As filed with the Securities and Exchange Commission on December 31, 2001
                                            Registration No. 333-_______
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                       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, Pennsylvania 19380-1478
                                 (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, Pennsylvania  19380-1478    1275 Pennsylvania Avenue, N.W.
(Name and Address of agent for Service    Washington, D.C.  20004-2415
    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,
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 [ ]

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Pursuant to Rule 429 under the Securities Act of 1933, a prospectus herein
also related to Registration Statement No. 333-28765.

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                      Calculation of Registration Fee
<TABLE>
<CAPTION>
                                                                     Proposed
Title of each class                            Proposed               maximum
of securities to be    Amount to be    maximum offering price    aggregate offering      Amount of
     registered         registered        price per unit(1)          price(1)        registration fee(2)
--------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>                       <C>                 <C>
Annuity Contracts
(Interests in          N/A             N/A                       $1,000,000,000        $239,000(3)
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)  Amounts  previously  registered in connection with File No.  333-28765 were
     $50,160,000 at registration fees of $15,200.

(3)  Pursuant to Rule 457(p) under the  Securities Act of 1933, the total filing
     fee of  $239,000  associated  with File No.  333-76128,  filed on behalf of
     Golden  American Life Insurance  Company on December 31, 2001,  offsets the
     amount  of  the  registration  fee  for  this  Registration  Statement.  No
     securities  have been or will be sold  under File No.  333-76128,  which is
     being withdrawn.
     ---------------------------------------------------------------------------
     The registrant hereby amends this registration  statement statement on such
     date or dates as may be  necessary  to delay its  effective  date until the
     registrant shall file a further  amendment which  specifically  states that
     this registration statement shall thereafter become effective in accordance
     with section 8(a) of the Securities  Act of 1933 or until the  registration
     statement  shall  become  effective on such date as the  Commission  acting
     pursuant to said section 8(a), may determine.
<PAGE>

                               PART I

The  Prospectus  filed herein  describes  certain  interests in a fixed  account
offered by Golden American Life Insurance Company under a contract issued by the
insurance company.  These interests (and the fixed account) are not offered as a
seperate product but in connection with a combination variable and fixed annuity
product  whose  prospectus  describes  the  contract  in more  detail  and  must
accompany or precede the delivery of this prospectus.
<PAGE>
ING  VARIABLE  ANNUITIES


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

                          GOLDENSELECT FIXED ACCOUNT I

                                FEBRUARY 12, 2002

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     Fixed Account I ("Fixed Account") is an optional fixed interest allocation
offered during the accumulation phase of your variable annuity contract between
you and Golden American Life Insurance Company ("Golden American," the
"Company," "we" or "our"). The Fixed Account, which is a segregated asset
account of Golden American, provides a means for you to invest on a tax-deferred
basis and earn a guaranteed interest for guaranteed interest periods (Fixed
Interest Allocation(s)). We will credit your Fixed Interest Allocation(s) with a
fixed rate of interest. We currently offer Fixed Interest Allocations with
guaranteed interest periods of 6 months, 1, 3, 5, 7 and 10 years. We may not
offer all guaranteed interest periods on all contracts and the rates for a given
guaranteed interest period may vary among contracts. We set the interest rates
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 take your money out
from a Fixed Interest Allocation more than 30 days 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. A surrender charge may also apply to
withdrawals from your contract. You bear the risk that you may receive less than
your principal because of the Market Value Adjustment.

For contracts sold in some states, not all Fixed Interest Allocations are
available. You have a right to return a contract for a refund as described in
the variable annuity contract prospectus. The variable annuity contract
prospectus describes a deferred group and individual variable annuity contract
(the "Contract") offered by Golden American. The Contract is available in
connection with certain retirement plans that qualify for special federal income
tax treatment as well as those that do not qualify for such treatment. Please
refer to the Contract prospectus for more information.

This prospectus accompanies a Contract prospectus and provides information that
you should know before investing in the Fixed Account and should be kept for
future reference. If you need more information after reading this prospectus,
please contact us at Customer Service Center, P.O. Box 2700, West Chester,
Pennsylvania 19380 or call (800) 366-0066 or your registered representative.
Either prospectus is available without charge upon request. To obtain a copy of
these documents, write to or call our Customer Service Center or access the
SEC's website (http://www.sec.gov).

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 THE FIXED ACCOUNT 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.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR A
VARIABLE CONTRACT.


<PAGE>

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

The variable contract has insurance features and investment features, and there
are charges related to each. For more information about these contract fees and
expenses please refer to the Contract prospectus.

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                     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. As
of December 31, 2000, Golden American became a wholly owned subsidiary of
Equitable Life Insurance Company of Iowa ("Equitable Life"). Equitable Life is a
wholly owned subsidiary of Equitable of Iowa Companies, Inc. ("Equitable of
Iowa") which in turn 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 ("First
Golden"), which is authorized to sell annuities in New York and Delaware. Golden
American's consolidated financial statements appear in this prospectus. On
January 2, 2002, First Golden was merged into ReliaStar Life Insurance Company
of New York, another wholly owned subsidiary of ING and an affiliate. Equitable
of Iowa is the holding company for Equitable Life, Directed Services, Inc., the
investment manager of the GCG Trust and the distributor of the Contracts, and
other interests. ING also owns ING Pilgrim Investments, LLC, a portfolio manager
of the GCG Trust, and the investment manager of the Pilgrim Variable Insurance
Trust and the Pilgrim Variable Products Trust. ING also owns: Baring
International Investment Limited, another portfolio manager of the GCG Trust,
and ING Investment Management Advisors B.V., a portfolio manager of the Pilgrim
Variable Insurance Trust. Our principal office is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380.

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                              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

The unaudited condensed consolidated financial statements of Golden American for
the nine months ended September 30, 2001 and the audited consolidated financial
statements of Golden American as of December 31, 2000, and for each of the three
years in the period ended December 31, 2000, are included in this prospectus.

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                          THE FIXED INTEREST ALLOCATION
--------------------------------------------------------------------------------

You may allocate premium payments and transfer your Contract value to the
guaranteed interest periods of the Fixed Account during the accumulation period
as described in the prospectus for the Contract. Every time you allocate money
to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed
interest period you select. We currently offer guaranteed interest periods of 6
months, 1, 3, 5, 7 and 10 years, although we may not offer all these periods
under all Contracts now or in the future. You may select one or more guaranteed
interest periods at any one time. We will credit your Fixed Interest Allocation
with a guaranteed interest rate for the interest period you select, so long as
you do not withdraw money from that Fixed Interest Allocation before the end of
the guaranteed interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the interest period is
scheduled to expire.

If you surrender, withdraw, transfer or annuitize your investment in a Fixed
Interest Allocation more than 30 days before the end of the guaranteed interest
period, we will apply a Market Value Adjustment to the transaction. A Market
Value Adjustment could increase or decrease the amount you surrender, withdraw,

Fixed Account-121472                   2

<PAGE>


transfer 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
because of the Market Value Adjustment.

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

SELECTING A GUARANTEED INTEREST PERIOD

You may select one or more Fixed Interest Allocations with specified guaranteed
interest periods. A guaranteed interest period is the period that a rate of
interest is guaranteed to be credited to your Fixed Interest Allocation. We may
at any time decrease or increase the number of guaranteed interest periods
offered. In addition, we may offer DCA Fixed Interest Allocations, which are
6-month and 1-year Fixed Interest Allocations available exclusively in
connection with our dollar cost averaging program. For more information on DCA
Fixed Interest Allocations, see "Transfers Among Your Investments -- Dollar Cost
Averaging from Fixed Interest Allocations." Your Contract value in the Fixed
Account is the sum of your Fixed Interest Allocations and the interest credited
as adjusted for any withdrawals, transfers or other charges we may impose,
including any Market Value Adjustment. Your Fixed Interest Allocation will be
credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium or reallocation of
Contract value. We will credit interest daily at a rate that yields the quoted
guaranteed interest rate.

GUARANTEED INTEREST RATES

Each Fixed Interest Allocation will have an interest rate that is guaranteed as
long as you do not take your money out until its 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 but no
Fixed Interest Allocation will ever have a guaranteed interest rate declared of
less than 3% per year.

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 then offered.
Renewal rates for such rate specials will be based on the base interest rate and
not on the special rates initially declared.

TRANSFERS FROM A FIXED INTEREST ALLOCATION

You may transfer your Contract value in a Fixed Interest Allocation to one or
more new Fixed Interest Allocations with new guaranteed interest periods, or to
any of the subaccounts of Golden American's Separate Account B as described in
the Contract prospectus. We will transfer amounts from your Fixed Interest
Allocations starting with the guaranteed interest period nearest its maturity
date, until we have honored your transfer request.

The minimum amount that you can transfer to or from any Fixed Interest
Allocation is $100. If a transfer request would reduce the Contract value
remaining in a Fixed Interest Allocation to less than $100, we will treat such
transfer request as a request to transfer the entire Contract value in such
Fixed Interest Allocation. Transfers from a Fixed Interest Allocation may be
subject to a Market Value Adjustment. If you have a special Fixed Interest
Allocation that was offered exclusively with our dollar cost averaging program,

Fixed Account-121472                   3

<PAGE>

cancelling dollar cost averaging will cause a transfer of the entire Contract
value in such Fixed Interest Allocation to the Liquid Asset subaccount, and such
a transfer will be subject to a Market Value Adjustment.

On the maturity date of a guaranteed interest period, you may transfer amounts
from the applicable Fixed Interest Allocation to the subaccounts and/or to new
Fixed Interest Allocations with guaranteed interest periods of any length we are
offering at that time. You may not, however, transfer amounts to any Fixed
Interest Allocation with a guaranteed interest period that extends beyond the
annuity start date.

At least 30 calendar days before a maturity date of any of your Fixed Interest
Allocations, or earlier if required by state law, we will send you a notice of
the guaranteed interest periods that are available. You must notify us which
subaccounts or new guaranteed interest periods you have selected before the
maturity date of your Fixed Interest Allocations. If we do not receive timely
instructions from you, we will transfer the Contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a guaranteed
interest period that is the same as the expiring guaranteed interest period. If
such guaranteed interest period is not available or would go beyond the annuity
start date, we will transfer your Contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does not go
beyond the annuity start date. If no such guaranteed interest period is
available, we will transfer the Contract value to a subaccount specially
designated by the Company for such purpose. Currently we use the Liquid Asset
subaccount for such purpose.

Please be aware that the benefit we pay under certain optional benefit riders
will be adjusted by any transfers you make to and from the Fixed Interest
Allocations during specified periods while the rider is in effect. See "Optional
Riders" in the Contract prospectus.

WITHDRAWALS FROM A FIXED INTEREST ALLOCATION

During the accumulation phase, you may withdraw a portion of your Contract value
in any Fixed Interest Allocation. You may make systematic withdrawals of only
the interest earned during the prior month, quarter or year, depending on the
frequency chosen, from a Fixed Interest Allocation under our systematic
withdrawal option. Systematic withdrawals from a Fixed Interest Allocation are
not permitted if such Fixed Interest Allocation is currently participating in
the dollar cost averaging program. A withdrawal from a Fixed Interest Allocation
may be subject to a Market Value Adjustment and a contract surrender charge. Be
aware that withdrawals may have federal income tax consequences, including a 10%
penalty tax, as well as state income tax consequences.

If you tell us the Fixed Interest Allocation from which your withdrawal will be
made, we will assess the withdrawal against that Fixed Interest Allocation. If
you do not, we will assess your withdrawal against the subaccounts in which you
are invested, unless the withdrawal exceeds the Contract value in the
subaccounts. If the withdrawal exceeds the Contract value in those subaccounts,
we will deduct your withdrawal from your Fixed Interest Allocations starting
with the guaranteed interest periods nearest their maturity dates until we have
honored your request. Please be aware that the benefit we pay under any of the
optional benefit riders will be reduced by any withdrawals you made from the
Fixed Interest Allocations during the period while the rider is in effect. See
"Optional Riders" in the Contract prospectus.

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 (i) whenever you
withdraw or transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed interest period,
or under the systematic withdrawal or dollar cost averaging program) and (ii) if
on the annuity start date a guaranteed interest period for any Fixed Interest
Allocation does not end on or within 30 days of the annuity start date.

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

Fixed Account-121472                   4

<PAGE>

                                            N/365
                         ((1+I)/(1+J+.0025))      -1

Where,

     o    "I" is the Index Rate for a Fixed Interest Allocation on the first day
          of the guaranteed interest period;

     o    "J" is the Index Rate for a new Fixed Interest Allocation with a
          guaranteed interest period equal to the time remaining (rounded up to
          the next full year) in the guaranteed interest period; and

     o    "N" is the remaining number of days in the guaranteed interest period
          at the time of calculation.

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 the 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, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from the amount
surrendered, transferred or annuitized. In the event of a partial withdrawal,
transfer or annuitization, we will add or subtract any Market Value Adjustment
from the total amount withdrawn, transferred or annuitized in order to provide
the amount requested. If a negative Market Value Adjustment exceeds your
Contract value in the Fixed Interest Allocation, we will consider your request
to be a full surrender, transfer or annuitization of the Fixed Interest
Allocation.

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

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                                  SPECIAL FUNDS
--------------------------------------------------------------------------------

We use the term Special Funds in the discussion of the enhanced death benefit
options and the optional riders. The Special Funds currently include Fixed
Interest Allocations and certain variable subaccounts as described in your
Contract prospectus. The Company may, at any time, designate any new and/or
existing subaccount as a Special Fund with 30 days notice with respect to new
premiums added or transfers to such subaccount. Allocations to Special Funds
will not affect the death benefit that may be available under the earnings
multiplier benefit rider. Designation of a subaccount as a Special Fund may vary
by benefit. For example, a subaccount may be designated a Special Fund for
purposes of calculating a living benefit, but not a death benefit or for
calculating one death benefit and not another.

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

The Contract is described in another prospectus. This prospectus describes the
Fixed Account and the operations of any Fixed Interest Allocation under your
Contract.

     CONTRACT VALUE IN THE FIXED INTEREST ALLOCATIONS. On the contract date, the
Contract value in any Fixed Interest Allocation in which you are invested is
equal to the portion of the initial premium paid and designated for allocation
to the Fixed Interest Allocation. On each business day after the contract date,
we calculate the amount of Contract value in each Fixed Interest Allocation as
follows:

Fixed Account-121472                   5

<PAGE>

     (1)  We take the Contract value in the Fixed Interest Allocation at the end
          of the preceding business day.

     (2)  We credit a daily rate of interest on (1) at the guaranteed rate since
          the preceding business day.

     (3)  We add (1) and

     (4)  We subtract from (3) any transfers from that Fixed Interest
          Allocation.

     (5)  We subtract from (4) any withdrawals, and then subtract any contract
          fees (including any rider charges) and premium taxes.

Additional premium payments and transfers allocated to the Fixed Account will be
placed in a new Fixed Interest Allocation. The Contract value on the date of
allocation will be the amount allocated.Several examples which illustrate how
the Market Value Adjustment works are included in Appendix A.

CASH SURRENDER VALUE

The cash surrender value is the amount you receive when you surrender the
Contract. The cash surrender value will fluctuate daily based on the interest
credited to Fixed Interest Allocations, any Market Value Adjustment, and any
surrender charge. 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, and then we deduct any surrender charge, any charge for premium
taxes, the annual contract administrative fee (unless waived), and any optional
benefit rider charge, and any other charges incurred but not yet deducted.

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

Any time during the accumulation phase and before the death of the contract
owner, except under certain qualified contracts, you may withdraw all or part of
your money. Keep in mind that if you request a withdrawal for more than 90% of
the cash surrender value, we will treat it as a request to surrender the
Contract.

