f)  Single Premium Deferred Modified Guaranteed
           Annuity Enrollment Form. (2)

     4(g)  Roth Individual Retirement Annuity Rider. (1)

     5     Opinion and Consent of Myles R. Tashman.

     10(a) Administrative Services Agreement between Golden
           American and Equitable Life Insurance Company of
           Iowa. (1)

     10(b) Service Agreement between Golden American and
           Directed Services, Inc. (1)

     10(c) Asset Management Agreement between Golden American
           and ING Investment Management LLC. (1)

     10(d) Reciprocal Loan Agreement between Golden American
           and ING America Insurance Holdings, Inc. (1)

     10(e) Revolving Note Payable between Golden American and
           SunTrust Bank. (1)

     10(f) Surplus Note, dated, 12/17/96 between Golden American
           and Equitable of Iowa Companies. (1)

     10(g) Surplus Note, dated, 12/30/98 between Golden American
           and Equitable Life Insurance Company of Iowa. (1)

     10(h) Surplus Note, dated, 09/30/99 between Golden American
           and ING AIH. (1)

     10(i) Surplus Note, dated, 12/08/99 between Golden American
           and First Columbine Life Insurance Company. (1)

     10(j) Surplus Note, dated, 12/30/99 between Golden American
           and Equitable of Iowa companies. (1)

     10(k) Reinsurance Agreement, dated 06/30/00, between
           GALIC & ELICI. (2)

     10(l) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of July 31, 2000 and expiring
           July 31, 2001. (2)

     23(a) Consent of Sutherland Asbill & Brennan LLP.

     23(b) Consent of Ernst & Young LLP, Independent Auditors.

     23(c) Consent of Myles R. Tashman, incorporated in Exhibit 5
           of this Part II, together with the Opinion of Myles R.
           Tashman.

     24    Powers of Attorney.


(1)  Incorporated herein by reference to the initial Registration Statement
     for Golden American filed with the Securities and Exchange Commission
     on June 30, 2000 (File No. 333-40596).

(2)  Incorporated herein by reference to Amendment No. 1 to the Registration
     Statement for Golden American filed with the Securities and Exchange
     Commission on September 13, 2000 (File No. 333-40596).

<PAGE>


(b)  FINANCIAL STATEMENT SCHEDULE.

    (1)  All financial statements are included in the Prospectus
          as indicated therein
    (2)  Schedules I, III and IV follow. All other schedules to the consolidated
         financial statements required by Article 7 of Regulation S-X are
         omitted because they are not applicable or because the information
         is included elsewhere in the consolidated financial statements or
         notes thereto.

<TABLE>
<CAPTION>
                                                             SCHEDULE I
                                                       SUMMARY OF INVESTMENTS
                                              OTHER THAN INVESTMENTS IN RELATED PARTIES
                                                       (Dollars in thousands)



                                                                                                                      BALANCE
                                                                                                                        SHEET
   DECEMBER 31, 2000                                                                     COST(1)        VALUE          AMOUNT
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>              <C>           <C>
   TYPE OF INVESTMENT
   Fixed maturities, available for sale:
    Bonds:
      United States government and governmental agencies and
        authorities.........................................................            $18,607       $19,171          $19,171
      Public utilities......................................................             54,132        52,826           52,826
      Corporate securities..................................................            355,890       349,202          349,202
      Other asset-backed securities.........................................            223,787       224,122          224,122
      Mortgage-backed securities............................................            146,335       147,257          147,257
                                                                                  --------------------------------------------
      Total fixed maturities, available for sale............................            798,751       792,578          792,578

   Equity securities:
      Common stocks: industrial, miscellaneous, and all other...............              8,611         6,791            6,791

   Mortgage loans on real estate.........................................                99,916                         99,916
   Policy loans..........................................................                13,323                         13,323
   Short-term investments................................................               106,775                        106,775
                                                                                  ---------------                -------------
   Total investments.....................................................            $1,027,376                     $1,019,383
                                                                                  ===============                =============
</TABLE>

Note 1: Cost is defined as original cost for common  stocks,  amortized cost for
bonds and  short-term  investments,  and unpaid  principal  for policy loans and
mortgage loans on real estate, adjusted for amortization of premiums and accrual
of discounts.



<PAGE>
<TABLE>
<CAPTION>


                                                            SCHEDULE III
                                                 SUPPLEMENTARY INSURANCE INFORMATION
                                                       (Dollars in thousands)


COLUMN A        COLUMN B     COLUMN C     COLUMN D    COLUMN E   COLUMN F   COLUMN G    COLUMN H    COLUMN I    COLUMN J   COLUMN K
------------------------------------------------------------------------------------------------------------------------------------
                                 FUTURE
                                 POLICY                                                             AMORTIZA-
                              BENEFITS,                   OTHER                           BENEFITS    TION OF
                                LOSSES,                  POLICY                            CLAIMS,   DEFERRED
                 DEFERRED        CLAIMS                  CLAIMS  INSURANCE                  LOSSES     POLICY
                   POLICY           AND    UNEARNED         AND   PREMIUMS        NET          AND     ACQUI-       OTHER
              ACQUISITION          LOSS     REVENUE    BENEFITS        AND INVESTMENT  SETTLEMENT      SITION   OPERATING   PREMIUMS
SEGMENT             COSTS      EXPENSES     RESERVE     PAYABLE    CHARGES     INCOME     EXPENSES      COSTS   EXPENSES*    WRITTEN
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>        <C>             <C>            <C>   <C>         <C>         <C>         <C>        <C>             <C>
YEAR ENDED DECEMBER 31, 2000:

Life insurance    $635,147   $1,062,891      $6,817         $82   $144,877    $64,140     $200,031    $55,154    $143,300        --

YEAR ENDED DECEMBER 31, 1999:

Life insurance     528,957    1,033,701       6,300           8     82,935     59,169      182,221     33,119     (83,827)       --

YEAR ENDED DECEMBER 31, 1998:

Life insurance     204,979      881,112       3,840          --     39,119     42,485       96,968      5,148     (26,406)       --



*    This includes policy  acquisition  costs deferred for first year commissions and interest  bonuses,  premium credit,  and other
     expenses related to the production of new business. The costs related to first year interest bonuses and the premium credit are
     included in benefits claims, losses, and settlement expenses.



</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                             SCHEDULE IV
                                                             REINSURANCE


COLUMN A                                             COLUMN B        COLUMN C        COLUMN D         COLUMN E        COLUMN F
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    PERCENTAGE
                                                                     CEDED TO         ASSUMED                        OF AMOUNT
                                                        GROSS           OTHER      FROM OTHER              NET         ASSUMED
                                                       AMOUNT       COMPANIES       COMPANIES           AMOUNT          TO NET
--------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>                       <C>    <C>                       <C>
AT DECEMBER 31, 2000:
    Life insurance in force.................     $196,334,000    $105,334,000              --      $91,000,000              --
                                                ================================================================================

At December 31, 1999:
    Life insurance in force.................     $225,000,000    $119,575,000              --     $105,425,000              --
                                                ================================================================================

AT DECEMBER 31, 1998:
    Life insurance in force.................     $181,456,000    $111,552,000              --      $69,904,000              --
                                                ================================================================================



</TABLE>

<PAGE>

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 set forth
             in the registration statement; and

      (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)  That, for purposes of determining any liability under
     the Securities Act of 1933, each filing of the
     registrant's annual report pursuant to Section 13(a) or
     Section 15(d) of the Securities Exchange Act of 1934
     (and, where applicable, each filing of an employee
     benefit plan's annual report pursuant to Section 15(d)
     of the Securities Exchange Act of 1934) that is
     incorporated by reference in the registration statement
     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.

<PAGE>
                           SIGNATURES

 As required by the Securities Act of 1933 and the Investment Company Act of
 1940, the Registrant has caused this Registration Statement to be signed on
 its behalf in the City of West Chester, and Commonwealth of Pennsylvania, on
 the 23rd day of April, 2001.


                                      SEPARATE ACCOUNT B
                                       (Registrant)

                                 By:  GOLDEN AMERICAN LIFE
                                      INSURANCE COMPANY
                                      (Depositor)

                                 By:
                                      --------------------
                                      Robert C. Salipante*
                                      Chief Executive Officer

 Attest: /s/ Marilyn Talman
         ------------------------
          Marilyn Talman
          Vice President, Associate General Counsel
          and Assistant Secretary of Depositor

 As required by the Securities Act of 1933, this Registration Statement has
 been signed by the following persons in the capacities indicated on
 April 23, 2001.

 Signature                     Title
 ---------                     -----

                               Director and Chief Executive
 --------------------          Officer of Depositor
 Robert C. Salipante*



                               Director, Senior Vice President
 --------------------          and Chief Financial Officer
 Wayne R. Huneke*


                 DIRECTORS OF DEPOSITOR


 ----------------------
 Robert C. Salipante*


 ----------------------
 Thomas J. McInerney*


 ----------------------
 Wayne R. Huneke*


 ----------------------
 Mark A. Tullis*


 ----------------------
 Phillip R. Lowery*


 Attest: /s/ Marilyn Talman
         ------------------------
          Marilyn Talman
          Vice President, Associate General Counsel
          and Assistant Secretary of Depositor

 *Executed by Marilyn Talman on behalf of those indicated pursuant
to Power of Attorney.

<PAGE>
                                  EXHIBIT INDEX

ITEM      EXHIBIT                                                PAGE #
----      -------                                                ------
5         Opinion and Consent of Myles R. Tashman.               EX-5

23(a)     Consent of Sutherland Asbill & Brennan LLP             EX-23.A

23(b)     Consent of Ernst & Young LLP, Independent Auditors     EX-23.B

24        Powers of Attorney                                     EX-24
[{"type": "S-1", "sequence": "1", "filename": "s1guaranteeannuity1.txt", "description": "INITIAL REGISTRATION STATEMENT", "secsgml_size_bytes": 319192}]
{"company-data": {"conformed-name": "GOLDEN AMERICAN LIFE INSURANCE CO /NY/", "cik": "0000836658", "assigned-sic": "", "irs-number": "410991508", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-59398", "film-number": "1608964"}, "business-address": {"street1": "1475 DUNWOODY DRIVE", "street2": "SUITE 400", "city": "WEST CHESTER", "state": "PA", "zip": "19380-1478", "phone": "6104253400"}, "mail-address": {"street1": "1475 DUNWOODY DRIVE", "street2": "P. O. BOX 2700", "city": "WEST CHESTER", "state": "PA", "zip": "19380-2700"}, "former-company": [{"former-conformed-name": "MB VARIABLE LIFE INSURANCE CO", "date-changed": "19600201"}, {"former-conformed-name": "GOLDEN AMERICAN LIFE INSURANCE CO", "date-changed": "19600201"}]}
As filed with the Securities and Exchange Commission on April 23, 2001
                                              Registration No. 333-_______
___________________________________________________________________________
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM S-1

          Registration Statement under the Securities Act of 1933

                  GOLDEN AMERICAN LIFE INSURANCE COMPANY
          (Exact name of registrant as specified in its charter)

           DELAWARE                 6355                   41-0991508
       (State or other        (Primary Standard         (I.R.S. Employer
       jurisdiction of            Industrial           Identification No.)
      incorporation or        Classification Code
        organization)              Number)

                            1475 Dunwoody Drive
                           West Chester, PA  19380
                              (610) 425-3400
 (Address and Telephone Number of registrant's principal executive office)

Marilyn Talman, Esq.                        Copy to:
Golden American Life Insurance Company      Stephen E. Roth, Esq.
1475 Dunwoody Drive                         Sutherland, Asbill & Brennan LLP
West Chester, PA  19380                     1275 Pennsylvania Avenue, N.W.
(610) 425-3516                              Washington, D.C.  20004-2415
(Name and Address of Agent for Service
            of Process)

     Approximate date of commencement of proposed sale to the public:
As soon as practical after the effective date of the Registration Statement

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, check the following box ...................................... [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ]..............

If this Form is post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering [ ].....................................

If this Form is post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering [ ].....................................

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box [ ]

Pursuant to Rule 429 under the Securities Act of 1933, the prospectus herein
relates to Registration Statement Number 333-40596 and 333-52320.
___________________________________________________________________________
                      Calculation of Registration Fee
Proposed
Title of each class                       Proposed             maximum         Amount of
of securities to be Amount to be  maximum offering price  aggregate offering   registration
     registered      registered      price per unit(1)        price(1)           fee(2)

-------------------------------------------------------------------------------------------
Annuity Contracts
(Interests in       N/A                 N/A                    $1,300,000,000    $325,000
Fixed Account)
(1) The maximum aggregate offering price is estimated solely for the
purpose of determining the registration fee.  The amount to be registered
and the proposed maximum offering price per unit are not applicable since
these securities are not issued in predetermined amounts or units.

(2) Amount previously registered in connection with File Nos. 333-40596
and 333-52320 were $378,787.88, $300,000,000, and $1,000,000,000 at
registration fees of $100, $79,200 and 264,000, respectively,
-----------------------------------------------------------------------------
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 this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
PART I

           GUARANTEE ANNUITY PROFILE AND PROSPECTUS
ING VARIABLE ANNUITIES

GOLDEN AMERICAN LIFE INSURANCE COMPANY

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

                                   PROFILE OF

                         GOLDENSELECT GUARANTEE ANNUITY

                  DEFERRED MODIFIED GUARANTEED ANNUITY CONTRACT

                                   MAY 1, 2001

     --------------------------------------------------------------------
     This Profile is a summary of some of the more important points that
     you should know and consider before purchasing the Contract. The
     Contract is more fully described in the full prospectus which
     accompanies this Profile. Please read the prospectus carefully.
     --------------------------------------------------------------------

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

1.   THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred modified guaranteed
annuity contract between you and Golden American Life Insurance Company. The
Contract provides a means for you to invest on a tax-deferred basis in a fixed
account of Golden American with guaranteed interest periods. We currently offer
guaranteed interest periods of 1, 3, 5, 6, 7, 8, 9 and 10 years in the fixed
account. We set the interest rates in the fixed account periodically. We may
credit a different interest rate for each interest period. The interest you earn
in the fixed account as well as your principal is guaranteed by Golden American
as long as you do not take your money out before the maturity date for the
applicable interest period. If you withdraw an amount in excess of the free
withdrawal amount more than 30 days before the applicable maturity date, we will
apply a surrender charge and market value adjustment. A market value adjustment
could increase or decrease your contract value and/or the amount you take out.

The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. The accumulation phase is the period
between the contract date and the date on which you start receiving the annuity
payments under your Contract. The amounts you accumulate during the accumulation
phase will determine the amount of annuity payments you will receive. The income
phase begins on the annuity start date, which is the date you start receiving
regular annuity payments from your Contract.

You determine (1) the amount of your premium payment, (2) the guarantee period,
(3) the type of annuity to be paid after the accumulation phase, (4) the
beneficiary who will receive the death benefits, and (5) the amount and
frequency of withdrawals.

GUARANTEE ANNUITY PROFILE                              PROSPECTUS BEGINS AFTER
109652                                                 PAGE 4 OF THIS PROFILE

2.   YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving on the
annuity start date. You may choose one of the following annuity payment options:
---------------------------------------------------------------------------
                                 Annuity Options
     ---------------------------------------------------------------------------
     Option 1   Income for a        Payments are made for a specified number of
                fixed period        years to you or your beneficiary.
     ---------------------------------------------------------------------------
     Option 2   Income for life     Payments are made for the rest of your life
                with a period       or longer for a specified  period such as 10
                certain             or 20 years or until the total amount used
                                    to buy this option has been repaid.  This
                                    option comes with an added guarantee that
                                    payments will continue to your beneficiary
                                    for the remainder of such period if you
                                    should die during the period.
     ---------------------------------------------------------------------------
     Option 3   Joint life income   Payments are made for your life and the life
                                    of another person (usually your spouse).
     ---------------------------------------------------------------------------

You will also be able to choose any other annuitization plan that we choose to
offer on the annuity start date. Annuity payments under Options 1, 2 and 3 are
fixed. Annuity payments under other available options may be fixed or variable.
If variable and subject to the Investment Company Act of 1940, it will comply
with requirements of such Act. Once you elect an annuity option and begin to
receive payments, it cannot be changed.

3.   PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with a payment of $5,000 or more ($1,500 for a
qualified Contract) up to and including age 90. A premium payment that would
cause the contract value of all annuities that you maintain with us to exceed
$1,000,000 requires our prior approval.

Who may purchase this Contract? The Contract may be purchased by individuals as
part of a personal retirement plan (a "non-qualified Contract"), or as a
Contract that qualifies for special tax treatment when purchased as either an
Individual Retirement Annuity (IRA) or in connection with a qualified retirement
plan (each a "qualified Contract").

IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See
"Expenses" in this profile.

The Contract is designed for people seeking long-term tax-deferred accumulation
of assets, generally for retirement or other long-term purposes. The
tax-deferred feature is more attractive to people in high federal and state tax
brackets. You should not buy this Contract: (1) if you are looking for a
short-term investment; (2) if you cannot risk getting back less money than you
put in; or (3) your assets are in a plan which provides for tax-deferral and you
see no other reason to purchase this Contract.

4.   THE FIXED ACCOUNT
You can direct your money into the fixed account with guaranteed interest
periods of 1, 3, 5, 6, 7, 8, 9 or 10 years. Not all guarantee periods may be
available at all times. An investment in the fixed account earns a fixed
interest rate.

109652                            2                GUARANTEE ANNUITY PROFILE
5.   EXPENSES
If you withdraw money from your Contract, or if you begin receiving annuity
payments, we may deduct a charge for premium tax of 0%-3.5% to pay to your
state.

We deduct a surrender charge and apply a market value adjustment if you
surrender your Contract or withdraw an amount exceeding the free withdrawal
amount. The free withdrawal amount is equal to the
prior 12 months' interest earned and not previously withdrawn. The surrender
charge varies by the length of the guarantee period selected, beginning with 8%
during year 1 and reducing by 1% per year to the earlier of the end of the
guarantee period or the 8th policy year. No surrender charge or market value
adjustment is imposed upon a surrender made during the 30-day period immediately
preceding the end of a guarantee period.

The surrender charge period resets at the beginning of each guarantee period.
Upon withdrawal, it is charged against the remaining contract value and is based
on the amount of the withdrawal. Upon surrender, a surrender charge and a market
value adjustment will be applied retroactively with respect to any free
withdrawal amount previously withdrawn within the same contract year as the
surrender. The following table shows the schedule of the surrender charge that
will apply.

     COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

6.   TAXES
Under a qualified Contract, your premium is generally a pre-tax contribution and
accumulates on a tax-deferred basis. Premium and earnings are generally taxed as
income when you make a withdrawal or begin receiving annuity payments,
presumably when you are in a lower tax bracket.

Under a non-qualified Contract, premiums are paid with after-tax dollars, and
any earnings will accumulate tax-deferred. You will generally be taxed on these
earnings, but not on premiums, when you make a withdrawal or begin receiving
annuity payments.

For owners of most qualified Contracts, when you reach age 70 1/2 (or, in some
cases, retire), you will be required by federal tax laws to begin receiving
payments from your annuity or risk paying a penalty tax. In those cases, we can
calculate and pay you the minimum required distribution amounts at your request.

If you are younger than 59 1/2 when you take money out, in most cases, you will
be charged a 10% federal penalty tax on the taxable earnings withdrawn.

7.   WITHDRAWALS
You can withdraw your money at any time during the accumulation phase. You may
elect in advance to take systematic withdrawals which are described on page 4.
Withdrawals above the free withdrawal amount taken more than 30 days before the
applicable maturity date may be subject to a surrender charge and market value
adjustment. Income taxes and a penalty tax may apply to amounts withdrawn.

8.   DEATH BENEFIT
The death benefit is payable when the first of the following persons dies before
the annuity start date: the contract owner, joint owner, or annuitant (if a
contract owner is not an individual). Assuming you are the contract owner, if
you die during the accumulation phase, your beneficiary will receive a death
benefit unless the beneficiary is your surviving spouse and elects to continue
the Contract. The death benefit value is calculated at the close of the business
day on which we receive written notice and due proof of death, as well as
required claim forms, at our Customer Service Center. If your beneficiary elects
to delay receipt of the death benefit until a date after the time of your death,
the amount of the benefit payable in the future may be affected. If you die
after the annuity start date and you are the annuitant, your beneficiary will
receive the death benefit you chose under the annuity option then in effect.

109652                            3                GUARANTEE ANNUITY PROFILE
The death benefit is equal to the contract value as of the date we receive due
proof of death and any other paperwork we may require. The amount of the death
benefit could be reduced by premium taxes owed and withdrawals not previously
deducted. No surrender charge or market value adjustment is applied to the death
benefit.

9.   OTHER INFORMATION
     FREE LOOK. If you cancel the Contract within 10 days after you receive it,
you will receive a refund of the adjusted contract value. We determine your
contract value at the close of business on the day we receive your written
refund request. For purposes of the refund during the free look period, (i) we
adjust your contract value for any market value adjustment, and (ii) then we
include a refund of any charges deducted from your contract value. Because of
the potential positive or negative effect of the market value adjustment, the
contract value returned may be greater or less than the premium payment you
paid. Some states require us to return to you the amount of the paid premium
(rather than the adjusted contract value) in which case you will not be subject
to any market value adjustment risk during the free look period. Also, under
certain circumstances, you may be entitled to a longer free look period.

     TRANSFER OF CONTRACT VALUE. You may transfer your contract value to another
guarantee period during the 30-day period starting 30 days before the end of the
current guarantee period and ending upon the end of the current guarantee period
("Transfer Period") without application of a surrender charge or market value
adjustment. Keep in mind that no transfers are permitted other than during the
Transfer Period.

     NO PROBATE. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate. See
"Federal Tax Considerations -- Taxation of Death Benefit Proceeds" in the
prospectus for the Contract.

     SYSTEMATIC WITHDRAWALS. This Contract also offers systematic withdrawals.
During the accumulation phase, you can arrange to have money sent to you at
regular intervals throughout the year. Systematic withdrawals in excess of the
free withdrawal amount will be subject to surrender charge and market value
adjustment. Of course, any applicable income and penalty taxes will apply on
amounts withdrawn.

10.  INQUIRIES
If you need more information after reading this profile and the prospectus,
please contact us at:

     CUSTOMER SERVICE CENTER
     P.O. BOX 2700
     WEST CHESTER, PENNSYLVANIA 19380
     (800) 366-0066

or your registered representative.

109652                            4                GUARANTEE ANNUITY PROFILE
--------------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY

                 DEFERRED MODIFIED GUARANTEED ANNUITY PROSPECTUS
                         GOLDENSELECT GUARANTEE ANNUITY
--------------------------------------------------------------------------------

                                                                     MAY 1, 2001

     This prospectus describes GoldenSelect Guarantee Annuity, a group and
individual deferred modified guaranteed annuity contract (the "Contract")
offered by Golden American Life Insurance Company (the "Company," "we" or
"our"). The Contract is available in connection with certain retirement plans
that qualify for special federal income tax treatment ("qualified Contracts") as
well as those that do not qualify for such treatment ("non-qualified
Contracts").

     The Contract provides a means for you to invest your single premium payment
in the fixed account with guaranteed interest periods. Your contract value will
vary to reflect interest credited. We will credit your contract value with a
fixed rate of interest. We set the interest rates periodically. You currently
may choose a guaranteed interest period of 1, 3, 5, 6, 7, 8, 9 and 10 years,
although we may not offer all these periods in the future or through all
broker-dealers. The interest earned on your money as well as your principal is
guaranteed as long as you hold them until the maturity date. If you take your
money out before the applicable maturity date, we will apply a market value
adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase
or decrease your contract value and/or the amount you take out. You bear the
risk that you may receive less than your principal if we take a Market Value
Adjustment. For Contracts sold in some states, not all guaranteed interest
periods are available. You have a right to return a Contract within 10 days
after you receive it for a refund of the adjusted contract value (which may be
more or less than the premium payment you paid), or, if required by your state,
the original amount of your premium payment. Longer free look periods apply in
some states and in certain situations.

     This prospectus provides information that you should know before investing
and should be kept for future reference.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

AN INVESTMENT IN THIS CONTRACT IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY ANY BANK OR BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.

GA-109652
--------------------------------------------------------------------------------
                                TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                            PAGE

Index of Special Terms......................................................   1
Fees and Expenses...........................................................   2
Financial Statements........................................................   2
Golden American Life Insurance Company......................................   2
The Fixed Account...........................................................   2
     Selecting a Guaranteed Interest Period.................................   3
     Guaranteed Interest Rates..............................................   3
     Renewal Interest Rates.................................................   3
     Withdrawals............................................................   3
     Market Value Adjustment................................................   4
The Annuity Contract........................................................   5
     Contract Date and Contract Year........................................   5
     Annuity Start Date.....................................................   5
     Contract Owner.........................................................   5
     Joint Owner............................................................   5
     Annuitant..............................................................   5
     Beneficiary............................................................   6
     Change of Contract Owner or Beneficiary................................   6
     Purchase and Availability of the Contract..............................   6
     Crediting of Premium Payment...........................................   6
     Administrative Procedures..............................................   7
     Contract Value.........................................................   7
     Cash Surrender Value...................................................   7
     Surrendering to Receive the Cash Surrender Value.......................   7
     The Fixed Account......................................................   7
     Other Important Provisions.............................................   8
Withdrawals     ............................................................   8
     Regular Withdrawals....................................................   8
     Systematic Withdrawals.................................................   8
          Fixed Dollar Systematic Withdrawal Feature........................   9
     IRA Withdrawals........................................................   9
Death Benefit   ............................................................  10
     Death Benefit During the Accumulation Phase............................  10
     Death Benefit During the Income Phase..................................  10
     Required Distributions upon Contract Owner's Death.....................  10
Charges and Fees............................................................  11
     Charges Deducted from the Contract Value...............................  11
          Surrender Charge..................................................  11
          Waiver of Surrender Charge for Extended Medical Coverage..........  12
          Free Withdrawal Amount............................................  12
          Surrender Charge for Excess Withdrawals...........................  12
          Premium Taxes.....................................................  12

GA-109652                            i
--------------------------------------------------------------------------------
                          TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------

                                                                            PAGE

The Annuity Options.........................................................  12
     Annuitization of Your Contract.........................................  12
     Selecting the Annuity Start Date.......................................  13
     Frequency of Annuity Payments..........................................  13
     The Annuity Options....................................................  13
          Income for a Fixed Period.........................................  13
          Income for Life with a Period Certain.............................  14
          Joint Life Income.................................................  14
     Payment When Named Person Dies.........................................  14
Other Contract Provisions...................................................  14
     Reports to Contract Owners.............................................  14
     Suspension of Payments.................................................  14
     In Case of Errors in Your Application..................................  14
     Assigning the Contract as Collateral...................................  15
     Contract Changes-Applicable Tax Law....................................  15
     Free Look..............................................................  15
     Group or Sponsored Arrangements........................................  15
     Selling the Contract...................................................  15
Other Information...........................................................  16
     State Regulation.......................................................  16
     Legal Proceedings......................................................  16
     Legal Matters..........................................................  16
     Experts................................................................  16
Federal Tax Considerations..................................................  17

More Information About Golden American Life Insurance Company...............  21
Financial Statements of Golden American Life Insurance Company..............  41
Appendix A
     Market Value Adjustment Examples.......................................  A1
Appendix B
     Surrender Charge for Excess Withdrawals Example........................  B1

GA-109652                            ii
--------------------------------------------------------------------------------
                             INDEX OF SPECIAL TERMS
--------------------------------------------------------------------------------

The following special terms are used throughout this prospectus. Refer to the
page(s) listed for an explanation of each term:

SPECIAL TERM                           PAGE
Annuitant                                5
Annuity Start Date                       5
Cash Surrender Value                     7
Contract Date                            5
Contract Owner                           5
Contract Value                           7
Contract Year                            5
Free Withdrawal Amount                  12
Market Value Adjustment                  4

The following terms as used in this prospectus have the same or substituted
meanings as the corresponding terms currently used in the Contract:

TERM USED IN THIS PROSPECTUS             CORRESPONDING TERM USED IN THE CONTRACT
Annuity Start Date                       Annuity Commencement Date
Contract Owner                           Owner or Certificate Owner
Contract Value                           Accumulation Value
Free Look Period                         Right to Examine Period
Guaranteed Interest Period               Guarantee Period
Withdrawals                              Partial Withdrawals

GA-109652                            1
This page intentionally left blank.
--------------------------------------------------------------------------------
                                FEES AND EXPENSES
--------------------------------------------------------------------------------

CONTRACT OWNER TRANSACTION EXPENSES*

     Surrender Charge:

     COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

     *    A Market Value Adjustment may apply to certain transactions. This may
          increase or decrease your contract value and/or your surrender amount.
          In addition, if you withdraw money from your Contract, or if you begin
          receiving annuity payments, we may deduct a premium tax charge of 0%
          to 3.5% to pay to your state.

FINANCIAL STATEMENTS
The audited consolidated financial statements of Golden American for the years
ended December 31, 2000, 1999, and 1998 are included in this prospectus.

--------------------------------------------------------------------------------
                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------

Golden American Life Insurance Company is a Delaware stock life insurance
company, which was originally incorporated in Minnesota on January 2, 1973.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. ("Equitable of Iowa"). Equitable of Iowa is a wholly owned subsidiary of
ING Groep N.V. ("ING"), a global financial services holding company based in The
Netherlands. Golden American is authorized to sell insurance and annuities in
all states, except New York, and the District of Columbia. In May 1996, Golden
American established a subsidiary, First Golden American Life Insurance Company
of New York, which is authorized to sell annuities in New York and Delaware.
Golden American's consolidated financial statements appear in this prospectus.

Equitable of Iowa is the holding company for Golden American, Directed Services,
Inc., the distributor of the Contracts, and other interests.

Our principal office is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380.

--------------------------------------------------------------------------------
                                THE FIXED ACCOUNT
--------------------------------------------------------------------------------

Assets supporting your contract value are invested in our Fixed Account. Your
premium payment (less withdrawals and less applicable premium taxes, if any)
will earn interest at the initial guarantee rate which is an annual effective
rate of interest. You may select the duration of your initial guarantee period
from among the durations offered by us. The duration you select will determine
your initial guarantee rate. We currently offer guaranteed interest periods of
1, 3, 5, 6, 7, 8, 9 and 10 years, although we may not offer all these periods in
the future or through all broker-dealers. We will credit your premium payment
with a guaranteed interest rate for the interest period you select, so long as
you do not withdraw money before the end of the guaranteed interest period. Each
guaranteed interest period ends on its maturity date which is the last day of
the last contract year in the guarantee period.

If you surrender, withdraw, or annuitize your investment before the 30 day
period prior to the end of the guaranteed interest period, we will apply a
Market Value Adjustment to the amount of the transaction in excess of the free
withdrawal amount. A Market Value Adjustment could increase or decrease the
amount you surrender, withdraw, or annuitize, depending on current interest
rates at the time of the transaction. You bear the risk that you may receive
less than your principal if we apply a Market Value Adjustment.

GA-109652                            2
Assets supporting your contract value are available to fund the claims of all
classes of our customers, contract owners and other creditors. Interests under
your Contract are registered under the Securities Act of 1933, but the Fixed
Account is not registered under the 1940 Act.

SELECTING A GUARANTEED INTEREST PERIOD
A guaranteed interest period is the period that a rate of interest is guaranteed
to be credited to your contract value. We may at any time decrease or increase
the number of guaranteed interest periods offered.

Your contract value is the sum of your premium payment and the interest credited
as adjusted for any withdrawals (including any Market Value Adjustment applied
to such withdrawal) or other charges we may impose. Your contract value will be
credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium. We will credit
interest daily at a rate which yields the quoted guaranteed interest rate.

GUARANTEED INTEREST RATES
The interest rate to be credited to your contract value is guaranteed as long as
you do not take your money out until the period beginning 30 days before the
applicable maturity date. We do not have a specific formula for establishing the
guaranteed interest rates for the different guaranteed interest periods. We
determine guaranteed interest rates at our sole discretion. To find out the
current guaranteed interest rate for a guaranteed interest period you are
interested in, please contact our Customer Service Center or your registered
representative. The determination may be influenced by the interest rates on
fixed income investments in which we may invest with the amounts we receive
under the Contracts. We will invest these amounts primarily in investment-grade
fixed income securities (i.e., rated by Standard & Poor's rating system to be
suitable for prudent investors) although we are not obligated to invest
according to any particular strategy, except as may be required by applicable
law. You will have no direct or indirect interest in these investments. We will
also consider other factors in determining the guaranteed interest rates,
including regulatory and tax requirements, sales commissions and administrative
expenses borne by us, general economic trends and competitive factors. We cannot
predict the level of future interest rates.

We may from time to time at our discretion offer interest rate specials for new
premiums that are higher than the current base interest rate. Renewal rates for
such rate specials will be based on the base interest rate and not on the
special rates initially declared.

RENEWAL INTEREST RATES
Unless you elect to surrender your contract, a subsequent guarantee period will
automatically begin at the end of a guarantee period. We may not offer the same
guarantee interest periods for renewal as for initial periods. If offered at the
time of your renewal, each subsequent guarantee period will be of the same
duration as the previous guarantee period unless you elect in writing, on any
day within the 30 day period preceding the end of the current guarantee period,
a guarantee period of a different duration from among those offered by us at
that time. At least 30 calendar days before the maturity date of the current
guarantee period, or earlier if required by state law, we will send you a notice
of the guaranteed interest periods that are available. If you do not elect a
different guarantee period, and your current guaranteed interest period is not
available as a renewal period or would go beyond the annuity start date, we will
transfer your contract value to the next shortest guaranteed interest period
which does not go beyond the annuity start date. Your contract value will then
earn interest at a guarantee rate that we have declared for that duration. The
guarantee rate for the guarantee period automatically applied in these
circumstances may be higher or lower than the guarantee rate for longer
durations.

The contract value at the beginning of any renewal guarantee period will be
equal to the contract value at the end of the guarantee period just ending. This
contract value, less withdrawals made after the beginning of the subsequent
guarantee period, will earn interest compounded annually at the renewal
guarantee rate.

WITHDRAWALS
During the accumulation phase, you may withdraw a portion of your contract
value. Beginning 28 days after the contract date, you may make systematic
withdrawals of only the interest earned during the prior month,

GA-109652                            3
quarter or year, depending on the frequency chosen, under our systematic
withdrawal option. A withdrawal may be subject to a Market Value Adjustment and,
in some cases, a surrender charge (see "Charges and Fees"). Be aware that
withdrawals may have federal income tax consequences, including a 10% penalty
tax.

MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on your
contract value. We will apply a Market Value Adjustment to amounts in excess of
the free withdrawal amount (i) whenever you withdraw money (unless made within
the 30 day period before the maturity date of the applicable guaranteed interest
period) and (ii) if on the annuity start date a guaranteed interest period does
not end on or within 30 days of the annuity start date. The Market Value
Adjustment resets at the start of each guarantee period.

We determine the Market Value Adjustment by multiplying the amount you withdraw
or apply to an income plan by the following factor:

                                            N/365
                         ((1+I)/(1+J+.0050))      -1*

     where:

     "I"  is the Index Rate (as defined below), determined at the beginning of
          the current guarantee period;

     "J"  is the Index Rate, determined at the time of surrender or withdrawal
          for a security with time to maturity equal to the number of years
          (fractional years rounded up to the next full year) remaining in the
          guarantee period from the date of surrender or withdrawal; and

     "N"  is the number of days from the date of surrender or withdrawal to the
          end of the current guarantee period.
          ----------------

          *    For contracts issued in Florida, the factor is
                                  N/365
               [(1+I)/(1+J+.0025)]      -1.

The Index Rate is the average of the Ask Yields for U.S. Treasury Strips as
quoted by a national quoting service for a period equal to an applicable
guaranteed interest period. The average currently is based on the period
starting from the 22nd day of the calendar month two months prior to the month
of the Index Rate determination and ending the 21st day of the calendar month
immediately before the month of determination. We currently calculate the Index
Rate once each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at least 28 days.
If the Ask Yields are no longer available, we will determine the Index Rate by
using a suitable and approved, if required, replacement method.

A Market Value Adjustment may be positive, negative or result in no change. In
general, if interest rates are rising, you bear the risk that any Market Value
Adjustment will likely be negative and reduce your contract value. On the other
hand, if interest rates are falling, it is more likely that you will receive a
positive Market Value Adjustment that increases your contract value. In the
event of a full surrender or annuitization, we will add or subtract any Market
Value Adjustment from the amount surrendered or annuitized. In the event of a
partial withdrawal or annuitization, we will add or subtract any Market Value
Adjustment from the total amount withdrawn or annuitized in order to provide the
amount requested. If a negative Market Value Adjustment exceeds your contract
value, we will consider your request to be a full surrender or annuitization.

Several examples which illustrate how the Market Value Adjustment works are
included in Appendix A.

GA-109652                            4
--------------------------------------------------------------------------------
                              THE ANNUITY CONTRACT
--------------------------------------------------------------------------------

The Contract described in this prospectus is a deferred fixed annuity contract.
The Contract provides a means for you to invest in the Fixed Account of the
Company.

CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date. Each 12-month
period following the contract date is a contract year.

ANNUITY START DATE
The annuity start date is the date you start receiving annuity payments under
your Contract. The Contract, like all deferred annuity contracts, has two
phases: the accumulation phase and the income phase. The accumulation phase is
the period between the contract date and the annuity start date. The income
phase begins when you start receiving regular annuity payments from your
Contract on the annuity start date.

CONTRACT OWNER
You are the contract owner. You are also the annuitant unless another annuitant
is named in the application. You have the rights and options described in the
Contract. One or more persons may own the Contract.

The death benefit becomes payable when you die. In the case of a sole contract
owner who dies before the income phase begins, we will pay the beneficiary the
death benefit then due. The sole contract owner's estate will be the beneficiary
if no beneficiary has been designated or the beneficiary has predeceased the
contract owner. In the case of a joint owner of the Contract dying before the
income phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary designation.

If the contract owner is a trust and a beneficial owner of the trust has been
designated, the beneficial owner will be treated as the contract owner for
determining the death benefit. If a beneficial owner is changed or added after
the contract date, this will be treated as a change of contract owner for
determining the death benefit.

JOINT OWNER. For non-qualified Contracts only, joint owners may be named in a
written request before the Contract is in effect. Joint owners may independently
exercise transfers and other transactions allowed under the Contract. All other
rights of ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights of a joint
owner end at death of that owner if the other joint owner survives. The entire
interest of the deceased joint owner in the Contract will pass to the surviving
joint owner.

ANNUITANT
The annuitant is the person designated by you to be the measuring life in
determining annuity payments. The annuitant's age determines when the income
phase must begin and the amount of the annuity payments to be paid. You are the
annuitant unless you choose to name another person. The annuitant may not be
changed after the Contract is in effect.

The contract owner will receive the annuity benefits of the Contract if the
annuitant is living on the annuity start date. If the annuitant dies before the
annuity start date, and a contingent annuitant has been named, the contingent
annuitant becomes the annuitant (unless the contract owner is not an individual,
in which case the death benefit becomes payable).

If there is no contingent annuitant when the annuitant dies before the annuity
start date, the contract owner will become the annuitant. The contract owner may
designate a new annuitant within 60 days of the death of the annuitant.

If there is no contingent annuitant when the annuitant dies before the annuity
start date and the contract owner is not an individual, we will pay the
designated beneficiary the death benefit then due. If a beneficiary

GA-109652                            5
has not been designated, or if there is no designated beneficiary living,
the contract owner will be the beneficiary. If the annuitant was the
sole contract owner and there is no beneficiary designation, the
annuitant's estate will be the beneficiary.

Regardless of whether a death benefit is payable, if the annuitant dies and any
contract owner is not an individual, distribution rules under federal tax law
will apply. You should consult your tax advisor for more information if you are
not an individual.

BENEFICIARY
The beneficiary is named by you in a written request. The beneficiary is the
person who receives any death benefit proceeds and who becomes the successor
contract owner if the contract owner (or the annuitant if the contract owner is
other than an individual) dies before the annuity start date. We pay death
benefits to the primary beneficiary (unless there are joint owners, in which
case death proceeds are payable to the surviving owner(s)).

If the beneficiary dies before the annuitant or the contract owner, the death
benefit proceeds are paid to the contingent beneficiary, if any. If there is no
surviving beneficiary, we pay the death benefit proceeds to the contract owner's
estate.

One or more persons may be a beneficiary or contingent beneficiary. In the case
of more than one beneficiary, we will assume any death benefit proceeds are to
be paid in equal shares to the surviving beneficiaries.

You have the right to change beneficiaries during the annuitant's lifetime
unless you have designated an irrevocable beneficiary. When an irrevocable
beneficiary has been designated, you and the irrevocable beneficiary may have to
act together to exercise some of the rights and options under the Contract.

CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime, you
may transfer ownership of a non-qualified Contract. You may also change the
beneficiary. All requests for changes must be in writing and submitted to our
Customer Service Center in good order. The change will be effective as of the
day you sign the request. The change will not affect any payment made or action
taken by us before recording the change.

A change of owners may have tax consequences.

PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract owner are
not older than age 90. The single premium payment must be $5,000 or more ($1,500
for qualified Contracts). Under certain circumstances, we may waive the minimum
premium payment requirement. We may also change the minimum initial premium
requirement for certain group or sponsored arrangements. Any premium payment
that would cause the contract value of all annuities that you maintain with us
to exceed $1,000,000 requires our prior approval.

IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See "Fees
and Expenses" in this prospectus.

CREDITING OF PREMIUM PAYMENT
We will process your premium payment within 2 business days after receipt, if
the application and all information necessary for processing the Contract are
complete. In certain states we also accept premium payments by wire order. Wire
transmittals must be accompanied by sufficient electronically transmitted data.
We may retain your premium payment for up to 5 business days while attempting to
complete an incomplete application. If the application cannot be completed
within this period, we will inform you of the reasons for the delay. We will
also return the premium payment immediately unless you direct us to hold the
premium payment until the application is completed.

GA-109652                            6
If your premium payment was transmitted by wire order from your broker-dealer,
we will follow one of the following two procedures after we receive and accept
the wire order and investment instructions. The procedure we follow depends on
state availability and the procedures of your broker-dealer.

     (1)  If either your state or broker-dealer do not permit us to issue a
          Contract without an application, we reserve the right to rescind the
          Contract if we do not receive and accept a properly completed
          application or enrollment form within 5 days of the premium payment.
          If we do not receive the application or form within 5 days of the
          premium payment, we will refund the contract value plus any charges we
          deducted, and the Contract will be voided. Some states require that we
          return the premium paid, in which case we will comply.

     (2)  If your state and broker-dealer allow us to issue a Contract without
          an application, we will issue and mail the Contract to you or your
          representative, together with an Application Acknowledgement Statement
          for your execution. Until our Customer Service Center receives the
          executed Application Acknowledgement Statement, neither you nor the
          broker-dealer may execute any financial transactions on your Contract
          unless they are requested in writing by you. We may require additional
          information before complying with your request (e.g., signature
          guarantee).

ADMINISTRATIVE PROCEDURES
We may accept a request for Contract service in writing, by telephone, or other
approved electronic means, subject to our administrative procedures, which vary
depending on the type of service requested and may include proper completion of
certain forms, providing appropriate identifying information, and/or other
administrative requirements.

CONTRACT VALUE
We determine your contract value on a daily basis beginning on the contract
date. Your contract value is the sum of the premium payment plus credited
interest, minus any withdrawals (including any Market Value Adjustment applied
to such withdrawal), contract fees, and premium taxes. If you surrender your
contract during the 30-day period preceding a maturity date, you will receive
the contract value.

CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender the
Contract, other than during the 30-day period prior to a maturity date. The cash
surrender value will fluctuate daily based on the interest credited to the
contract value and any Market Value Adjustment. We do not guarantee any minimum
cash surrender value. On any date during the accumulation phase, we calculate
the cash surrender value as follows: we start with your contract value, then we
adjust for any Market Value Adjustment, then we deduct any surrender charge, any
charge for premium taxes, and any other charges incurred but not yet deducted.

SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is living and
before the annuity start date. A surrender will be effective on the date your
written request and the Contract are received at our Customer Service Center. We
will determine and pay the cash surrender value after receipt of all paperwork
required in order for us to process your surrender. Once paid, all benefits
under the Contract will be terminated. You may receive the cash surrender value
in a single sum payment or apply it under one or more annuity options. We will
usually pay the cash surrender value within 7 days.

Consult your tax advisor regarding the tax consequences associated with
surrendering your Contract. A surrender made before you reach age 59 1/2 may
result in a 10% tax penalty. See "Federal Tax Considerations" for more details.

THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the assets that
support a contract owner's contract value. See "The Fixed Account" for more
information.

GA-109652                            7
OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Death Benefit," "Charges and Fees," "The Annuity Options"
and "Other Contract Provisions" in this prospectus for information on other
important provisions in your Contract.

--------------------------------------------------------------------------------
                                   WITHDRAWALS
--------------------------------------------------------------------------------

Any time during the accumulation phase and before the death of the owner, you
may withdraw all or part of your money. Keep in mind that your contract value
after the withdrawal must equal or exceed $1,000 or we will treat the withdrawal
request as a request to surrender the Contract. We deduct a surrender charge if
you surrender your Contract or withdraw an amount exceeding the free withdrawal
amount. The free withdrawal amount is equal to the prior 12 months' interest
earned and not previously withdrawn. The surrender charge varies by the length
of the guarantee period selected, beginning with 8% during year 1 and reducing
by 1% per year to the end of the guarantee period. No surrender charge is
imposed upon a surrender made during the 30-day period immediately preceding the
end of a guarantee period. The surrender charge period resets at the beginning
of each guarantee period. It is charged against the contract value and is based
on the amount of the withdrawal.

We will apply a Market Value Adjustment to any withdrawal in excess of the free
withdrawal amount taken prior to the 30-day period before the maturity date.
Definitive guidance on the proper federal tax treatment of the market value
adjustment has not been issued. You may want to discuss the potential tax
consequences of a market value adjustment with your tax adviser. We will
determine the contract value as of the close of business on the day we receive
your withdrawal request at our Customer Service Center. The contract value may
be more or less than the premium payment made.

Upon surrender, surrender charges and a Market Value Adjustment will be applied
retroactively with respect to any free withdrawal amount previously withdrawn
within the same contract year as the surrender.

We offer the following three withdrawal options:

REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each withdrawal
must be a minimum of $100. We will apply a surrender charge and Market Value
Adjustment to any regular withdrawal in excess of the free withdrawal amount
that is taken prior to the 30 day period before the maturity date.

SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawal payments. Systematic
withdrawals are limited to interest earnings during the prior month, quarter, or
year, depending on the frequency you chose. Systematic withdrawals are not
subject to a Market Value Adjustment, unless you have added the Fixed Dollar
Systematic Withdrawal Feature discussed below and the payments exceed the free
withdrawal amount. Systematic withdrawals under the Fixed Dollar Systematic
Withdrawal Feature are available only in connection with Section 72(q) or 72(t)
distributions.

Systematic withdrawals may be taken monthly, quarterly or annually. You decide
when you would like systematic payments to start as long as they start at least
28 days after your contract date. You also select the date on which the
systematic withdrawals will be made, but this date cannot be later than the 28th
day of the month. If you have elected to receive systematic withdrawals but have
not chosen a date, we will make the withdrawals on the same calendar day of each
month as your contract date. If your contract date is after the 28th , your
systematic withdrawal will be made on the 28th day of each month.

Each systematic withdrawal amount must be a minimum of $100. The amount of your
systematic withdrawal can either be (1) a fixed dollar amount, or (2) an amount
based on a percentage of the interest earned and not previously withdrawn, but
in either case is limited to interest earnings. If your systematic withdrawal is
a fixed dollar amount and the amount to be withdrawn would exceed the applicable
free

GA-109652                            8
withdrawal amount on any withdrawal date, we will automatically reduce the
amount withdrawn so that it equals such free withdrawal amount. Thus, your fixed
dollar systematic withdrawals will never exceed the free withdrawal amount. If
you want fixed dollar systematic withdrawals to exceed the free withdrawal
amount and are willing to incur associated surrender charges, consider the Fixed
Dollar Systematic Withdrawal Feature which you may add to your regular
systematic withdrawal program.

You may change the amount or percentage of your systematic withdrawal once each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal date. The systematic withdrawal option may commence in a contract
year where a regular withdrawal has been taken but you may not change the amount
or percentage of your withdrawals in any contract year during which you have
previously taken a regular withdrawal. You may not elect the systematic
withdrawal option if you are taking IRA withdrawals.

FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar
Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal
program. This feature allows you to receive a systematic withdrawal in a fixed
dollar amount regardless of any surrender charges or Market Value Adjustments.
Systematic withdrawals under the Fixed Dollar Systematic Withdrawal Feature are
available only in connection with Section 72(q) or 72(t) distributions. You
choose the amount of the fixed systematic withdrawals. We will assess a
surrender charge and Market Value Adjustment on the withdrawal date if the
withdrawal exceeds the free withdrawal amount on the withdrawal date. We will
apply the surrender charge and any Market Value Adjustment directly to your
contract value (rather than to the systematic withdrawal) so that the amount of
each systematic withdrawal remains fixed.

Flat dollar systematic withdrawals which are intended to satisfy the
requirements of Section 72(q) or 72(t) of the Tax Code may exceed the free
withdrawal amount. Such withdrawals are subject to surrender charges and Market
Value Adjustment when they exceed the applicable free withdrawal amount.

IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the
current calendar year, you may elect to have distributions made to you to
satisfy requirements imposed by Federal tax law. IRA withdrawals provide payout
of amounts required to be distributed by the Internal Revenue Service rules
governing mandatory distributions under qualified plans. We will send you a
notice before your distributions commence. You may elect to take IRA withdrawals
at that time, or at a later date. You may not elect IRA withdrawals and
participate in systematic withdrawals at the same time. If you do not elect to
take IRA withdrawals, and distributions are required by Federal tax law,
distributions adequate to satisfy the requirements imposed by Federal tax law
may be made. Thus, if you are participating in systematic withdrawals,
distributions under that option must be adequate to satisfy the mandatory
distribution rules imposed by federal tax law.

You may choose to receive IRA withdrawals on a monthly, quarterly or annual
basis. Under this option, you may elect payments to start as early as 28 days
after the contract date. You select the day of the month when the withdrawals
will be made, but it cannot be later than the 28th day of the month. If no date
is selected, we will make the withdrawals on the same calendar day of the month
as the contract date.

You may request that we calculate for you the amount that is required to be
withdrawn from your Contract each year based on the information you give us and
various choices you make. For information regarding the calculation and choices
you have to make, see the Statement of Additional Information. Or, we will
accept your written instructions regarding the calculated amount required to be
withdrawn from your Contract each year. The minimum dollar amount you can
withdraw is $100. When we determine the required IRA withdrawal amount for a
taxable year based on the frequency you select, if that amount is less than
$100, we will pay $100. At any time where the IRA withdrawal amount is greater
than the contract value, we will cancel the Contract and send you the amount of
the cash surrender value.

You may change the payment frequency of your IRA withdrawals once each contract
year or cancel this option at any time by sending us satisfactory notice to our
Customer Service Center at least 7 days before the next scheduled withdrawal
date.

GA-109652                            9
An IRA withdrawal in excess of the amount allowed under systematic withdrawals
will be subject to a Market Value Adjustment.

CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING
WITHDRAWALS. You are responsible for determining that withdrawals comply with
applicable law. A withdrawal made before
the taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See "Federal
Tax Considerations" for more details.

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                                  DEATH BENEFIT
--------------------------------------------------------------------------------

DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either, the
contract owner or the first of joint owners dies, or the annuitant dies (when a
contract owner is not an individual). Assuming you are the contract owner, your
beneficiary will receive a death benefit unless the beneficiary is your
surviving spouse and elects to continue the Contract. The death benefit is equal
to the contract value. The death benefit value is calculated at the close of the
business day on which we receive written notice and due proof of death, as well
as any required paperwork, at our Customer Service Center. Amounts could be
reduced by a charge for premium taxes owed and withdrawals not previously
deducted.

If your beneficiary elects to delay receipt of the death benefit until a date
after the time of death, the amount of the benefit payable in the future may be
affected. The proceeds may be received in a single sum or applied to any of the
annuity options. If we do not receive a request to apply the death benefit
proceeds to an annuity option, we will make a single sum distribution. We will
generally pay death benefit proceeds within 7 days after our Customer Service
Center has received sufficient information to make the payment. For information
on required distributions under federal income tax laws, you should see
"Required Distributions upon Contract Owner's Death."

The death benefit applies on the first person to die of the contract owner,
joint owner, or annuitant (if a contract owner is not an individual). Assuming
you are the contract owner, if you die during the accumulation phase, your
beneficiary will receive a death benefit unless the beneficiary is the surviving
spouse and elects to continue the Contract.

DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start date, we
will pay the beneficiary any certain benefit remaining under the annuity in
effect at the time.

REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.

If any owner of a non-qualified contract dies before the annuity start date, the
death benefit payable to the beneficiary will be distributed as follows: (a) the
death benefit must be completely distributed within 5 years of the contract
owner's date of death; or (b) the beneficiary may elect, within the 1-year
period after the contract owner's date of death, to receive the death benefit in
the form of an annuity from us, provided that (i) such annuity is distributed in
substantially equal installments over the life of such beneficiary or over a
period not extending beyond the life expectancy of such beneficiary; and (ii)
such distributions begin not later than 1 year after the contract owner's date
of death.

Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is
the deceased owner's surviving spouse, then such spouse may elect to continue
the Contract under the same terms as before the contract owner's death. Upon
receipt of such election from the spouse at our Customer Service Center: (1) all
rights of the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become the owner
of the Contract and will also be treated as the contingent annuitant, if none
has been named and only if the deceased owner was the annuitant; and (3) all
rights and privileges

GA-109652                            10
granted by the Contract or allowed by Golden American will
belong to the spouse as contract owner of the Contract. This election will be
deemed to have been made by the spouse if such spouse fails to make a timely
election as described in this paragraph. If the owner's beneficiary is a
nonspouse, the distribution provisions described in subparagraphs (a) and (b)
above, will apply even if the annuitant and/or contingent annuitant are alive at
the time of the contract owner's death.

If we do not receive an election from a nonspouse owner's beneficiary within the
1-year period after the contract owner's date of death, then we will pay the
death benefit to the owner's beneficiary in a cash payment within five years
from date of death. We will determine the death benefit as of the date we
receive proof of death. We will make payment of the proceeds on or before the
end of the 5-year period starting on the owner's date of death. Such cash
payment will be in full settlement of all our liability under the Contract.

If the contract owner dies after the annuity start date, we will continue to
distribute any benefit payable at least as rapidly as under the annuity option
then in effect. All of the contract owner's rights granted under the Contract or
allowed by us will pass to the contract owner's beneficiary.

If the Contract has joint owners we will consider the date of death of the first
joint owner as the death of the contract owner and the surviving joint owner
will become the contract owner of the Contract.

--------------------------------------------------------------------------------
                                CHARGES AND FEES
--------------------------------------------------------------------------------

We deduct the Contract charges described below to cover our cost and expenses,
services provided and risks assumed under the Contracts. We incur certain costs
and expenses for distributing and administering the Contracts, including
compensation and expenses paid in connection with sales of the Contracts, for
paying the benefits payable under the Contracts and for bearing various risks
associated with the Contracts. The amount of a Contract charge will not always
correspond to the actual costs associated with the charge. For example, the
surrender charge collected may not fully cover all of the distribution expenses
incurred by us with the service or benefits provided. In the event there are any
profits from fees and charges deducted under the Contract, we may use such
profits to finance the distribution of Contracts.