You need to submit to us a written request specifying the Fixed Interest
Allocations or subaccounts from which amounts are to be withdrawn, otherwise the
withdrawal will be made on a pro rata basis from all of the allocations and
subaccounts in which you are invested. If there is not enough Contract value in
the subaccounts, we will deduct the balance of the withdrawal from your Fixed
Interest Allocations starting with the guaranteed interest periods nearest their
maturity dates until we have honored your request. We will apply a Market Value
Adjustment to any withdrawal from your Fixed Interest Allocation taken more than
30 days before its maturity date. 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 payments
made.

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 Market Value Adjustment to any
regular withdrawal from a Fixed Interest Allocation that is taken more than 30
days before its maturity date.

SYSTEMATIC WITHDRAWALS

See the Contract prospectus for general information on Systematic Withdrawals.

Systematic withdrawals from Fixed Interest Allocations 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 interest earnings. Systematic withdrawals from
Fixed Interest

Fixed Account-121472                   6

<PAGE>

Allocations under the Fixed Dollar Systematic Withdrawal Feature are available
only in connection with Section 72(q) and 72(t) distributions. A Fixed Interest
Allocation may not participate in both the systematic withdrawal option and the
dollar cost averaging program at the same time.

     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 Market Value Adjustments. Systematic withdrawals
from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal
Feature are available only in connection with Section 72(q) and 72(t)
distributions. We will assess a Market Value Adjustment on the withdrawal date
if the withdrawal from a Fixed Interest Allocation exceeds your interest
earnings on the withdrawal date. We will adjust the amount withdrawn to include
any Market Value Adjustment so that the amount of each systematic withdrawal
remains fixed, unless you direct otherwise.

IRA WITHDRAWALS

See the Contract prospectus for general information on IRA Withdrawals.

An IRA withdrawal from a Fixed Interest Allocation 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" in the
Contract prospectus for more details.

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                        TRANSFERS AMONG YOUR INVESTMENTS
--------------------------------------------------------------------------------

You may transfer your Contract value among the subaccounts in which you are
invested and your Fixed Interest Allocations at the end of the free look period
until the annuity start date. See the Contract prospectus for general
information regarding transfers including transfers by third parties. We will
apply a Market Value Adjustment to transfers from a Fixed Interest Allocation
taken more than 30 days before its maturity date, unless the transfer is made
under the dollar cost averaging program. Keep in mind that transfers between
Special Funds and other investment portfolios may negatively impact your death
benefit or rider benefits.

If you allocate Contract value to an investment option that has been designated
as a Restricted Fund, your ability to transfer Contract value to the Restricted
Fund may be limited. A transfer to the Restricted Funds will not be permitted to
the extent that it would increase the Contract value in the Restricted Fund to
more than the applicable limits following the transfer. We do not limit
transfers from Restricted Funds. If the result of multiple reallocations is to
lower the percentage of total Contract value in the Restricted Fund, the
reallocation will be permitted even if the percentage of Contract value in the
Restricted Fund is greater than the limit.

Please be aware that the benefit we pay under an optional benefit rider may be
affected by certain transfers you make while the rider is in effect. Transfers,
including those involving Special Funds, may also affect your optional rider
base. See "The Annuity Contract -- Optional Riders" in the Contract prospectus.

Transfers will be based on values at the end of the business day in which the
transfer request is received at our Customer Service Center.

The minimum amount that you may transfer is $100 or, if less, your entire
Contract value held in a subaccount or a Fixed Interest Allocation.

Fixed Account-121472                   7

<PAGE>

DOLLAR COST AVERAGING FROM FIXED INTEREST ALLOCATIONS

You may elect to participate in our dollar cost averaging program if you have at
least $1,200 of Contract value in Fixed Account Interest Allocations with a
guaranteed interest period of 1 year or less. The Fixed Interest Allocations
serve as the source accounts from which we will, on a monthly basis,
automatically transfer a set dollar amount of money to other Fixed Interest
Allocations or contract investment portfolio subaccounts selected by you.

The dollar cost averaging program is designed to lessen the impact of market
fluctuation on your investment. Since we transfer the same dollar amount to
subaccounts each month, more units of a subaccount are purchased if the value of
its unit is low and fewer units are purchased if the value of its unit is high.
Therefore, a lower than average value per unit may be achieved over the long
term. However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities regardless of
fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.

You elect the dollar amount you want transferred under this program. Each
monthly transfer must be at least $100. You may change the transfer amount once
each contract year.

Transfers from a Fixed Interest Allocation under the dollar cost averaging
program are not subject to a Market Value Adjustment.

If you do not specify the subaccounts to which the dollar amount of the source
account is to be transferred, we will transfer the money to the subaccounts in
which you are invested on a proportional basis. The transfer date is the same
day each month as your contract date. If, on any transfer date, your Contract
value in a source account is equal or less than the amount you have elected to
have transferred, the entire amount will be transferred and the program will
end. You may terminate the dollar cost averaging program at any time by sending
satisfactory notice to our Customer Service Center at least 7 days before the
next transfer date. A Fixed Interest Allocation may not participate in the
dollar cost averaging program and in systematic withdrawals at the same time.

See "Dollar Cost Averaging" in the Contract prospectus for a discussion of
transferring to a Restricted Fund.

We may in the future offer additional subaccounts or withdraw any subaccount or
Fixed Interest Allocation to or from the dollar cost averaging program or
otherwise modify, suspend or terminate this program. Of course, such change will
not affect any dollar cost averaging programs in operation at the time.

--------------------------------------------------------------------------------
                                CHARGES AND FEES
--------------------------------------------------------------------------------
The Contract has insurance features and investment features, and there are
charges related to each. For the insurance features, the Company deducts a
mortality and expense risk charge, an asset-based administrative charge, and an
annual contract administrative charge of $40. You may also purchase optional
benefit riders, charges for which are deducted from your Contract value. We
deduct the mortality and expense risk charge and the asset-based administrative
charges daily directly from your Contract value in the subaccounts and in the
case of the earnings multiplier benefit rider from your Fixed Interest
Allocations, as well.

When deducting the other contract charges and rider charges; if the value in the
subaccounts is insufficient, the contract charges and rider charge will be
deducted from the Fixed Interest Allocations starting with the guaranteed
interest periods nearest their maturity dates until the charge has been paid and
the amount deducted may be subject to a Market Value Adjustment. See the
Contract prospectus for more information.

Fixed Account-121472                   8

<PAGE>

--------------------------------------------------------------------------------
                        DEATH BENEFIT AND OPTIONAL RIDERS
--------------------------------------------------------------------------------
Please refer to your Contract prospectus for descriptions of benefits and
optional riders under the Contract and the effect of your Fixed Interest
Allocations on those benefits and riders. For purposes of calculating the death
benefits and optional riders, certain investment portfolios and the Fixed
Account are designated as "Special Funds." Selecting a Special Fund may limit or
reduce the death benefit.

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

SUSPENSION OF PAYMENTS

We have the right to delay payment of amounts from a Fixed Interest Allocation
for up to 6 months.

--------------------------------------------------------------------------------
                                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. 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 material
adverse impact on the Company or Separate Account B.

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 consolidated financial statements of Golden American at December 31,
2000 and 1999 and for each of the three years in the period ended December 31,
2000 appearing in this prospectus or Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing in this prospectus or in the Registration Statement, and are included
or incorporated by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

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

For a general description of the federal income tax considerations associated
with the Contract please refer to the Contract prospectus. The "Federal Tax
Considerations" section of the Contract prospectus and does not purport to be
complete or to cover all tax situations. The discussion is not intended as tax
advice. You should consult your counsel or other competent tax advisers for more
complete information. The 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.

Fixed Account-121472                   9

<PAGE>


--------------------------------------------------------------------------------
         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 Period
                                          January 1,      For the Year     For the Year    For the Year       October 25,
                                         2001 through         Ended            Ended           Ended         1997 through
                                         September 30,    December 31,     December 31,    December 31,      December 31,
                                             2001             2000             1999            1998              1997
                                        --------------    ------------     ------------    ------------     --------------
<S>                                     <C>              <C>               <C>              <C>              <C>
Annuity and Interest
    Sensitive Life
    Product Charges.................    $     117,308    $      144,877    $     82,935     $     39,119     $      3,834
Net Income (Loss) before
    Federal Income Tax .............    $       5,513    $       32,862    $     19,737     $     10,353     $       (279)
Net Income (Loss)...................    $       3,444    $       19,180    $     11,214     $      5,074     $       (425)
Total Assets........................    $  12,031,210    $   11,852,677    $  9,392,857     $  4,754,623     $  2,446,395
Total Liabilities...................    $  11,270,516    $   11,235,540    $  8,915,008     $  4,400,729     $  2,219,082
Total Stockholder's Equity..........    $     760,694    $      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>



<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 condensed 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

THE FIRST NINE MONTHS OF 2001
COMPARED TO SAME PERIOD OF 2000

PREMIUMS

<TABLE>
<CAPTION>
                                                          PERCENTAGE      DOLLAR
FOR THE NINE MONTHS ENDED SEPTEMBER 30          2001        CHANGE        CHANGE         2000
                                              --------    ----------     --------      --------
                                                             (Dollars in millions)
<S>                                            <C>          <C>          <C>          <C>
Variable annuity premiums:
    Separate account........................   $ 303.9      (55.5)%      $(378.8)     $  682.7
    Fixed account...........................    1043.1      107.3          539.9         503.2
Total variable annuity premiums.............    1347.0       13.6          161.1       1,185.9
Fixed annuity premiums......................       1.9        --             1.9           --
Variable life premiums......................       1.1      (26.7)          (0.4)          1.5
                                              --------      -------       ------      --------
Total premiums..............................  $1,350.0       13.7%        $162.6      $1,187.4
                                              ========      =======       ======      ========
</TABLE>

For the Companies' variable and fixed 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 premiums net of reinsurance increased 13.6% during the first
nine months of 2001 compared to the same period of 2000. This increase is
primarily due to sales of the Guarantee product, a registered fixed annuity
product introduced in the last quarter of 2000. Sales for this product totaled
$463.0 million in the first nine months of 2001. Also contributing to the
increase is a decline of $0.1 billion in ceded variable annuity separate account
premiums to $1.6 billion for the first nine months of 2000. This is mainly due
to the effects of modified coinsurance agreements. Offsetting these increases is
a reduction of $574.4 million in the sales of variable annuity separate account
products in the first nine months of 2001 as compared to the first nine months
of 2000.



<PAGE>

During the first nine months of 2001, First Golden began selling two fixed
annuity products, a Flex Annuity and a Multi-Year Guarantee Annuity. Premiums,
net of reinsurance, for variable products from a significant broker/dealer
having at least ten percent of total sales for the nine months ended September
30, 2001 totaled $132.8 million, or 10% of total premiums ($139.3 million, or
12% from a significant broker/dealer for the same period in 2000). Gross
premiums for variable products from a significant broker/dealer having at least
ten percent of total sales for the nine months ended September 30, 2001, totaled
$313.2 million, or 11% of total gross premiums ($659.9 million, or 22%, from two
significant broker/dealers for the same period in 2000).

REVENUES

<TABLE>
<CAPTION>
                                                          PERCENTAGE      DOLLAR
FOR THE NINE MONTHS ENDED SEPTEMBER 30          2001        CHANGE        CHANGE         2000
                                              --------    ----------     --------      --------
                                                             (Dollars in millions)
<S>                                            <C>          <C>           <C>          <C>
Annuity and interest sensitive life
   product charges.........................   $117.3         12.9%         $13.4        $103.9
Management fee revenue.....................     18.7         11.3            1.9          16.8
Net investment income......................     67.0         39.9           19.1          47.9
Realized losses on investments.............     (1.5)       (66.7)           3.0          (4.5)
                                              ------         -----         -----        ------
                                              $201.5         22.8%         $37.4        $164.1
                                              ======         =====         =====        ======
</TABLE>

Total revenues increased 22.8% in the first nine months of 2001 from the same
period in 2000. Annuity and interest sensitive life product charges increased
12.9% in the first nine months of 2001 due to additional fees earned from the
higher average block of business under management in the variable separate
accounts and higher surrender charges. Golden American provides certain
managerial and supervisory services to Directed Services, Inc. ("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 $17.3 million and $15.6
million for the first nine months of 2001 and 2000, respectively. This increase
was due to the increasing average assets in the variable separate accounts.

Net investment income increased 39.9% in the first nine months of 2001 due to a
growth in invested assets during 2001 mainly related to the introduction of the
Guarantee product. The Companies had $1.5 million of realized losses on the sale
of investments in the first nine months of 2001, compared to losses of $4.5
million in the same period of 2000.

EXPENSES

Total insurance benefits and expenses increased $60.3 million, or 49.2%, to
$181.5 million in the first nine months of 2001 from the same period in 2000.
Interest credited to account balances decreased $22.6 million, or 15.4%, to
$124.1 million in the first nine months of 2001. The premium credit on the
Premium Plus product decreased $31.7 million to $73.9 million at September 30,
2001 due to a decrease in variable annuity sales of the separate account
product. This decrease was partially offset by an increase in interest credited
due to higher average account balances associated with the Companies' fixed
account options, mainly due to the introduction of the Guarantee product in the
fourth quarter of 2000. The guaranteed benefits reserve change was $19.6 million
for the nine months ended September 30, 2001 mainly due to the downturn in the
equity markets.

Commissions were nearly unchanged from September 30, 2000 at $160.8 million for
the nine months ended September 30, 2001. This is consistent with relatively
stable gross premiums for the nine months ended September 30, 2001 and 2000,
despite a change in the product sales mix. Insurance taxes, state licenses, and
fees increased $1.0 million, or 24.3%, to $5.0 million in the first nine months
of 2001. Changes in commissions and insurance taxes, state licenses, and fees
are generally related to changes in the level and mix or composition of fixed
and variable product sales. Most costs incurred as the result of sales have been
deferred, thus having very little impact on current earnings.



<PAGE>

General expenses increased $23.4 million, or 38.2%, to $84.6 million in the
first nine months of 2001. 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. Contributing to this increase in general expenses
are additional cost allocations during the first nine months of 2001. The
increase in general expenses was partially offset by reimbursements received
from DSI, Equitable Life Insurance Company of Iowa ("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 the Companies.

During the first nine months of 2001 and 2000, the value of purchased insurance
in force ("VPIF") was adjusted to increase amortization by $1,116,000 and
$687,000, respectively, to reflect changes in the assumptions related to the
timing of estimated gross profits. 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 September 30, 2001 is $0.8
million for the remainder of 2001, $2.9 million in 2002, $2.7 million in 2003,
$2.4 million in 2004, $1.9 million in 2005, and $1.4 million in 2006. Actual
amortization may vary based upon changes in assumptions and experience.

Amortization of deferred policy acquisition costs ("DPAC") decreased $9.3
million, or 18.8%, in the first nine months of 2001. The decrease in the
amortization was mainly due to an increase in the amount of deferred costs that
have been offset due to the modified coinsurance agreement entered into during
the second quarter of 2000. Deferred policy acquisition costs decreased $27.7
million, or 31.6%, for the nine months ended September 30, 2001. The decline in
the deferred policy acquisition costs was mainly due to a lower deferral of the
premium credit on the Premium Plus product.

Expenses and charges reimbursed to Golden American under modified coinsurance
agreements decreased from $220.2 million for the first nine months in 2000 to
$194.0 million during the first nine months in 2001. This reimbursement is
primarily due to a modified coinsurance agreement which was entered into during
the second quarter of 2000, with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued after
January 1, 2000, excluding those with an interest rate guarantee. Under this
reinsurance agreement, $192.5 million and $214.7 in expenses and charges were
reimbursed during the first nine months of 2001 and 2000, respectively. This
reimbursement offset deferred policy acquisition costs and non-deferrable costs
related to policies reinsured under this agreement.