CHARGES DEDUCTED FROM THE CONTRACT VALUE
We deduct the following charges from your contract value:

     SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a
"surrender charge") if you surrender your Contract or if you take a withdrawal
in excess of the free withdrawal amount during the guarantee period. The free
withdrawal amount is equal to the prior 12 months' interest earned and not
previously withdrawn. The surrender charge is charged against the contract value
and is based on the amount of the withdrawal. This charge is intended to cover
sales expenses that we have incurred. We may in the future reduce or waive the
surrender charge in certain situations and will never charge more than the
maximum surrender charges. The percentage deducted at the time of surrender or
excess withdrawal depends on the number of complete years that have elapsed
since the beginning of the guarantee period.

The surrender charge varies by the length of the guarantee period selected,
beginning with 8% during year 1 and reducing by 1% per year to the earlier of
the end of the guarantee period or the 8th policy year. No surrender charge is
imposed upon a surrender made during the 30-day period immediately preceding the
end of a guarantee period.

The surrender charge period resets at the beginning of each guarantee period.
Upon withdrawal, it is charged against the remaining contract value and is based
on the amount of the withdrawal. Upon surrender, a surrender charge and a Market
Value Adjustment will be applied retroactively with respect to any free
withdrawal amount previously withdrawn within the same contract year as the
surrender. The following table shows the schedule of the surrender charge that
will apply.

GA-109652                            11
COMPLETE YEARS ELAPSED                0   1   2   3   4   5   6   7   8+
        SINCE START OF GUARANTEE PERIOD
     SURRENDER CHARGE                      8%  7%  6%  5%  4%  3%  2%  1%  0%

     WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the
surrender charge in most states in the following events: (i) you begin receiving
qualified extended medical care on or after the first contract anniversary for
at least 45 days during a 60-day period and your request for the surrender or
withdrawal, together with all required documentation is received at our Customer
Service Center during the
term of your care or within 90 days after the last day of your care; or (ii) you
are first diagnosed by a qualifying medical professional, on or after the first
contract anniversary, as having a qualifying terminal illness. We have the right
to require an examination by a physician of our choice. If we require such an
examination, we will pay for it. You are required to send us satisfactory
written proof of illness. See your Contract for more information. The waiver of
surrender charge may not be available in all states.

     FREE WITHDRAWAL AMOUNT. No surrender charge or Market Value Adjustment
applies to withdrawals made during the 30-day period prior to the end of a
guarantee interest period. The interest earned during the prior 12 months and
not previously withdrawn may be withdrawn without surrender charge or Market
Value Adjustment.

     SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge
for excess withdrawals. We consider a withdrawal to be an "excess withdrawal"
when the amount you withdraw in any contract year exceeds the free withdrawal
amount. Where you are receiving systematic withdrawals, any combination of
regular withdrawals taken and any systematic withdrawals expected to be received
in a contract year will be included in determining the amount of the excess
withdrawal. Such a withdrawal will be considered a partial surrender of the
Contract and we will impose a surrender charge and any associated premium tax.
ANY EXCESS WITHDRAWAL MORE THAN 30 DAYS BEFORE A MATURITY DATE WILL TRIGGER A
MARKET VALUE ADJUSTMENT.

     PREMIUM TAXES. We may make a charge for state and local premium taxes
depending on your state of residence. The tax can range from 0% to 3.5% of the
premium payment. We have the right to change this amount to conform with changes
in the law or if you change your state of residence.

We deduct the premium tax from your contract value on the annuity start date.
However, some jurisdictions impose a premium tax at the time that premiums are
paid, regardless of when the annuity payments begin. In those states we may
defer collection of the premium taxes from your contract value and deduct it
when you surrender the Contract, when you take an excess withdrawal, or on the
annuity start date.

--------------------------------------------------------------------------------
                               THE ANNUITY OPTIONS
--------------------------------------------------------------------------------

ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start date, we
will begin making payments to the contract owner under an income plan. We will
make these payments under the annuity option chosen. You may change your annuity
option by making a written request to us at least 30 days before the annuity
start date. The amount of the payments will be determined by applying your
contract value adjusted for any applicable market value adjustment on the
annuity start date in accordance with the annuity option you chose.

You may also elect an annuity option on surrender of the Contract for its cash
surrender value or you may choose one or more annuity options for the payment of
death benefit proceeds while it is in effect and before the annuity start date.
If, at the time of the contract owner's death or the annuitant's death (if the
contract owner is not an individual), no option has been chosen for paying death
benefit proceeds, the beneficiary may choose an annuity option within 60 days.
In all events, payments of death benefit proceeds must comply with the
distribution requirements of applicable federal tax law.

GA-109652                            12
The minimum monthly annuity income payment that we will make is $20. We may
require that a single sum payment be made if the contract value is less than
$2,000 or if the calculated monthly annuity income payment is less than $20.

For each annuity option we will issue a separate written agreement putting the
annuity option into effect. Before we pay any annuity benefits, we require the
return of your Contract. If your Contract has been lost, we will require that
you complete and return the applicable lost Contract form. Various factors will
affect the level of annuity benefits, such as the annuity option chosen and the
applicable payment rate used.

Our current annuity options provide only for fixed payments. Fixed annuity
payments are regular payments, the amount of which is fixed and guaranteed by
us. Some fixed annuity options provide fixed payments either for a specified
period of time or for the life of the annuitant. The amount of life income
payments will depend on the form and duration of payments you chose, the age of
the annuitant or beneficiary (and gender, where appropriate under applicable
law), the total contract value applied, and the applicable payment rate.

Our approval is needed for any option where:

     (1)  The person named to receive payment is other than the contract owner
          or beneficiary;

     (2)  The person named is not a natural person, such as a corporation; or

     (3)  Any income payment would be less than the minimum annuity income
          payment allowed.

SELECTING THE ANNUITY START DATE
You select the annuity start date, which is the date on which the annuity
payments commence. The annuity start date must be at least 1 year from the
contract date but before the month immediately following the annuitant's 90th
birthday, or 10 years from the contract date, if later. If, on the annuity start
date, a surrender charge remains, the elected annuity option must include a
period certain of at least 5 years.

If you do not select an annuity start date, it will automatically begin in the
month following the annuitant's 90th birthday, or 10 years from the contract
date, if later.

If the annuity start date occurs when the annuitant is at an advanced age, such
as over age 85, it is possible that the Contract will not be considered an
annuity for federal tax purposes. See "Federal Tax Considerations." For a
Contract purchased in connection with a qualified plan, other than a Roth IRA,
distributions must commence not later than April 1st of the calendar year
following the calendar year in which you attain age 70 1/2 or, in some case,
retire. Distributions may be made through annuitization or withdrawals. You
should consult your tax adviser for tax advice.

FREQUENCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be monthly,
quarterly, semi-annually or annually. If we do not receive written notice from
you, we will make the payments monthly. There may be certain restrictions on
minimum payments that we will allow.

THE ANNUITY OPTIONS
We offer the 3 annuity options shown below. Payments under Options 1, 2 and 3
are fixed. The contract value can be applied to any other annuitization plan
that we choose to offer on the annuity start date. Annuity payments under other
available options may be fixed and/or variable.

     OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly
payments in equal installments for a fixed number of years based on the contract
value on the annuity start date. We guarantee that each monthly payment will be
at least the amount stated in your Contract. If you prefer, you may request that
payments be made in annual, semi-annual or quarterly installments. We will
provide you with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may apply to
the taxable portion of each income payment until the contract owner reaches age
59 1/2.

GA-109652                            13
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made for the
life of the annuitant in equal monthly installments and guaranteed for at least
a period certain such as 10 or 20 years. Other periods certain may be available
to you on request. You may choose a refund period instead. Under this
arrangement, income is guaranteed until payments equal the amount applied. If
the person named lives beyond the guaranteed period, payments continue until his
or her death. We guarantee that each payment will be at least the amount
specified in the Contract corresponding to the person's age on his or her last
birthday before the annuity start date. Amounts for ages not shown in the
Contract are available if you ask for them.

     OPTION 3. JOINT LIFE INCOME. This option is available when there are 2
persons named to determine annuity payments. At least one of the persons named
must be either the contract owner or beneficiary of the Contract. We guarantee
monthly payments will be made as long as at least one of the named persons is
living. There is no minimum number of payments. Monthly payment amounts are
available if you ask for them.

The contract value can be applied to any other annuitization plan that we choose
to offer on the annuity start date. Annuity payments under other available
options may be fixed and/or variable. If variable and subject to the Investment
Company Act of 1940 it will comply with requirements of such Act.

PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any amounts still due
as provided in the annuity agreement between you and Golden American. The
amounts we will pay are determined as follows:

     (1)  For Option 1, or any remaining guaranteed payments under Option 2, we
          will continue payments. Under Options 1 and 2, the discounted values
          of the remaining guaranteed payments may be paid in a single sum. This
          means we deduct the amount of the interest each remaining guaranteed
          payment would have earned had it not been paid out early. The discount
          interest rate is never less than 3% for Option 1 and for Option 2 per
          year. We will, however, base the discount interest rate on the
          interest rate used to calculate the payments for Options 1 and 2 if
          such payments were not based on the tables in the Contract.

     (2)  For Option 3, no amounts are payable after both named persons have
          died.

For other available options, the annuity option agreement will state the amount
we will pay, if any.

--------------------------------------------------------------------------------
                            OTHER CONTRACT PROVISIONS
--------------------------------------------------------------------------------

REPORTS TO CONTRACT OWNERS
We will send you an annual report within 31 days after the end of each contract
year. The report will show the contract value, cash surrender value, and the
death benefit as of the end of the contract year. The report will also show the
amounts deducted from or added to the contract value since the last report. You
have 30 days to notify our Customer Service Center of any errors or
discrepancies contained in the report or in any confirmation notices. We will
also send you any other reports, notices or documents we are required by law to
furnish to you.

SUSPENSION OF PAYMENTS
The Company reserves the right to delay payment for up to 6 months.

IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is misstated, the
amounts payable or benefits provided by the Contract shall be those that the
premium payment would have bought at the correct age or sex.

GA-109652                            14
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a loan but
you should understand that your rights and any beneficiary's rights may be
subject to the terms of the assignment. An assignment may have federal tax
consequences. You must give us satisfactory written notice at our Customer
Service Center in order to make or release an assignment. We are not responsible
for the validity of any assignment.

CONTRACT CHANGES -- APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to qualify the
Contract as an annuity under applicable federal tax law. You will be given
advance notice of such changes.

FREE LOOK
You may cancel your Contract within your 10-day free look period. We deem the
free look period to expire 15 days after we mail the Contract to you. Some
states may require a longer free look period. To cancel, you need to send your
Contract to our Customer Service Center or to the agent from whom you purchased
it. We will refund the contract value. For purposes of the refund during the
free look period, (i) we adjust your contract value for any Market Value
Adjustment, and (ii) then we include a refund of any charges deducted from your
contract value. Because of the potential positive or negative effect of the
Market Value Adjustment, the contract value returned may be greater or less than
the premium payment you paid. Some states require us to return to you the amount
of the paid premium (rather than the adjusted contract value) in which case you
will not be subject to investment risk during the free look period. Your
Contract is void as of the day we receive your Contract and cancellation
request. We determine your contract value at the close of business on the day we
receive your written request.

GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce any surrender
charges. We may also change the minimum premium payment requirement, or offer an
alternative or reduced death benefit.

SELLING THE CONTRACT
Directed Services, Inc. is the principal underwriter and distributor of the
Contract as well as for other contracts issued through Separate Account B and
other separate accounts of Golden American. The principal address of Directed
Services is 1475 Dunwoody Drive, West Chester, Pennsylvania 19380. Directed
Services is a corporation organized under the laws of New York and is a wholly
owned subsidiary of Equitable of Iowa. Directed Services is registered as a
broker-dealer with the SEC under the Securities Exchange Act of 1934, as well as
with securities commissions in the states in which it operates, and is a member
of the National Association of Securities Dealers, Inc. ("NASD").

Directed Services has the authority to enter into selling agreements with other
firms. Directed Services has entered into selling agreements with broker-dealers
to sell the Contracts through registered representatives. Those representatives
are registered with the NASD, and if applicable, also with the states in which
they do business. They also are licensed as insurance agents in the states in
which they do business.

We pay sales commissions to Directed Services for the sale of the Contracts.
Directed Services passes through the entire amount of the sales commission to
the broker-dealer whose registered representative sold the Contract. The maximum
sales commission payable will be approximately 5.5% of the premium payment.

GA-109652                            15
This commission may be returned if the Contract is not continued through the
first Contract Year.

   --------------------------------------------------------------------------
                          UNDERWRITER COMPENSATION
   --------------------------------------------------------------------------
      NAME OF PRINCIPAL              AMOUNT OF                   OTHER
         UNDERWRITER           COMMISSION TO BE PAID         COMPENSATION
   --------------------------------------------------------------------------
   Directed Services, Inc.         Maximum of 5%         Reimbursement of any
                                         of                covered expenses
                                  premium payment              incurred
                                    except when             by registered
                                      combined              representatives
                                with commissions on          in connection
                               renewal of a guarantee           with the
                                  period or annual           distribution
                                 trail commissions.        of the Contracts.
   --------------------------------------------------------------------------

Certain sales agreements may provide for a combination of a certain percentage
of commission at the time of sale, upon the start of a new guarantee period or
an annual trail commission (which when combined could exceed 5% of total premium
payments).

We may make additional cash payments to broker-dealers for marketing and
educational expenses and for the reimbursement of certain expenses incurred by
registered representatives in connection with the distribution of the Contracts.

We do not pay any additional commissions on the sale or exercise of any of the
optional benefit riders offered in this prospectus.

--------------------------------------------------------------------------------
                                OTHER INFORMATION
--------------------------------------------------------------------------------

STATE REGULATION
We are regulated by the Insurance Department of the State of Delaware. We are
also subject to the insurance laws and regulations of all jurisdictions where we
do business. The Contract offered by this prospectus has been approved where
required by those jurisdictions. We are required to submit annual statements of
our operations, including financial statements, to the Insurance Departments of
the various jurisdictions in which we do business to determine solvency and
compliance with state insurance laws and regulations.

LEGAL PROCEEDINGS
The Company, like other insurance companies, may be involved in lawsuits,
including class action lawsuits. In some class action and other lawsuits
involving insurers, substantial damages have been sought and/or material
settlement payments have been made. We believe that currently there are no
pending or threatened lawsuits that are reasonably likely to have a materially
adverse impact on the Company.

LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R. Tashman, Esquire,
Executive Vice President, General Counsel and Assistant Secretary of Golden
American. Sutherland Asbill & Brennan LLP of Washington, D.C. has provided
advice on certain matters relating to federal securities laws.

EXPERTS
The audited financial statements of Golden American appearing in this prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing in this prospectus and
in the Registration Statement and are included or

GA-109652                            16
incorporated by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

--------------------------------------------------------------------------------
                           FEDERAL TAX CONSIDERATIONS
--------------------------------------------------------------------------------

The following summary provides a general description of the federal income tax
considerations associated with this Contract and does not purport to be complete
or to cover all tax situations. This discussion is not intended as tax advice.
You should consult your counsel or other competent tax advisers for more
complete information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations as to the
likelihood of continuation of the present federal income tax laws or as to how
they may be interpreted by the IRS.

TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or purchased on a
tax-qualified basis. Qualified Contracts are designed for use by individuals
whose premium payments are comprised solely of proceeds
from and/or contributions under retirement plans that are intended to qualify as
plans entitled to special income tax treatment under Sections 401(a), 403(b),
408, or 408A of the Code. The ultimate effect of federal income taxes on the
amounts held under a Contract, or annuity payments, depends on the type of
retirement plan, on the tax and employment status of the individual concerned,
and on our tax status. In addition, certain requirements must be satisfied in
purchasing a qualified Contract with proceeds from a tax-qualified plan and
receiving distributions from a qualified Contract in order to continue receiving
favorable tax treatment. Some retirement plans are subject to distribution and
other requirements that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contract comply with applicable law. Therefore, you should seek
competent legal and tax advice regarding the suitability of a Contract for your
particular situation. The following discussion assumes that qualified Contracts
are purchased with proceeds from and/or contributions under retirement plans
that qualify for the intended special federal income tax treatment.

TAX STATUS OF THE CONTRACTS
     REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for
federal income tax purposes, the Code requires any nonqualified Contract to
contain certain provisions specifying how your interest in the Contract will be
distributed in the event of your death. The non-qualified Contracts contain
provisions that are intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We intend to
review such provisions and modify them if necessary to assure that they comply
with the applicable requirements when such requirements are clarified by
regulation or otherwise.

Other rules may apply to Qualified Contracts.

The following discussion assumes that the Contracts will qualify as annuity
contracts for federal income tax purposes.

TAX TREATMENT OF ANNUITIES
     IN GENERAL. We believe that if you are a natural person you will generally
not be taxed on increases in the value of a Contract until a distribution occurs
or until annuity payments begin. (For these purposes, the agreement to assign or
pledge any portion of the contract value, and, in the case of a qualified
Contract, any portion of an interest in the qualified plan, generally will be
treated as a distribution.)

TAXATION OF NON-QUALIFIED CONTRACTS
     NON-NATURAL PERSON. The owner of any annuity contract who is not a natural
person generally must include in income any increase in the excess of the
contract value over the "investment in the contract" (generally, the premiums or
other consideration you paid for the contract less any nontaxable withdrawals)

GA-109652                            17
during the taxable year. There are some exceptions to this rule and a
prospective contract owner that is not a natural person may wish to discuss
these with a tax adviser. The following discussion generally applies to
Contracts owned by natural persons.

     WITHDRAWALS. When a withdrawal from a non-qualified Contract occurs, the
amount received will be treated as ordinary income subject to tax up to an
amount equal to the excess (if any) of the contract value (unreduced by the
amount of any surrender charge) immediately before the distribution over the
contract owner's investment in the Contract at that time. The tax treatment of
Market Value Adjustments is uncertain. You should consult a tax adviser if you
are considering taking a withdrawal from your Contract in circumstances where a
Market Value Adjustment would apply.

In the case of a surrender under a non-qualified Contract, the amount received
generally will be taxable only to the extent it exceeds the contract owner's
investment in the Contract.

     PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution from a
non-qualified Contract, there may be imposed a federal tax penalty equal to 10%
of the amount treated as income. In general, however, there is no penalty on
distributions:

     o    made on or after the taxpayer reaches age 59 1/2;

     o    made on or after the death of a contract owner;

     o    attributable to the taxpayer's becoming disabled; or

     o    made as part of a series of substantially equal periodic payments for
          the life (or life expectancy) of the taxpayer.

Other exceptions may be applicable under certain circumstances and special rules
may be applicable in connection with the exceptions enumerated above. A tax
adviser should be consulted with regard to exceptions from the penalty tax.

     ANNUITY PAYMENTS. Although tax consequences may vary depending on the
payment option elected under an annuity contract, a portion of each annuity
payment is generally not taxed and the remainder is taxed as ordinary income.
The non-taxable portion of an annuity payment is generally determined in a
manner that is designed to allow you to recover your investment in the Contract
ratably on a tax-free basis over the expected stream of annuity payments, as
determined when annuity payments start. Once your investment in the Contract has
been fully recovered, however, the full amount of each annuity payment is
subject to tax as ordinary income.

     TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a
Contract because of your death or the death of the annuitant. Generally, such
amounts are includible in the income of recipient as follows: (i) if distributed
in a lump sum, they are taxed in the same manner as a surrender of the Contract,
or (ii) if distributed under a payment option, they are taxed in the same way as
annuity payments.

     TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT. A
transfer or assignment of ownership of a Contract, the designation of an
annuitant, or payee other than an owner, the selection of certain dates for
commencement of the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A contract owner
contemplating any such transfer, assignment, designation or exchange, should
consult a tax advisor as to the tax consequences.

     WITHHOLDING. Annuity distributions are generally subject to withholding for
the recipient's federal income tax liability. Recipients can generally elect,
however, not to have tax withheld from distributions.

     MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts that are
issued by us (or our affiliates) to the same contract owner during any calendar
year are treated as one non-qualified deferred annuity contract for purposes of
determining the amount includible in such contract owner's income when a taxable
distribution occurs.

GA-109652                            18
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified plans. The
tax rules applicable to participants in these qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from: contributions in excess
of specified limits; distributions before age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; and in other specified circumstances. Therefore, no
attempt is made to provide more than general information about the use of the
Contracts with the various types of qualified retirement plans. Contract owners,
annuitants, and beneficiaries are cautioned that the rights of any person to any
benefits under these qualified retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contract, but we shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the Contract, unless the Company
consents.

     DISTRIBUTIONS. Annuity payments are generally taxed in the same manner as
under a non-qualified Contract. When a withdrawal from a qualified Contract
occurs, a pro rata portion of the amount received is taxable, generally based on
the ratio of the contract owner's investment in the Contract (generally, the
premiums or other consideration paid for the Contract) to the participant's
total accrued benefit balance
under the retirement plan. For qualified Contracts, the investment in the
Contract can be zero. For Roth IRAs, distributions are generally not taxed,
except as described below. For qualified plans under Section 401(a) and 403(b),
the Code requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) (i) reaches age 70 1/2 or (ii) retires, and
must be made in a specified form or manner. If the plan participant is a "5
percent owner" (as defined in the Code), distributions generally must begin no
later than April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the contract
owner (or plan participant) reaches age 701/2. Roth IRAs under Section 408A do
not require distributions at any time before the contract owner's death.

     WITHHOLDING. Distributions from certain qualified plans generally are
subject to withholding for the contract owner's federal income tax liability.
The withholding rates vary according to the type of distribution and the
contract owner's tax status. The contract owner may be provided the opportunity
to elect not to have tax withheld from distributions. "Eligible rollover
distributions" from section 401(a) plans and section 403(b) tax-sheltered
annuities are subject to a mandatory federal income tax withholding of 20%. An
eligible rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the Code or
distributions in a specified annuity form. The 20% withholding does not apply,
however, if the contract owner chooses a "direct rollover" from the plan to
another tax-qualified plan or IRA.

Brief descriptions of the various types of qualified retirement plans in
connection with a Contract follow. We will endorse the Contract as necessary to
conform it to the requirements of such plan.

CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish various
types of retirement plans for employees, and permits self-employed individuals
to establish these plans for themselves and their employees. These retirement
plans may permit the purchase of the Contracts to accumulate retirement savings
under the plans. Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or transferred
to any individual as a means to provide benefit payments, unless the plan
complies with all legal requirements applicable to such benefits before transfer
of the Contract. Employers intending to use the Contract with such plans should
seek competent advice.

INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA." These IRAs are subject to limits on the amount that can be contributed,
the deductible amount of the contribution, the persons who may be eligible, and
the time when

GA-109652                            19
distributions commence. Also, distributions from certain other
types of qualified retirement plans may be "rolled over" or transferred on a
tax-deferred basis into an IRA. There are significant restrictions on rollover
or transfer contributions from Savings Incentive Match Plans (SIMPLE), under
which certain employers may provide contributions to IRAs on behalf of their
employees, subject to special restrictions. Employers may establish Simplified
Employee Pension (SEP) Plans to provide IRA contributions on behalf of their
employees. Sales of the Contract for use with IRAs may be subject to special
requirements of the IRS.

ROTH IRA
Section 408A of the Code permits certain eligible individuals to contribute to a
Roth IRA. Contributions to a Roth IRA, which are subject to certain limitations,
are not deductible, and must be made in cash or as a rollover or transfer from
another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth
IRA may be subject to tax, and other special rules may apply. Distributions from
a Roth IRA generally are not taxed, except that, once aggregate distributions
exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply
to distributions made (1) before age 59 1/2 (subject to certain exceptions) or
(2) during the five taxable years starting with the year in which the first
contribution is made to any Roth IRA. A 10% penalty tax may apply to amounts
attributable to a conversion from an IRA if they are distributed during the five
taxable years beginning with the year in which the conversion was made.

TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section 501(c)(3)
organizations and public schools to exclude from their gross income the premium
payments made, within certain limits, on a Contract that will provide an annuity
for the employee's retirement. These premium payments may be subject to FICA
(Social Security) tax. Distributions of (1) salary reduction contributions made
in years beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings on amounts held as of the last year beginning before January 1,
1989, are not allowed prior to age 59 1/2, separation from service, death or
disability. Salary reduction contributions may also be distributed upon
hardship, but would generally be subject to penalties.

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

POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is always the
possibility that the tax treatment of the Contracts could change by legislation
or other means. It is also possible that any change could be retroactive (that
is, effective before the date of the change). You should consult a tax adviser
with respect to legislative developments and their effect on the Contract.

GA-109652                            20
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          MORE INFORMATION ABOUT GOLDEN AMERICAN LIFE INSURANCE COMPANY
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SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for Golden American should be read in
conjunction with the financial statements and notes thereto included in this
prospectus.

On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable of Iowa"), according to a merger agreement among Equitable of Iowa,
PFHI and ING Groep N.V. (the "ING acquisition"). On August 13, 1996, Equitable
of Iowa acquired all of the outstanding capital stock of BT Variable, Inc., then
the parent of Golden American (the "Equitable acquisition"). For financial
statement purposes, the ING acquisition was accounted for as a purchase
effective October 25, 1997 and the Equitable acquisition was accounted for as a
purchase effective August 14, 1996. As a result, the financial data presented
below for periods after October 24, 1997, are presented on the Post-Merger new
basis of accounting, for the period August 14, 1996 through October 24, 1997,
are presented on the Post-Acquisition basis of accounting, and for August 13,
1996 and prior periods are presented on the Pre-Acquisition basis of accounting.
SELECTED GAAP BASIS FINANCIAL DATA
                                                                       (IN THOUSANDS)

                                                                         POST-MERGER
                                                 -------------------------------------------------------------
                                                                                                For the Period
                                                 For the Year    For the Year    For the Year     October 25,
                                                    Ended           Ended           Ended        1997 through
                                                 December 31,    December 31,    December 31,    December 31,
                                                     2000            1999            1998            1997
                                                 -----------     -----------     -----------     -----------
Annuity and Interest
   Sensitive Life  Product Charges .........     $   144,877     $    82,935     $    39,119     $     3,834
Net Income (Loss) before  Federal Income Tax     $    32,862     $    19,737     $    10,353     $      (279)
Net Income (Loss) ..........................     $    19,180     $    11,214     $     5,074     $      (425)
Total Assets ...............................     $11,852,677     $ 9,392,857     $ 4,754,623     $ 2,446,395
Total Liabilities ..........................     $11,235,540     $ 8,915,008     $ 4,400,729     $ 2,219,082
Total Stockholder's Equity .................     $   617,137     $   477,849     $   353,894     $   227,313
POST-ACQUISITION           PRE-ACQUISITION
                                               ---------------------------------  ---------------
                                               For the Period     For the Period  For the Period
                                               January 1,1997       August 14,      January 1,
                                                   through         1996 through    1996 through
                                                 October 24,       December 31,     August 13,
                                                    1997              1996             1996
                                               --------------     --------------  ---------------
Annuity and Interest
   Sensitive Life  Product Charges .........     $   18,288        $    8,768       $   12,259
Net Income (Loss) before  Federal Income Tax     $     (608)       $      570       $    1,736
Net Income (Loss) ..........................     $      729        $      350       $    3,199
Total Assets ...............................            N/A        $1,677,899              N/A
Total Liabilities ..........................            N/A        $1,537,415              N/A
Total Stockholder's Equity .................            N/A        $  140,484              N/A
GA-109652                            21
BUSINESS ENVIRONMENT
The current business and regulatory environment presents many challenges to the
insurance industry. The variable annuity competitive environment remains intense
and is dominated by a number of large highly rated insurance companies.
Increasing competition from traditional insurance carriers as well as banks and
mutual fund companies offers consumers many choices. However, overall demand for
variable insurance products remains strong for several reasons including: low
levels of inflation, moderate interest rate levels, a growing U.S. economy; an
aging U.S. population that is increasingly concerned about retirement, estate
planning, and maintaining their standard of living in retirement; and potential
reductions in government and employer-provided benefits at retirement, as well
as lower public confidence in the adequacy of those benefits.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
The purpose of this section is to discuss and analyze Golden American Life
Insurance Company's ("Golden American") consolidated results of operations. In
addition, some analysis and information regarding financial condition and
liquidity and capital resources is provided. This analysis should be read
jointly with the consolidated financial statements, related notes, and the
Cautionary Statement Regarding Forward-Looking Statements, which appear
elsewhere in this report. Golden American reports financial results on a
consolidated basis. The consolidated financial statements include the accounts
of Golden American and its wholly owned subsidiary, First Golden American Life
Insurance Company of New York ("First Golden," and collectively with Golden
American, the "Companies").

                              RESULTS OF OPERATION

2000 COMPARED TO 1999

PREMIUMS
                                             PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31       2000      CHANGE     CHANGE        1999
                                     ----    ----------   ------        ----
                                              (Dollars in millions)
Variable annuity premiums:
   Separate account ...........   $  1,307.3   (48.0)%  $ (1,204.4)  $  2,511.7
   Fixed account ..............        793.1     2.9          22.4        770.7
                                  ----------   -----    ----------   ----------
Total variable annuity premiums      2,100.4   (36.0)     (1,182.0)     3,282.4
Variable life premiums ........          1.6   (81.8)         (7.0)         8.6
                                  ----------   -----    ----------   ----------
Total premiums ................   $  2,102.0   (36.1)%  $ (1,189.0)  $  3,291.0
                                  ==========   =====    ==========   ==========

For the Companies' variable insurance contracts, premiums collected are not
reported as revenues, but as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment spread and
product charges.

Variable annuity separate account premiums decreased 48.0% in 2000. Excluded
from the variable annuity separate account premiums above are $1,787.9 million
and $97.9 million for the years ended December 31, 2000 and 1999, respectively,
related to modified coinsurance agreements. The fixed account portion of the
Companies' variable annuity premiums increased 2.9% in 2000. Excluding the
effect of the modified coinsurance agreements, the increase in premiums resulted
from increased sales of existing annuity products and from the introduction of a
new annuity product during 2000 called GoldenSelect Guarantee Annuity.

Variable life premiums decreased 81.8% in 2000. In August 1999, Golden American
discontinued offering variable life products, but the Companies continue to
accept additional premiums from existing policyholders.

GA-109652                            22
Premiums, net of reinsurance, for variable products from a significant
broker/dealer having at least ten percent of total sales for the year ended
December 31, 2000, totaled $235.3 million, or 11% of total net premiums compared
to $918.4 million, or 28%, from two significant broker/dealers for the year
ended December 31, 1999. Gross premiums for variable products from two
significant broker/dealers having at least ten percent of total sales for the
year ended December 31, 2000, totaled $831.0 million, or 21% of total gross
premiums compared to $1,018.9 million, or 30%, from two significant
broker/dealers for the year ended December 31, 1999.
REVENUES
                                                          PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31                  2000        CHANGE      CHANGE       1999
                                                ----      ----------    ------       ----
                                                          (Dollars in millions)
Annuity and interest sensitive life product
   charges ................................   $  144.9        74.7%    $   62.0    $   82.9
Management fee revenue ....................       23.0       106.4         11.9        11.1
Net investment income .....................       64.1         8.4          4.9        59.2
Realized gains (losses) on investments ....       (6.6)     (124.2)        (3.7)       (2.9)
                                              --------      ------     --------    --------
                                              $  225.4        50.0%    $   75.1    $  150.3
                                              ========      ======     ========    ========
Total revenues increased 50.0%, or $75.1 million, to $225.4 million in 2000.
Annuity and interest sensitive life product charges increased 74.7%, or $62.0
million, to $144.9 million in 2000, primarily due to additional fees earned from
the increasing block of business in the separate accounts.

Golden American provides certain managerial and supervisory services to Directed
Services, Inc. ("DSI"), a wholly owned subsidiary of EIC. The fee paid to Golden
American for these services, which is calculated as a percentage of average
assets in the variable separate accounts, was $21.3 million for 2000 and $10.1
million for 1999. This increase is due to the increasing assets in the separate
accounts and renegotiation of the fee paid by DSI to Golden American.

Net investment income increased 8.4%, or $4.9 million, to $64.1 million in 2000
from $59.2 million in 1999, due to increasing investment yields, as well as a
larger average amount of assets backing the fixed account options within the
variable products.

During 2000, the Companies had net realized losses on investments of $6.6
million, mainly due to sales of fixed maturities, including a $142,000 write
down of an impaired fixed maturity. In 1999, the Companies had net realized
losses on investments of $2.9 million, including a $1.6 million write down of
two impaired fixed maturities.

GA-109652                            23
EXPENSES
                                                                    PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31                          2000          CHANGE      CHANGE       1999
                                                        ----        ----------    ------       ----
                                                                      (Dollars in millions)
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances .......   $  195.1          11.3%    $   19.8    $  175.3
      Benefit claims incurred in excess of
         account balances .........................        4.9         (22.4)        (1.4)        6.3
   Underwriting, acquisition, and insurance
      expenses:
      Commissions .................................      213.7          13.4         25.3       188.4
      General expenses ............................       84.9          41.1         24.7        60.2
      Insurance taxes, state licenses, and fees ...        4.5          12.5          0.5         4.0
      Policy acquisition costs deferred ...........     (168.4)        (51.4)       178.0      (346.4)
      Expenses and charges reimbursed under
         modified coinsurance agreements ..........     (225.8)      2,341.7       (216.6)       (9.2)
      Amortization:
         Deferred policy acquisition costs ........       55.2          66.5         22.1        33.1
         Value of purchased insurance in force ....        4.8         (23.0)        (1.4)        6.2
         Goodwill .................................        3.8          --           --           3.8
                                                      --------       -------     --------    --------
                                                      $  172.7          41.9%    $   51.0    $  121.7
                                                      ========       =======     ========    ========
Total insurance benefits and expenses increased 41.9%, or $51.0 million, in 2000
from $121.7 million in 1999. Interest credited to account balances increased
11.3%, or $19.8 million, in 2000 from $175.3 million in 1999. The premium credit
on the Premium Plus variable annuity product increased $8.2 million to $132.0
million at December 31, 2000. The remaining increase in interest credited
relates to higher average account balances and higher average credited rates
associated with the Companies' fixed account options within the variable
products.

Commissions increased 13.4%, or $25.3 million, in 2000 from $188.4 million in
1999 due to increased sales of the fixed and separate account options in 2000.
Insurance taxes, state licenses, and fees increased 12.5%, or $0.5 million, in
2000 from $4.0 million in 1999. Changes in commissions and insurance taxes,
state licenses, and fees are generally related to changes in the level and
composition of variable product sales. Most costs incurred as the result of
sales have been deferred, thus having very little impact on current earnings.

General expenses increased 41.1%, or $24.7 million, in 2000 from $60.2 million
in 1999. Management expects general expenses to continue to increase in 2001 as
a result of the emphasis on expanding the salaried wholesaler distribution
network and the growth in sales. The Companies use a network of wholesalers to
distribute products, and the salaries and sales bonuses of these wholesalers are
included in general expenses. The portion of these salaries and related expenses
that varies directly with production levels is deferred thus having little
impact on current earnings. The increase in general expenses was partially
offset by reimbursements received from DSI, Equitable Life Insurance Company of
Iowa ("Equitable Life"), an affiliate, ING Mutual Funds Management Co., LLC, an
affiliate, Security Life of Denver Insurance Company, an affiliate, Southland
Life Insurance Company, an affiliate, and United Life & Annuity Insurance
Company, an affiliate, for certain advisory, computer, and other resources and
services provided by Golden American.

The Companies' previous balances of deferred policy acquisition costs ("DPAC"),
value of purchased insurance in force ("VPIF"), and unearned revenue reserve
were eliminated and a new asset of $44.3 million representing VPIF was
established for all policies in force at the merger date. During 2000, VPIF
established at the merger date of the Companies' Parent and ING, was adjusted to
reduce amortization by $1.6 million to reflect changes in the assumptions
related to the timing of estimated gross profits. During 1999, VPIF was adjusted
to increase amortization by $0.7 million to reflect changes in the assumptions
related to the timing of future gross profits. Amortization of DPAC increased
$22.1 million, or 66.5%, in 2000. This increase

GA-109652                            24
resulted from a growth in
deferred policy acquisition costs generated by expenses associated with the
large sales volume experienced since December 31, 1999. Deferred policy
acquisition costs decreased $178.0 million or 51.4% for the year ended December
31, 2000. This decrease was due to a modified coinsurance agreement which was
entered into during the second quarter of 2000, and which resulted in a $223.7
million decrease in deferred policy acquisition costs. Based on current
conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF as
of December 31, 2000, is $3.9 million in 2001, $3.6 million in 2002, $3.0
million in 2003, $2.4 million in 2004, and $1.9 million in 2005. Actual
amortization may vary based upon changes in assumptions and experience.

Expenses and charges reimbursed under modified coinsurance agreements increased
by $216.6 million to $225.8 million during 2000 as compared to the year ended
December 31, 1999. This was primarily due to a modified coinsurance agreement
which was entered into during the second quarter of 2000, with an affiliate,
Equitable Life, covering a part of the business issued after January 1, 2000.
This reinsurance agreement contributed $218.8 million to expenses and charges
reimbursed under modified coinsurance agreements during the year ended December
31, 2000. This was offset by a corresponding decrease in deferred policy
acquisition costs and reimbursement of non-deferrable costs related to policies
reinsured under this agreement.

Interest expense increased 123.4%, or $11.0 million, in 2000 from $8.9 million
in 1999. Interest expense on a $25 million surplus note issued December 1996 and
expiring December 2026 was $2.1 million for the year ended December 31, 2000,
unchanged from the same period of 1999. Interest expense on a $60 million
surplus note issued in December 1998 and expiring December 2028 was $4.4 million
for the year ended December 31, 2000, unchanged from the same period of 1999.
Interest expense on a $75 million surplus note, issued September 30, 1999 and
expiring September 29, 2029 was $5.8 million for the year ended December 31,
2000, and $1.5 million for the year ended December 31, 1999. Interest expense on
a $50 million surplus note, issued December 1999 and expiring December 2029 was
$4.1 million for the year ended December 31, 2000. Interest expense on a $35
million surplus note issued December 1999 and expiring December 2029 was $3.0
million for the year ended December 31, 2000. Golden American also paid $0.4
million in 2000 and $0.8 million in 1999 to ING America Insurance Holdings, Inc.
("ING AIH") for interest on a reciprocal loan agreement. Interest expense on a
revolving note payable with SunTrust Bank, Atlanta was $0.1 million and $0.2
million for the years ended December 31, 2000 and 1999, respectively.

INCOME. Net income for 2000 was $19.2 million, an increase of $8.0 million from
$11.2 million for 1999.

Comprehensive income for 2000 was $24.3 million, an increase of $21.3 million
from comprehensive income of $3.0 million for 1999.

1999 COMPARED TO 1998

PREMIUMS
                                            PERCENTAGE    DOLLAR
FOR THE YEAR ENDED DECEMBER 31       1999     CHANGE      CHANGE        1998
                                     ----   ----------    ------        ----
                                              (Dollars in millions)
Variable annuity premiums:
   Separate account ...........   $  2,511.7    71.9%   $  1,050.5   $  1,461.2
   Fixed account ..............        770.7    30.9         182.0        588.7
                                  ----------   -----    ----------   ----------
Total variable annuity premiums      3,282.4    60.1       1,232.5      2,049.9
Variable life premiums ........          8.6   (37.8)         (5.2)        13.8
                                  ----------   -----    ----------   ----------
Total premiums ................   $  3,291.0    59.5%   $  1,227.3   $  2,063.7
                                  ==========   =====    ==========   ==========

For the Companies' variable insurance contracts, premiums collected are not
reported as revenues, but as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment spread and
product charges.

GA-109652                            25
Variable annuity separate account premiums increased 71.9% in 1999. The fixed
account portion of the Companies' variable annuity premiums increased 30.9% in
1999. These increases resulted from increased sales of the Premium Plus variable
annuity product.

Variable life premiums decreased 37.8% in 1999. In August 1999, Golden American
discontinued offering variable life products.

Premiums, net of reinsurance, for variable products from two significant
broker/dealers each having at least ten percent of total sales for the year
ended December 31, 1999 totaled $918.4 million, or 28% of premiums compared to
$528.9 million, or 26%, from two significant broker/dealers for the year ended
December 31, 1998.
REVENUES
                                                         PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31                  1999       CHANGE     CHANGE     1998
                                                ----     ----------   ------     ----
                                                           (Dollars in millions)
Annuity and interest sensitive life product
   charges ................................   $   82.9      112.0%   $  43.8    $  39.1
Management fee revenue ....................       11.1      131.2        6.3        4.8
Net investment income .....................       59.2       39.3       16.7       42.5
Realized gains (losses) on investments ....       (2.9)      96.1       (1.4)      (1.5)
                                              --------      -----    -------    -------
                                              $  150.3       77.0%   $  65.4    $  84.9
                                              ========      =====    =======    =======
Total revenues increased 77.0%, or $65.4 million, to $150.3 million in 1999.
Annuity and interest sensitive life product charges increased 112.0%, or $43.8
million, to $82.9 million in 1999, primarily due to additional fees earned from
the increasing block of business in the separate accounts.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid to Golden American for these services, which is calculated as a
percentage of average assets in the variable separate accounts, was $10.1
million for 1999 and $4.8 million for 1998.

Net investment income increased 39.3%, or $16.7 million, to $59.2 million in
1999 from $42.5 million in 1998, due to growth in invested assets from December
31, 1998, increasing interest rates, and a relative increase in below investment
grade investments.

During 1999, the Company had net realized losses on investments of $2.9 million,
which includes a $1.6 million write down of two impaired fixed maturities,
compared to net realized losses on investments of $1.5 million in 1998 which
included a $1.0 million write down of two impaired fixed maturities.

GA-109652                            26
EXPENSES
                                                              PERCENTAGE   DOLLAR
FOR THE YEAR ENDED DECEMBER 31                       1999       CHANGE     CHANGE      1998
                                                     ----     ----------   ------      ----
                                                             (Dollars in millions)
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances ....   $  175.3       84.7%   $   80.4   $   94.9
      Benefit claims incurred in excess of
         account balances ......................        6.3      200.2         4.2        2.1
   Underwriting, acquisition, and insurance
      expenses:
      Commissions ..............................      188.4       55.5        67.2      121.2
      General expenses .........................       60.2       60.2        22.6       37.6
      Insurance taxes, state licenses, and fees         4.0       (4.0)       (0.1)       4.1
      Policy acquisition costs deferred ........     (346.4)      75.1      (148.6)    (197.8)
      Expenses and charges reimbursed under
         modified coinsurance agreements .......       (9.2)      64.3        (3.6)      (5.6)
      Amortization:
         Deferred policy acquisition costs .....       33.1      543.3        28.0        5.1
         Value of purchased insurance in force .        6.2       32.0         1.5        4.7
         Goodwill ..............................        3.8       --          --          3.8
                                                   --------      -----    --------   --------
                                                   $  121.7       73.6%   $   51.6   $   70.1
                                                   ========      =====    ========   ========
Total insurance benefits and expenses increased 73.6%, or $51.6 million, in 1999
from $70.1 million in 1998. Interest credited to account balances increased
84.7%, or $80.4 million, in 1999 from $94.9 million in 1998. The premium credit
on the Premium Plus variable annuity product increased $69.3 million to $123.8
million at December 31, 1999. The bonus interest on the fixed account increased
$3.0 million to $10.9 million at December 31, 1999. The remaining increase in
interest credited relates to higher account balances associated with the
Companies' fixed account options within the variable products.

Commissions increased 55.5%, or $67.2 million, in 1999 from $121.2 million in
1998. Insurance taxes, state licenses, and fees decreased 4.0%, or $0.1 million,
in 1999 from $4.1 million in 1998. Changes in commissions and insurance taxes,
state licenses, and fees are generally related to changes in the level and
composition of variable product sales. Insurance taxes, state licenses, and fees
are impacted by several other factors, which include an increase in FICA taxes
primarily due to bonuses and expenses for the triennial insurance department
examination of Golden American, which were offset by a decrease in 1999 of
guaranty fund assessments paid. Most costs incurred as the result of sales have
been deferred, thus having very little impact on current earnings.

General expenses increased 60.2%, or $22.6 million, in 1999 from $37.6 million
in 1998. Management expects general expenses to continue to increase in 2000 as
a result of the emphasis on expanding the salaried wholesaler distribution
network and the growth in sales. The Companies use a network of wholesalers to
distribute products, and the salaries and sales bonuses of these wholesalers are
included in general expenses. The portion of these salaries and related expenses
that varies directly with production levels is deferred thus having little
impact on current earnings. The increase in general expenses was partially
offset by reimbursements received from DSI, Equitable Life, ING Mutual Funds
Management Co., LLC, an affiliate, Security Life of Denver Insurance Company, an
affiliate, Southland Life Insurance Company, an affiliate, and United Life &
Annuity Insurance Company, an affiliate, for certain advisory, computer, and
other resources and services provided by Golden American.

The Companies' previous balances of deferred policy acquisition costs ("DPAC"),
value of purchased insurance in force ("VPIF"), and unearned revenue reserve
were eliminated and a new asset of $44.3 million representing VPIF was
established for all policies in force at the merger date. During 1999, VPIF was
adjusted to increase amortization by $0.7 million to reflect changes in the
assumptions related to the timing of estimated gross profits. During 1998, VPIF
decreased $2.7 million to adjust the value of other receivables

GA-109652                            27
and increased $0.2 million as a result of an adjustment to the merger costs.
During 1998, VPIF was adjusted to reduce amortization by $0.2 million to reflect
changes in the assumptions related to the timing of future gross profits.
Amortization of DPAC increased $28.0 million, or 543.3%, in 1999. This increase
resulted from growth in policy acquisition costs deferred from $197.8 million at
December 31, 1998 to $346.4 million at December 31, 1999, which was generated by
expenses associated with the large sales volume experienced since December 31,
1998. Based on current conditions and assumptions as to the impact of future
events on acquired policies in force, the expected approximate net amortization
relating to VPIF as of December 31, 1999 is $4.0 million in 2000, $3.6 million
in 2001, $3.3 million in 2002, $2.8 million in 2003, and $2.3 million in 2004.
Actual amortization may vary based upon changes in assumptions and experience.

Expenses and charges reimbursed under modified coinsurance agreements increased
by $3.6 million due primarily to income received under a modified reinsurance
agreement with an unaffiliated reinsurer.

Interest expense increased 102.6%, or $4.5 million, in 1999 from $4.4 million in
1998. Interest expense on a $25 million surplus note issued December 1996 and
expiring December 2026 was $2.1 million for the year ended December 31, 1999,
unchanged from the same period of 1998. Interest expense on a $60 million
surplus note issued in December 1998 and expiring December 2028 was $4.3 million
for the year ended December 31, 1999. Interest expense on a $75 million surplus
note, issued September 30, 1999 and expiring September 29, 2029 was $1.5 million
for the year ended December 31, 1999. Golden American also paid $0.8 million in
1999 and $1.8 million in 1998 to ING America Insurance Holdings, Inc. ("ING
AIH") for interest on a reciprocal loan agreement. Interest expense on a
revolving note payable with SunTrust Bank, Atlanta was $0.2 million and $0.3
million for the years ended December 31, 1999 and 1998, respectively. In
addition, Golden American incurred interest expense of $0.2 million in 1998 on a
line of credit with Equitable.

INCOME. Net income for 1999 was $11.2 million, an increase of $6.1 million from
$5.1 million for 1998.

Comprehensive income for 1999 was $3.0 million, a decrease of $0.9 million from
comprehensive income of $3.9 million for 1998.

                               FINANCIAL CONDITION

RATINGS. Currently, the Companies' ratings are A+ by A. M. Best Company, AA+ by
Fitch IBCA, Duff & Phelps Credit Rating Company, and AA+ by Standard & Poor's
Rating Services ("Standard & Poor's").

INVESTMENTS. The financial statement carrying value and amortized cost basis of
the Companies' total investments decreased slightly in 2000. All of the
Companies' investments, other than mortgage loans on real estate, are carried at
fair value in the Companies' financial statements. The decrease in the carrying
value of the Companies' investment portfolio was due to changes in unrealized
appreciation and depreciation of fixed maturities, offset by net sales. The
decrease in the cost basis of the Companies' investment portfolio resulted from
the sale of assets to support net transfers of policyholders from the Companies'
fixed account options to the separate account options, and a shift towards
short-term investments. The Companies manage the growth of insurance operations
in order to maintain adequate capital ratios. To support the fixed account
options of the Companies' variable insurance products, cash flow was invested
primarily in fixed maturities, short-term investments and mortgage loans on real
estate.

At December 31, 2000, the Companies investments had a yield of 6.7%. The
Companies estimate the total investment portfolio, excluding policy loans, had a
fair value approximately equal to 99.3% of amortized cost value at December 31,
2000.

Fixed Maturities: At December 31, 2000, the Companies had fixed maturities with
an amortized cost of $798.8 million and an estimated fair value of $792.6
million. The Companies classify 100% of securities as available for sale. Net
unrealized depreciation of fixed maturities of $6.2 million comprised of gross
appreciation of $5.8 million and gross depreciation of $12.0 million.
Depreciation of $1.5 million was included

GA-109652                            28
in stockholder's equity at December 31, 2000 (net of adjustments of
$0.8 million to VPIF, $3.1 million to DPAC, and $0.8 million to deferred
taxes).

The individual securities in the Companies' fixed maturities portfolio (at
amortized cost) include investment grade securities, which include securities
issued by the U.S. government, its agencies, and corporations that are rated at
least A- by Standard & Poor's ($519.9 million or 65.1%), that are rated BBB+ to
BBB- by Standard & Poor's ($117.9 million or 14.7%), and below investment grade
securities, which are securities issued by corporations that are rated BB+ to B-
by Standard & Poor's ($53.5 million or 6.7%). Securities not rated by Standard &
Poor's had a National Association of Insurance Commissioners ("NAIC") rating of
1, 2, 3, 4, or 5 ($106.9 million or 13.4%) and investments with a rating of 6 on
which impairment writedowns have been recognized ($0.6 million or 0.1%). The
Companies' fixed maturity investment portfolio had a combined yield at amortized
cost of 6.8% December 31, 2000. Fixed maturities rated BBB+ to BBB- may have
speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to
make principal and interest payments than is the case with higher rated fixed
maturities.

At December 31, 2000, the amortized cost value of the Companies' total
investment in below investment grade securities, excluding mortgage-backed
securities, was $65.1 million, or 6.4%, of the Companies' investment portfolio.
The Companies intend to purchase additional below investment grade securities,
but do not expect the percentage of the portfolio invested in such securities to
exceed 10% of the investment portfolio. At December 31, 2000, the yield at
amortized cost on the Companies' below investment grade portfolio was 8.2%
compared to 6.6% for the Companies' investment grade corporate bond portfolio.
The Companies estimate the fair value of the below investment grade portfolio
was $60.2 million, or 92.6% of amortized cost value, at December 31, 2000.

Below investment grade securities have different characteristics than investment
grade corporate debt securities. Risk of loss upon default by the borrower is
significantly greater with respect to below investment grade securities than
with other corporate debt securities. Below investment grade securities are
generally unsecured and are often subordinated to other creditors of the issuer.
Also, issuers of below investment grade securities usually have higher levels of
debt and are more sensitive to adverse economic conditions, such as a recession
or increasing interest rates, than are investment grade issuers. The Companies
attempt to reduce the overall risk in the below investment grade portfolio, as
in all investments, through careful credit analysis, strict investment policy
guidelines, and diversification by company and by industry.

The Companies analyze the investment portfolio, including below investment grade
securities, at least quarterly in order to determine if the Companies' ability
to realize the carrying value on any investment has been impaired. For debt and
equity securities, if impairment in value is determined to be other than
temporary (i.e. if it is probable the Companies will be unable to collect all
amounts due according to the contractual terms of the security), the cost basis
of the impaired security is written down to fair value, which becomes the new
cost basis. The amount of the write-down is included in earnings as a realized
loss. Future events may occur, or additional or updated information may be
received, which may necessitate future write-downs of securities in the
Companies' portfolio. Significant write-downs in the carrying value of
investments could materially adversely affect the Companies' net income in
future periods.

In 2000, fixed maturities designated as available for sale with a combined
amortized cost of $211.3 million were sold, called, or repaid by their issuers.
In total, net pre-tax losses from sales, calls, and repayments of fixed
maturities amounted to $6.1 million in 2000, excluding the $142,000 pre-tax loss
recognized in June 2000 to reduce the carrying value of an impaired bond to its
net realizable value of $315,000.

Equity Securities: Equity securities at market represent 0.7% of the fair value
of the Companies' investment portfolio. At December 31, 2000, the Companies
owned equity securities with a cost of $8.6 million and an estimated fair value
of $6.8 million. Net unrealized depreciation of equity securities was comprised
entirely of gross depreciation of $1.8 million. Equity securities are primarily
comprised of investments in shares of the mutual funds underlying the Companies'
registered separate accounts.

Mortgage Loans on Real Estate: Mortgage loans on real estate represent 9.9% of
the Companies' investment portfolio. Mortgages outstanding at amortized cost
were $99.9 million at December 31, 2000 with an

GA-109652                            29
estimated fair value of $100.5 million. The Companies' mortgage loan
portfolio includes 56 loans with an average size of $1.8 million and
average seasoning of 0.6 years if weighted by the number of loans.

The Companies' mortgage loans on real estate are typically secured by occupied
buildings in major metropolitan locations and not speculative developments and
are diversified by type of property and geographic location. Mortgage loans on
real estate have been analyzed by geographical location with concentrations by
state identified as California (15% in 2000 and 12% in 1999), and Utah (9% in
2000, 10% in 1999). There are no other concentrations of mortgage loans on real
estate in any state exceeding ten percent at December 31, 2000 and 1999.
Mortgage loans on real estate have also been analyzed by collateral type with
significant concentrations identified in office buildings (29% in 2000, 34% in
1999), industrial buildings (35% in 2000, 33% in 1999), retail facilities (18%
in 2000, 19% in 1999), and multi-family apartments (10% in 2000 and 10% in
1999). At December 31, 2000, the yield on the Companies' mortgage loan portfolio
was 7.3%.

At December 31, 2000, no mortgage loan on real estate was delinquent by 90 days
or more. The Companies' loan investment strategy is consistent with other life
insurance subsidiaries of ING in the United States. The Companies have
experienced a historically low default rate in their mortgage loan portfolios.

OTHER ASSETS. Reinsurance recoverables increased $19.1 million during 2000, due
largely to an increase of $14.6 million in reinsurance reserves from an
intercompany reinsurance agreement between Golden American and Security Life of
Denver International Limited. On December 28, 2000, effective January 1, 2000,
Golden American entered into a reinsurance agreement with Security Life of
Denver International Limited, an affiliate, covering variable annuity minimum
guaranteed death benefits and minimum guaranteed living benefits. The remainder
of the increase was mainly due to an increase in reinsurance receivable from
surrenders, and was consistent with an increase in ceded premiums from 1999 to
2000.

Amounts due from affiliates increased by $38.1 million during 2000 due mainly to
a capital contribution receivable of $35.0 million from the parent company at
December 31, 2000. The remainder of the increase was an increased receivable for
management fee revenues. The increase was due to higher management fees in the
current year as well as the timing of the receivable settlement.

Accrued investment income decreased $1.6 million during 2000, due to a shift
from long-term to short-term investments at December 31, 2000 as compared to
December 31, 1999.

DPAC represents certain deferred costs of acquiring new insurance business,
principally first year commissions and interest bonuses, premium credits, and
other expenses related to the production of new business after the merger. Any
expenses which vary directly with the sales of the Companies' products are
deferred and amortized. The Companies' previous balances of DPAC and VPIF were
eliminated as of the merger date, and an asset representing VPIF was established
for all policies in force at the merger date. VPIF is amortized into income in
proportion to the expected gross profits of in force acquired business in a
manner similar to DPAC amortization. At December 31, 2000, the Companies had
DPAC and VPIF balances of $635.1 million and $25.9 million, respectively, as
compared to DPAC and VPIF balances of $529.0 million and $31.7 million at
December 31, 1999.