Interest expense decreased 3.6%, or $0.5 million, to $14.4 million in the first
nine months of 2001. Interest expense on a $25 million surplus note issued
December 1996 and expiring December 2026 was $1.5 million for the first nine
months of 2001 and 2000. Interest expense on a $60 million surplus note issued
in December 1998 and expiring December 2028 was $3.3 million for the first nine
months of 2001 and 2000, respectively. Interest expense on a $75 million surplus
note, issued September 1999 and expiring September 2029 was $4.4 million for the
first nine months of 2001 and 2000, respectively. Interest expense on a $50
million surplus note, issued December 1999 and expiring December 2029 was $3.1
million for the first nine months of 2001 and 2000. Interest expense on a $35
million surplus note issued December 1999 and expiring December 2029 was $2.1
million for the first nine months of 2001 and $2.3 million in 2000. Golden
American also paid $25,000 in 2001 and $0.4 million in 2000 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 $117,000 and $36,000 for the first nine months of 2001 and 2000,
respectively.

INCOME

Net income was $3.4 million for the first nine months of 2001, a decrease of
$14.7 million, or 81.0% from the same period of 2000.

Comprehensive income for the first nine months of 2001 was $12.6 million, a
decrease of $9.2 million from comprehensive income of $21.8 million in the same
period of 2000.



<PAGE>

Net loss on a statutory basis was $206.8 million and $6.0 for the nine months
ended September 30, 2001 and 2000, respectively. This decrease is mainly due to
increased reserves related to the downturn in the equity markets.

2000 COMPARED TO 1999

PREMIUMS
<TABLE>
<CAPTION>

                                                           PERCENTAGE        DOLLAR
FOR THE YEAR ENDED DECEMBER 31                 2000          CHANGE          CHANGE         1999
                                             --------      ----------        ------         ----
                                                              (Dollars in millions)
<S>                                          <C>             <C>           <C>            <C>
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
                                             ========       =======        =========      ========
</TABLE>

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. 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
<TABLE>
<CAPTION>

                                                           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 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.

<PAGE>

Golden American provides certain managerial and supervisory services to 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.

EXPENSES
<TABLE>
<CAPTION>

                                                                           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


<PAGE>

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 DPAC, 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 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 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.



<PAGE>

1999 COMPARED TO 1998

PREMIUMS
<TABLE>
<CAPTION>

                                                      PERCENTAGE      DOLLAR
FOR THE YEAR ENDED DECEMBER 31            1999          CHANGE        CHANGE          1998
                                        --------      ----------      ------          ----
                                                         (Dollars in millions)
<S>                                     <C>             <C>           <C>           <C>
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
                                        ========        ======        ========      ========
</TABLE>

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 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
<TABLE>
<CAPTION>

                                                               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)       93.3          (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.



<PAGE>

EXPENSES
<TABLE>
<CAPTION>
                                                                           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)
      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
    Expenses and charges reimbursed under
        modified coinsurance agreements..............        (9.2)             64.3              (3.6)           (5.6)
                                                          -------              -----           ------          ------
                                                          $ 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 DPAC, 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 and increased
$0.2 million as a result of an adjustment to the merger costs. During 1998,



<PAGE>

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 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 Life.

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 increased 76.5% and 72.4%, respectively, during
the first nine months of 2001 after decreasing 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 increase in the carrying
value of the Companies' investment portfolio was due mainly to net purchases, as
well as changes in unrealized appreciation and depreciation of fixed maturities.
Growth in the cost basis of the Companies' investment portfolio resulted from
the investment of premiums from the sale of the Companies' fixed account options
due mainly to the introduction of the Guarantee product. The Companies manage
the growth of insurance operations in order to maintain adequate capital ratios.
To support the fixed account options of the Companies' insurance products, cash
flow was invested primarily in fixed maturities and mortgage loans on real
estate.

At September 30, 2001 and December 31, 2000, the Companies investments had a
yield of 6.3% and 6.7%, respectively. The Companies estimate the total
investment portfolio, excluding policy loans, had a fair value approximately
equal to 102.1% and 99.3% of amortized cost value at September 30, 2001 and
December 31, 2000, respectively.

Fixed Maturities: At September 30, 2001, the Companies had fixed maturities with
an amortized cost and an estimated fair value of $1.3 billion. The Companies
classify 100% of securities as available for sale. Net unrealized appreciation
of fixed maturities of $27.6 million was comprised of gross appreciation of
$36.1 million and gross depreciation of $8.5 million. Net unrealized holding
gains on these securities, net of adjustments for VPIF, DPAC, and deferred
income taxes of $5.1 million, were included in stockholder's equity at September
30, 2001.


<PAGE>

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 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 Rating Services ("Standard & Poor's") ($593.0
million or 45.6% at September 30, 2001 and $519.9 million or 65.1% at December
31, 2000), that are rated BBB+ to BBB- by Standard & Poor's ($297.7 million or
22.9% at September 30, 2001 and $117.9 million or 14.7% at December 31, 2000),
and below investment grade securities, which are securities issued by
corporations that are rated BB+ and lower by Standard & Poor's ($105.0 million
or 8.0% at September 30, 2001 and $53.5 million or 6.7% at December 31, 2000).
Securities not rated by Standard & Poor's had a National Association of
Insurance Commissioners ("NAIC") rating of 1, 2, 3, 4, 5, or 6 ($306.1 million
or 23.5% at September 30, 2001 and $106.9 million or 13.4% at December 31,
2000). The Companies' fixed maturity investment portfolio had a combined yield
at amortized cost of 6.7% and 6.8% at September 30, 2001 and December 31, 2000,
respectively.

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 September 30, 2001, the amortized cost value of the Companies' total
investments in below investment grade securities, excluding mortgage-backed
securities, was $98.1 million, or 5.6%, of the Companies' investment portfolio
($65.1 million, or 6.4% at December 31, 2000). The Companies do not expect the
percentage of the portfolio invested in below investment grade securities,
excluding mortgage-backed securities, to exceed 10% of the investment portfolio.
At September 30, 2001, the yield at amortized cost on the Companies' below
investment grade portfolio was 8.5% compared to 6.8% for the Companies'
investment grade corporate bond 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 $92.5 million, or 94.3% of amortized cost value, at September 30, 2001
($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.

During the first nine months of 2001 and the year ended December 31, 2000, fixed
maturities designated as available for sale with a combined amortized cost of
$406.3 million and $211.3 million, respectively, were sold, called, or repaid by
their issuers. In total, net pre-tax gains from sales, calls, and repayments of
fixed



<PAGE>

maturities amounted to $1.4 million in the first nine months to September
2001. During the first nine months of 2001, Golden American determined that the
carrying value of four impaired bonds exceeded their estimated net realizable
value. As a result, at September 30, 2001, Golden American recognized a total
pre-tax loss of approximately $1,279,000 to reduce the carrying value of the
bonds to their net realizable value of $565,000. For year ended December 31,
2000, net pre-tax losses from sales, calls, and repayment of fixed maturities
amounted to $6.1 million, 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 with a cost of $8.6 million were redeemed
during the first nine months of 2001 resulting in a realized loss of $1.6
million. At September 30, 2001, the Companies owned equity securities with a
cost of $66,000. As of December 31, 2000, 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 12.3% of
the Companies' investment portfolio at September 30, 2001. Mortgages outstanding
were $215.1 million at September 30, 2001 with an estimated fair value of $223.8
million. Mortgages outstanding at amortized cost were $99.9 million at December
31, 2000 with an estimated fair value of $100.5 million. The Companies' mortgage
loan portfolio includes 60 loans with an average size of $2.5 million at
September 30, 2001. 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 Ohio (20% in 2001 and 4% in
2000) and California (15% in 2001 and in 2000). There are no other
concentrations of mortgage loans on real estate in any state exceeding ten
percent at September 30, 2001 and December 31, 2000. Mortgage loans on real
estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (22% in 2001 and 29% in 2000),
industrial buildings (18% in 2001 and 11% in 2000), retail facilities (20% in
2001 and 18% in 2000), and multi-family apartments (36% in 2001 and 10% in
2000). At September 30, 2001 and December 31, 2000, the yield on the Companies'
mortgage loan portfolio was 7.0% and 7.3%, respectively.

Mortgage loans on real estate represent 9.9% of the Companies' investment
portfolio at December 21, 2000. Mortgages outstanding at amortized cost were
$99.9 million at December 31, 2000 with an 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 September 30, 2001 and 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 $48.4 million during the first
nine months of 2001 and $19.1 million during 2000, due largely to an increase of
$45.9 million during the first nine months of 2001 and $14.6 million during 2000
in reinsurance reserves from an intercompany reinsurance agreement between
Golden American and Security Life of Denver International Limited. On December
28, 2000, effective



<PAGE>

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. Negative equity market returns during 2001 led to the increase in the
reinsurance reserves under this agreement. The remainder of the increase in 2000
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 were $10,000 and $38.8 million at September 30, 2001
and December 31, 2000, respectively. At December 31, 2000, the companies had a
receivable of $35.0 million related to a capital contribution from its parent
Equitable of Iowa. Most of the remaining balance at December 31, 2000 was due to
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 acquisition
of Equitable of Iowa and its subsidiaries by ING Groep N.V. ("ING") on October
24, 1997 (the "acquisition date"). The Companies' previous balances of DPAC and
VPIF were eliminated as of the acquisition date, and an asset representing VPIF
was established for all policies in force at the acquisition 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. Any expenses which
vary directly with the sales of the Companies' products are deferred and
amortized. At September 30, 2001, the Companies had DPAC and VPIF balances of
$635.7 million and $17.3 million, respectively ($635.1 million and $25.9
million, respectively, at December 31, 2000). During the first nine months of
2001 and 2000, VPIF was adjusted to increase amortization by $1,116,000 and by
$687,000, respectively, to reflect changes in the assumptions related to the
timing of estimated gross profits.

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 September 30, 2001 and December
31, 2000 was $14.8 million and $11.9 million, respectively.

Other assets increased $17.0 million during first nine months of 2001 and $29.5
million during 2000, due mainly to increases in the receivable for securities
sold.

At September 30, 2001, the Companies had $9.2 billion of separate account assets
compared to $9.8 billion at December 31, 2000. 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 September 30, 2001, the
Companies had total assets of $12.0 billion, relatively unchanged from December
31, 2000. At December 31, 2000, the Companies had total assets of $11.9 billion,
a 26.2% increase from December 31, 1999.

LIABILITIES. During the nine months ended September 30, 2001, future policy
benefits for annuity and interest sensitive life products increased $604.9
million, or 56.9%, to $1.7 billion reflecting net sales of the Companies' fixed
account net of transfers to the separate account options.

Separate account liabilities decreased $587.2 million, or 6.0% to $9.2 billion
at September 30, 2001. Net contributions to the separate account were more than
offset by a decrease in separate account liabilities resulting from the negative
equity market returns.

During the year ended December 31, 2000, 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,

<PAGE>

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 Life, which matures on December 17,
2026. As a result of the merger of Equitable Life into EIC, the surplus note is
now payable to EIC.

Amounts due to affiliates decreased $10.5 million or 52.6% to $9.4 million
during the first nine months of 2001. This is mainly due to the partial cash
settlement of a liability for the modified coinsurance agreement with Equitable
Life.

During the year ended December 31, 2000, 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 $26.0 million or 37.5% to $95.4 million during the
first nine months of 2001 due to the increase in the payable for securities
purchased. 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.

The Companies total liabilities increased $35 million, during the first nine
months 2001 and totaled $11.3 billion at September 30, 2001. 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 $131.0 million, or
22.4% from December 31, 2000 due to capital contributions from the Parent.
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 $190.4 million in the first nine
months of 2001 compared to net cash provided by operating activities of $142.9
million in the same period of 2000. 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



<PAGE>

result primarily from commissions and other deferrable expenses related to the
continued growth in the variable annuity products. For the nine months ended
September 30, 2001 and 2000, negative operating cash flows have been offset by
the effects of a modified coinsurance agreement entered into during the second
quarter of 2000 with Equitable Life. This resulted in a net cash settlement of
$192.5 million in the first nine months of 2001. For the nine months ended
September 30, 2000, this modified coinsurance resulted in a net cash settlement
of $214.7 million. Also contributing to the increase in net cash provided by
operating activities for the first nine months of 2001 as compared to 2000 is an
increase in reserves for guaranteed benefits due to the negative equity market
returns. 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 used in investing activities was $597.3 million during the first nine
months of 2001 compared to net cash provided by investing activities of $70.5
million in the same period of 2000. This increase in the net cash used in
investing activities is primarily due to net purchases of fixed maturities and
mortgage loans on real estate during the first nine months of 2001 versus net
sales in 2000. Net purchases of fixed maturities reached $504.1 million during
the first nine months of 2001 versus net sales of $53.1 million in the same
period of 2000. Net purchases of mortgage loans on real estate reached $115.4
million in the first nine months of 2000 versus net purchases of $4.7 million
during the same period in 2000. These investment purchases were mainly due to an
increase in sales of the Companies fixed account options, primarily from the
introduction of the Guarantee product in the fourth quarter of 2000.

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 provided by financing activities was $526.9 million during the first
nine months of 2001 compared to net cash used in financing activities of $162.4
million during the same period in 2000. In the first nine months of 2001, net
cash provided by financing activities was positively impacted by net fixed
account deposits of $965.3 million compared to $379.6 million in the same period
of 2000 due primarily to the introduction of the Guarantee product in the fourth
quarter of 2000. In addition, there was a decrease of $49.8 million in net
reallocations to Separate Accounts. In the first nine months of 2001, net cash
provided by financing activities was positively impacted by an increase in
capital contributions from the Parent. The Companies received $131.0 million and
$80.0 million of capital contributions from the Parent in the first nine months
of 2001 and 2000, respectively.

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. This revolving note payable was amended and restated in
April 2001 with an expiration date of May 31, 2002. Management believes these
sources of liquidity are adequate to meet the Companies' short-term cash
obligations.



<PAGE>

Based on current trends, the Companies expect to continue to use
net cash in operating activities before reinsurance. 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. Currently, Golden American occupies
125,000 square feet of leased space. From January 1, 2001 to September 30, 2001,
First Golden's principal office was located in New York, New York, where certain
of the companies' records were maintained. The 2,568 square feet of office space
is leased through 2001. As of October 1, 2001, First Golden's principal office
moved to Woodbury, New York.

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 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 June 30, 2001, Golden American had reinsurance treaties with
five unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. 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 $25,000,000
related to this agreement. Effective September 30, 2001, the agreement was
amended, and the letter of credit amount was revised to $60 million.



<PAGE>

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.

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
September 30, 2001 levels, variable separate account funds, which represent 85%
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 September 30, 2001 levels, the
remaining 15% 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.



<PAGE>

       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-dealer 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
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") $0.2 million for the first six months of 2001, $1.3
million for 2000, and $1.3 million for 1999 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 $17.2 million, $21.3 million and $10.1 million for the first six months of
2001 and 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 first nine months of 2001 and for the years ended December
31, 2000 and 1999, Golden American and First Golden incurred fees of $2.9
million, $2.5 million and $2.2 million, respectively, under this agreement.



<PAGE>

Since 1997, Golden American has provided certain advisory, computer and other
resources and services to Equitable Life. Revenues for these services totaled
$4.0 million for the first nine months of 2001 and $6.2 million for 2000 and
$6.1 million for 1999.