Goodwill totaling $151.1 million, representing the excess of the acquisition
cost over the fair value of net assets acquired, was established at the merger
date. Accumulated amortization of goodwill as of December 31, 2000 was $11.9
million.

Other assets increased $29.5 million during 2000, due mainly to an increase in
the receivable for securities sold.

At December 31, 2000, the Companies had $9.8 billion of separate account assets
compared to $7.6 billion at December 31, 1999. The increase in separate account
assets resulted from sales of the Companies' variable annuity products, net of
redemptions and reinsurance, and from net policyholder transfers to the separate
account options from the fixed account options within the variable products. The
increase was partially offset by negative equity market returns.

At December 31, 2000, the Companies had total assets of $11.9 billion, a 26.2%
increase from December 31, 1999.

GA-109652                            30
LIABILITIES. Future policy benefits for annuity and interest sensitive life
products increased $29.2 million, or 2.8%, to $1.1 billion reflecting mainly an
increase in reserves due to the introduction of minimum guaranteed living
benefits as new riders available to policyholders as of February, 2000 on
certain variable products. Sales, net of redemptions and reinsurance, and
increased transfer activity to the separate account options accounted for the
$2.2 billion, or 30.0%, increase in separate account liabilities to $9.8 billion
at December 31, 2000.

On December 30, 1999, Golden American issued a $50 million, 8.179% surplus note
to Equitable Life, which matures on December 29, 2029.

On December 8, 1999, Golden American issued a $35 million, 7.979% surplus note
to First Columbine Life Insurance Company, an affiliate, which matures on
December 7, 2029.

On September 30, 1999, Golden American issued a $75 million, 7.75% surplus note
to ING AIH, which matures on September 29, 2029. On December 30, 1999, ING AIH
assigned the surplus note to Equitable Life.

On December 30, 1998, Golden American issued a $60 million, 7.25% surplus note
to Equitable Life, which matures on December 29, 2028.

On December 17, 1996, Golden American issued a $25 million, 8.25% surplus note
to Equitable, which matures on December 17, 2026. As a result of the merger of
Equitable into EIC, the surplus note is now payable to EIC.

Amounts due to affiliates increased by $7.2 million from $12.7 million at
December 31, 1999 to $19.9 million at December 31, 2000. This was mainly due to
the overpayment of the cash settlement for the modified coinsurance agreement
with an affiliate.

Other liabilities increased $16.2 million from $53.2 million at December 31,
1999, due primarily to the timing of the settlement of account transfers, an
increase in outstanding checks, and an increased pension liability, partly
offset by a decrease in the payable for securities purchased.

In conjunction with the volume of variable annuity sales, the Companies' total
liabilities increased $2.3 billion, or 26.0%, during 2000 and totaled $11.2
billion at December 31, 2000.

The effects of inflation and changing prices on the Companies' financial
position are not material since insurance assets and liabilities are both
primarily monetary and remain in balance. An effect of inflation, which has been
low in recent years, is a decline in stockholder's equity when monetary assets
exceed monetary liabilities.

STOCKHOLDER'S EQUITY. Additional paid-in capital increased $115.0 million, or
24.5%, from December 31, 1999 to $583.6 million at December 31, 2000, due to
capital contributions from the Parent.

                         LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of the Companies to generate sufficient cash flows to
meet the cash requirements of operating, investing, and financing activities.
The Companies' principal sources of cash are variable annuity premiums and
product charges, investment income, maturing investments, proceeds from debt
issuance, and capital contributions made by the Parent. Primary uses of these
funds are payments of commissions and operating expenses, interest and premium
credits, investment purchases, repayment of debt, as well as withdrawals and
surrenders.

Net cash provided by operating activities was $72.7 million in 2000 compared to
net cash used by operating activities of $74.0 million in 1999. The Companies
have predominantly had negative cash flows from operating activities since
Golden American started issuing variable insurance products in 1989. These
negative operating cash flows result primarily from the funding of commissions
and other deferrable

GA-109652                            31
expenses related to the continued growth in the sales of
variable annuity products. During 2000, these
negative cash flows were offset by the effects of a modified coinsurance
agreement entered into with an affiliate which resulted in the reimbursement of
policy acquisition costs incorporated in a net cash settlement of $218.8
million. This was partially offset also by the use of cash from increases in
reinsurance recoverable, due from affiliates and other assets.

Net cash provided by investing activities was $28.0 million during 2000 as
compared to net cash used in investing activities of $177.5 million in 1999.
This increase is primarily due to lower purchases of fixed maturities during
2000 than in 1999. Net sales of fixed maturities totaled $51.1 million in 2000
versus net purchases of $124.0 million in 1999. This change was mainly due to
the relatively constant level policyholder account balances in the fixed account
options during 2000 as compared to an increase during 1999, combined with a
shift toward short-term investments.

Net cash used by financing activities was $51.9 million during 2000 as compared
to net cash provided by financing activities of $259.2 million during the prior
year. In 2000, net cash provided by financing activities was positively impacted
by net fixed account deposits of $660.4 million compared to $627.1 million in
1999. This increase was more than offset by net reallocations to the Companies'
separate accounts, which increased to $825.9 million from $650.3 million during
the prior year. In 2000, another important source of cash provided by financing
activities was $115.0 million in capital contributions from the Parent compared
to $121.0 million in 1999. Another source of cash provided by financing
activities during 1999 was $160.0 million in proceeds from surplus notes. No
surplus notes were issued during 2000.

The Companies' liquidity position is managed by maintaining adequate levels of
liquid assets, such as cash or cash equivalents and short-term investments.
Additional sources of liquidity include borrowing facilities to meet short-term
cash requirements. Golden American maintains a $65.0 million reciprocal loan
agreement with ING AIH, which expires on December 31, 2007. In addition, the
Companies have established an $85.0 million revolving note facility with
SunTrust Bank, Atlanta, which expires on July 31, 2001. Management believes
these sources of liquidity are adequate to meet the Companies' short-term cash
obligations.

Based on current trends, the Companies expect to continue to use net cash in
operating activities, given the continued growth of the variable annuity sales.
It is anticipated that a continuation of capital contributions from the Parent,
the issuance of additional surplus notes, and/or the use of modified coinsurance
agreements will cover these net cash outflows. ING AIH is committed to the
sustained growth of Golden American. During 2001, ING AIH will maintain Golden
American's statutory capital and surplus at the end of each quarter at a level
such that: 1) the ratio of Total Adjusted Capital divided by Company Action
Level Risk Based Capital exceeds 300%; 2) the ratio of Total Adjusted Capital
(excluding surplus notes) divided by Company Action Level Risk Based Capital
exceeds 200%; and 3) Golden American's statutory capital and surplus exceeds the
"Amounts Accrued for Expense Allowances Recognized in Reserves" as disclosed on
page 3, Line 13A of Golden American's statutory statement.

During the first quarter of 1999, Golden American's operations were moved to a
new site in West Chester, Pennsylvania. Previously, Golden American's business
operations were housed in leased facilities located in Wilmington, Delaware and
leased facilities in Pennsylvania. During 2000, Golden American occupied 105,000
square feet of leased space; and an affiliate occupied 20,000 square feet in the
same facilities. Golden American's New York subsidiary is housed in leased space
in New York, New York. The Companies intend to spend approximately $3.9 million
on capital needs for 2001.

The ability of Golden American to pay dividends to its Parent is restricted.
Prior approval of insurance regulatory authorities is required for payment of
dividends to the stockholder which exceed an annual limit. During 2001, Golden
American cannot pay dividends to its Parent without prior approval of statutory
authorities.

Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder, Golden American,
unless a notice of its intent to declare a dividend and the amount of the
dividend has been filed with the New York Insurance Department at least thirty
days in advance of the proposed declaration. If the Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution, the Superintendent may disapprove the

GA-109652                            32
distribution by giving written notice to First Golden within thirty days
after the filing. The management of First Golden does not anticipate paying
dividends to Golden American during 2001.

The NAIC's risk-based capital requirements require insurance companies to
calculate and report information under a risk-based capital formula. These
requirements are intended to allow insurance regulators to monitor the
capitalization of insurance companies based upon the type and mixture of risks
inherent in a company's operations. The formula includes components for asset
risk, liability risk, interest rate exposure, and other factors. The Companies
have complied with the NAIC's risk-based capital reporting requirements. Amounts
reported indicate that the Companies have total adjusted capital well above all
required capital levels.

Reinsurance: At December 31, 2000, Golden American had reinsurance treaties with
six unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. Golden American remains liable to the
extent its reinsurers do not meet their obligations under the reinsurance
agreements.

On June 30, 2000, effective January 1, 2000, Golden American entered into a
modified coinsurance agreement with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued on or after
January 1, 2000, excluding those with an interest rate guarantee.

On December 28, 2000, Golden American entered into a reinsurance agreement with
Security Life of Denver International Limited, an affiliate, covering variable
annuity minimum guaranteed death benefits and minimum guaranteed living benefits
of variable annuities issued on or after January 1, 2000. An irrevocable letter
of credit was obtained through Bank of New York in the amount of $10,500,000
related to this agreement.

On December 29, 2000, First Golden entered into a reinsurance treaty with London
Life Reinsurance Company of Pennsylvania, an unaffiliated reinsurer, covering
the minimum guaranteed death benefits of First Golden's variable annuities
issued on or after January 1, 2000.

                         MARKET RISK AND RISK MANAGEMENT

Asset/liability management is integrated into many aspects of the Companies'
operations, including investment decisions, product development, and crediting
rates determination. As part of the risk management process, different economic
scenarios are modeled, including cash flow testing required for insurance
regulatory purposes, to determine that existing assets are adequate to meet
projected liability cash flows. Key variables include contractholder behavior
and the variable separate accounts' performance.

Contractholders bear the majority of the investment risks related to the
variable insurance products. Therefore, the risks associated with the
investments supporting the variable separate accounts are assumed by
contractholders, not by the Companies (subject to, among other things, certain
minimum guarantees). The Companies' products also provide certain minimum death
and guaranteed living benefits that depend on the performance of the variable
separate accounts. Currently, the majority of death and living benefit risks are
reinsured, which protects the Companies from adverse mortality experience and
prolonged capital market decline.

A surrender, partial withdrawal, transfer, or annuitization made prior to the
end of a guarantee period from the fixed account may be subject to a market
value adjustment. As the majority of the liabilities in the fixed account are
subject to market value adjustment, the Companies do not face a material amount
of market risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can generate
predictable, steady rates of return. The portfolio management strategy for the
fixed account considers the assets available for sale. This enables the
Companies to respond to changes in market interest rates, changes in prepayment
risk, changes in relative values of asset sectors and individual securities and
loans, changes in credit quality outlook, and other relevant factors. The
objective of portfolio management is to maximize returns, taking into account
interest rate and credit risks, as well as other risks. The Companies'
asset/liability management discipline includes strategies to minimize exposure
to loss as interest rates and economic and market conditions change.

GA-109652                            33
On the basis of these analyses, management believes there is no material
solvency risk to the Companies. With respect to a 10% drop in equity values from
year end 2000 levels, variable separate account funds, which represent 90% of
the in force, pass the risk in underlying fund performance to the contractholder
(except for certain minimum guarantees). With respect to interest rate movements
up or down 100 basis points from year end 2000 levels, the remaining 10% of the
in force are fixed account funds and almost all of these have market value
adjustments which provide significant protection against changes in interest
rates.

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Any forward-looking statement contained herein or in any other oral or written
statement by the Companies or any of their officers, directors, or employees is
qualified by the fact that actual results of the Companies may differ materially
from such statement, among other risks and uncertainties inherent in the
Companies' business, due to the following important factors:

     1.   Prevailing interest rate levels and stock market performance, which
          may affect the ability of the Companies to sell their products, the
          market value and liquidity of the Companies' investments, fee revenue,
          and the lapse rate of the Companies' policies, notwithstanding product
          design features intended to enhance persistency of the Companies'
          products.

     2.   Changes in the federal income tax laws and regulations, which may
          affect the tax status of the Companies' products.

     3.   Changes in the regulation of financial services, including bank sales
          and underwriting of insurance products, which may affect the
          competitive environment for the Companies' products.

     4.   Increasing competition in the sale of the Companies' products.

     5.   Other factors that could affect the performance of the Companies,
          including, but not limited to, market conduct claims, litigation,
          insurance industry insolvencies, availability of competitive
          reinsurance on new business, investment performance of the underlying
          portfolios of the variable products, variable product design, and
          sales volume by significant sellers of the Companies' variable
          products.

                                OTHER INFORMATION

SEGMENT INFORMATION. During the period since the acquisition by Bankers Trust,
September 30, 1992 to date of this Prospectus, Golden American's operations
consisted of one business segment, the sale of variable insurance products.
Golden American and its affiliate DSI are party to in excess of 620 sales
agreements with broker-dealers, seven of whom, Locust Street Securities, Inc.,
Vestax Securities Corporation, Compu Life Investors Services, Inc., IFG Network
Securities, Inc., Multi-Financial Securities Corporation, Primevest Financial
Services and Washington Square Securities, Inc. are affiliates of Golden
American. As of December 31, 2000, one broker-dealers produces 10% or more of
Golden American's product sales net of reinsurance.

RESERVES. In accordance with the life insurance laws and regulations under which
Golden American operates, it is obligated to carry on its books, as liabilities,
actuarially determined reserves to meet its obligations on outstanding
Contracts. Reserves, based on valuation mortality tables in general use in the
United States, where applicable, are computed to equal amounts which, together
with interest on such reserves computed annually at certain assumed rates, make
adequate provision according to presently accepted actuarial standards of
practice, for the anticipated cash flows required by the contractual obligations
and related expenses of Golden American.

COMPETITION. Golden American is engaged in a business that is highly competitive
because of the large number of stock and mutual life insurance companies and
other entities marketing insurance products
comparable to those of Golden American. There are over 2500 stock, mutual and
other types of insurers in the

GA-109652                            34
life insurance business in the United States, a
substantial number of which are significantly larger than Golden American.

AGREEMENTS WITH AFFILIATES. Pursuant to a service agreement between Golden
American and Equitable Life, Equitable Life provides certain administrative,
financial and other services to Golden American. Equitable Life billed Golden
American and its subsidiary First Golden American Life Insurance Company of New
York ("First Golden"), $1.3 million and $1.3 million, for the years ended
December 31, 2000 and 1999, respectively, under this service agreement.

Golden American provides to DSI certain of its personnel to perform management,
administrative and clerical services and the use of certain facilities. Golden
American charges DSI for such expenses and all other general and administrative
costs, first on the basis of direct charges when identifiable, and the remainder
allocated based on the estimated amount of time spent by Golden American's
employees on behalf of DSI. In the opinion of management, this method of cost
allocation is reasonable. In 1995, the service agreement between DSI and Golden
American was amended to provide for a management fee from DSI to Golden American
for managerial and supervisory services provided by Golden American. This fee,
calculated as a percentage of average assets in the variable separate accounts,
was $21.3 million and $10.1 million for the years 2000 and 1999, respectively.

Since January 1, 1998, Golden American and First Golden have had an asset
management agreement with ING Investment Management LLC ("ING IM"), an
affiliate, in which ING IM provides asset management and accounting services for
a fee, based on assets under management and payable quarterly. For the years
ended December 31, 2000 and 1999, Golden American and First Golden incurred fees
of $2.5 million and $2.2 million, respectively, under this agreement.

Since 1997, Golden American has provided certain advisory, computer and other
resources and services to Equitable Life. Revenues for these services totaled
$6.2 million for 2000 and $6.1 million for 1999.

The Companies provide resources and services to DSI. Revenues for these services
totaled $0.2 million for 2000 and $0.4 of 1999.

Golden American provides resources and services to ING Mutual Funds Management
Co., LLC, an affiliate. Revenues for these services totaled $0.5 million for
2000 and $0.2 million for 1999.

Golden American provides resources and services to United Life & Annuity
Insurance Company, an affiliate. Revenues for these services, which reduce
general expenses incurred by Golden American, totaled $0.6 million and $0.5
million for the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Security Life of Denver
Insurance Company, an affiliate. Revenues for these services, which reduce
general expenses incurred by the Companies totaled $0.3 million and $0.2 million
for the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduce general
expenses incurred by the Companies totaled $0.1 million and $0.1 million for the
years ended December 31, 2000 and 1999, respectively.

Golden American has a guaranty agreement with Equitable Life, an affiliate. In
consideration of an annual fee, payable June 30, Equitable Life guarantees to
Golden American that it will make funds available, if needed, to Golden American
to pay the contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and nothing
contained therein or done pursuant thereto by Equitable Life shall be deemed to
constitute, a direct or indirect guaranty by Equitable Life of the payment of
any debt or other obligation, indebtedness, or liability of any kind or
character whatsoever, of Golden American. The agreement does not guarantee the
value of the underlying assets held in separate accounts in which funds of
variable life insurance and variable annuity policies have been invested. The
calculation of the annual fee is based on risk based capital. On June 30, 2000,
Golden American incurred a fee of $7,000, under this agreement. No annual fee
was paid in 1999.

GA-109652                            35
DISTRIBUTION AGREEMENT. Under a distribution agreement, DSI acts as the
principal underwriter (as defined in the Securities Act of 1933 and the
Investment Company Act of 1940, as amended) of the variable insurance products
issued by Golden American which as of December 31, 2000, are sold through other
broker/dealer institutions. For the years 2000 and 1999, commissions paid by
Golden American to DSI (including commissions paid by First Golden) aggregated
$208.9 million and $181.5 million, respectively.

EMPLOYEES. Certain officers of Golden American are also officers of DSI, and
their salaries are allocated among both companies. Certain officers of Golden
American are also officers of other Equitable of Iowa subsidiaries. See
"Directors and Executive Officers."

PROPERTIES. Golden American's principal office is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380, where most of Golden American's records
are maintained. This office space is leased. Other records are maintained in Des
Moines and Atlanta at the offices of Equitable and ING, respectively.

STATE REGULATION. Golden American is subject to the laws of the State of
Delaware governing insurance companies and to the regulations of the Delaware
Insurance Department (the "Insurance Department"). A detailed financial
statement in the prescribed form (the "Annual Statement") is filed with the
Insurance Department each year covering Golden American's operations for the
preceding year and its financial condition as of the end of that year.
Regulation by the Insurance Department includes periodic examination to
determine contract liabilities and reserves so that the Insurance Department may
certify that these items are correct. Golden American's books and accounts are
subject to review by the Insurance Department at all times. A full examination
of Golden American's operations is conducted periodically by the Insurance
Department and under the auspices of the NAIC.

In addition, Golden American 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. Golden American 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 formula for determining adequate levels
of capital and surplus. Insurance companies are required to calculate their
risk-based capital in accordance with this formula and to include the results in
their Annual Statement. It is anticipated that these standards will have no
significant effect upon Golden American. For additional information about the
Risk-Based Capital adequacy monitoring system and Golden American, see
"Management's Discussion and Analysis Results of Operations."

In addition, many states regulate affiliated groups of insurers, such as Golden
American, and its affiliates, under insurance holding company legislation. Under
such laws, inter-company transfers of assets and dividend payments from
insurance subsidiaries may be subject to prior notice or approval, depending on
the size of the transfers and payments in relation to the financial positions of
the companies involved.

Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed (up to prescribed limits) for contract owner losses
incurred by other insurance companies which have become insolvent. Most of these
laws provide that an assessment may be excused or deferred if it would threaten
an insurer's own financial strength. For information regarding Golden American's
estimated liability for future guaranty fund assessments, see Note 10 of Notes
to Financial Statements.

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 Golden American 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

GA-109652                            36
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.

DIRECTORS AND OFFICERS

NAME (AGE)                  POSITION(S) WITH THE COMPANY
--------------------------  ----------------------------------------------------
Robert C. Salipante (44)    Chief Executive Officer and Director
Chris D. Schreier (44)      President
Barnett Chernow (50)        President and CEO, Investment Products Group
Myles R. Tashman (57)       Executive Vice President, General Counsel
                            and Assistant Secretary
Wayne R. Huneke (49)        Director and Chief Financial Officer
Thomas J. McInerney (44)    Director
Mark A. Tullis (45)         Director
Phillip R. Lowery (48)      Director
Paula Cludray-Engelke (44)  Secretary
James R. McInnis (53)       Executive Vice President and Chief Marketing Officer
Stephen J. Preston (43)     Executive Vice President and Chief Actuary
E. Robert Koster (42)       Senior Vice President
David S. Pendergrass (41)   Vice President and Treasurer
David L. Jacobson (51)      Senior Vice President and Assistant Secretary
William L. Lowe (37)        Senior Vice President
Ronald R. Blasdell (47)     Senior Vice President
Steven G. Mandel (41)       Senior Vice President and Chief Information Officer
Gary F. Haynes (56)         Senior Vice President and Assistant Secretary
Andrew D. Chua (46 )        Senior Vice President

Each director is elected to serve for one year or until the next annual meeting
of shareholders or until his or her successor is elected. Some directors are
directors of insurance company subsidiaries of Golden American's parent,
Equitable of Iowa. Golden American's directors and senior executive officers and
their principal positions for the past five years are listed below:

Mr. Robert C. Salipante was elected Director and Chief Executive Officer of
Golden American in March, 2001. He has served as a Director of ReliaStar Life
Insurance Company from October, 1995 to the present. He served ReliaStar
Financial Corp. from February, 1996 to November, 1996 as Senior Vice President,
Individual Insurance Division and Technology and from November, 1996 to July,
1999 as Senior Vice President, Personal Financial Services. He was elected
President, Chief Operating Officer and Director of ReliaStar Financial Corp.
July, 1999 to August, 2000. He became General Manager and Chief Executive
Officer, US Retail Financial Services in September, 2000.

Mr. Chris D. Schreier was elected President of Golden American in March, 2001.
From January, 1994 to September, 1996 he served as Assistant Vice President and
Assistant Controller for ReliaStar Financial Corp. He was elected Second Vice
President of ReliaStar Financial Corp. and ReliaStar Life Insurance Company from
September, 1996 to January, 1999. He has served as Vice President and Controller
of ReliaStar Financial Corp. since January, 1999.

Mr. Barnett Chernow became President and CEO of Investment Products Group in
March 2001 and President of First Golden in April, 1998. From 1998 to 2001, Mr.
Chernow served as President of Golden American. From 1996 to 1998, Mr. Chernow
served as Executive Vice President of First Golden. From 1993 to 1998, Mr.
Chernow also served as Executive Vice President of Golden American. He was
elected to serve as a director of First Golden in June, 1996 and Golden American
in April, 1998.

Mr. Myles R. Tashman joined Golden American in August, 1994 as Senior Vice
President and was named Executive Vice President, General Counsel effective
January, 1996 and Assistant Secretary effective March, 2001. He served as a
Director of Golden American from January, 1998 to March, 2001. He also serves as
a Director, Executive Vice President, General Counsel and Secretary of First
Golden.

GA-109652                            37
Mr. Wayne R. Huneke was elected Director, Senior Vice President and Chief
Financial Officer of Golden American in March, 2001. Since October, 1995 he has
served as a Director of ReliaStar Life Insurance Company. He served ReliaStar
Financial Corp. as Senior Vice President, Chief Financial Officer from August,
1994 to November, 1997, from November, 1997 to May, 1999 he served as Senior
Vice President, ReliaStar Financial Markets. He became Senior Executive Vice
President of ReliaStar Financial Corp. in May, 1999.

Mr. Thomas J. McInerney was elected as a Director of Golden American in March,
2001. He served Aetna U.S. Healthcare, Inc. as Vice President, National Accounts
from April, 1996 to March, 1997. From August, 1997 to the present he has served
as Director and from September, 1997 to the present he has served as President
of Aetna Life Insurance & Annuity Company. He has served as President and
Director of Aetna Insurance Company of America from September, 1997 to the
present.

Mr. Mark A. Tullis became a Director of Golden American and First Golden in
December 1999. He has served as Executive Vice President, Strategy and
Operations for ING Americas Region since September 1999. From June, 1994 to
August, 1999, he was with Primerica, serving as Executive Vice President at the
time of his departure.

Mr. Phillip R. Lowery became a Director of Golden American in April, 1999 and
First Golden in December, 1999. He has served as Executive Vice President and
Chief Actuary for ING Americas Region since 1990.

Ms. Paula Cludray-Engelke was elected Secretary of Golden American in March,
2001. From October, 1985 to October, 2000 Ms. Cludray-Engelke served with
ReliaStar Life Insurance Company (f/k/a Northwestern National Life Insurance
Company) in various compliance positions. From October, 2000 to the present she
has served as an Attorney with ING US Legal Services.

Mr. James R. McInnis joined Golden American and First Golden in December, 1997
as Executive Vice President. From 1982 through November, 1997, he held several
positions with the Endeavor Group and was President upon his departure.

Mr. E. Robert Koster was elected Senior Vice President of Golden American and
Senior Vice President and Chief Financial Officer of First Golden in September,
1998. From September, 1998 to March, 2001, he was also Chief Financial Officer
of Golden American. From August, 1984 to September, 1998 he has held various
positions with ING companies in The Netherlands.

Mr. David S. Pendergrass was elected Treasurer and Vice President of Golden
American in December, 2000. Since October, 1995 he has served as a Vice
President and Treasurer of ING North America Insurance Corporation.

Mr. David L. Jacobson joined Golden American in November, 1993 as Vice President
and Assistant Secretary and became Senior Vice President in December, 1993. He
was elected Senior Vice President and Assistant Secretary for First Golden in
June, 1996.

Mr. Stephen J. Preston joined Golden American in December, 1993 as Senior Vice
President, Chief Actuary and Controller. He became an Executive Vice President
and Chief Actuary in June, 1998. He was elected Senior Vice President and Chief
Actuary of First Golden in June, 1996 and elected Executive Vice President in
June, 1998.

Mr. William L. Lowe joined Equitable Life as Vice President, Sales & Marketing
in January, 1994. He became a Senior Vice President, Sales & Marketing, of
Golden American in August, 1997. He was also President of Equitable of Iowa
Securities Network, Inc. until October, 1998.

Mr. Steven G. Mandel joined Golden American in October 1988 and became Senior
Vice President and Chief Information Officer in June, 1998.

Mr. Ronald R. Blasdell joined Golden American in February, 1994 and became
Senior Vice President, Project Implementation in June, 1998.

GA-109652                           38
Mr. Gary Haynes rejoined Golden American in April, 1999 as Senior Vice
President, Operations. From August, 1995 to February, 1998 he was with F&G Life
Insurance Company; serving as Senior Vice President, Operations at the time of
his departure. He served as Senior Vice President, Operations with Golden
American from July, 1994 to August, 1995.

Mr. Andrew D. Chua joined Golden American as Vice President in June, 1998 and
became a Senior Vice President in February, 2000. From January, 1998 to May,
1998, Mr. Chua was employed by Transamerica Life & Annuity Company. From
January, 1993 to December, 1997, Mr. Chua was employed by National Actuarial
Network, Inc.

COMPENSATION TABLE AND OTHER INFORMATION
The following sets forth information with respect to the Chief Executive Officer
of Golden American as well as the annual salary and bonus for the next five
highly compensated executive officers for the fiscal year ended December 31,
2000. Certain executive officers of Golden American are also officers of DSI and
First Golden. The salaries of such individuals are allocated among Golden
American, DSI and First Golden pursuant to an arrangement among these companies.

EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual salary and
bonus for Golden American's Chief Executive Officer and the four other most
highly compensated executive officers for the fiscal year ended December 31,
2000.
LONG-TERM
                                     ANNUAL COMPENSATION         COMPENSATION
                                     -------------------    ----------------------
                                                            RESTRICTED  SECURITIES
NAME AND                                                   STOCK AWARDS UNDERLYING    ALL OTHER
PRINCIPAL POSITION      YEAR       SALARY         BONUS 1     OPTIONS     OPTIONS   COMPENSATION2
------------------      ----       ------         -------     -------     -------   -------------
Barnett Chernow ...     2000     $  409,447     $  638,326                 10,200     $   26,887
President               1999     $  300,009     $  698,380                  6,950     $   20,464
                        1998     $  284,171     $  105,375      8,000

James R. McInnis ..     2000     $  337,543     $1,210,898                  5,200     $   19,487
Executive Vice          1999     $  250,007     $  955,646                  5,550     $   15,663
President               1998     $  250,004     $  626,245      2,000

William L. Lowe ...     2000     $  205,144     $  821,545                  3,500     $       81
Senior Vice             1999     $  191,589     $  737,933                            $    2,924
President               1998     $  165,816     $  528,299                            $      756

Stephen J. Preston      2000     $  230,170     $  426,994                  5,000     $   14,713
Executive Vice          1999     $  198,964     $  235,002                  2,050     $   12,564
President and Chief     1998     $  173,870     $   32,152      3,500
Actuary

Gary Haynes .......     2000     $  201,136     $  404,773                  3,000     $   14,735
Senior Vice             1999     $  159,030     $  50,000                             $    9,540
President
--------------------

1    The amount shown relates to bonuses paid in 2000, 1999 and 1998.

2    Other compensation for 2000 and 1999 includes a business allowance for each
     named executive which is required to be applied to specific business
     expenses of the named executive.

GA-109652                            39
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
                                                                          REALIZABLE VALUE AT
                                   % OF TOTAL                                ASSUMED ANNUAL
                        NUMBER OF    OPTIONS                                 RATES OF STOCK
                        SECURITIES  GRANTED TO                             PRICE APPRECIATION
                        UNDERLYING  EMPLOYEES  EXERCISE                     FOR OPTION TERM 3
                         OPTIONS    IN FISCAL  OR BASE    EXPIRATION     -----------------------
NAME                    GRANTED 1     YEAR     PRICE 2       DATE            5%           10%
----                    ----------  ---------- --------   ----------     ---------     ---------
Barnett Chernow .....     10,200      0.85%    $ 54.56    04/03/2010     $ 348,987     $ 886,937
James R. McInnis ....      5,200      0.43%    $ 54.56    04/03/2010     $ 178,425     $ 452,164
William L. Lowe .....      3,500      0.29%    $ 54.56    04/03/2010     $ 120,094     $ 304,341
Stephen J. Preston ..      5,000      0.42%    $ 54.56    04/03/2010     $ 171,562     $ 434,773
Gary Haynes .........      3,000      0.25%    $ 54.56    04/03/2010     $ 102,937     $ 260,864
----------------

1    Stock appreciation rights granted in 2000 to the officers of Golden
     American have a three-year vesting period and an expiration date as shown.

2    The base price was equal to the fair market value of ING's stock on the
     date of grant.

3    Total dollar gains based on indicated rates of appreciation of share price
     over the total term of the rights.

GA-109652                            40
--------------------------------------------------------------------------------
         FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholder
Golden American Life Insurance Company

We have audited the accompanying consolidated balance sheets of Golden American
Life Insurance Company as of December 31, 2000 and 1999, and the related
consolidated statements of operations, changes in stockholder's equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Golden American
Life Insurance Company at December 31, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.

                                        /s/ Ernst & Young LLP

Atlanta, Georgia
March 12, 2001

GA-109652                            41
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in thousands, except per share data)
December 31,  December 31,
                                                                  2000          1999
                                                              -----------   -----------
ASSETS

Investments:

   Fixed maturities, available for sale, at fair value
      (cost: 2000 - $798,751; 1999 - $858,052) ............   $   792,578   $   835,321

   Equity securities, at fair value (cost: 2000 - $8,611;
      1999 - $14,952) .....................................         6,791        17,330

   Mortgage loans on real estate ..........................        99,916       100,087

   Policy loans ...........................................        13,323        14,157

   Short-term investments .................................       106,775        80,191
                                                              -----------   -----------
Total investments .........................................     1,019,383     1,047,086

Cash and cash equivalents .................................        63,207        14,380

Reinsurance recoverable ...................................        19,331        14,834

Reinsurance recoverable from affiliates ...................        14,642            --

Due from affiliates .......................................        38,786           637

Accrued investment income .................................         9,606        11,198

Deferred policy acquisition costs .........................       635,147       528,957

Value of purchased insurance in force .....................        25,942        31,727

Current income taxes recoverable ..........................           511            35

Deferred income tax asset .................................         9,047        21,943

Property and equipment, less allowances for depreciation of
   $5,638 in 2000 and $3,229 in 1999 ......................        14,404        13,888

Goodwill, less accumulated amortization of $11,964 in 2000
   and $8,186 in 1999 .....................................       139,163       142,941

Other assets ..............................................        32,019         2,514

Separate account assets ...................................     9,831,489     7,562,717
                                                              -----------   -----------
Total assets ..............................................   $11,852,677   $ 9,392,857
                                                              ===========   ===========
See accompanying notes.

GA-109652                            42
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                  (Dollars in thousands, except per share data)
December 31,    December 31,
                                                                    2000            1999
                                                                ------------    ------------
LIABILITIES AND STOCKHOLDER`S EQUITY

Policy liabilities and accruals:

   Future policy benefits:

      Annuity and interest sensitive life products ..........   $  1,062,891    $  1,033,701

      Unearned revenue reserve ..............................          6,817           6,300

   Other policy claims and benefits .........................             82               8
                                                                ------------    ------------
                                                                   1,069,790       1,040,009

Surplus notes ...............................................        245,000         245,000

Revolving note payable ......................................             --           1,400

Due to affiliates ...........................................         19,887          12,650

Other liabilities ...........................................         69,374          53,232

Separate account liabilities ................................      9,831,489       7,562,717
                                                                ------------    ------------
                                                                  11,235,540       8,915,008

Commitments and contingencies

Stockholder's equity:

   Common stock, par value $10 per share, authorized, issued,
      and outstanding 250,000 shares ........................          2,500           2,500

   Additional paid-in capital ...............................        583,640         468,640

   Accumulated other comprehensive loss .....................         (4,046)         (9,154)

   Retained earnings ........................................         35,043          15,863
                                                                ------------    ------------
Total stockholder's equity ..................................        617,137         477,849
                                                                ------------    ------------
Total liabilities and stockholder's equity ..................   $ 11,852,677    $  9,392,857
                                                                ============    ============
See accompanying notes.

GA-109652                            43
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Dollars in thousands)
Year Ended December 31                                  2000         1999         1998
                                                     ---------    ---------    ---------
REVENUES:
Annuity and interest sensitive life product
      charges ....................................   $ 144,877    $  82,935    $  39,119
   Management fee revenue ........................      22,982       11,133        4,771
   Net investment income .........................      64,140       59,169       42,485
   Realized losses on investments ................      (6,554)      (2,923)      (1,491)
                                                     ---------    ---------    ---------
                                                       225,445      150,314       84,884
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
      Interest credited to account balances ......     195,088      175,257       94,845
      Benefit claims incurred in excess of account
         balances ................................       4,943        6,370        2,123
Underwriting, acquisition and insurance  expenses:
   Commissions ...................................     213,719      188,383      121,171
   General expenses ..............................      84,936       60,205       37,612
   Insurance taxes, state licenses, and fees .....       4,528        3,976        4,140
   Policy acquisition costs deferred .............    (168,444)    (346,396)    (197,796)
   Amortization:
      Deferred policy acquisition costs ..........      55,154       33,119        5,148
      Value of purchased insurance in force ......       4,801        6,238        4,724
      Goodwill ...................................       3,778        3,778        3,778
   Expenses and charges reimbursed under
      modified coinsurance agreements ............    (225,787)      (9,247)      (5,604)
                                                     ---------    ---------    ---------
                                                       172,716      121,683       70,141

Interest expense .................................      19,867        8,894        4,390
                                                     ---------    ---------    ---------
                                                       192,583      130,577       74,531
                                                     ---------    ---------    ---------
Income before income taxes .......................      32,862       19,737       10,353

Income taxes .....................................      13,682        8,523        5,279
                                                     ---------    ---------    ---------

Net income .......................................   $  19,180    $  11,214    $   5,074
                                                     =========    =========    =========
See accompanying notes.

GA-109652                            44
GOLDEN AMERICAN LIFE INSURANCE COMPANY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                             (Dollars in thousands)
Additional Accumulated Other  Retained       Total
                                      Common        Paid-in    Comprehensive    Earnings    Stockholder's
                                       Stock        Capital    Income (Loss)    (Deficit)      Equity
                                     --------------------------------------------------------------------
Balance at December 31, 1997 .....   $   2,500     $ 224,997     $     241      $    (425)    $ 227,313
   Comprehensive income:
      Net income .................          --            --            --          5,074         5,074
      Change in net unrealized
         investment gains (losses)          --            --        (1,136)            --        (1,136)
   Comprehensive income ..........       3,938
   Contribution of capital .......          --       122,500            --             --       122,500
   Other .........................          --           143            --             --           143
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 1998 .....       2,500       347,640          (895)         4,649       353,894
   Comprehensive income:
      Net income .................          --            --            --         11,214        11,214
      Change in net unrealized
         investment gains (losses)          --            --        (8,259)            --        (8,259)
   Comprehensive income ..........       2,955
   Contribution of capital .......          --       121,000            --             --       121,000
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 1999 .....   $   2,500     $ 468,640     $  (9,154)     $  15,863     $ 477,849
   Comprehensive income:
      Net income .................          --            --            --         19,180        19,180
      Change in net unrealized
         investment gains (losses)          --            --         5,108             --         5,108
   Comprehensive income ..........      24,288
   Contribution of capital .......          --       115,000            --             --       115,000
                                     ---------     ---------     ---------      ---------     ---------
Balance at December 31, 2000 .....   $   2,500     $ 583,640     $  (4,046)     $  35,043     $ 617,137
                                     =========     =========     =========      =========     =========
See accompanying notes.

GA-109652                            45
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
Year Ended December 31                                     2000         1999         1998
                                                        ---------    ---------    ---------
OPERATING ACTIVITIES
Net income ..........................................   $  19,180    $  11,214    $   5,074
Adjustments to reconcile net income to net
   cash provided by (used in) operations:
   Adjustments related to annuity and interest
      sensitive life products:
      Interest credited and other charges on interest
         sensitive products .........................     195,088      175,257       94,845
      Charges for mortality and administration ......        (313)         524         (233)
      Change in unearned revenues ...................         517        2,460        2,651
   Increase (decrease) in policy liabilities and
      accruals ......................................          74            8          (10)
   Decrease (increase) in accrued investment
      income ........................................       1,592       (1,553)      (3,222)
   Policy acquisition costs deferred ................    (168,444)    (346,396)    (197,796)
   Amortization of deferred policy acquisition costs       55,154       33,119        5,148
   Amortization of value of purchased insurance
      in force ......................................       4,801        6,238        4,724
   Change in other assets, due to/from affiliates,
      other liabilities and accrued income taxes ....     (63,840)      24,845        9,979
   Provision for depreciation and amortization ......       8,616        8,850        8,147
   Provision for deferred income taxes ..............      13,728        8,523        5,279
   Realized losses on investments ...................       6,554        2,923        1,491
                                                        ---------    ---------    ---------
Net cash provided by (used in) operating activities .      72,707      (73,988)     (63,923)
                                                        ---------    ---------    ---------

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
   Fixed maturities - available for sale ............     205,136      220,547      145,253
   Mortgage loans on real estate ....................      12,701        6,572        3,791
   Equity securities ................................       6,128           --           --
   Policy loans - net ...............................         834           --           --
                                                        ---------    ---------    ---------
                                                          224,799      227,119      149,044

Acquisition of investments:
   Fixed maturities - available for sale ............    (154,028)    (344,587)    (476,523)
   Equity securities ................................          --           --      (10,000)
   Mortgage loans on real estate ....................     (12,887)      (9,659)     (16,390)
   Policy loans - net ...............................          --       (2,385)      (2,940)
   Short-term investments - net .....................     (26,584)     (39,039)     (26,692)
                                                        ---------    ---------    ---------
                                                         (193,499)    (395,670)    (532,545)

Issuance of reciprocal loan agreement receivables ...     (16,900)          --           --
Receipt of repayment of reciprocal loan agreement
   receivables ......................................      16,900           --           --
Net purchase of property and equipment ..............      (3,285)      (8,968)      (6,485)
                                                        ---------    ---------    ---------
Net cash provided by (used in) investing activities .      28,015     (177,519)    (389,986)
See accompanying notes.

GA-109652                            46
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                             (Dollars in thousands)
Year Ended December 31                                   2000         1999         1998
                                                      ---------    ---------    ---------
FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement
   borrowings .....................................   $ 178,900    $ 396,350    $ 500,722
Repayment of reciprocal loan agreement
   borrowings .....................................    (178,900)    (396,350)    (500,722)
Proceeds from revolving note payable ..............      67,200      220,295      108,495
Repayment of revolving note payable ...............     (68,600)    (218,895)    (108,495)
Proceeds from surplus note ........................          --      160,000       60,000
Repayment of line of credit borrowings ............          --           --       (5,309)
Receipts from annuity and interest sensitive
   life policies credited to account balances .....     801,793      773,685      593,428
Return of account balances on annuity
   and interest sensitive life policies ...........    (141,440)    (146,607)     (72,649)

Net reallocations to separate account .............    (825,848)    (650,270)    (239,671)
Contributions of capital by parent ................     115,000      121,000      103,750
                                                      ---------    ---------    ---------
Net cash provided by (used in) financing activities     (51,895)     259,208      439,549
                                                      ---------    ---------    ---------

Increase (decrease) in cash and cash
   equivalents ....................................      48,827        7,701      (14,360)

Cash and cash equivalents at beginning of
   period .........................................      14,380        6,679       21,039
                                                      ---------    ---------    ---------
Cash and cash equivalents at end of period ........   $  63,207    $  14,380    $   6,679
                                                      =========    =========    =========

SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION
Cash paid during the period for:
   Interest .......................................   $  22,444    $   6,392    $   4,305
   Income taxes ...................................         957           --           99
Non-cash financing activities:
   Non-cash adjustment to additional paid-in
      capital for adjusted merger costs ...........          --           --          143
   Contribution of capital from parent to
      repay line of credit borrowings .............          --           --       18,750
See accompanying notes.

GA-109652                            47
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION
The consolidated financial statements include Golden American Life Insurance
Company ("Golden American") and its wholly owned subsidiary, First Golden
American Life Insurance Company of New York ("First Golden," and collectively
with Golden American, the "Companies"). All significant intercompany accounts
and transactions have been eliminated.

ORGANIZATION
Golden American, a wholly owned subsidiary of Equitable of Iowa Companies, Inc.,
offers variable insurance products and is licensed as a life insurance company
in the District of Columbia and all states except New York. First Golden is
licensed to sell insurance products in New York and Delaware. The Companies'
variable annuity products are marketed by broker/dealers, financial
institutions, and insurance agents. The Companies' primary customers are
consumers and corporations.

On October 24, 1997 ("the merger date"), PFHI Holding, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of Equitable of Iowa
Companies ("Equitable") according to the terms of an Agreement and Plan of
Merger dated July 7, 1997 among Equitable, PFHI, and ING Groep N.V. ("ING").
PFHI is a wholly owned subsidiary of ING, a global financial services holding
company based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously renamed Equitable of Iowa Companies,
Inc. ("EIC" or the "Parent"), a Delaware corporation.

INVESTMENTS
Fixed Maturities: The Companies account for their investments under the
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which requires fixed
maturities to be designated as either "available for sale," "held for
investment," or "trading." Sales of fixed maturities designated as "available
for sale" are not restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these securities are
included directly in stockholder's equity, after adjustment for related changes
in value of purchased insurance in force ("VPIF"), deferred policy acquisition
costs ("DPAC"), and deferred income taxes. At December 31, 2000 and 1999, all of
the Companies' fixed maturities are designated as available for sale, although
the Companies are not precluded from designating fixed maturities as held for
investment or trading at some future date.

Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value, which becomes the new cost basis by a
charge to realized losses in the Companies' Statements of Operations. Premiums
and discounts are amortized/accrued utilizing a method which results in a
constant yield over the securities' expected lives. Amortization/accrual of
premiums and discounts on mortgage and other asset-backed securities
incorporates a prepayment assumption to estimate the securities' expected lives.

Equity Securities: Equity securities are reported at estimated fair value if
readily marketable. The change in unrealized appreciation and depreciation of
marketable equity securities (net of related deferred income taxes, if any) is
included directly in stockholder's equity. Equity securities determined to have
a decline in value that is other than temporary are written down to estimated
fair value, which becomes the new cost basis by a charge to realized losses in
the Companies' Statements of Operations.

Mortgage Loans on Real Estate: Mortgage loans on real estate are reported at
cost adjusted for amortization of premiums and accrual of discounts. If the
value of any mortgage loan is determined to be impaired (i.e., when it is
probable the Companies will be unable to collect all amounts due according to
the contractual terms of the loan agreement), the carrying value of the mortgage
loan is reduced to the present value of expected future cash flows from the loan
discounted at the loan's effective interest rate, or to the loan's observable
market price, or the fair value of the underlying collateral. The carrying value
of impaired loans is

GA-109652                            48
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

reduced by the establishment of a valuation allowance, which is adjusted at each
reporting date for significant changes in the calculated value of the loan.
Changes in this valuation allowance are charged or credited to income.

Other Investments: Policy loans are reported at unpaid principal. Short-term
investments are reported at cost, adjusted for amortization of premiums and
accrual of discounts.

Realized Gains and Losses: Realized gains and losses are determined on the basis
of specific identification.

Fair Values: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market are estimated
using a third party pricing process. This pricing process uses a matrix
calculation assuming a spread over U.S. Treasury bonds based upon the expected
average lives of the securities. Estimated fair values of publicly traded fixed
maturities are reported by an independent pricing service. Fair values of
private placement bonds are estimated using a matrix that assumes a spread
(based on interest rates and a risk assessment of the bonds) over U.S. Treasury
bonds. Estimated fair values of equity securities, which consist of the
Companies' investment in its registered separate accounts, are based upon the
quoted fair value of the securities comprising the individual portfolios
underlying the separate accounts.

CASH AND CASH EQUIVALENTS
For purposes of the accompanying Statements of Cash Flows, the Companies
consider all demand deposits and interest-bearing accounts not related to the
investment function to be cash equivalents. All interest-bearing accounts
classified as cash equivalents have original maturities of three months or less.

DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally first year
commissions and interest bonuses, premium credit, and other expenses related to
the production of new business ($63.8 million during 2000, $153.0 million during
1999, and $73.4 million during 1998), have been deferred. Acquisition costs for
variable insurance products are being amortized generally in proportion to the
present value (using the assumed crediting rate) of expected future gross
profits. This amortization is adjusted retrospectively when the Companies revise
their estimate of current or future gross profits to be realized from a group of
products. DPAC is adjusted to reflect the pro forma impact of unrealized gains
and losses on fixed maturities the Companies have designated as "available for
sale" under SFAS No. 115.

VALUE OF PURCHASED INSURANCE IN FORCE
As a result of the merger, a portion of the purchase price was allocated to the
right to receive future cash flows from existing insurance contracts. This
allocated cost represents VPIF, which reflects the value of those purchased
policies calculated by discounting actuarially determined expected future cash
flows at the discount rate determined by the purchaser. Amortization of VPIF is
charged to expense in proportion to expected gross profits of the underlying
business. This amortization is adjusted retrospectively when the Companies
revise the estimate of current or future gross profits to be realized from the
insurance contracts acquired. VPIF is adjusted to reflect the pro forma impact
of unrealized gains and losses on available for sale fixed maturities.

PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements, office
furniture, certain other equipment, and capitalized computer software and are
not considered to be significant to the Companies' overall operations. Property
and equipment are reported at cost less allowances for depreciation.
Depreciation

GA-109652                            49
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

expense is computed primarily on the basis of the straight-line method
over the estimated useful lives of the assets.

GOODWILL
Goodwill was established as a result of the merger and is being amortized
over 40 years on a straight-line basis.

FUTURE POLICY BENEFITS
Future policy benefits for divisions of the variable products with fixed
interest guarantees are established utilizing the retrospective deposit
accounting method. Policy reserves represent the premiums received plus
accumulated interest, less mortality and administration charges. Interest
credited to these policies ranged from 3.00% to 14.00% during 2000, 3.00% to
11.00% during 1999, and 3.00% to 10.00% during 1998. The unearned revenue
reserve represents unearned distribution fees. These distribution fees have been
deferred and are amortized over the life of the contracts in proportion to
expected gross profits.

SEPARATE ACCOUNTS
Assets and liabilities of the separate accounts reported in the accompanying
Balance Sheets represent funds separately administered principally for variable
contracts. Contractholders, rather than the Companies, bear the investment risk
for the variable insurance products. At the direction of the contractholders,
the separate accounts invest the premiums from the sale of variable insurance
products in shares of specified mutual funds. The assets and liabilities of the
separate accounts are clearly identified and segregated from other assets and
liabilities of the Companies. The portion of the separate account assets equal
to the reserves and other liabilities of variable contracts cannot be charged
with liabilities arising out of any other business the Companies may conduct.

Variable separate account assets are carried at fair value of the underlying
investments and generally represent contractholder investment values maintained
in the accounts. Variable separate account liabilities represent account
balances for the variable contracts invested in the separate accounts; the fair
value of these liabilities is equal to their carrying amount. Net investment
income and realized and unrealized capital gains and losses related to separate
account assets are not reflected in the accompanying Statements of Operations.

Product charges recorded by the Companies from variable insurance products
consist of charges applicable to each contract for mortality and expense risk,
cost of insurance, contract administration, and surrender charges. In addition,
some variable annuity and all variable life contracts provide for a distribution
fee collected for a limited number of years after each premium deposit. Revenue
recognition of collected distribution fees is amortized over the life of the
contract in proportion to its expected gross profits. The balance of
unrecognized revenue related to the distribution fees is reported as an unearned
revenue reserve.

DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rate. Deferred tax assets or liabilities are adjusted to
reflect the pro forma impact of unrealized gains and losses on equity securities
and fixed maturities the Companies have designated as available for sale under
SFAS No. 115. Changes in deferred tax assets or liabilities resulting from this
SFAS No. 115 adjustment are charged or credited directly to stockholder's
equity. Deferred income tax expenses or credits reflected in the Companies'
Statements of Operations are based on the changes in the deferred tax asset or
liability from period to period (excluding the SFAS No. 115 adjustment).

GA-109652                            50
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DIVIDEND RESTRICTIONS
Golden American's ability to pay dividends to its Parent is restricted. Prior
approval of insurance regulatory authorities is required for payment of
dividends to the stockholder which exceed an annual limit. During 2001, Golden
American cannot pay dividends to its Parent without prior approval of statutory
authorities. Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its stockholder, Golden
American, unless a notice of its intent to declare a dividend and the amount of
the dividend has been filed with the New York Insurance Department at least
thirty days in advance of the proposed declaration. If the Superintendent of the
New York Insurance Department finds the financial condition of First Golden does
not warrant the distribution, the Superintendent may disapprove the distribution
by giving written notice to First Golden within thirty days after the filing.

SEGMENT REPORTING
The Companies manage their business as one segment, the sale of variable
insurance products designed to meet customer needs for tax-advantaged saving for
retirement and protection from death. Variable insurance products are sold to
consumers and corporations throughout the United States.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
affecting the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are: (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and value of purchased insurance in force, (4) fair values of
assets and liabilities recorded as a result of merger, (5) asset valuation
allowances, (6) guaranty fund assessment accruals, (7) deferred tax benefits
(liabilities), and (8) estimates for commitments and contingencies including
legal matters, if a liability is anticipated and can be reasonably estimated.
Estimates and assumptions regarding all of the preceding items are inherently
subject to change and are reassessed periodically. Changes in estimates and
assumptions could materially impact the financial statements.

PENDING ACCOUNTING STANDARDS: DERIVATIVE FINANCIAL INSTRUMENTS
During 1998, the Financial Accounting Standards Board issued Statement No. 133
("SFAS 133"), Accounting for Derivative Financial Instruments and Hedging
Activities. SFAS 133 requires that all derivative instruments, including certain
derivative instruments embedded in other contracts, be recorded on the balance
sheet and measured at its fair value. The change in a derivative's fair value is
generally to be recognized in current period earnings.

If certain conditions are met, a derivative may be specifically designated as a
hedge of an exposure to changes in fair value, variability of cash flows, or
certain foreign currency exposures. When designated as a hedge, the fair value
should be recognized currently in earnings or other comprehensive income,
depending on whether such designation is considered a fair value or as a cash
flow hedge. With respect to fair value hedges, the fair value of the derivative,
as well as changes in the fair value of the hedged item, are reported in
earnings. For cash flow hedges, changes in the derivatives fair value are
reported in other comprehensive income and subsequently reclassified into
earnings when the hedged item affects earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Companies

GA-109652                           51
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

adopted SFAS 133 on January 1, 2000. The cumulative effect of the
accounting change upon adoption was not material.

RECLASSIFICATIONS
Certain amounts in the 1999 and 1998 financial statements have been
reclassified to conform to the 2000 financial statement presentation.

2.   BASIS OF FINANCIAL REPORTING

The financial statements of the Companies differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of acquiring
new business are deferred and amortized over the life of the policies rather
than charged to operations as incurred; (2) an asset representing the present
value of future cash flows from insurance contracts acquired was established as
a result of the merger/acquisition and is amortized and charged to expense; (3)
future policy benefit reserves for divisions with fixed interest guarantees of
the variable insurance products are based on full account values, rather than
the greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts, for
these credits rather than presented net of these credits; (5) fixed maturity
investments are designated as "available for sale" and valued at fair value with
unrealized appreciation/depreciation, net of adjustments to value of purchased
insurance in force, deferred policy acquisition costs, and deferred income taxes
(if applicable), credited/charged directly to stockholder's equity rather than
valued at amortized cost; (6) the carrying value of fixed maturities is reduced
to fair value by a charge to realized losses in the Statements of Operations
when declines in carrying value are judged to be other than temporary, rather
than through the establishment of a formula-determined statutory investment
reserve (carried as a liability), changes in which are charged directly to
surplus; (7) deferred income taxes are provided for the difference between the
financial statement and income tax bases of assets and liabilities; (8) net
realized gains or losses attributed to changes in the level of interest rates in
the market are recognized when the sale is completed rather than deferred and
amortized over the remaining life of the fixed maturity security; (9) a
liability is established for anticipated guaranty fund assessments, net of
related anticipated premium tax credits, rather than capitalized when assessed
and amortized in accordance with procedures permitted by insurance regulatory
authorities; (10) revenues for variable insurance products consist of policy
charges applicable to each contract for the cost of insurance, policy
administration charges, amortization of policy initiation fees, and surrender
charges assessed rather than premiums received; (11) the financial statements of
Golden American's wholly owned subsidiary are consolidated rather than recorded
at the equity in net assets; (12) surplus notes are reported as liabilities
rather than as surplus; and (13) assets and liabilities are restated to fair
values when a change in ownership occurs, with provisions for goodwill and other
intangible assets, rather than continuing to be presented at historical cost.

The net loss for Golden American as determined in accordance with statutory
accounting practices was $71,134,000 in 2000, $85,578,000 in 1999, $68,002,000
in 1998. Total statutory capital and surplus was $406,923,000 and $368,928,000
at December 31, 2000 and 1999, respectively.

The National Association of Insurance Commissioners has revised the Accounting
Practices and Procedures Manual, the guidance that defines statutory accounting
principles. The revised manual will be effective January 1, 2001, and has been
adopted, at least in part, by the States of Delaware and New York, which are the
states of domicile for Golden American and First Golden, respectively. The
revised manual will result in changes to the accounting practices that the
Companies use to prepare their statutory-basis financial statements. Management
believes the impact of these changes to the Companies' statutory-basis capital
and surplus as of January 1, 2001 will not be significant.

GA-109652                           52
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS

INVESTMENT RESULTS
Major categories of net investment income are summarized below:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities ......................   $ 55,302       $ 50,352      $ 35,224
Equity securities .....................        248            515            --
Mortgage loans on real estate .........      7,832          7,074         6,616
Policy loans ..........................        516            485           619
Short-term investments ................      2,253          2,583         1,311
Other, net ............................        543            388           246
                                          --------       --------      --------
Gross investment income ...............     66,694         61,397        44,016
Less investment expenses ..............     (2,554)        (2,228)       (1,531)
                                          --------       --------      --------
Net investment income .................   $ 64,140       $ 59,169      $ 42,485
                                          ========       ========      ========

Realized losses on investments follows:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities, available for sale ..   $ (6,289)      $ (2,910)     $ (1,428)
Equity securities .....................       (213)            --            --
Mortgage loans on real estate .........        (52)           (13)          (63)
                                          --------       --------      --------
Realized losses on investments ........   $ (6,554)      $ (2,923)     $ (1,491)
                                          ========       ========      ========

The change in unrealized appreciation (depreciation) of securities at fair value
follows:

Year Ended December 31                      2000           1999          1998
                                          --------       --------      --------
                                                  (Dollars in thousands)
Fixed maturities, available for sale ..   $ 16,558       $(24,944)     $  1,100
Equity securities .....................     (4,198)         5,301        (2,390)
                                          --------       --------      --------
Unrealized appreciation (depreciation)
   of securities ......................   $ 12,360       $(19,643)     $ (1,290)
                                          ========       ========      ========

GA-109652                           53
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)

At December 31, 2000 and December 31, 1999, amortized cost, gross unrealized
gains and losses, and estimated fair values of fixed maturities, all of which
are designated as available for sale, follows:

                                                 Gross      Gross     Estimated
                                  Amortized   Unrealized  Unrealized    Fair
                                     Cost        Gains      Losses      Value
                                   --------    --------    --------    --------
                                              (Dollars in thousands)
December 31, 2000
-----------------
U.S. government and governmental
   agencies and authorities ....   $ 18,607    $    580    $    (16)   $ 19,171
Public utilities ...............     54,132         294      (1,600)     52,826
Corporate securities ...........    355,890       1,318      (8,006)    349,202
Other assets-backed securities .    223,787       2,166      (1,831)    224,122
Mortgage-backed securities .....    146,335       1,465        (543)    147,257
                                   --------    --------    --------    --------
Total ..........................   $798,751    $  5,823    $(11,996)   $792,578
                                   ========    ========    ========    ========

December 31, 1999
-----------------
U.S. government and governmental
   agencies and authorities ....   $ 21,363          --    $   (260)   $ 21,103
Public utilities ...............     53,754    $     25      (2,464)     51,315
Corporate securities ...........    396,494          53     (12,275)    384,272
Other assets-backed securities .    207,044         850      (4,317)    203,577
Mortgage-backed securities .....    179,397          39      (4,382)    175,054
                                   --------    --------    --------    --------
Total ..........................   $858,052    $    967    $(23,698)   $835,321
                                   ========    ========    ========    ========

Short-term investments with maturities of 30 days or less have been excluded
from the above schedules. Amortized cost approximates fair value for these
securities. At December 31, 2000, net unrealized investment loss on fixed
maturities designated as available for sale totaled $6,173,000. Depreciation of
$1,447,000 was included in stockholder's equity at December 31, 2000 (net of
adjustments of $801,000 to VPIF, $3,146,000 to DPAC, and $779,000 to deferred
income taxes). At December 31, 1999, net unrealized investment loss on fixed
maturities designated as available for sale totaled $22,731,000. Depreciation of
$6,955,000 was included in stockholder's equity at December 31, 1999 (net of
adjustments of $1,785,000 to VPIF, $10,246,000 to DPAC, and $3,745,000 to
deferred income taxes).

At December 31, 2000, net unrealized depreciation on equity securities was
comprised entirely of gross depreciation of $1,820,000. At December 31, 1999,
net unrealized appreciation on equity securities was comprised entirely of gross
appreciation of $2,378,000.

Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 2000 are shown
below. Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.

GA-109652                           54
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)
                                                      Amortized       Estimated
December 31, 2000                                       Cost          Fair Value
--------------------------------------------------------------------------------
                                                        (Dollars in thousands)
Due within one year .........................         $ 51,001         $ 50,836
Due after one year through five years .......          323,753          317,862
Due after five years through ten years ......           45,812           44,891
Due after ten years .........................            8,063            7,610
                                                      --------         --------
                                                       428,629          421,199
Other asset-backed securities ...............          223,787          224,122
Mortgage-backed securities ..................          146,335          147,257
                                                      --------         --------
Total .......................................         $798,751         $792,578
                                                      ========         ========

An analysis of sales, maturities, and principal repayments of the Companies'
fixed maturities portfolio follows:
Gross       Gross        Proceeds
                                              Amortized     Realized     Realized        From
                                                 Cost         Gains       Losses         Sale
                                               --------     --------     --------      --------
                                                            (Dollars in thousands)
For the year ended December 31, 2000:
Scheduled principal repayments, calls, and
   tenders ...............................     $ 91,158     $    122     $     (1)     $ 91,279
Sales ....................................      120,125          285       (6,553)      113,857
                                               --------     --------     --------      --------
Total ....................................     $211,283     $    407     $ (6,554)     $205,136
                                               ========     ========     ========      ========

For the year ended December 31, 1999:
Scheduled principal repayments, calls, and
   tenders ...............................     $141,346     $    216         (174)     $141,388
Sales ....................................       80,472          141     $ (1,454)       79,159
                                               --------     --------     --------      --------
Total ....................................     $221,818     $    357     $ (1,628)     $220,547
                                               ========     ========     ========      ========

For the year ended December 31, 1998:
Scheduled principal repayments, calls, and
   tenders ...............................     $102,504     $     60     $     (3)     $102,561
Sales ....................................       43,204          518       (1,030)       42,692
                                               --------     --------     --------      --------
Total ....................................     $145,708     $    578     $ (1,033)     $145,253
                                               ========     ========     ========      ========
Investment Valuation Analysis: The Companies analyze the investment portfolio at
least quarterly in order to determine if the carrying value of any investment
has been impaired. The carrying value of debt and equity securities is written
down to fair value by a charge to realized losses when an impairment in value
appears to be other than temporary.

GA-109652                          55
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)

During the second quarter of 2000, Golden American determined that the carrying
value of an impaired bond exceeded its estimated net realizable value. As a
result, on June 30, 2000, Golden American recognized a total pre-tax loss of
approximately $142,000 to reduce the carrying value of the bond to its net
realizable value of $315,000 at December 31, 2000.

During the fourth quarter of 1998, Golden American determined that the carrying
value of two bonds exceeded their estimated net realizable value. As a result,
at December 31, 1998, Golden American recognized a total pre-tax loss of
$973,000 to reduce the carrying value of the bonds to their combined net
realizable value of $2,919,000. During the second quarter of 1999, further
information was received regarding these bonds and Golden American determined
that the carrying value of the two bonds exceeded their estimated net realizable
value. As a result, at June 30, 1999, Golden American recognized a total pre-tax
loss of $1,639,000 to further reduce the carrying value of the bonds to their
combined net realizable value of $1,137,000. During the year 2000, these bonds
had no further reduction in carrying value.

Investments on Deposit: At December 31, 2000 and 1999, affidavits of deposits
covering bonds with a par value of $6,870,000 and $6,470,000, respectively, were
on deposit with regulatory authorities pursuant to certain statutory
requirements.

Investment Diversifications: The Companies' investment policies related to the
investment portfolio require diversification by asset type, company, and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at December
31, 2000 and December 31, 1999. Fixed maturities included investments in basic
industrials (29% in 2000, 29% in 1999), conventional mortgage-backed securities
(20% in 2000, 22% in 1999), financial companies (14% in 2000, 16% in 1999), and
other asset-backed securities (20% in 2000, 19% in 1999). Mortgage loans on real
estate have been analyzed by geographical location with concentrations by state
identified as California (15% in 2000, 12% in 1999) and Utah (9% in 2000, 10% in
1999). There are no other concentrations of mortgage loans on real estate in any
state exceeding ten percent at December 31, 2000 and 1999. Mortgage loans on
real estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (29% in 2000, 34% in 1999),
industrial buildings (35% in 2000, 33% in 1999), retail facilities (18% in 2000,
19% in 1999), and multi-family apartments (10% in 2000, 10% in 1999). Equity
securities are not significant to the Companies' overall investment portfolio.

No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceeded ten percent of stockholder's
equity at December 31, 2000.

4.   COMPREHENSIVE INCOME

Comprehensive income includes all changes in stockholder's equity during a
period except those resulting from investments by and distributions to the
stockholder. Total comprehensive income (loss) for the Companies includes
$606,000 for the year ended December 31, 2000 for First Golden and $(452,000)
and $1,015,000 for the years ended December 31, 1999 and 1998, respectively.
Other comprehensive income excludes net investment gains (losses) included in
net income, which merely represent transfers from unrealized to realized gains
and losses. These amounts total $(2,670,000), $(1,468,000) and $(2,133,000) in
the years ended December 31, 2000, 1999 and 1998, respectively. Such amounts,
which have been measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $(4,742,000), $(1,441,000) and $705,000 in
the years ended December 31, 2000, 1999 and 1998, respectively.

GA-109652                           56
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

5.   FAIR VALUES OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of estimated fair value of all financial instruments, including both
assets and liabilities recognized and not recognized in a company's balance
sheet, unless specifically exempted. SFAS No. 119, "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments," requires
additional disclosures about derivative financial instruments. Most of the
Companies' investments, investment contracts, and debt fall within the
standards' definition of a financial instrument. Fair values for the Companies'
insurance contracts other than investment contracts are not required to be
disclosed. In cases where quoted market prices are not available, estimated fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. Accounting, actuarial, and
regulatory bodies are continuing to study the methodologies to be used in
developing fair value information, particularly as it relates to such things as
liabilities for insurance contracts. Accordingly, care should be exercised in
deriving conclusions about the Companies' business or financial condition based
on the information presented herein.

The Companies closely monitor the composition and yield of invested assets, the
duration and interest credited on insurance liabilities, and resulting interest
spreads and timing of cash flows. These amounts are taken into consideration in
the Companies' overall management of interest rate risk, which attempts to
minimize exposure to changing interest rates through the matching of investment
cash flows with amounts expected to be due under insurance contracts. These
assumptions may not result in values consistent with those obtained through an
actuarial appraisal of the Companies' business or values that might arise in a
negotiated transaction.

The following compares carrying values as shown for financial reporting purposes
with estimated fair values:
December 31                                           2000                      1999
                                             -----------------------   -----------------------
                                                           Estimated                Estimated
                                              Carrying       Fair       Carrying      Fair
                                                Value        Value        Value       Value
                                             ----------   ----------   ----------   ----------
                                                           (Dollars in thousands)
ASSETS
   Fixed maturities, available for sale ..   $  792,578   $  792,578   $  835,321   $  835,321
   Equity securities .....................        6,791        6,791       17,330       17,330
   Mortgage loans on real estate .........       99,916      100,502      100,087       95,524
   Policy loans ..........................       13,323       13,323       14,157       14,157
   Short-term investments ................      106,775      106,775       80,191       80,191
   Cash and cash equivalents .............       63,207       63,207       14,380       14,380
   Separate account assets ...............    9,831,489    9,831,489    7,562,717    7,562,717

LIABILITIES
   Annuity products ......................    1,047,932      962,810    1,017,105      953,546
   Surplus notes .........................      245,000      204,455      245,000      226,100
   Revolving note payable ................           --           --        1,400        1,400
   Separate account liabilities ..........    9,831,489    9,831,489    7,562,717    7,562,717
GA-109652                           57
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

5.   FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)

The following methods and assumptions were used by the Companies in estimating
fair values.

Fixed maturities: Estimated fair values of conventional mortgage-backed
securities not actively traded in a liquid market and publicly traded securities
are estimated using a third party pricing process. This pricing process uses a
matrix calculation assuming a spread over U.S. Treasury bonds based upon the
expected average lives of the securities.

Equity securities: Estimated fair values of equity securities, which consist of
the Companies' investment in the portfolios underlying its separate accounts,
are based upon the quoted fair value of individual securities comprising the
individual portfolios. For equity securities not actively traded, estimated fair
values are based upon values of issues of comparable returns and quality.

Mortgage loans on real estate: Fair values are estimated by discounting expected
cash flows, using interest rates currently offered for similar loans.

Policy loans: Carrying values approximate the estimated fair value for policy
loans.

Short-term investments and cash and cash equivalents: Carrying values reported
in the Companies' historical cost basis balance sheet approximate estimated fair
value for these instruments due to their short-term nature.

Separate account assets: Separate account assets are reported at the quoted fair
values of the individual securities in the separate accounts.

Annuity products: Estimated fair values of the Companies' liabilities for future
policy benefits for the divisions of the variable annuity products with fixed
interest guarantees and for supplemental contracts without life contingencies
are stated at cash surrender value, the cost the Companies would incur to
extinguish the liability.

Surplus notes: Estimated fair value of the Companies' surplus notes were based
upon discounted future cash flows using a discount rate approximating the
current market value.

Revolving note payable: Carrying value reported in the Companies' historical
cost basis balance sheet approximates estimated fair value for this instrument,
as the agreement carries a variable interest rate provision.

Separate account liabilities: Separate account liabilities are reported at full
account value in the Companies' historical cost balance sheet. Estimated fair
values of separate account liabilities are equal to their carrying amount.

6.   VALUE OF PURCHASED IN FORCE

As a result of the merger, a portion of the purchase price was allocated to the
right to receive future cash flows from existing insurance contracts. This
allocated cost represents VPIF, which reflects the value of those purchased
policies calculated by discounting actuarially determined expected future cash
flows at the discount rate determined by the purchaser. Interest was accrued at
a rate of 7.32% during 2000 (7.33% during 1999, and 7.29% during 1998).

GA-109652                           58
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

6.   VALUE OF PURCHASED IN FORCE (continued)

A reconciliation of the change in the VPIF asset follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                     (Dollars in thousands)
Beginning balance .........................    $ 31,727    $ 35,977    $ 43,174
   Accretion of interest ..................       2,016       2,372       2,802
   Amortization of asset ..................      (6,817)     (8,610)     (7,526)
   Adjustment for unrealized gains (losses)        (984)      1,988        (203)
   Purchase price adjustment to opening
      balance sheet .......................          --          --      (2,270)
                                               --------    --------    --------
Ending balance ............................    $ 25,942    $ 31,727    $ 35,977
                                               ========    ========    ========

Based on current conditions and assumptions as to the impact of future events on
acquired policies in force, the expected approximate net amortization relating
to VPIF as of December 31, 2000, is $3.9 million in 2001, $3.6 million in 2002,
$3.0 million in 2003, $2.4 million in 2004, and $1.9 million in 2005. Actual
amortization may vary based upon changes in assumptions and experience.

7.   INCOME TAXES

Golden American files a consolidated federal income tax return. Under the
Internal Revenue Code, a newly acquired insurance company cannot file as part of
the Parent's consolidated tax return for 5 years.

At December 31, 2000, the Companies have net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $189,656,000.
Approximately $5,094,000, $3,354,000, $50,449,000, $94,078,000 and $36,681,000
of these NOL carryforwards are available to offset future taxable income of the
Companies through the years 2011, 2012, 2018, 2019 and 2020, respectively.

INCOME TAX EXPENSE (BENEFIT)
Income tax expense (benefit) included in the consolidated financial statements
follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                    (Dollars in thousands)
Current ...................................    $    (46)   $     --    $     --
Deferred ..................................      13,728       8,523       5,279
                                               --------    --------    --------
                                               $ 13,682    $  8,523    $  5,279
                                               ========    ========    ========

GA-109652                           59
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

7.   INCOME TAXES (continued)

The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference follows:

Year Ended December 31                           2000        1999        1998
                                               --------    --------    --------
                                                    (Dollars in thousands)

Income before income taxes ................    $ 32,862    $ 19,737    $ 10,353
                                               ========    ========    ========
Income tax at federal statutory rate ......    $ 11,502    $  6,908    $  3,624
Tax effect of:
    Goodwill amortization .................       1,322       1,322       1,322
    Meals and entertainment ...............         292         199         157
    Other items ...........................         566          94         176
                                               --------    --------    --------
Income tax expense ........................    $ 13,682    $  8,523    $  5,279
                                               ========    ========    ========

DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Companies' deferred
income tax assets and liabilities at December 31, 2000 and 1999 follows:
December 31                                                                2000         1999
                                                                        ---------    ---------
                                                                        (Dollars in thousands)
Deferred tax assets:
   Net unrealized depreciation of securities at fair value ..........   $     637    $      --
   Net unrealized depreciation of available for sale fixed maturities         779        3,745
   Future policy benefits ...........................................     163,691      133,494
   Goodwill .........................................................      15,111       16,323
   Net operating loss carryforwards .................................      66,380       56,630
   Other ............................................................       1,333        1,333
                                                                        ---------    ---------
                                                                          247,931    $ 211,525
Deferred tax liabilities:
   Net unrealized appreciation of securities at fair value ..........          --         (832)
   Fixed maturity securities ........................................     (17,774)     (17,774)
   Deferred policy acquisition costs ................................    (184,743)    (154,706)
   Mortgage loans on real estate ....................................        (715)        (715)
   Value of purchased insurance in force ............................      (8,512)     (10,462)
   Other ............................................................     (25,724)      (1,348)
                                                                        ---------    ---------
                                                                         (237,468)    (185,837)
                                                                        ---------    ---------
Valuation allowance .................................................      (1,416)      (3,745)
                                                                        ---------    ---------
Deferred income tax asset ...........................................   $   9,047    $  21,943
                                                                        =========    =========
At December 31, 2000, the Company reported, for financial statement purposes,
unrealized losses on certain investments, which have not been recognized for tax
purposes. Since it is uncertain as to whether these capital losses, if ever
realized, could be utilized to offset capital gains, a valuation allowance has
been established for the tax effect of the financial statement losses.

GA-109652                          60
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

8.   RETIREMENT PLANS AND EMPLOYEE STOCK COMPENSATION

DEFINED BENEFIT PLANS
In 2000, 1999 and 1998, the Companies were allocated their share of the pension
liability associated with their employees. The Companies' employees are covered
by the employee retirement plan of an affiliate, Equitable Life. Further,
Equitable Life sponsors a defined contribution plan that is qualified under
Internal Revenue Code Section 401(k).

The following tables summarize the benefit obligations and the funded status for
pension benefits over the two-year period ended December 31, 2000:

                                                            2000         1999
                                                           -------      -------
                                                          (Dollars in thousands)
Change in benefit obligation:
   Benefit obligation at January 1 ...............         $ 4,221      $ 4,454
   Service cost ..................................           1,569        1,500
   Interest cost .................................             554          323
   Actuarial (gain) loss .........................           1,562       (2,056)
                                                           -------      -------
   Benefit obligation at December 31 .............         $ 7,906      $ 4,221
                                                           =======      =======

Funded status:
   Funded status at December 31 ..................         $(7,906)     $(4,221)
   Unrecognized past service cost ................             141           --
   Unrecognized net loss .........................           1,627          210
                                                           -------      -------
   Net amount recognized .........................         $(6,138)     $(4,011)
                                                           =======      =======

The Companies' plan assets were held by Equitable Life, an affiliate. During
1998, the Equitable Life Employee Pension Plan began investing in an undivided
interest of the ING-NA Master Trust (the "Master Trust"). Boston Safe Deposit
and Trust Company holds the Master Trust's investment assets.

The weighted-average assumptions used in the measurement of the Companies'
benefit obligation follows:

December 31                                                  2000         1999
                                                            ------       ------
Discount rate ....................................           7.75%        8.00%
Expected return on plan assets ...................           9.25         9.25
Rate of compensation increase ....................           5.00         5.00

The following table provides the net periodic benefit cost for the fiscal years
2000, 1999, and 1998:

Year Ended December 31                              2000       1999       1998
                                                   ------     ------     ------
                                                      (Dollars in thousands)
Service cost ...............................       $1,569     $1,500     $1,138
Interest cost ..............................          554        323         97
                                                   ------     ------     ------
Net periodic benefit cost ..................       $2,123     $1,823     $1,235
                                                   ======     ======     ======

GA-109652                           61
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

8.   RETIREMENT PLANS AND EMPLOYEE STOCK COMPENSATION (continued)

There were no gains or losses resulting from curtailments or settlements during
2000, 1999, or 1998.

The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for pension plans with accumulated benefit obligations in excess
of plan assets were $7,906,000, $4,701,000, and $0, respectively, as of December
31, 2000 and $4,221,000, $2,488,000, and $0, respectively, as of December 31,
1999.

PHANTOM STOCK OPTION PLAN
The Phantom Stock Option Plan (the "Phantom Plan"), which covers certain key
employees, is similar to a standard stock option plan; however, the phantom
share option entitles the holder to a cash benefit in Dutch Guilders linked to
the rise in value of ING ordinary shares on the Amsterdam Stock Exchange. The
plan participants are entitled to any appreciation in the value of ING ordinary
shares over the Phantom Plan option price (strike price) of 53.85 Euros for
options issued on July 1, 1999, 140.40 Dutch Guilders for options issued on May
26, 1998, and 85.10 Dutch Guilders for options issued on May 23, 1997, not the
ordinary shares themselves.

Options are granted at fair value on the date of grant. Options in the Phantom
Plan are subject to forfeiture to ING should the individuals terminate their
relationship with ING before the three-year initial retention period has
elapsed. All options expire five years from the date of grant.

On July 1, 1999, ING issued 34,750 options to employees of Golden American
related to this plan at a strike price of 53.85 Euros.

On May 26, 1998, ING issued 42,400 options related to this plan at a strike
price of 140.40 Dutch Guilders. Since the strike price at December 31, 1998 was
higher than the ING share price, there was no compensation expense related to
these options in 1998.

On May 23, 1997, ING issued 3,500 options related to this plan at a strike price
of 85.10 Dutch Guilders. Since the strike price was lower than the ING share
price at December 31, 1998, Golden American incurred $46,000 of compensation
expense related to these options during 1998.

No expense was recognized in 1999 related to the above options. As of December
31, 1999, 58,250 options remain outstanding.

During 2000, the Phantom Plan liability was transferred to ING. As of December
31, 2000, the Companies held no liabilities under the Phantom Plan. There were
no expenses incurred related to this plan during the year ended December 31,
2000.

9.   RELATED PARTY TRANSACTIONS

Operating Agreements: Directed Services, Inc. ("DSI"), an affiliate, acts as the
principal underwriter (as defined in the Securities Act of 1933 and the
Investment Company Act of 1940, as amended) and distributor of the variable
insurance products issued by the Companies. DSI is authorized to enter into
agreements with broker/dealers to distribute the Companies' variable insurance
products and appoint representatives of the broker/dealers as agents. For the
years ended December 31, 2000, 1999 and 1998, the Companies paid commissions to
DSI totaling $208,883,000, $181,536,000, and $117,470,000, respectively.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid by DSI for these services is calculated as a percentage of average
assets in the variable separate accounts. For the years ended December 31, 2000,
1999 and 1998, the fee was $21,296,000, $10,136,000, and $4,771,000,
respectively.

GA-109652                           62
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Effective January 1, 1998, the Companies have an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM provides
asset management and accounting services. Under the agreement, the Companies
record a fee based on the value of the assets under management. The fee is
payable quarterly. For the years ended December 31, 2000, 1999 and 1998, the
Companies incurred fees of $2,521,000, $2,227,000 and $1,504,000, respectively,
under this agreement.

Golden American has a guaranty agreement with Equitable Life Insurance Company
of Iowa ("Equitable Life"), an affiliate. In consideration of an annual fee,
payable June 30, Equitable Life guarantees to Golden American that it will make
funds available, if needed, to Golden American to pay the contractual claims
made under the provisions of Golden American's life insurance and annuity
contracts. The agreement is not, and nothing contained therein or done pursuant
thereto by Equitable Life shall be deemed to constitute, a direct or indirect
guaranty by Equitable Life of the payment of any debt or other obligation,
indebtedness, or liability, of any kind or character whatsoever, of Golden
American. The agreement does not guarantee the value of the underlying assets
held in separate accounts in which funds of variable life insurance and variable
annuity policies have been invested. The calculation of the annual fee is based
on risk based capital. On June 30, 2000, Golden American incurred a fee of
$7,000 under this agreement. No annual fee was paid in 1999.

Golden American provides certain advisory, computer, and other resources and
services to Equitable Life. Revenues for these services, which reduced general
expenses incurred by Golden American, totaled $6,193,000, $6,107,000 and
$5,833,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

The Companies have a service agreement with Equitable Life in which Equitable
Life provides administrative and financial related services. Under this
agreement, the Companies incurred expenses of $1,270,000, $1,251,000 and
$1,058,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

First Golden provided resources and services to DSI. Revenues for these
services, which reduce general expenses incurred by the Companies, totaled
$223,000, $387,000, and $75,000 for the years ended December 31, 2000, 1999 and
1998, respectively.

Golden American provides resources and services to ING Mutual Funds Management
Co., LLC, an affiliate. Revenues for these services, which reduced general
expenses incurred by Golden American, totaled $455,000 and $244,000 for the
years ended December 31, 2000 and 1999, respectively.

Golden American provides resources and services to United Life & Annuity
Insurance Company, an affiliate. Revenues for these services, which reduced
general expenses incurred by Golden American, totaled $593,000 and $460,000 for
the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Security Life of Denver
Insurance Company, an affiliate. Revenues for these services, which reduced
general expenses incurred by the Companies, totaled $261,000 and $216,000 for
the years ended December 31, 2000 and 1999, respectively.

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduce general
expenses incurred by the Companies, totaled $115,000 and $103,000 for the years
ended December 31, 2000 and 1999, respectively.

GA-109652                          63
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

In 2000, 1999, and 1998, the Companies received 11.3%, 10.0%, and 9.6% of total
premiums, net of reinsurance, for variable products sold through eight
affiliates as noted in the following table:

Year Ended December 31                            2000        1999        1998
                                                -------     -------     -------
                                                    (Dollars in thousands)
LSSI .......................................    $ 127.0     $ 168.5     $ 122.9
Vestax Securities Corporation ..............       47.2        88.1        44.9
DSI ........................................        1.4         2.5        13.6
Multi-Financial Securities Corporation .....       38.6        44.1        13.4
IFG Network Securities, Inc. ...............       23.1        25.8         3.7
Washington Square ..........................       44.6          --          --
Primevest ..................................        6.2          --          --
Compulife ..................................        2.7          --          --
                                                -------     -------     -------
Total ......................................    $ 290.8     $ 329.0     $ 198.5
                                                =======     =======     =======

Modified Coinsurance Agreement: On June 30, 2000, effective January 1, 2000,
Golden American entered into a modified coinsurance agreement with Equitable
Life, an affiliate, covering a considerable portion of Golden American's
variable annuities issued on or after January 1, 2000, excluding those with an
interest rate guarantee. The financial statements are presented net of the
effects of the agreement.

Under this agreement, Golden American received a net reimbursement of expenses
and charges of $218.8 million. This was offset by a decrease in deferred
acquisition costs of $223.7 million. As at December 31, 2000, Golden American
also had a payable to Equitable Life of $16.3 million due to the overpayment by
Equitable Life of the cash settlement for the modified coinsurance agreement.

Reinsurance Agreement Covering Minimum Guaranteed Benefits: On December 28,
2000, Golden American entered into a reinsurance agreement with Security Life of
Denver International Limited, an affiliate, covering variable annuity minimum
guaranteed death benefits and minimum guaranteed living benefits of variable
annuities issued on or after January 1, 2000. An irrevocable letter of credit
was obtained through Bank of New York in the amount of $10,500,000 related to
this agreement. Under this agreement, Golden American recorded a reinsurance
recoverable of $14.6 million at December 31, 2000.