First Golden provides resources and services to DSI. Revenues for these services
totaled $0.1 million for the first nine months of 2001 and $0.2 million for 2000
and $0.4 for 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 the
first nine months of 2001 and $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 $0.3 million in the first
nine months of 2001 and $0.6 million for 2000 and $0.5 million for 1999.

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 $0.2 million for the first
nine months of 2001 and $0.3 million for 2000 and $0.2 million for 1999.

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 $0.08 million for the first nine
months of 2001 and $0.1 million for 2000 and $0.1 million for 1999.

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, 2001
and for 2000, Golden American incurred a fee of $12,000 and $7,000,
respectively, under this agreement. No annual fee was paid in 1999.

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 first nine months of 2001 and the years 2000
and 1999, commissions paid by Golden American to DSI (including commissions paid
by First Golden) aggregated $160.0 million, $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 Life 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


<PAGE>

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 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 (45)          Chief Executive Officer and Director
Chris D. Schreier (45)            President
Barnett Chernow (50)              President and CEO, Investment Products Group
Myles R. Tashman (58)             Executive Vice President, General Counsel and
                                     Assistant Secretary
Wayne R. Huneke (50)              Director and Chief Financial Officer
Thomas J. McInerney (45)          Director
Mark A. Tullis (46)               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 (44)           Executive Vice President and Chief Actuary
David S. Pendergrass (41)         Vice President and Treasurer
David L. Jacobson (52)            Senior Vice President and Assistant Secretary
William L. Lowe (37)              Senior Vice President
Steven G. Mandel (42)             Senior Vice President and Chief Information
                                     Officer
Gary F. Haynes (56)               Senior Vice President



<PAGE>


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. From 1998 to 2001, Mr. Chernow served as President of Golden
American and First Golden. 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.

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.



<PAGE>

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. 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. 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.

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.

These  officers  serve other roles to affiliated  companies  and these  salaries
include compensation for these services.

<PAGE>

<TABLE>
<CAPTION>
                                                                                  LONG-TERM
                                            ANNUAL COMPENSATION                 COMPENSATION
                                       ---------------------------        ---------------------------
                                                                           RESTRICTED      SECURITIES
NAME AND                                                                  STOCK AWARDS     UNDERLYING       ALL OTHER
PRINCIPAL POSITION           YEAR        SALARY          BONUS/1/         OPTIONS           OPTIONS       COMPENSATION/2/
------------------           ----      -----------     -----------        ------------     ----------     ---------------
<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                1998      $   173,870     $     32,152            3,500
Chief 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.



<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                         POTENTIAL
                                           % OF TOTAL                               REALIZABLE VALUE AT
                            NUMBER OF        OPTIONS                                  ASSUMED ANNUAL
                           SECURITIES      GRANTED TO                                 RATES OF STOCK
                           UNDERLYING       EMPLOYEES    EXERCISE                   PRICE APPRECIATION
                             OPTIONS        IN FISCAL     OR BASE    EXPIRATION      FOR OPTION TERM/3/
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.


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

For the Nine Months Ended September 30, 2001







<PAGE>


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

<TABLE>
<CAPTION>

                                                                             September 30, 2001       December 31, 2000
                                                                             ------------------       -----------------
<S>                                                                            <C>                      <C>
ASSETS
Investments:
   Fixed maturities, available for sale, at fair value
     (cost: 2001 - $1,301,768; 2000 - $798,751)........................        $    1,329,414           $     792,578
   Equity securities, at fair value
   (cost: 2001 - $66; 2000 - $8,611)...................................                    52                   6,791
   Mortgage loans on real estate.......................................               215,059                  99,916
   Policy loans........................................................                14,454                  13,323
   Short-term investments..............................................                    --                  17,102
                                                                               --------------           -------------
Total investments......................................................             1,558,979                 929,710

Cash and cash equivalents..............................................               272,826                 152,880
Reinsurance recoverable................................................                21,891                  19,331
Reinsurance recoverable from affiliate.................................                60,500                  14,642
Due from affiliates....................................................                    10                  38,786
Accrued investment income..............................................                18,326                   9,606
Deferred policy acquisition costs......................................               635,737                 635,147
Value of purchased insurance in force .................................                17,286                  25,942
Current income taxes recoverable.......................................                     3                     511
Deferred income tax asset..............................................                 4,757                   9,047
Property and equipment, less allowances for depreciation of
   $9,337 in 2001 and $5,638 in 2000...................................                11,248                  14,404
Goodwill, less accumulated amortization of $14,798 in 2001
   and $11,964 in 2000.................................................               136,329                 139,163
Other assets...........................................................                48,989                  32,019
Separate account assets................................................             9,244,329               9,831,489
                                                                               --------------           -------------
Total assets...........................................................        $   12,031,210           $  11,852,677
                                                                               ==============           =============

LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
   Future policy benefits:
     Annuity and interest sensitive life products......................        $    1,667,756           $   1,062,891
     Unearned revenue reserve..........................................                 6,436                   6,817
   Other policy claims and benefits....................................                   810                      82
                                                                               --------------           -------------
                                                                                    1,675,002               1,069,790

Surplus notes..........................................................               245,000                 245,000
Revolving note payable.................................................                 1,400                      --
Due to affiliates......................................................                 9,429                  19,887
Other liabilities......................................................                95,356                  69,374
Separate account liabilities...........................................             9,244,329               9,831,489
                                                                               --------------           -------------
                                                                                   11,270,516              11,235,540
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..........................................               714,640                 583,640
   Accumulated other comprehensive income (loss).......................                 5,067                  (4,046)
   Retained earnings ..................................................                38,487                  35,043
                                                                               --------------           -------------
Total stockholder's equity.............................................               760,694                 617,137
                                                                               --------------           -------------
Total liabilities and stockholder's equity.............................        $   12,031,210           $  11,852,677
                                                                               ==============           =============
</TABLE>



<PAGE>
<TABLE>

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

                                                                   For the Nine            For the Nine
                                                                   Months Ended            Months Ended
                                                                September 30, 2001      September 30, 2000
<S>                                                                <C>                     <C>
                                                                ------------------      ------------------
Revenues:
   Annuity and interest sensitive life product charges.......      $   117,308              $  103,923
   Management fee revenue....................................           18,675                  16,827
   Net investment income.....................................           67,020                  47,896
   Realized losses on investments............................           (1,529)                 (4,546)
                                                                   -----------              ----------
                                                                       201,474                 164,100

Insurance benefits and expenses:
 Annuity and interest sensitive life benefits:
   Interest credited to account balances.....................          124,061               146,672
   Guaranteed benefits reserve change........................           16,615                      --
   Benefit claims incurred in excess of account balances.....           (5,557)                  1,680
 Underwriting, acquisition, and insurance expenses:
   Commissions...............................................          160,752               160,105
   General expenses..........................................           84,551                  61,194
   Insurance taxes, state licenses, and fees.................            5,030                   4,047
     Policy acquisition costs deferred.......................          (60,031)                (87,753)
     Amortization:
       Deferred policy acquisition costs.....................           40,214                  49,527
     Value of purchased insurance in force...................            4,097                   3,181
     Goodwill................................................            2,834                   2,834
   Expense and charges reimbursed under modified
      coinsurance agreements                                          (194,043)               (220,249)
                                                                   -----------              ----------
                                                                       181,523                 121,238
Interest expense.............................................           14,438                  14,976
                                                                   -----------              ----------
                                                                       195,961                 136,214
                                                                   -----------              ----------
Income before income taxes...................................            5,513                  27,886

Income taxes.................................................            2,069                   9,802
                                                                   -----------              ----------
Net income...................................................      $     3,444              $   18,084
                                                                   ===========              ==========
</TABLE>
                             See accompanying notes.



<PAGE>

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

<TABLE>
<CAPTION>
                                                                   For the Nine            For the Nine
                                                                   Months Ended            Months Ended
                                                                September 30, 2001      September 30, 2000
                                                                ------------------      ------------------
<S>                                                                <C>                     <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES...................       $     190,373           $    142,933

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
   Fixed maturities - available for sale....................             406,428                158,731
   Equity securities........................................               6,956                  5,196
   Mortgage loans on real estate............................             126,940                  5,118
   Policy loans - net.......................................                  --                    837
   Short-term investments - net.............................              17,102                 17,880
                                                                   -------------           ------------
                                                                         557,426                187,762

Acquisition of investments:
   Fixed maturities - available for sale....................            (910,534)              (105,606)
   Mortgage loans on real estate............................            (242,357)                (9,786)
   Policy loans - net.......................................              (1,131)                    --
                                                                   -------------           ------------
                                                                      (1,154,022)              (115,392)
Net purchases of property and equipment.....................                (745)                (1,898)
Issuance of reciprocal loan agreement receivables...........                  --                (16,900)
Receipt of repayment of reciprocal loan agreement
   receivables..............................................                  --                 16,900
                                                                   -------------           ------------
Net cash provided by(used in)  investing activities.........            (597,341)                70,472

FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement borrowings..........              29,300                177,900
Repayment of reciprocal loan agreement borrowings...........             (29,300)              (177,900)
Proceeds from revolving note payable........................               1,400                 66,100
Repayment of revolving note payable.........................                  --                (67,500)
Receipts from annuity and interest sensitive life
   policies credited to account balances....................           1,074,755                506,412
Return of account balances on annuity
   and interest sensitive life policies.....................            (109,462)              (126,803)
Net reallocations to Separate Accounts......................            (570,779)              (620,568)
Contribution from parent ...................................             131,000                 80,000
                                                                   -------------           ------------
Net cash provided by (used in) financing activities.........             526,914               (162,359)
                                                                   -------------           ------------

Increase  in cash and cash equivalents......................             119,946                 51,046

Cash and cash equivalents at beginning of period............             152,880                 76,690
                                                                   -------------           ------------

Cash and cash equivalents at end of period..................       $     272,826           $    127,736
                                                                   =============           ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for
   Interest.................................................       $      14,949           $     18,068
   Taxes....................................................       $           1           $         28

</TABLE>
                             See accompanying notes.



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               September 30, 2001

1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. All adjustments
were of a normal recurring nature, unless otherwise noted in Management's
Discussion and Analysis and the Notes to Financial Statements. Operating results
for the nine months ended September 30, 2001 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2001. These
financial statements should be read in conjunction with the financial statements
and related footnotes included in the Golden American Life Insurance Company's
annual report on Form 10-K for the year ended December 31, 2000.

CONSOLIDATION

The condensed 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 with
Golden American, collectively, the "Companies"). All significant intercompany
accounts and transactions have been eliminated.

ORGANIZATION

Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. ("EIC" or the "Parent"). EIC is an indirect wholly owned subsidiary of ING
Groep N.V., a global financial services holding company based in The
Netherlands.

SIGNIFICANT ACCOUNTING POLICIES

New Accounting Standards: As of January 1, 2001, the Companies adopted FAS No.
133, Accounting for Derivative Instruments and Hedging Activities, as amended
and interpreted by FAS No. 137, Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133,
FAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an Amendment of FASB Statement No. 133, and certain FAS No. 133
implementation issues. This standard, as amended, requires companies to record
all derivatives on the balance sheet as either assets or liabilities and measure
those instruments at fair value. The manner in which companies are to record
gains or losses resulting from changes in the fair values of those derivatives
depends on the use of the derivative and whether it qualifies for hedge
accounting.

Adoption of FAS No. 133 did not have a material effect on the Companies'
financial position or results of operations given the Companies' limited
derivative and embedded derivative holdings.

The Companies chose to elect a transition date of January 1, 1999 for embedded
derivatives. Therefore, only those derivatives embedded in hybrid instruments
issued, acquired or substantively modified by the entity on or after January 1,
1999 are recognized as separate assets or liabilities. The cumulative effect of
the accounting change upon adoption was not material.

Accounting for Derivative Instruments and Hedging Activities: The Companies may
from time to time utilize various derivative instruments to manage interest rate
and price risk (collectively, market risk). The Companies have appropriate
controls in place, and financial exposures are monitored and managed by the
Companies as an integral part of their overall risk management program.
Derivatives are recognized on the balance sheet at their fair value.

The Companies occasionally purchase a financial instrument that contains a
derivative instrument that is "embedded" in the instrument. The Companies'
insurance products are also reviewed to determine whether they contain an
embedded derivative. The Companies assess whether the economic characteristics
of the


<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               September 30, 2001

1.  BASIS OF PRESENTATION (continued)
embedded derivative are clearly and closely related to the economic
characteristics of the remaining component of the financial instrument or
insurance product (i.e., the host contract) and whether a separate instrument
with the same terms as the embedded instrument would meet the definition of a
derivative instrument. When it is determined that the embedded derivative
possesses economic characteristics that are not clearly and closely related to
the economic characteristics of the host contract and that a separate instrument
with the same terms would qualify as a derivative instrument, the embedded
derivative is separated from the host contract and carried at fair value. In
cases where the host contract is measured at fair value, with changes in fair
value reported in current period earnings, or the Companies are unable to
reliably identify and measure the embedded derivative for separation from its
host contract, the entire contract is carried on the balance sheet at fair value
and is not designated as a hedging instrument.

Pending Accounting Standards: In June 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards No. 141, "Business
Combinations", and No. 142, "Goodwill and Other Intangible Assets", effective
for fiscal years beginning after December 15, 2001. Under the new rules,
goodwill and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives. The Companies are required to adopt the new rules effective
January 1, 2002. The Companies are evaluating the impact of the adoption of
these standards and have not yet determined the effect of adoption on their
financial position and results of operations.

STATUTORY

Net loss for Golden American as determined in accordance with statutory
accounting practices was $206,801,000 and $6,017,000 for the nine months ended
September 30, 2001 and 2000, respectively. Total statutory capital and surplus
was $323,288,000 at September 30, 2001 and $406,923,000 at December 31, 2000.

The National Association of Insurance Commissioners has revised the Accounting
Practices and Procedures Manual, the guidance that defines statutory accounting
principles. The revised manual was 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 has resulted in changes to the accounting practices that the
Companies use to prepare their statutory-basis financial statements. The impact
of these changes to the Companies' statutory-basis capital and surplus as of
January 1, 2001 was not significant.

RECLASSIFICATIONS

Certain amounts in the prior period financial statements have been reclassified
to conform to the September 30, 2001 financial statement presentation.

2.  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. During the third quarters of 2001 and 2000, total comprehensive
income (loss) for the Companies amounted to $(4.8) million and $14.8 million,
respectively, and $12.6 million and $21.8 million for the nine months ended
September 30, 2001 and 2000, respectively. Other comprehensive income (loss)
excludes net investment gains (losses) included in net income which merely
represent transfers from unrealized to realized gains and losses. These amounts
totaled $231,000 and $(834,000) during the third quarters of 2001 and 2000,
respectively, and $45,000 and $(1.4) million for the nine months ended September
30, 2001 and 2000, respectively. Such amounts, which have been measured through
the date of sale, are net of income taxes and adjustments for the value of
purchased insurance in



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

2.  COMPREHENSIVE INCOME (continued)
force and deferred policy acquisition costs totaling $160,000 and $(1,080,000)
for the third quarters of 2001 and 2000, respectively, and $56,000 and
$(3,121,000) for the nine months ended September 30, 2001 and 2000,
respectively.

3.  INVESTMENTS

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
September 30, 2001 and December 31, 2000. Fixed maturities included investments
in basic industrials (63% in 2001, 29% in 2000), conventional mortgage-backed
securities (10% in 2001, 20% in 2000), financial companies (8% in 2001, 14% in
2000), and other asset-backed securities (1% in 2001, 20% in 2000). Mortgage
loans on real estate have been analyzed by geographical location with
concentrations by state identified as Ohio (20% in 2001 and 4% in 2000) and
California (15% in 2001 and 15% in 2000). There are no other concentrations of
mortgage loans on real estate in any state exceeding ten percent at September
30, 2001. Mortgage loans on real estate have also been analyzed by collateral
type with significant concentrations identified in office buildings (22% in 2001
and 29% in 2000), industrial buildings (18% in 2001 and 11% in 2000), retail
facilities (20% in 2001 and 18% in 2000), and multi-family apartments (36% in
2001 and 10% in 2000).

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 impairment in value
appears to be other than temporary. During the first nine months of 2001, Golden
American determined that the carrying value of four bonds exceeded their
estimated net realizable value. As a result, during the nine months ended
September 30, 2001, Golden American recognized a total pre-tax loss of
$1,279,000 to reduce the carrying value of the bonds to their combined net
realizable value of $565,000.

4.  DERIVATIVE INSTRUMENTS

The Companies may from time to time utilize various derivative instruments to
manage interest rate and price risk (collectively, market risk). The Companies
have appropriate controls in place, and financial exposures are monitored and
managed by the Companies as an integral part of their overall risk management
program. Derivatives are recognized on the balance sheet at their fair value. At
September 30, 2001, the Companies did not utilize any such derivatives.

The estimated fair values and carrying amounts of the Companies' embedded
derivatives at September 30, 2001 were $0, net of reinsurance. The estimated
fair values and carrying amounts of the embedded derivatives on a direct basis,
before reinsurance, were $4.9 million.

The fair value of these instruments was estimated based on quoted market prices,
dealer quotations or internal estimates.

5.  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. The
Companies paid commissions to DSI totaling $51,551,000 and $159,949,000 in the
third quarter and the first nine months of 2001, respectively ($47,073,000 and
$156,325,000, respectively, for the same periods of 2000).



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
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 third quarter and nine months
ended September 30, 2001, the fee was $5,749,000 and $17,282,000, respectively
($6,521,000 and $15,579,000, respectively, for the same periods of 2000).

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 managed by ING IM. The fee is payable quarterly. For the
third quarter and the first nine months of 2001, the Companies incurred fees of
$1,204,000 and $2,905,000, respectively, under this agreement ($596,000 and
$1,870,000, respectively, for the same periods of 2000).

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. For the nine months ended September 30, 2001 and 2000,
Golden American incurred a fee of $12,000 and $7,000, respectively, under this
agreement.

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 $1,360,000 and $4,079,000 for the
third quarter and nine months ended September 30, 2001, respectively ($1,534,000
and $4,810,000, respectively, for the same periods of 2000).

The Companies have a service agreement with Equitable Life in which Equitable
Life provides administrative and financial related services. Under this
agreement with Equitable Life, the Companies incurred expenses of $80,000 and
$232,000 for the third quarter and nine months ended September 30, 2001,
respectively ($339,000 and $1,006,000, respectively, for the same periods in
2000).

During 2001, the State of Delaware Insurance Department approved expense sharing
agreements with ING America Insurance Holdings for administrative, management,
financial, and information technology services. Under these agreements with ING
America Insurance Holdings, Golden American incurred expenses of $20.7 million
for the nine months ended September 30, 2001.

First Golden provides resources and services to DSI. Revenues for these
services, which reduced general expenses incurred by First Golden, totaled
$5,000 and $139,000 for the third quarter and nine months ended September 30,
2001, respectively ($54,000 and $162,000, respectively, for the same periods in
2000).

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 $0 and $478,000 for the third
quarter and nine months ended September 30, 2001, respectively ($117,000 and
$387,000, respectively, for the same periods in 2000).

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 $93,000 and $292,000 for
the third quarter and nine months ended September 30, 2001, respectively
($145,000 and $463,000, respectively, for the same periods in 2000).



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
Golden American provides 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 $112,000 and $245,000 for
the third quarter and nine months ended September 30, 2001, respectively
($65,000 and $173,000, respectively, for the same periods in 2000).

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduced general
expenses incurred by the Companies, totaled $34,000 and $97,000 for the third
quarter and nine months ended September 30, 2001, respectively ($26,000 and
$78,000, respectively, for the same periods in 2000).

For the third quarter of 2001, the Companies received premiums, net of
reinsurance, for variable products sold through eight affiliates, Locust Street
Securities, Inc. ("LSSI"), Vestax Securities Corporation ("Vestax"), DSI,
Multi-Financial Securities Corporation ("Multi-Financial"), IFG Network
Securities, Inc. ("IFG"), Washington Square Securities, Inc. ("Washington
Square"), PrimeVest Financial ("PrimeVest"), and Compulife Investor Services,
Inc. ("Compulife") of $28.8 million, $8.7 million, $0.2 million, $6.6 million,
$3.1 million, $25.0 million, $9.8 million and $1.5 million, respectively ($6.0
million, $0.7 million, $0, $2.1 million, $2.7 million, $0, $0, and $0,
respectively, for the same period of 2000). For the first nine months of 2001,
the Companies received premiums, net of reinsurance for variable products sold
through eight affiliates, LSSI, Vestax, DSI, Multi-Financial, IFG, Washington
Square, PrimeVest, and Compulife of $66.7 million, $21.6 million, $0.6 million,
$15.6 million, $8.6 million, $53.9 million, $20.7 million, and $5.3 million,
respectively ($73.0 million, $29.0 million, $0.8 million, $23.2 million, $11.0
million, $0, $0, and $0, respectively, for the same period of 2000).

For the third quarter and nine months ended September 30, 2001, First Golden
received premiums for fixed annuities products sold through Washington Square of
approximately $0.3 million and $0.8 million, respectively.

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 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 $31.6 million and $192.5 million for the third quarter and the
nine months ended September 30, 2001, respectively ($102.9 million and $214.7
million for the same periods in 2000). This was offset by a decrease in deferred
acquisition costs of $50.1 million and $210.9 million, respectively, for the
third quarter and the nine months ended September 30, 2001 ($103.7 million and
$213.0 million for the same periods in 2000). At September 30, 2001, Golden
American had a receivable from Equitable Life of $1.9 million due to the timing
of the cash settlement for the modified coinsurance agreement. As at December
31, 2000, Golden American had a payable of $16.3 million under the 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 minimum guaranteed death
benefits and minimum guaranteed living benefits of variable annuities issued
after January 1, 2000. An irrevocable letter of credit was obtained through Bank
of New York in the amount of $60.0 million related to this agreement. Under this
agreement, Golden American recorded a reinsurance recoverable of $60.5 million
and $14.6 million at September 30, 2001 and December 31, 2000, respectively.



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
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 of 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 $0 and
$91,000 for the third quarters of 2001 and 2000, respectively, and $25,000 and
$427,000 for the nine months ended September 30, 2001 and 2000, respectively. At
September 30, 2001, Golden American did not have any borrowings or receivables
from ING AIH under this agreement.

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 $1,031,000 and
$1,020,000 for the third quarters of 2001 and 2000, respectively, and $3,059,000
and $3,076,000 for the nine months ended September 30, 2001 and 2000,
respectively.

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
$704,000 and $696,000 for the third quarters of 2001 and 2000, respectively, and
$2,089,000 and $2,271,000 for the first nine months of 2001 and 2000,
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 $1,465,000 and $1,449,000 for the third quarters of
2001 and 2000, respectively, and $4,347,000 and $4,355,000 for the first nine
months of 2001 and 2000, respectively. 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 $1,096,000 and $1,088,000 for the third quarters of
2001 and 2000, respectively, and $3,254,000 and $3,263,000 for the first nine
months of 2001 and 2000, respectively.



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
On December 17, 1996, Golden American issued an 8.25% surplus note in the amount
of $25,000,000 to Equitable of Iowa Companies. 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 $516,000 for the third
quarters of 2001 and 2000, respectively, and $1,547,000 for the first nine
months of 2001 and 2000, respectively.

Stockholder's Equity: During the third quarter and the first nine months of
2001, Golden American received capital contributions from its Parent of
$124,000,000 and $131,000,000, respectively ($0 and $80,000,000, respectively,
for the same periods in 2000).

6.  COMMITMENTS AND CONTINGENCIES

Reinsurance: At September 30, 2001, the Companies had reinsurance treaties with
five unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the minimum guaranteed death and living benefits under
its variable contracts as of September 30, 2001. Golden American remains liable
to the extent its reinsurers do not meet their obligations under the reinsurance
agreements.

At September 30, 2001 and December 31, 2000, the Companies had net receivables
of $82,391,000 and $33,973,000, respectively, for reinsurance claims, reserve
credits, or other receivables from these reinsurers. These net receivables were
comprised of $2,955,000 and $1,820,000, respectively, for claims recoverable
from reinsurers, $4,024,000 and $4,007,000, respectively, for a payable for
reinsurance premiums, $60,500,000 and $14,642,000, respectively, for reserve
credits, and $22,960,000 and $21,518,000, respectively, for a receivable from an
unaffiliated reinsurer. Included in the accompanying financial statements are
net considerations to reinsurers of $8,593,000 for the third quarter of 2001 and
$21,211,000 for the first nine months of 2001 compared to $6,564,000 and
$14,472,000 for the same periods in 2000. Also included in the accompanying
financial statements are net policy benefits of $13,314,000 for the third
quarter of 2001 and $25,091,000 for the first nine months of 2001 compared to
$1,122,000 and $2,957,000 for the same period in 2000.

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 after
January 1, 2000, excluding those with an interest rate guarantee. For the nine
months ended September 30, 2001, Golden American had received a total settlement
of $192.5 million under this agreement, compared to $214.7 million for the same
period in 2000. The carrying value of the separate account liabilities covered
under this agreement represent 26.3% of total separate account liabilities
outstanding at September 30, 2001, compared to 17.1% at September 30, 2000.
Golden American remains liable to the extent Equitable Life does not meet its
obligations under the agreement. The accompanying financial statements 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 minimum
guaranteed death benefits and minimum guaranteed living benefits of variable
annuities issued after January 1, 2000. An irrevocable letter of credit was
obtained through Bank of New York in the amount of $60,000,000 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 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.



<PAGE>

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

6.  COMMITMENTS AND CONTINGENCIES  (continued)
Investment Commitments: At September 30, 2001, outstanding commitments to fund
mortgage loans totaled $35,000,000. There were no outstanding commitments to
fund mortgage loans at December 31, 2000.

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 offset 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 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. The Companies charged
to expense $2,000 in guaranteed fund assessments in the first nine months of
2001 and 2000. At September 30, 2001 and December 31, 2000, the Companies have
an undiscounted reserve $2,430,000 to cover future assessments (net of related
anticipated premium tax offsets), and have established an asset totaling
$691,000 and $733,000, 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. As of September 30, 2001, the Companies had one
investment (other than bonds issued by agencies of the United States government)
exceeding ten percent of stockholder's equity. The Companies' asset growth, net
investment income, and cash flow are primarily generated from the sale of
variable and fixed 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 on the Companies' financial condition. One
broker/dealer generated 10% of the Companies' net sales during the third quarter
of 2001 (27% by two broker/dealers in the same period of 2000). One
broker/dealer generated 10% of the Companies' net sales during the first nine
months of 2001 (12% by one broker/dealer in the same period of 2000). The
Premium Plus product generated 47% and 50% of the Companies' sales during the
third quarter of 2001 and the first nine months of 2001 (73% and 74% in the same
periods of 2000). The ES II product generated 16% of the Companies' sales during
the third and the first nine months of 2001 (12% in the same periods of 2000).
The Guarantee product, introduced in the fourth quarter of 2000, generated 11%
and 16% of the Companies' sales during the third quarter and the first nine
months of 2001.

Revolving Note Payable: To enhance short-term liquidity, the Companies
established revolving notes payable with SunTrust Bank, Atlanta (the "Bank").
These revolving notes payable were amended and restated in April 2001 with an
expiration date of May 31, 2002. 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 notes accrue
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 third
quarters ended September 30, 2001 and 2000, the



<PAGE>

Companies incurred interest expense of $118,000 and $0, respectively. During the
nine months ended September 30, 2001 and 2000, the Companies incurred interest
expense of $117,000 and $36,000, respectively. At September 30, 2001 and
December 31, 2000, the Companies had borrowings of $1,400,000 and $0,
respectively, under these agreements.

7.  MERGER OF FIRST GOLDEN WITH RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
On September 25, 2001, the Board of Directors of First Golden approved a plan of
merger to merge First Golden into ReliaStar Life Insurance Company of New York
("ReliaStar of NY"). The merger is anticipated to be effective on January 1,
2002 (the "merger date"), subject to the approval of the Insurance Department of
the State of New York, which has the discretion, as deemed necessary, to hold a
public hearing with regard to the merger. If approved, on the merger date, First
Golden will cease to exist and will be succeeded by ReliaStar of NY.



<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



<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.


<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.



<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.



<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.



<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.



<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 accounts ............    (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.



<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



<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



<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).



<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


<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.



<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)
                                          ========       ========      ========



<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.



<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>


<PAGE>

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

3.   INVESTMENT OPERATIONS (continued)

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.

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.



<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>



<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).


<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
                                               ========    ========    ========



<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.



<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
                                                   ======     ======     ======



<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.



<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.



<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.



<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).



<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



<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.

<PAGE>


--------------------------------------------------------------------------------
                                   APPENDIX A
--------------------------------------------------------------------------------


                        MARKET VALUE ADJUSTMENT EXAMPLES

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

      Assume $100,000 was allocated to a Fixed Interest Allocation 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 this Fixed Interest Allocation have been made. CALCULATE THE MARKET
VALUE ADJUSTMENT

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

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

     3.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0825)           -1 ] = $9,700

     Therefore, the amount paid to you on full surrender is $114,530
($124,230 - $9,700 ).


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

      Assume $100,000 was allocated to a Fixed Interest Allocation 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 this Fixed Interest Allocation have been made. CALCULATE THE MARKET
VALUE ADJUSTMENT

     1.   The contract value of the Fixed Interest Allocation on the date of
          surrender is $124,230 ($100,000 x 1.0753)

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

     3.   Market Value Adjustment =
                                     2,555/365
          $124,230 x [( 1.07/1.0625 )           -1 ]= $6,270

     Therefore, the amount paid to you on full surrender is $130,500
($124,230 + $6,270 ).


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

      Assume $200,000 was allocated to a Fixed Interest Allocation 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 $114,530 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 this Fixed Interest Allocation have been made.

Fixed Account-121472                   A1

<PAGE>


     First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.

     1.   The contract value of the Fixed Interest Allocation on the date of
          withdrawal is $248,459 ( $200,000 x 1.0753 )

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

     3.   Amount that must be withdrawn =

                                    2,555/365
          [ $114,530 / (1.07/1.0825)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0825)           -1 ] = $9,700

     Therefore, the amount of the withdrawal paid to you is $114,530, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $114,530, and also reduced by the Market Value Adjustment of $9,700,
for a total reduction in the Fixed Interest Allocation of $124,230.

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

      Assume $200,000 was allocated to a Fixed Interest Allocation 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 $130,500 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 this Fixed Interest Allocation have been made.

     First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.

     1.   The contract value of Fixed Interest Allocation on the date of
          surrender is $248,459 ( $200,000 x 1.0753)

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

     3.   Amount that must be withdrawn =

                                    2,555/365
          [ $130,500 / (1.07/1.0625)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0625)           -1 ] = $$6,270

     Therefore, the amount of the withdrawal paid to you is $130,500, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $130,500, but increased by the Market Value Adjustment of $6,270,
for a total reduction in the Fixed Interest Allocation of $124,230.