Reciprocal Loan Agreement: Golden American maintains a reciprocal loan agreement
with ING America Insurance Holdings, Inc. ("ING AIH"), a Delaware corporation
and affiliate, to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Under this agreement, which became effective
January 1, 1998 and expires December 31, 2007, Golden American and ING AIH can
borrow up to $65,000,000 from one another. Prior to lending funds to ING AIH,
Golden American must obtain the approval from the Department of Insurance of the
State of Delaware. Interest on any Golden American borrowings is charged at the
rate of ING AIH's cost of funds for the interest period plus 0.15%. Interest on
any ING AIH borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a similar duration.
Under this agreement, Golden American incurred interest expense of $481,000,
$815,000 and $1,765,000 for the years ended December 31, 2000, 1999 and 1998,
respectively. At December 31, 2000, 1999 and 1998, Golden American did not have
any borrowings or receivables from ING AIH under this agreement.

GA-109652                          64
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Line of credit: Golden American maintained a line of credit agreement with
Equitable to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Under this agreement, which became effective December 1, 1996
and expired December 31, 1997, Golden American could borrow up to $25,000,000.
Interest on any borrowings was charged at the rate of Equitable's monthly
average aggregate cost of short-term funds plus 1.00%. Under this agreement,
Golden American incurred interest expense of $211,000 for the year ended
December 31, 1998. The outstanding balance was paid by a capital contribution
and with funds borrowed from ING AIH.

Surplus Notes: On December 30, 1999, Golden American issued an 8.179% surplus
note in the amount of $50,000,000 to Equitable Life. The note matures on
December 29, 2029. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary claims,
as well as debts owed to all other classes of debtors, other than surplus note
holders, of Golden American. Any payment of principal and/or interest made is
subject to the prior approval of the Delaware Insurance Commissioner. Under this
agreement, Golden American incurred interest expense of $4,112,000 for the year
ended December 31, 2000. Golden American incurred no interest expense during the
year ended December 31, 1999.

On December 8, 1999, Golden American issued a 7.979% surplus note in the amount
of $35,000,000 to First Columbine Life Insurance Company ("First Columbine"), an
affiliate. The note matures on December 7, 2029. Payment of the note and related
accrued interest is subordinate to payments due to policyholders, claimant and
beneficiary claims, as well as debts owed to all other classes of debtors, other
than surplus note holders, of Golden American. Any payment of principal and/or
interest made is subject to the prior approval of the Delaware Insurance
Commissioner. Under this agreement, Golden American incurred interest expense of
$2,961,000 and $0 for the years ended December 31, 2000 and 1999, respectively.

On September 30, 1999, Golden American issued a 7.75% surplus note in the amount
of $75,000,000 to ING AIH. The note matures on September 29, 2029. Payment of
the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of Golden American.
Any payment of principal and/or interest made is subject to the prior approval
of the Delaware Insurance Commissioner. Under this agreement, Golden American
incurred interest expense of $5,813,000 in 2000 and $1,469,000 in 1999. On
December 30, 1999, ING AIH assigned the note to Equitable Life.

On December 30, 1998, Golden American issued a 7.25% surplus note in the amount
of $60,000,000 to Equitable Life. The note matures on December 29, 2028. Payment
of the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of Golden American.
Any payment of principal and/or interest made is subject to the prior approval
of the Delaware Insurance Commissioner. Under this agreement, Golden American
incurred interest expense of $4,350,000 in 2000 and 1999. Golden American
incurred no interest in 1998.

On December 17, 1996, Golden American issued an 8.25% surplus note in the amount
of $25,000,000 to Equitable. The note matures on December 17, 2026. Payment of
the note and related accrued interest is subordinate to payments due to
policyholders, claimant, and beneficiary claims, as well as debts owed to all
other classes of debtors of Golden American. Any payment of principal made is
subject to the prior approval of the Delaware Insurance Commissioner. Golden
American incurred interest totaling $2,063,000 in 2000, unchanged from 1999 and
1998. On December 17, 1996, Golden American contributed the $25,000,000 to First
Golden acquiring 200,000 shares of common stock (100% of outstanding stock).

GA-109652                           65
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

9.   RELATED PARTY TRANSACTIONS (continued)

Stockholder's Equity: During 2000, 1999 and 1998, Golden American received
capital contributions from its Parent of $80,000,000, $121,000,000 and
$122,500,000, respectively. As at December 31, 2000, Golden American also had a
receivable of $35,000,000 from capital contributions made by its Parent.

10.  COMMITMENTS AND CONTINGENCIES

Reinsurance: At December 31, 2000, the Companies had reinsurance treaties with
six unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. Golden American remains liable to the
extent reinsurers do not meet their obligations under the reinsurance
agreements. Reinsurance ceded in force for life mortality risks were
$105,334,000, and $119,575,000 at December 31, 2000 and 1999, respectively. At
December 31, 2000 and 1999, the Companies have a net receivable of $33,973,000
and $14,834,000, respectively, for reserve credits, reinsurance claims, or other
receivables from these reinsurers comprised of $16,462,000 and $493,000,
respectively, for claims recoverable from reinsurers, $4,007,000 and $1,201,000,
respectively, for a payable for reinsurance premiums, and $21,518,000 and
$15,542,000, respectively, for a receivable from an unaffiliated reinsurer.
Included in the accompanying financial statements, excluding the modified
coinsurance agreements, are net considerations to reinsurers of $21,655,000,
$9,883,000 and $4,797,000 and net policy benefits recoveries of $8,927,000,
$3,059,000 and $2,170,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.

On June 30, 2000, effective January 1, 2000, Golden American entered into a
modified coinsurance agreement with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued on or after
January 1, 2000, excluding those with an interest rate guarantee. At December
31, 2000, Golden American had received a total settlement of $218.8 million
under this agreement. The carrying value of the separate account liabilities
covered under this agreement represent 17.6% of total separate account
liabilities outstanding at December 31, 2000. Golden American remains liable to
the extent Equitable Life does not meet its obligations under the agreement. The
accompanying statement of operations, statement of changes in stockholder's
equity and statement of cash flows are presented net of the effects of the
agreement.

On December 28, 2000, Golden American entered into a reinsurance agreement with
Security Life of Denver International Limited, an affiliate, covering variable
annuity minimum guaranteed death benefits and guaranteed living benefits of
variable annuities issued on or after January 1, 2000. An irrevocable letter of
credit was obtained through Bank of New York in the amount of $10,500,000
related to this agreement.

On December 29, 2000, First Golden entered into a reinsurance treaty with London
Life Reinsurance Company of Pennsylvania, an unaffiliated reinsurer, covering
the minimum guaranteed death benefits of First Golden's variable annuities
issued on or after January 1, 2000.

Effective June 1, 1994, Golden American entered into a modified coinsurance
agreement with an unaffiliated reinsurer. The accompanying financial statements
are presented net of the effects of the treaty which increased income by
$736,000, $1,729,000, $1,022,000 for the years ended December 31, 2000, 1999 and
1998, respectively.

Guaranty Fund Assessments: Assessments are levied on the Companies by life and
health guaranty associations in most states in which the Companies are licensed
to cover losses of policyholders of insolvent or rehabilitated insurers. In some
states, these assessments can be partially recovered through a reduction in
future premium taxes. The Companies cannot predict whether and to what extent
legislative initiatives may affect the right to offset. The associated cost for
a particular insurance company can vary significantly based upon its fixed
account premium volume by line of business and state premiums as well as its
potential for

GA-109652                           66
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

10.  COMMITMENTS AND CONTINGENCIES (continued)

premium tax offset. The Companies have established an undiscounted reserve to
cover such assessments, review information regarding known failures, and revise
estimates of future guaranty fund assessments. Accordingly, the Companies
accrued and charged to expense an additional $3,000, $3,000 and $1,123,000 for
the years ended December 31, 2000, 1999 and 1998, respectively. At December 31,
2000 and 1999, the Companies have an undiscounted reserve of $2,430,000, and
$2,444,000, respectively, to cover estimated future assessments (net of related
anticipated premium tax credits) and have established an asset totaling
$733,000, and $618,000, respectively, for assessments paid which may be
recoverable through future premium tax offsets. The Companies believe this
reserve is sufficient to cover expected future guaranty fund assessments based
upon previous premiums and known insolvencies at this time.

Litigation: The Companies, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits and
arbitrations. In some class action and other actions involving insurers,
substantial damages have been sought and/or material settlement or award
payments have been made. The Companies currently believe no pending or
threatened lawsuits or actions exist that are reasonably likely to have a
material adverse impact on the Companies.

Vulnerability from Concentrations: The Companies have various concentrations in
the investment portfolio (see Note 3 for further information). The Companies'
asset growth, net investment income, and cash flow are primarily generated from
the sale of variable insurance products and associated future policy benefits
and separate account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme fluctuations in
interest rates or stock market returns, which may result in higher lapse
experience than assumed, could cause a severe impact to the Companies' financial
condition. A broker/dealer, having at least ten percent of total net premiums,
generated 11% of the Companies' sales in 2000 (28% and 26% by two broker/dealers
during 1999 and 1998, respectively). Two broker dealers, having at least ten
percent of total gross premiums, generated 21% of the Companies' sales in 2000
(30% and 27% by two broker/dealers during 1999 and 1998, respectively). The
Premium Plus product generated 71% of the Companies' sales during 2000 (79%
during 1999 and 63% during 1998).

Leases: The Companies lease their home office space, certain other equipment,
and capitalized computer software under operating leases which expire through
2020. During the years ended December 31, 2000, 1999 and 1998, rent expense
totaled $2,874,000, $2,273,000, and $1,241,000, respectively. At December 31,
2000, minimum rental payments due under all non-cancelable operating leases with
initial terms of one year or more are: 2001 - $3,790,000; 2002 - $3,257,000;
2003 - $2,611,000; 2004 - $2,419,000; 2005 - $2,419,000, and 2006 and thereafter
- $38,700,000.

Revolving Note Payable: To enhance short-term liquidity, the Companies
established a revolving note payable with SunTrust Bank, Atlanta (the "Bank")
which expires July 30, 2001. The note was approved by the Boards of Directors of
Golden American and First Golden on August 5, 1998 and September 29, 1998,
respectively. The total amount the Companies may have outstanding is
$85,000,000, of which Golden American and First Golden have individual credit
sublimits of $75,000,000 and $10,000,000, respectively. The note accrues
interest at an annual rate equal to: (1) the cost of funds for the Bank for the
period applicable for the advance plus 0.225% or (2) a rate quoted by the Bank
to the Companies for the advance. The terms of the agreement require the
Companies to maintain the minimum level of Company Action Level Risk Based
Capital as established by applicable state law or regulation. During the years
ended December 31, 2000, 1999 and 1998, the Companies incurred interest expense
of $87,000, $198,000 and $352,000, respectively. At December 31, 2000, there
were no amounts outstanding under this agreement. At December 31, 1999, the
Companies had a $1,400,000 note payable to the Bank under this agreement.

GA-109652                           67
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APPENDIX A

                        MARKET VALUE ADJUSTMENT EXAMPLES

EXAMPLE #1: FULL SURRENDER -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT

     Assume a single premium payment of $100,000 with a guaranteed interest
period of 10 years, a guaranteed interest rate of 7.5%, an initial Index Rate
("I") of 7%; that a full surrender is requested 3 years into the guaranteed
interest period; that the then Index Rate for a 7 year guaranteed interest
period ("J") is 8%; and that no prior transfers or withdrawals affecting the
contract value have been made.

CALCULATE THE MARKET VALUE ADJUSTMENT

     1.   The contract value on the date of surrender is
                                    3
          $124,230 ($100,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0850)           -1 ] = $11,535

     Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $112,695 ($124,230 - $11,535 ).

  EXAMPLE #2: FULL SURRENDER -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT

     Assume $100,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate ("I") of 7%;
that a full surrender is requested 3 years into the guaranteed interest period;
that the then Index Rate for a 7 year guaranteed interest period ("J") is 6%;
and that no prior transfers or withdrawals affecting the contract value have
been made. Calculate the Market Value Adjustment

     1.   The contract value on the date of surrender is
                                    3
          $124,230 ($100,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Market Value Adjustment =
                                     2,555/365
          $124,230 x [( 1.07/1.0650 )           -1 ]= $4,141

     Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $128,371 ($124,230 + $4,141 ).

EXAMPLE #3: WITHDRAWAL -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT

     Assume $200,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate ("I") of 7%;
that a withdrawal of $112,695 is requested 3 years into the guaranteed interest
period; that the then Index Rate ("J") for a 7 year guaranteed interest period
is 8%; and that no prior transfers or withdrawals affecting the contract value
have been made.

GA-109652                           A1
First calculate the amount that must be withdrawn to provide the amount
requested.

     1.   The contract value on the date of withdrawal is
          $248,459 ( $200,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Amount that must be withdrawn =
                                    2,555/365
          [ $112,695 / (1.07/1.0850)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0850)           -1 ] = $11,535

     Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $112,695, as requested. The contract value will be reduced by the
amount of the withdrawal, $112,695, and also reduced by the Market Value
Adjustment of $11,535, for a total reduction in the contract value of $124,230.

EXAMPLE #4: WITHDRAWAL -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT

     Assume $200,000 single premium with a guaranteed interest period of 10
years, a guaranteed interest rate of 7.5%, an initial Index Rate of 7%; that a
withdrawal of $128,371 requested 3 years into the guaranteed interest period;
that the then Index Rate ("J") for a 7 year guaranteed interest period is 6%;
and that no prior transfers or withdrawals affecting the contract value have
been made.

     First calculate the amount that must be withdrawn to provide the amount
requested.

     1.   The contract value on the date of surrender is
                                     3
          $248,459 ( $200,000 x 1.075  )

     2.   N = 2,555 ( 365 x 7 )

     3.   Amount that must be withdrawn =
                                    2,555/365
          [ $128,371 / (1.07/1.0650)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =
                                   2,555/365
          $124,230 x [(1.07/1.0650)           -1 ] = $$4,141

     Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $128,371, as requested. The contract value will be reduced by the
amount of the withdrawal, $128,371, but increased by the Market Value Adjustment
of $4,141, for a net reduction in the contract value of $124,230.

GA-109652                              A2
APPENDIX B

                            SURRENDER CHARGE EXAMPLES

EXAMPLE #1: SURRENDER CHARGES -- PARTIAL WITHDRAWAL IN EXCESS OF FREE WITHDRAWAL
AMOUNT

The following assumes you made an initial single premium payment of $100,000
into the 10 year guarantee period with an interest rate of 7.50%. It also
assumes a withdrawal at the beginning of the fifth contract year of 20% of the
contract value. The accumulation value as of the beginning of the fifth contract
year is $133,546.91. The interest earned in the last 12 months as of the
beginning of the fifth contract year is $9,317.23.

In this example, $9,317.23 (last 12 months' interest earnings) is the maximum
free withdrawal amount that you may withdraw during the contract year without a
surrender charge. The total withdrawal would be $26,709.39 ($133,546.91 x .20).
Therefore, $17,392.16 ($26,709.39 - $9,317.23) is considered an excess
withdrawal and would be subject to a 4% surrender charge of $695.69 ($17,392.16
x .04).

This example does not take into account any Market Value Adjustment or deduction
of any premium taxes.

EXAMPLE #2: SURRENDER CHARGES -- FREE PARTIAL WITHDRAWAL FOLLOWED BY FULL
SURRENDER

The following assumes you made an initial single premium payment of $100,000
into the 10 year guarantee period with an interest rate of 6.00%. It also
assumes a free partial withdrawal at the beginning of the fifth contract year of
$7,146.10, followed by a full surrender 183 days later.

The accumulation value as of the beginning of the fifth contract year is
$126,247.70. The interest earned in the last 12 months as of the beginning of
the fifth contract year is $7,146.10. In this example, $7,146.10 (last 12
months' interest earnings) is the maximum free withdrawal amount that you may
withdraw during the contract year without a surrender charge. The accumulation
value immediately after the partial withdrawal is $119,101.60.

Assume that 183 days later the policy is surrendered. The accumulation value has
grown to $122,632.40 ($119,101.60 x (1.06(183/365))). On full surrender,
surrender charges are applied to all amounts withdrawn in that contract year.
The cash surrender value is calculated as follows.

1.   The surrender charge on the free partial withdrawal amount is $297.75
     ($7146.10 x (1/(1-.04) -1)).

2.   The adjusted accumulation value is $122,334.65 ($122,632.40 - $297.75).

3.   The surrender charge upon surrender is $4,893.39 ($122,334.65 x .04).

4.   The cash surrender value is $117,441.26 ($122,334.65 - $4,893.39).

This example does not take into account any Market Value Adjustment or deduction
of any premium taxes.

GA-109652                           B1
ING VARIABLE ANNUITIES

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled in Delaware.

--------------------------------------------------------------------------------
Guarantee Annuity  109652                                             05/01/2001
PART II
             INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Not applicable.

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

The following provisions regarding the Indemnification of
Directors and Officers of the Registrant are applicable:

     INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
     INCORPORATORS

     Delaware General Corporation Law, Title 8, Section 145
     provides that corporations incorporated in Delaware may
     indemnify their officers, directors, employees or agents
     for threatened, pending or past legal action by reason
     of the fact he/she is or was a director, officer, employee
     or agent.  Such indemnification is provided for under the
     Company's By-Laws under Article VI. Indemnification
     includes all liability and loss suffered and expenses
     (including attorneys' fees) reasonably incurred by such
     indemnitee.  Prepayment of expenses is permitted, however,
     reimbursement is required if it is ultimately determined
     that indemnification should not have been given.

     DIRECTORS' AND OFFICERS' INSURANCE

     The directors, officers, and employees of the
     registrant, in addition to the indemnifications
     described above, are indemnified through the blanket
     liability insurance policy of Registrant's ultimate
     parent, ING Groep N.V., or directly by Equitable of
     Iowa Companies, Inc. for liabilities not covered through
     the indemnification provided under the By-Laws.

     SECURITIES AND EXCHANGE COMMISSION POSITION ON
     INDEMNIFICATION

     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     Distribution Agreement Between Golden American and
           Directed Services, Inc. (1)

     3(a)  Certificate of Amendment of the Restated Articles of
           Incorporation of Golden American, dated (03/01/95). (1)

     3(b)  By-Laws of Golden American, dated (01/07/94). (1)

     3(c)  Resolution of Board of Directors for Powers of
           Attorney, dated (04/23/99). (1)

     4(a)  Single Premium Deferred Modified Guaranteed
           Annuity Contract. (1)

     4(b)  Single Premium Deferred Modified Guaranteed
           Annuity Master Contract. (2)

     4(c)  Single Premium Deferred Modified Guaranteed
           Annuity Certificate. (2)

     4(d)  Individual Retirement Annuity Rider Page. (1)

     4(e)  Single Premium Deferred Modified Guaranteed
           Annuity Application. (2)

     4(f)  Single Premium Deferred Modified Guaranteed
           Annuity Enrollment Form. (2)

     4(g)  Roth Individual Retirement Annuity Rider. (1)

     5     Opinion and Consent of Myles R. Tashman.

     10(a) Administrative Services Agreement between Golden
           American and Equitable Life Insurance Company of
           Iowa. (1)

     10(b) Service Agreement between Golden American and
           Directed Services, Inc. (1)

     10(c) Asset Management Agreement between Golden American
           and ING Investment Management LLC. (1)

     10(d) Reciprocal Loan Agreement between Golden American
           and ING America Insurance Holdings, Inc. (1)

     10(e) Revolving Note Payable between Golden American and
           SunTrust Bank. (1)

     10(f) Surplus Note, dated, 12/17/96 between Golden American
           and Equitable of Iowa Companies. (1)

     10(g) Surplus Note, dated, 12/30/98 between Golden American
           and Equitable Life Insurance Company of Iowa. (1)

     10(h) Surplus Note, dated, 09/30/99 between Golden American
           and ING AIH. (1)

     10(i) Surplus Note, dated, 12/08/99 between Golden American
           and First Columbine Life Insurance Company. (1)

     10(j) Surplus Note, dated, 12/30/99 between Golden American
           and Equitable of Iowa companies. (1)

     10(k) Reinsurance Agreement, dated 06/30/00, between
           GALIC & ELICI. (2)

     10(l) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of July 31, 2000 and expiring
           July 31, 2001. (2)

     23(a) Consent of Sutherland Asbill & Brennan LLP.

     23(b) Consent of Ernst & Young LLP, Independent Auditors.

     23(c) Consent of Myles R. Tashman, incorporated in Exhibit 5
           of this Part II, together with the Opinion of Myles R.
           Tashman.

     24    Powers of Attorney.

(1)  Incorporated herein by reference to the initial Registration Statement
     for Golden American filed with the Securities and Exchange Commission
     on June 30, 2000 (File No. 333-40596).

(2)  Incorporated herein by reference to Amendment No. 1 to the Registration
     Statement for Golden American filed with the Securities and Exchange
     Commission on September 13, 2000 (File No. 333-40596).
(b)  FINANCIAL STATEMENT SCHEDULE.

    (1)  All financial statements are included in the Prospectus
          as indicated therein
    (2)  Schedules I, III and IV follow. All other schedules to the consolidated
         financial statements required by Article 7 of Regulation S-X are
         omitted because they are not applicable or because the information
         is included elsewhere in the consolidated financial statements or
         notes thereto.
SCHEDULE I
                                                       SUMMARY OF INVESTMENTS
                                              OTHER THAN INVESTMENTS IN RELATED PARTIES
                                                       (Dollars in thousands)

                                                                                                                      BALANCE
                                                                                                                        SHEET
   DECEMBER 31, 2000                                                                     COST(1)        VALUE          AMOUNT
------------------------------------------------------------------------------------------------------------------------------
TYPE OF INVESTMENT
   Fixed maturities, available for sale:
    Bonds:
      United States government and governmental agencies and
        authorities.........................................................            $18,607       $19,171          $19,171
      Public utilities......................................................             54,132        52,826           52,826
      Corporate securities..................................................            355,890       349,202          349,202
      Other asset-backed securities.........................................            223,787       224,122          224,122
      Mortgage-backed securities............................................            146,335       147,257          147,257
                                                                                  --------------------------------------------
      Total fixed maturities, available for sale............................            798,751       792,578          792,578

   Equity securities:
      Common stocks: industrial, miscellaneous, and all other...............              8,611         6,791            6,791

   Mortgage loans on real estate.........................................                99,916                         99,916
   Policy loans..........................................................                13,323                         13,323
   Short-term investments................................................               106,775                        106,775
                                                                                  ---------------                -------------
   Total investments.....................................................            $1,027,376                     $1,019,383
                                                                                  ===============                =============
Note 1: Cost is defined as original cost for common  stocks,  amortized cost for
bonds and  short-term  investments,  and unpaid  principal  for policy loans and
mortgage loans on real estate, adjusted for amortization of premiums and accrual
of discounts.
SCHEDULE III
                                                 SUPPLEMENTARY INSURANCE INFORMATION
                                                       (Dollars in thousands)

COLUMN A        COLUMN B     COLUMN C     COLUMN D    COLUMN E   COLUMN F   COLUMN G    COLUMN H    COLUMN I    COLUMN J   COLUMN K
------------------------------------------------------------------------------------------------------------------------------------
                                 FUTURE
                                 POLICY                                                             AMORTIZA-
                              BENEFITS,                   OTHER                           BENEFITS    TION OF
                                LOSSES,                  POLICY                            CLAIMS,   DEFERRED
                 DEFERRED        CLAIMS                  CLAIMS  INSURANCE                  LOSSES     POLICY
                   POLICY           AND    UNEARNED         AND   PREMIUMS        NET          AND     ACQUI-       OTHER
              ACQUISITION          LOSS     REVENUE    BENEFITS        AND INVESTMENT  SETTLEMENT      SITION   OPERATING   PREMIUMS
SEGMENT             COSTS      EXPENSES     RESERVE     PAYABLE    CHARGES     INCOME     EXPENSES      COSTS   EXPENSES*    WRITTEN
------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2000:

Life insurance    $635,147   $1,062,891      $6,817         $82   $144,877    $64,140     $200,031    $55,154    $143,300        --

YEAR ENDED DECEMBER 31, 1999:

Life insurance     528,957    1,033,701       6,300           8     82,935     59,169      182,221     33,119     (83,827)       --

YEAR ENDED DECEMBER 31, 1998:

Life insurance     204,979      881,112       3,840          --     39,119     42,485       96,968      5,148     (26,406)       --

*    This includes policy  acquisition  costs deferred for first year commissions and interest  bonuses,  premium credit,  and other
     expenses related to the production of new business. The costs related to first year interest bonuses and the premium credit are
     included in benefits claims, losses, and settlement expenses.
SCHEDULE IV
                                                             REINSURANCE

COLUMN A                                             COLUMN B        COLUMN C        COLUMN D         COLUMN E        COLUMN F
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    PERCENTAGE
                                                                     CEDED TO         ASSUMED                        OF AMOUNT
                                                        GROSS           OTHER      FROM OTHER              NET         ASSUMED
                                                       AMOUNT       COMPANIES       COMPANIES           AMOUNT          TO NET
--------------------------------------------------------------------------------------------------------------------------------
AT DECEMBER 31, 2000:
    Life insurance in force.................     $196,334,000    $105,334,000              --      $91,000,000              --
                                                ================================================================================

At December 31, 1999:
    Life insurance in force.................     $225,000,000    $119,575,000              --     $105,425,000              --
                                                ================================================================================

AT DECEMBER 31, 1998:
    Life insurance in force.................     $181,456,000    $111,552,000              --      $69,904,000              --
                                                ================================================================================
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 set forth
             in the registration statement; and

      (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)  That, for purposes of determining any liability under
     the Securities Act of 1933, each filing of the
     registrant's annual report pursuant to Section 13(a) or
     Section 15(d) of the Securities Exchange Act of 1934
     (and, where applicable, each filing of an employee
     benefit plan's annual report pursuant to Section 15(d)
     of the Securities Exchange Act of 1934) that is
     incorporated by reference in the registration statement
     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.
SIGNATURES

 As required by the Securities Act of 1933 and the Investment Company Act of
 1940, the Registrant has caused this Registration Statement to be signed on
 its behalf in the City of West Chester, and Commonwealth of Pennsylvania, on
 the 23rd day of April, 2001.

                                      SEPARATE ACCOUNT B
                                       (Registrant)

                                 By:  GOLDEN AMERICAN LIFE
                                      INSURANCE COMPANY
                                      (Depositor)

                                 By:
                                      --------------------
                                      Robert C. Salipante*
                                      Chief Executive Officer

 Attest: /s/ Marilyn Talman
         ------------------------
          Marilyn Talman
          Vice President, Associate General Counsel
          and Assistant Secretary of Depositor

 As required by the Securities Act of 1933, this Registration Statement has
 been signed by the following persons in the capacities indicated on
 April 23, 2001.

 Signature                     Title
 ---------                     -----

                               Director and Chief Executive
 --------------------          Officer of Depositor
 Robert C. Salipante*

                               Director, Senior Vice President
 --------------------          and Chief Financial Officer
 Wayne R. Huneke*

                 DIRECTORS OF DEPOSITOR

 ----------------------
 Robert C. Salipante*

 ----------------------
 Thomas J. McInerney*

 ----------------------
 Wayne R. Huneke*

 ----------------------
 Mark A. Tullis*

 ----------------------
 Phillip R. Lowery*

 Attest: /s/ Marilyn Talman
         ------------------------
          Marilyn Talman
          Vice President, Associate General Counsel
          and Assistant Secretary of Depositor

 *Executed by Marilyn Talman on behalf of those indicated pursuant
to Power of Attorney.
EXHIBIT INDEX

ITEM      EXHIBIT                                                PAGE #
----      -------                                                ------
5         Opinion and Consent of Myles R. Tashman.               EX-5

23(a)     Consent of Sutherland Asbill & Brennan LLP             EX-23.A

23(b)     Consent of Ernst & Young LLP, Independent Auditors     EX-23.B

24        Powers of Attorney                                     EX-24