Fixed Account-121472                   A2

<PAGE>






                             ING VARIABLE ANNUITIES

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY

            Golden American Life Insurance Company is a stock company
                             domiciled in Delaware.
--------------------------------------------------------------------------------
Fixed Account--121472                                                02/12/2002


<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     Underwriting Agreement Between Golden American and
           Directed Services, Inc. incorporated by reference to
           Item 16(a)(1) of Amendment No. 1 to a Registration Statement
           for Golden American filed with the Securities and Exchange
           Commission ("SEC") on September 24, 1997 (File No. 333-28765).

     3(a)  Certificate of Amendment of the Restated Articles of
           Incorporation of Golden American incorporated by reference
           to Item 16(a)(3)(a) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     3(b)  By-Laws of Golden American incorporated by reference to
           Item 16(a)(3)(b) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     3(c)  Resolution of Board of Directors for Powers of Attorney
           incorporated by reference to Item 16(a)(3)(c) of Amendment
           No. 5 to a Registration Statement for Golden American filed
           with the SEC on April 23, 1999 (File No. 333-28765).

     4(a)  Individual Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(a) of
           Amendment No. 5 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-28765).

     4(b)  Group Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(b) of
           Amendment No. 5 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-28765).

     4(c)  Individual Deferred Variable Annuity Contract incorporated
           by reference to Item 16(a)(4)(c) of Amendment No. 5 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-28765).

     4(d)  Individual Retirement Annuity Rider Page incorporated by
           reference to Item 16(a)(4)(d) of Amendment No. 1 to a
           Registration Statement for Golden American filed with the
           SEC on September 24, 1997 (File No. 333-28765).

     4(e)  Individual Deferred Combination Variable and Fixed
           Annuity Application incorporated by reference to
           Item 16(a)(4)(e) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           December 3, 1999 (File No. 333-28765).

     4(f)  Group Deferred Combination Variable and Fixed
           Annuity Enrollment Form incorporated by reference to
           Item 16(a)(4)(f) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           December 3, 1999 (File No. 333-28765).

     4(g)  Individual Deferred Variable Annuity Application
           incorporated by reference to Item 16(a)(4)(g) of
           Amendment No. 5 to a Registration Statement for
           Golden American filed with the SEC on December 3, 1999
           (File No. 333-28765).

     4(h)  Roth Individual Retirement Annuity Rider
           incorporated by reference to Item 16(a)(4)(h) of
           Amendment No. 2 to a Registration Statement for
           Golden American filed with the SEC on February 12, 1998
           (File No. 333-28765).

     4(i)  Minimum Guaranteed Accumulation Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(i) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(j)  Minimum Guaranteed Income Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(j) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(k)  Minimum Guaranteed Withdrawal Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(k) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(l)  Living Benefit Endorsement (Inforce Riders)
           incorporated by reference to Item 16(a)(4)(l) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(m)  Death Benefit Endorsement No.1 (REV) (7% Solution Enhanced)
           incorporated by reference to Item 16(a)(4)(m) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(n)  Death Benefit Endorsement No.2 (REV) (Ratchet Enhanced)
           incorporated by reference to Item 16(a)(4)(n) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(o)  Death Benefit Endorsement No.3 (REV) (Standard)
           incorporated by reference to Item 16(a)(4)(o) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(p)  Death Benefit Endorsement No.4 (REV) (Max 7 Enhanced)
           incorporated by reference to Item 16(a)(4)(p) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(q)  Death Benefit Endorsement No.5 (Base Death Benefit)
           incorporated by reference to Item 16(a)(4)(q) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(r)  Death Benefit Endorsement No.6 (Inforce Contracts)
           incorporated by reference to Item 16(a)(4)(r) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(s)  Earnings Enhancement Death Benefit Rider
           incorporated by reference to Item 16(a)(4)(s) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(t)  Individual Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(a) of
           Amendment No. 3 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-51353).

     4(u)  Group Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(b) of
           Amendment No. 3 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-51353).

     4(v)  Individual Deferred Variable Annuity Contract incorporated
           by reference to Item 16(a)(4)(c) of Amendment No. 3 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-51353).

     5     Opinion and Consent of Myles R. Tashman

     10(a) Administrative Services Agreement between Golden American
           and Equitable Life Insurance Company of Iowa
           incorporated by reference to Item 16(a)(10)(b) of
           Amendment No. 4 to a Registration Statement for
           Golden American filed with the SEC on April 29, 1998
           (File No. 333-28765).

     10(b) Service Agreement between Golden American and Directed
           Services, Inc. incorporated by reference to
           Item 16(a)(10)(c) of Amendment No. 4 to a Registration
           Statement for Golden American filed with the SEC on
           April 29, 1998 (File No. 333-28765).

     10(c) Asset Management Agreement between Golden American and
           ING Investment Management LLC. incorporated by reference
           to Item 16(a)(10)(d) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     10(d) Reciprocal Loan Agreement between Golden American and
           ING America Insurance Holdings, Inc. incorporated by
           reference to Item 16(a)(10)(e) of Amendment No. 5 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-28765).

     10(e) Revolving Note Payable between Golden American and
           SunTrust Bank incorporated by reference to
           Item 16(a)(10)(f) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     10(f) Surplus Note, dated December 17, 1996, between Golden
           American and Equitable of Iowa Companies incorporated
           by reference to Item 16(a)(10)(g) of Amendment No. 8
           to a Registration Statement for Golden American filed
           with the SEC on April 26, 2000 (File No. 333-28765).

     10(g) Surplus Note, dated December 330, 1998, between Golden
           American and Equitable Life Insurance Company of Iowa
           incorporated by reference to Item 16(a)(10)(h) of
           Amendment No. 8 to a Registration Statement for Golden
           American filed with the SEC on April 26, 2000
           (File No. 333-28765).

     10(h) Surplus Note, dated September 30, 1999, between Golden
           American and ING AIH incorporated by reference to
           Item 16(a)(10)(i) of Amendment No. 8 to a Registration
           Statement for Golden American filed with the SEC on
           April 26, 2000 (File No. 333-28765).

     10(i) Surplus Note, dated December 8, 1999, between Golden
           American and First Columbine Life Insurance Company
           incorporated by reference to Item 16(a)(10)(j) of
           Amendment No. 7 to a Registration Statement for Golden
           American filed with the SEC on January 27, 2000
           (File No. 333-28765).

     10(j) Surplus Note, dated December 8, 1999, between Golden
           American and Equitable of Iowa companies incorporated
           by reference to Item 16(a)(10)(k) of Amendment No. 7 to
           a Registration Statement for Golden American filed with
           the SEC on January 27, 2000 (File No. 333-28765).

     10(k) Reinsurance Agreement, dated June 30, 2000, between
           Golden American and Equitable Life Insurance Company
           of Iowa incorporated by reference to Item 16(a)(10)(o)
           of Amendment No. 9 to a Registration Statement for Golden
           American filed with the SEC on September 13, 2000
           (File No. 333-28765).

     10(l) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of July 31, 2000 incorporated by
           reference to Item 16(a)(10)(p) of Amendment No. 9 to a
           Registration Statement for Golden American filed with
           the SEC on September 13, 2000 (File No. 333-28765).

     10(m) Reinsurance Agreement, effective 01/01/00, between Golden
           American and Security Life of Denver International Limited
           incorporated by reference to Item 16(a)(10)(q) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     10(n) Letter of Credit between Security Life of Denver
           International Limited and The Bank of New York for the
           benefit of Golden American incorporated by reference to
           Item 16(a)(10)(r) of Amendment No. 11 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 2001 (File No. 333-28765).

     10(o) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of April 30, 2000 incorporated by
           reference to Item 16(a)(10)(u) of Amendment No. 12 to a
           Registration Statement for Golden American filed with
           the SEC on October 26, 2001 (File No. 333-28765).

     10(p) Amendment to Reinsurance Agreement, amendment dated
           September 28, 2001, between Golden American and Security
           Life of Denver International Limited incorporated by
           reference to Item 16(a)(10)(v) of Amendment No. 12 to a
           Registration Statement for Golden American filed with
           the SEC on October 26, 2001 (File No. 333-28765).

     10(q) Form of Services Agreement among Golden American
           Life Insurance Company and ING affiliated
           Insurance Companies

     10(r) Form of Services Agreement between Golden
           American Life Insurance Company and ING North
           American Insurance Corporation, Inc.

     10(s) Form of Shared Services Center Agreement among
           ING North American Insurance Corporation, Inc.
           and ING affiliated Insurance Companies

     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 Item 5 of this
            Part II, together with the Opinion of Myles R. Tashman.

     24    Powers of Attorney.



<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 31st day of December, 2001.



                                     GOLDEN AMERICAN LIFE
                                     INSURANCE COMPANY
                                     (Registrant)

                                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
December 31, 2001.

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

                              Director and Chief Executive
--------------------          Officer
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

10(q)     Form of Services Agreement among Golden American
          Life Insurance Company and ING affiliated
          Insurance Companies                                        EX-99.B10Q

10(r)     Form of Services Agreement between Golden
          American Life Insurance Company and ING North
          American Insurance Corporation, Inc.                       EX-99.B10R

10(s)     Form of Shared Services Center Agreement among
          ING North American Insurance Corporation, Inc.
          and ING affiliated Insurance Companies                     EX-99.B10S

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": "s1acc3.txt", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 336005}]
{"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": "333-76150", "film-number": "1826701"}, "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": "GOLDEN AMERICAN LIFE INSURANCE CO", "date-changed": "19600201"}, {"former-conformed-name": "MB VARIABLE LIFE INSURANCE CO", "date-changed": "19600201"}]}
As filed with the Securities and Exchange Commission on December 31, 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, Pennsylvania 19380-1478
                                 (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, Pennsylvania  19380-1478    1275 Pennsylvania Avenue, N.W.
(Name and Address of agent for Service    Washington, D.C.  20004-2415
    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,
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, a prospectus herein
also related to Registration Statement No. 333-28765.

-----------------------------------------------------------------------------
                      Calculation of Registration Fee
Proposed
Title of each class                            Proposed               maximum
of securities to be    Amount to be    maximum offering price    aggregate offering      Amount of
     registered         registered        price per unit(1)          price(1)        registration fee(2)
--------------------------------------------------------------------------------------------------------
Annuity Contracts
(Interests in          N/A             N/A                       $1,000,000,000        $239,000(3)
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)  Amounts  previously  registered in connection with File No.  333-28765 were
     $50,160,000 at registration fees of $15,200.

(3)  Pursuant to Rule 457(p) under the  Securities Act of 1933, the total filing
     fee of  $239,000  associated  with File No.  333-76128,  filed on behalf of
     Golden  American Life Insurance  Company on December 31, 2001,  offsets the
     amount  of  the  registration  fee  for  this  Registration  Statement.  No
     securities  have been or will be sold  under File No.  333-76128,  which is
     being withdrawn.
     ---------------------------------------------------------------------------
     The registrant hereby amends this registration  statement statement on such
     date or dates as may be  necessary  to delay its  effective  date until the
     registrant shall file a further  amendment which  specifically  states that
     this registration statement shall thereafter become effective in accordance
     with section 8(a) of the Securities  Act of 1933 or until the  registration
     statement  shall  become  effective on such date as the  Commission  acting
     pursuant to said section 8(a), may determine.
PART I

The  Prospectus  filed herein  describes  certain  interests in a fixed  account
offered by Golden American Life Insurance Company under a contract issued by the
insurance company.  These interests (and the fixed account) are not offered as a
seperate product but in connection with a combination variable and fixed annuity
product  whose  prospectus  describes  the  contract  in more  detail  and  must
accompany or precede the delivery of this prospectus.
ING  VARIABLE  ANNUITIES

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

                          GOLDENSELECT FIXED ACCOUNT I

                                FEBRUARY 12, 2002

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

     Fixed Account I ("Fixed Account") is an optional fixed interest allocation
offered during the accumulation phase of your variable annuity contract between
you and Golden American Life Insurance Company ("Golden American," the
"Company," "we" or "our"). The Fixed Account, which is a segregated asset
account of Golden American, provides a means for you to invest on a tax-deferred
basis and earn a guaranteed interest for guaranteed interest periods (Fixed
Interest Allocation(s)). We will credit your Fixed Interest Allocation(s) with a
fixed rate of interest. We currently offer Fixed Interest Allocations with
guaranteed interest periods of 6 months, 1, 3, 5, 7 and 10 years. We may not
offer all guaranteed interest periods on all contracts and the rates for a given
guaranteed interest period may vary among contracts. We set the interest rates
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 take your money out
from a Fixed Interest Allocation more than 30 days 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. A surrender charge may also apply to
withdrawals from your contract. You bear the risk that you may receive less than
your principal because of the Market Value Adjustment.

For contracts sold in some states, not all Fixed Interest Allocations are
available. You have a right to return a contract for a refund as described in
the variable annuity contract prospectus. The variable annuity contract
prospectus describes a deferred group and individual variable annuity contract
(the "Contract") offered by Golden American. The Contract is available in
connection with certain retirement plans that qualify for special federal income
tax treatment as well as those that do not qualify for such treatment. Please
refer to the Contract prospectus for more information.

This prospectus accompanies a Contract prospectus and provides information that
you should know before investing in the Fixed Account and should be kept for
future reference. If you need more information after reading this prospectus,
please contact us at Customer Service Center, P.O. Box 2700, West Chester,
Pennsylvania 19380 or call (800) 366-0066 or your registered representative.
Either prospectus is available without charge upon request. To obtain a copy of
these documents, write to or call our Customer Service Center or access the
SEC's website (http://www.sec.gov).

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 THE FIXED ACCOUNT 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.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR A
VARIABLE CONTRACT.
--------------------------------------------------------------------------------
                                FEES AND EXPENSES
--------------------------------------------------------------------------------

The variable contract has insurance features and investment features, and there
are charges related to each. For more information about these contract fees and
expenses please refer to the Contract 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. As
of December 31, 2000, Golden American became a wholly owned subsidiary of
Equitable Life Insurance Company of Iowa ("Equitable Life"). Equitable Life is a
wholly owned subsidiary of Equitable of Iowa Companies, Inc. ("Equitable of
Iowa") which in turn 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 ("First
Golden"), which is authorized to sell annuities in New York and Delaware. Golden
American's consolidated financial statements appear in this prospectus. On
January 2, 2002, First Golden was merged into ReliaStar Life Insurance Company
of New York, another wholly owned subsidiary of ING and an affiliate. Equitable
of Iowa is the holding company for Equitable Life, Directed Services, Inc., the
investment manager of the GCG Trust and the distributor of the Contracts, and
other interests. ING also owns ING Pilgrim Investments, LLC, a portfolio manager
of the GCG Trust, and the investment manager of the Pilgrim Variable Insurance
Trust and the Pilgrim Variable Products Trust. ING also owns: Baring
International Investment Limited, another portfolio manager of the GCG Trust,
and ING Investment Management Advisors B.V., a portfolio manager of the Pilgrim
Variable Insurance Trust. Our principal office is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380.

--------------------------------------------------------------------------------
                              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

The unaudited condensed consolidated financial statements of Golden American for
the nine months ended September 30, 2001 and the audited consolidated financial
statements of Golden American as of December 31, 2000, and for each of the three
years in the period ended December 31, 2000, are included in this prospectus.

--------------------------------------------------------------------------------
                          THE FIXED INTEREST ALLOCATION
--------------------------------------------------------------------------------

You may allocate premium payments and transfer your Contract value to the
guaranteed interest periods of the Fixed Account during the accumulation period
as described in the prospectus for the Contract. Every time you allocate money
to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed
interest period you select. We currently offer guaranteed interest periods of 6
months, 1, 3, 5, 7 and 10 years, although we may not offer all these periods
under all Contracts now or in the future. You may select one or more guaranteed
interest periods at any one time. We will credit your Fixed Interest Allocation
with a guaranteed interest rate for the interest period you select, so long as
you do not withdraw money from that Fixed Interest Allocation before the end of
the guaranteed interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the interest period is
scheduled to expire.

If you surrender, withdraw, transfer or annuitize your investment in a Fixed
Interest Allocation more than 30 days before the end of the guaranteed interest
period, we will apply a Market Value Adjustment to the transaction. A Market
Value Adjustment could increase or decrease the amount you surrender, withdraw,

Fixed Account-121472                   2
transfer 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
because of the Market Value Adjustment.

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

SELECTING A GUARANTEED INTEREST PERIOD

You may select one or more Fixed Interest Allocations with specified guaranteed
interest periods. A guaranteed interest period is the period that a rate of
interest is guaranteed to be credited to your Fixed Interest Allocation. We may
at any time decrease or increase the number of guaranteed interest periods
offered. In addition, we may offer DCA Fixed Interest Allocations, which are
6-month and 1-year Fixed Interest Allocations available exclusively in
connection with our dollar cost averaging program. For more information on DCA
Fixed Interest Allocations, see "Transfers Among Your Investments -- Dollar Cost
Averaging from Fixed Interest Allocations." Your Contract value in the Fixed
Account is the sum of your Fixed Interest Allocations and the interest credited
as adjusted for any withdrawals, transfers or other charges we may impose,
including any Market Value Adjustment. Your Fixed Interest Allocation will be
credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium or reallocation of
Contract value. We will credit interest daily at a rate that yields the quoted
guaranteed interest rate.

GUARANTEED INTEREST RATES

Each Fixed Interest Allocation will have an interest rate that is guaranteed as
long as you do not take your money out until its 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 but no
Fixed Interest Allocation will ever have a guaranteed interest rate declared of
less than 3% per year.

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 then offered.
Renewal rates for such rate specials will be based on the base interest rate and
not on the special rates initially declared.

TRANSFERS FROM A FIXED INTEREST ALLOCATION

You may transfer your Contract value in a Fixed Interest Allocation to one or
more new Fixed Interest Allocations with new guaranteed interest periods, or to
any of the subaccounts of Golden American's Separate Account B as described in
the Contract prospectus. We will transfer amounts from your Fixed Interest
Allocations starting with the guaranteed interest period nearest its maturity
date, until we have honored your transfer request.

The minimum amount that you can transfer to or from any Fixed Interest
Allocation is $100. If a transfer request would reduce the Contract value
remaining in a Fixed Interest Allocation to less than $100, we will treat such
transfer request as a request to transfer the entire Contract value in such
Fixed Interest Allocation. Transfers from a Fixed Interest Allocation may be
subject to a Market Value Adjustment. If you have a special Fixed Interest
Allocation that was offered exclusively with our dollar cost averaging program,

Fixed Account-121472                   3
cancelling dollar cost averaging will cause a transfer of the entire Contract
value in such Fixed Interest Allocation to the Liquid Asset subaccount, and such
a transfer will be subject to a Market Value Adjustment.

On the maturity date of a guaranteed interest period, you may transfer amounts
from the applicable Fixed Interest Allocation to the subaccounts and/or to new
Fixed Interest Allocations with guaranteed interest periods of any length we are
offering at that time. You may not, however, transfer amounts to any Fixed
Interest Allocation with a guaranteed interest period that extends beyond the
annuity start date.

At least 30 calendar days before a maturity date of any of your Fixed Interest
Allocations, or earlier if required by state law, we will send you a notice of
the guaranteed interest periods that are available. You must notify us which
subaccounts or new guaranteed interest periods you have selected before the
maturity date of your Fixed Interest Allocations. If we do not receive timely
instructions from you, we will transfer the Contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a guaranteed
interest period that is the same as the expiring guaranteed interest period. If
such guaranteed interest period is not available or would go beyond the annuity
start date, we will transfer your Contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does not go
beyond the annuity start date. If no such guaranteed interest period is
available, we will transfer the Contract value to a subaccount specially
designated by the Company for such purpose. Currently we use the Liquid Asset
subaccount for such purpose.

Please be aware that the benefit we pay under certain optional benefit riders
will be adjusted by any transfers you make to and from the Fixed Interest
Allocations during specified periods while the rider is in effect. See "Optional
Riders" in the Contract prospectus.

WITHDRAWALS FROM A FIXED INTEREST ALLOCATION

During the accumulation phase, you may withdraw a portion of your Contract value
in any Fixed Interest Allocation. You may make systematic withdrawals of only
the interest earned during the prior month, quarter or year, depending on the
frequency chosen, from a Fixed Interest Allocation under our systematic
withdrawal option. Systematic withdrawals from a Fixed Interest Allocation are
not permitted if such Fixed Interest Allocation is currently participating in
the dollar cost averaging program. A withdrawal from a Fixed Interest Allocation
may be subject to a Market Value Adjustment and a contract surrender charge. Be
aware that withdrawals may have federal income tax consequences, including a 10%
penalty tax, as well as state income tax consequences.

If you tell us the Fixed Interest Allocation from which your withdrawal will be
made, we will assess the withdrawal against that Fixed Interest Allocation. If
you do not, we will assess your withdrawal against the subaccounts in which you
are invested, unless the withdrawal exceeds the Contract value in the
subaccounts. If the withdrawal exceeds the Contract value in those subaccounts,
we will deduct your withdrawal from your Fixed Interest Allocations starting
with the guaranteed interest periods nearest their maturity dates until we have
honored your request. Please be aware that the benefit we pay under any of the
optional benefit riders will be reduced by any withdrawals you made from the
Fixed Interest Allocations during the period while the rider is in effect. See
"Optional Riders" in the Contract prospectus.

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 (i) whenever you
withdraw or transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed interest period,
or under the systematic withdrawal or dollar cost averaging program) and (ii) if
on the annuity start date a guaranteed interest period for any Fixed Interest
Allocation does not end on or within 30 days of the annuity start date.

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

Fixed Account-121472                   4
N/365
                         ((1+I)/(1+J+.0025))      -1

Where,

     o    "I" is the Index Rate for a Fixed Interest Allocation on the first day
          of the guaranteed interest period;

     o    "J" is the Index Rate for a new Fixed Interest Allocation with a
          guaranteed interest period equal to the time remaining (rounded up to
          the next full year) in the guaranteed interest period; and

     o    "N" is the remaining number of days in the guaranteed interest period
          at the time of calculation.

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 the 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, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from the amount
surrendered, transferred or annuitized. In the event of a partial withdrawal,
transfer or annuitization, we will add or subtract any Market Value Adjustment
from the total amount withdrawn, transferred or annuitized in order to provide
the amount requested. If a negative Market Value Adjustment exceeds your
Contract value in the Fixed Interest Allocation, we will consider your request
to be a full surrender, transfer or annuitization of the Fixed Interest
Allocation.

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

--------------------------------------------------------------------------------
                                  SPECIAL FUNDS
--------------------------------------------------------------------------------

We use the term Special Funds in the discussion of the enhanced death benefit
options and the optional riders. The Special Funds currently include Fixed
Interest Allocations and certain variable subaccounts as described in your
Contract prospectus. The Company may, at any time, designate any new and/or
existing subaccount as a Special Fund with 30 days notice with respect to new
premiums added or transfers to such subaccount. Allocations to Special Funds
will not affect the death benefit that may be available under the earnings
multiplier benefit rider. Designation of a subaccount as a Special Fund may vary
by benefit. For example, a subaccount may be designated a Special Fund for
purposes of calculating a living benefit, but not a death benefit or for
calculating one death benefit and not another.

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

The Contract is described in another prospectus. This prospectus describes the
Fixed Account and the operations of any Fixed Interest Allocation under your
Contract.

     CONTRACT VALUE IN THE FIXED INTEREST ALLOCATIONS. On the contract date, the
Contract value in any Fixed Interest Allocation in which you are invested is
equal to the portion of the initial premium paid and designated for allocation
to the Fixed Interest Allocation. On each business day after the contract date,
we calculate the amount of Contract value in each Fixed Interest Allocation as
follows:

Fixed Account-121472                   5
(1)  We take the Contract value in the Fixed Interest Allocation at the end
          of the preceding business day.

     (2)  We credit a daily rate of interest on (1) at the guaranteed rate since
          the preceding business day.

     (3)  We add (1) and

     (4)  We subtract from (3) any transfers from that Fixed Interest
          Allocation.

     (5)  We subtract from (4) any withdrawals, and then subtract any contract
          fees (including any rider charges) and premium taxes.

Additional premium payments and transfers allocated to the Fixed Account will be
placed in a new Fixed Interest Allocation. The Contract value on the date of
allocation will be the amount allocated.Several examples which illustrate how
the Market Value Adjustment works are included in Appendix A.

CASH SURRENDER VALUE

The cash surrender value is the amount you receive when you surrender the
Contract. The cash surrender value will fluctuate daily based on the interest
credited to Fixed Interest Allocations, any Market Value Adjustment, and any
surrender charge. 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, and then we deduct any surrender charge, any charge for premium
taxes, the annual contract administrative fee (unless waived), and any optional
benefit rider charge, and any other charges incurred but not yet deducted.

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

Any time during the accumulation phase and before the death of the contract
owner, except under certain qualified contracts, you may withdraw all or part of
your money. Keep in mind that if you request a withdrawal for more than 90% of
the cash surrender value, we will treat it as a request to surrender the
Contract.

You need to submit to us a written request specifying the Fixed Interest
Allocations or subaccounts from which amounts are to be withdrawn, otherwise the
withdrawal will be made on a pro rata basis from all of the allocations and
subaccounts in which you are invested. If there is not enough Contract value in
the subaccounts, we will deduct the balance of the withdrawal from your Fixed
Interest Allocations starting with the guaranteed interest periods nearest their
maturity dates until we have honored your request. We will apply a Market Value
Adjustment to any withdrawal from your Fixed Interest Allocation taken more than
30 days before its maturity date. 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 payments
made.

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 Market Value Adjustment to any
regular withdrawal from a Fixed Interest Allocation that is taken more than 30
days before its maturity date.

SYSTEMATIC WITHDRAWALS

See the Contract prospectus for general information on Systematic Withdrawals.

Systematic withdrawals from Fixed Interest Allocations 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 interest earnings. Systematic withdrawals from
Fixed Interest

Fixed Account-121472                   6
Allocations under the Fixed Dollar Systematic Withdrawal Feature are available
only in connection with Section 72(q) and 72(t) distributions. A Fixed Interest
Allocation may not participate in both the systematic withdrawal option and the
dollar cost averaging program at the same time.

     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 Market Value Adjustments. Systematic withdrawals
from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal
Feature are available only in connection with Section 72(q) and 72(t)
distributions. We will assess a Market Value Adjustment on the withdrawal date
if the withdrawal from a Fixed Interest Allocation exceeds your interest
earnings on the withdrawal date. We will adjust the amount withdrawn to include
any Market Value Adjustment so that the amount of each systematic withdrawal
remains fixed, unless you direct otherwise.

IRA WITHDRAWALS

See the Contract prospectus for general information on IRA Withdrawals.

An IRA withdrawal from a Fixed Interest Allocation 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" in the
Contract prospectus for more details.

--------------------------------------------------------------------------------
                        TRANSFERS AMONG YOUR INVESTMENTS
--------------------------------------------------------------------------------

You may transfer your Contract value among the subaccounts in which you are
invested and your Fixed Interest Allocations at the end of the free look period
until the annuity start date. See the Contract prospectus for general
information regarding transfers including transfers by third parties. We will
apply a Market Value Adjustment to transfers from a Fixed Interest Allocation
taken more than 30 days before its maturity date, unless the transfer is made
under the dollar cost averaging program. Keep in mind that transfers between
Special Funds and other investment portfolios may negatively impact your death
benefit or rider benefits.

If you allocate Contract value to an investment option that has been designated
as a Restricted Fund, your ability to transfer Contract value to the Restricted
Fund may be limited. A transfer to the Restricted Funds will not be permitted to
the extent that it would increase the Contract value in the Restricted Fund to
more than the applicable limits following the transfer. We do not limit
transfers from Restricted Funds. If the result of multiple reallocations is to
lower the percentage of total Contract value in the Restricted Fund, the
reallocation will be permitted even if the percentage of Contract value in the
Restricted Fund is greater than the limit.

Please be aware that the benefit we pay under an optional benefit rider may be
affected by certain transfers you make while the rider is in effect. Transfers,
including those involving Special Funds, may also affect your optional rider
base. See "The Annuity Contract -- Optional Riders" in the Contract prospectus.

Transfers will be based on values at the end of the business day in which the
transfer request is received at our Customer Service Center.

The minimum amount that you may transfer is $100 or, if less, your entire
Contract value held in a subaccount or a Fixed Interest Allocation.

Fixed Account-121472                   7
DOLLAR COST AVERAGING FROM FIXED INTEREST ALLOCATIONS

You may elect to participate in our dollar cost averaging program if you have at
least $1,200 of Contract value in Fixed Account Interest Allocations with a
guaranteed interest period of 1 year or less. The Fixed Interest Allocations
serve as the source accounts from which we will, on a monthly basis,
automatically transfer a set dollar amount of money to other Fixed Interest
Allocations or contract investment portfolio subaccounts selected by you.

The dollar cost averaging program is designed to lessen the impact of market
fluctuation on your investment. Since we transfer the same dollar amount to
subaccounts each month, more units of a subaccount are purchased if the value of
its unit is low and fewer units are purchased if the value of its unit is high.
Therefore, a lower than average value per unit may be achieved over the long
term. However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities regardless of
fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.

You elect the dollar amount you want transferred under this program. Each
monthly transfer must be at least $100. You may change the transfer amount once
each contract year.

Transfers from a Fixed Interest Allocation under the dollar cost averaging
program are not subject to a Market Value Adjustment.

If you do not specify the subaccounts to which the dollar amount of the source
account is to be transferred, we will transfer the money to the subaccounts in
which you are invested on a proportional basis. The transfer date is the same
day each month as your contract date. If, on any transfer date, your Contract
value in a source account is equal or less than the amount you have elected to
have transferred, the entire amount will be transferred and the program will
end. You may terminate the dollar cost averaging program at any time by sending
satisfactory notice to our Customer Service Center at least 7 days before the
next transfer date. A Fixed Interest Allocation may not participate in the
dollar cost averaging program and in systematic withdrawals at the same time.

See "Dollar Cost Averaging" in the Contract prospectus for a discussion of
transferring to a Restricted Fund.

We may in the future offer additional subaccounts or withdraw any subaccount or
Fixed Interest Allocation to or from the dollar cost averaging program or
otherwise modify, suspend or terminate this program. Of course, such change will
not affect any dollar cost averaging programs in operation at the time.

--------------------------------------------------------------------------------
                                CHARGES AND FEES
--------------------------------------------------------------------------------
The Contract has insurance features and investment features, and there are
charges related to each. For the insurance features, the Company deducts a
mortality and expense risk charge, an asset-based administrative charge, and an
annual contract administrative charge of $40. You may also purchase optional
benefit riders, charges for which are deducted from your Contract value. We
deduct the mortality and expense risk charge and the asset-based administrative
charges daily directly from your Contract value in the subaccounts and in the
case of the earnings multiplier benefit rider from your Fixed Interest
Allocations, as well.

When deducting the other contract charges and rider charges; if the value in the
subaccounts is insufficient, the contract charges and rider charge will be
deducted from the Fixed Interest Allocations starting with the guaranteed
interest periods nearest their maturity dates until the charge has been paid and
the amount deducted may be subject to a Market Value Adjustment. See the
Contract prospectus for more information.

Fixed Account-121472                   8
--------------------------------------------------------------------------------
                        DEATH BENEFIT AND OPTIONAL RIDERS
--------------------------------------------------------------------------------
Please refer to your Contract prospectus for descriptions of benefits and
optional riders under the Contract and the effect of your Fixed Interest
Allocations on those benefits and riders. For purposes of calculating the death
benefits and optional riders, certain investment portfolios and the Fixed
Account are designated as "Special Funds." Selecting a Special Fund may limit or
reduce the death benefit.

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

SUSPENSION OF PAYMENTS

We have the right to delay payment of amounts from a Fixed Interest Allocation
for up to 6 months.

--------------------------------------------------------------------------------
                                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. 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 material
adverse impact on the Company or Separate Account B.

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 consolidated financial statements of Golden American at December 31,
2000 and 1999 and for each of the three years in the period ended December 31,
2000 appearing in this prospectus or Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing in this prospectus or in the Registration Statement, and are included
or incorporated by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

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

For a general description of the federal income tax considerations associated
with the Contract please refer to the Contract prospectus. The "Federal Tax
Considerations" section of the Contract prospectus and does not purport to be
complete or to cover all tax situations. The discussion is not intended as tax
advice. You should consult your counsel or other competent tax advisers for more
complete information. The 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.

Fixed Account-121472                   9
--------------------------------------------------------------------------------
         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.
SELECTED GAAP BASIS FINANCIAL DATA
                                                                 (IN THOUSANDS)
                                                                   POST-MERGER
                                        ----------------------------------------------------------------------------------
                                        For the Period                                                      For the Period
                                          January 1,      For the Year     For the Year    For the Year       October 25,
                                         2001 through         Ended            Ended           Ended         1997 through
                                         September 30,    December 31,     December 31,    December 31,      December 31,
                                             2001             2000             1999            1998              1997
                                        --------------    ------------     ------------    ------------     --------------
Annuity and Interest
    Sensitive Life
    Product Charges.................    $     117,308    $      144,877    $     82,935     $     39,119     $      3,834
Net Income (Loss) before
    Federal Income Tax .............    $       5,513    $       32,862    $     19,737     $     10,353     $       (279)
Net Income (Loss)...................    $       3,444    $       19,180    $     11,214     $      5,074     $       (425)
Total Assets........................    $  12,031,210    $   11,852,677    $  9,392,857     $  4,754,623     $  2,446,395
Total Liabilities...................    $  11,270,516    $   11,235,540    $  8,915,008     $  4,400,729     $  2,219,082
Total Stockholder's Equity..........    $     760,694    $      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
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 condensed 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

THE FIRST NINE MONTHS OF 2001
COMPARED TO SAME PERIOD OF 2000

PREMIUMS
PERCENTAGE      DOLLAR
FOR THE NINE MONTHS ENDED SEPTEMBER 30          2001        CHANGE        CHANGE         2000
                                              --------    ----------     --------      --------
                                                             (Dollars in millions)
Variable annuity premiums:
    Separate account........................   $ 303.9      (55.5)%      $(378.8)     $  682.7
    Fixed account...........................    1043.1      107.3          539.9         503.2
Total variable annuity premiums.............    1347.0       13.6          161.1       1,185.9
Fixed annuity premiums......................       1.9        --             1.9           --
Variable life premiums......................       1.1      (26.7)          (0.4)          1.5
                                              --------      -------       ------      --------
Total premiums..............................  $1,350.0       13.7%        $162.6      $1,187.4
                                              ========      =======       ======      ========
For the Companies' variable and fixed 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 premiums net of reinsurance increased 13.6% during the first
nine months of 2001 compared to the same period of 2000. This increase is
primarily due to sales of the Guarantee product, a registered fixed annuity
product introduced in the last quarter of 2000. Sales for this product totaled
$463.0 million in the first nine months of 2001. Also contributing to the
increase is a decline of $0.1 billion in ceded variable annuity separate account
premiums to $1.6 billion for the first nine months of 2000. This is mainly due
to the effects of modified coinsurance agreements. Offsetting these increases is
a reduction of $574.4 million in the sales of variable annuity separate account
products in the first nine months of 2001 as compared to the first nine months
of 2000.
During the first nine months of 2001, First Golden began selling two fixed
annuity products, a Flex Annuity and a Multi-Year Guarantee Annuity. Premiums,
net of reinsurance, for variable products from a significant broker/dealer
having at least ten percent of total sales for the nine months ended September
30, 2001 totaled $132.8 million, or 10% of total premiums ($139.3 million, or
12% from a significant broker/dealer for the same period in 2000). Gross
premiums for variable products from a significant broker/dealer having at least
ten percent of total sales for the nine months ended September 30, 2001, totaled
$313.2 million, or 11% of total gross premiums ($659.9 million, or 22%, from two
significant broker/dealers for the same period in 2000).

REVENUES
PERCENTAGE      DOLLAR
FOR THE NINE MONTHS ENDED SEPTEMBER 30          2001        CHANGE        CHANGE         2000
                                              --------    ----------     --------      --------
                                                             (Dollars in millions)
Annuity and interest sensitive life
   product charges.........................   $117.3         12.9%         $13.4        $103.9
Management fee revenue.....................     18.7         11.3            1.9          16.8
Net investment income......................     67.0         39.9           19.1          47.9
Realized losses on investments.............     (1.5)       (66.7)           3.0          (4.5)
                                              ------         -----         -----        ------
                                              $201.5         22.8%         $37.4        $164.1
                                              ======         =====         =====        ======
Total revenues increased 22.8% in the first nine months of 2001 from the same
period in 2000. Annuity and interest sensitive life product charges increased
12.9% in the first nine months of 2001 due to additional fees earned from the
higher average block of business under management in the variable separate
accounts and higher surrender charges. Golden American provides certain
managerial and supervisory services to Directed Services, Inc. ("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 $17.3 million and $15.6
million for the first nine months of 2001 and 2000, respectively. This increase
was due to the increasing average assets in the variable separate accounts.

Net investment income increased 39.9% in the first nine months of 2001 due to a
growth in invested assets during 2001 mainly related to the introduction of the
Guarantee product. The Companies had $1.5 million of realized losses on the sale
of investments in the first nine months of 2001, compared to losses of $4.5
million in the same period of 2000.

EXPENSES

Total insurance benefits and expenses increased $60.3 million, or 49.2%, to
$181.5 million in the first nine months of 2001 from the same period in 2000.
Interest credited to account balances decreased $22.6 million, or 15.4%, to
$124.1 million in the first nine months of 2001. The premium credit on the
Premium Plus product decreased $31.7 million to $73.9 million at September 30,
2001 due to a decrease in variable annuity sales of the separate account
product. This decrease was partially offset by an increase in interest credited
due to higher average account balances associated with the Companies' fixed
account options, mainly due to the introduction of the Guarantee product in the
fourth quarter of 2000. The guaranteed benefits reserve change was $19.6 million
for the nine months ended September 30, 2001 mainly due to the downturn in the
equity markets.

Commissions were nearly unchanged from September 30, 2000 at $160.8 million for
the nine months ended September 30, 2001. This is consistent with relatively
stable gross premiums for the nine months ended September 30, 2001 and 2000,
despite a change in the product sales mix. Insurance taxes, state licenses, and
fees increased $1.0 million, or 24.3%, to $5.0 million in the first nine months
of 2001. Changes in commissions and insurance taxes, state licenses, and fees
are generally related to changes in the level and mix or composition of fixed
and 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 $23.4 million, or 38.2%, to $84.6 million in the
first nine months of 2001. 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. Contributing to this increase in general expenses
are additional cost allocations during the first nine months of 2001. The
increase in general expenses was partially offset by reimbursements received
from DSI, Equitable Life Insurance Company of Iowa ("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 the Companies.

During the first nine months of 2001 and 2000, the value of purchased insurance
in force ("VPIF") was adjusted to increase amortization by $1,116,000 and
$687,000, respectively, to reflect changes in the assumptions related to the
timing of estimated gross profits. 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 September 30, 2001 is $0.8
million for the remainder of 2001, $2.9 million in 2002, $2.7 million in 2003,
$2.4 million in 2004, $1.9 million in 2005, and $1.4 million in 2006. Actual
amortization may vary based upon changes in assumptions and experience.

Amortization of deferred policy acquisition costs ("DPAC") decreased $9.3
million, or 18.8%, in the first nine months of 2001. The decrease in the
amortization was mainly due to an increase in the amount of deferred costs that
have been offset due to the modified coinsurance agreement entered into during
the second quarter of 2000. Deferred policy acquisition costs decreased $27.7
million, or 31.6%, for the nine months ended September 30, 2001. The decline in
the deferred policy acquisition costs was mainly due to a lower deferral of the
premium credit on the Premium Plus product.

Expenses and charges reimbursed to Golden American under modified coinsurance
agreements decreased from $220.2 million for the first nine months in 2000 to
$194.0 million during the first nine months in 2001. This reimbursement is
primarily due to a modified coinsurance agreement which was entered into during
the second quarter of 2000, with Equitable Life, an affiliate, covering a
considerable portion of Golden American's variable annuities issued after
January 1, 2000, excluding those with an interest rate guarantee. Under this
reinsurance agreement, $192.5 million and $214.7 in expenses and charges were
reimbursed during the first nine months of 2001 and 2000, respectively. This
reimbursement offset deferred policy acquisition costs and non-deferrable costs
related to policies reinsured under this agreement.

Interest expense decreased 3.6%, or $0.5 million, to $14.4 million in the first
nine months of 2001. Interest expense on a $25 million surplus note issued
December 1996 and expiring December 2026 was $1.5 million for the first nine
months of 2001 and 2000. Interest expense on a $60 million surplus note issued
in December 1998 and expiring December 2028 was $3.3 million for the first nine
months of 2001 and 2000, respectively. Interest expense on a $75 million surplus
note, issued September 1999 and expiring September 2029 was $4.4 million for the
first nine months of 2001 and 2000, respectively. Interest expense on a $50
million surplus note, issued December 1999 and expiring December 2029 was $3.1
million for the first nine months of 2001 and 2000. Interest expense on a $35
million surplus note issued December 1999 and expiring December 2029 was $2.1
million for the first nine months of 2001 and $2.3 million in 2000. Golden
American also paid $25,000 in 2001 and $0.4 million in 2000 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 $117,000 and $36,000 for the first nine months of 2001 and 2000,
respectively.

INCOME

Net income was $3.4 million for the first nine months of 2001, a decrease of
$14.7 million, or 81.0% from the same period of 2000.

Comprehensive income for the first nine months of 2001 was $12.6 million, a
decrease of $9.2 million from comprehensive income of $21.8 million in the same
period of 2000.
Net loss on a statutory basis was $206.8 million and $6.0 for the nine months
ended September 30, 2001 and 2000, respectively. This decrease is mainly due to
increased reserves related to the downturn in the equity markets.

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. 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 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 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.

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 DPAC, 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 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 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.

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)       93.3          (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.
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)
      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
    Expenses and charges reimbursed under
        modified coinsurance agreements..............        (9.2)             64.3              (3.6)           (5.6)
                                                          -------              -----           ------          ------
                                                          $ 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 DPAC, 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 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 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 Life.

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 increased 76.5% and 72.4%, respectively, during
the first nine months of 2001 after decreasing 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 increase in the carrying
value of the Companies' investment portfolio was due mainly to net purchases, as
well as changes in unrealized appreciation and depreciation of fixed maturities.
Growth in the cost basis of the Companies' investment portfolio resulted from
the investment of premiums from the sale of the Companies' fixed account options
due mainly to the introduction of the Guarantee product. The Companies manage
the growth of insurance operations in order to maintain adequate capital ratios.
To support the fixed account options of the Companies' insurance products, cash
flow was invested primarily in fixed maturities and mortgage loans on real
estate.

At September 30, 2001 and December 31, 2000, the Companies investments had a
yield of 6.3% and 6.7%, respectively. The Companies estimate the total
investment portfolio, excluding policy loans, had a fair value approximately
equal to 102.1% and 99.3% of amortized cost value at September 30, 2001 and
December 31, 2000, respectively.

Fixed Maturities: At September 30, 2001, the Companies had fixed maturities with
an amortized cost and an estimated fair value of $1.3 billion. The Companies
classify 100% of securities as available for sale. Net unrealized appreciation
of fixed maturities of $27.6 million was comprised of gross appreciation of
$36.1 million and gross depreciation of $8.5 million. Net unrealized holding
gains on these securities, net of adjustments for VPIF, DPAC, and deferred
income taxes of $5.1 million, were included in stockholder's equity at September
30, 2001.
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 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 Rating Services ("Standard & Poor's") ($593.0
million or 45.6% at September 30, 2001 and $519.9 million or 65.1% at December
31, 2000), that are rated BBB+ to BBB- by Standard & Poor's ($297.7 million or
22.9% at September 30, 2001 and $117.9 million or 14.7% at December 31, 2000),
and below investment grade securities, which are securities issued by
corporations that are rated BB+ and lower by Standard & Poor's ($105.0 million
or 8.0% at September 30, 2001 and $53.5 million or 6.7% at December 31, 2000).
Securities not rated by Standard & Poor's had a National Association of
Insurance Commissioners ("NAIC") rating of 1, 2, 3, 4, 5, or 6 ($306.1 million
or 23.5% at September 30, 2001 and $106.9 million or 13.4% at December 31,
2000). The Companies' fixed maturity investment portfolio had a combined yield
at amortized cost of 6.7% and 6.8% at September 30, 2001 and December 31, 2000,
respectively.

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 September 30, 2001, the amortized cost value of the Companies' total
investments in below investment grade securities, excluding mortgage-backed
securities, was $98.1 million, or 5.6%, of the Companies' investment portfolio
($65.1 million, or 6.4% at December 31, 2000). The Companies do not expect the
percentage of the portfolio invested in below investment grade securities,
excluding mortgage-backed securities, to exceed 10% of the investment portfolio.
At September 30, 2001, the yield at amortized cost on the Companies' below
investment grade portfolio was 8.5% compared to 6.8% for the Companies'
investment grade corporate bond 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 $92.5 million, or 94.3% of amortized cost value, at September 30, 2001
($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.

During the first nine months of 2001 and the year ended December 31, 2000, fixed
maturities designated as available for sale with a combined amortized cost of
$406.3 million and $211.3 million, respectively, were sold, called, or repaid by
their issuers. In total, net pre-tax gains from sales, calls, and repayments of
fixed
maturities amounted to $1.4 million in the first nine months to September
2001. During the first nine months of 2001, Golden American determined that the
carrying value of four impaired bonds exceeded their estimated net realizable
value. As a result, at September 30, 2001, Golden American recognized a total
pre-tax loss of approximately $1,279,000 to reduce the carrying value of the
bonds to their net realizable value of $565,000. For year ended December 31,
2000, net pre-tax losses from sales, calls, and repayment of fixed maturities
amounted to $6.1 million, 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 with a cost of $8.6 million were redeemed
during the first nine months of 2001 resulting in a realized loss of $1.6
million. At September 30, 2001, the Companies owned equity securities with a
cost of $66,000. As of December 31, 2000, 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 12.3% of
the Companies' investment portfolio at September 30, 2001. Mortgages outstanding
were $215.1 million at September 30, 2001 with an estimated fair value of $223.8
million. Mortgages outstanding at amortized cost were $99.9 million at December
31, 2000 with an estimated fair value of $100.5 million. The Companies' mortgage
loan portfolio includes 60 loans with an average size of $2.5 million at
September 30, 2001. 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 Ohio (20% in 2001 and 4% in
2000) and California (15% in 2001 and in 2000). There are no other
concentrations of mortgage loans on real estate in any state exceeding ten
percent at September 30, 2001 and December 31, 2000. Mortgage loans on real
estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (22% in 2001 and 29% in 2000),
industrial buildings (18% in 2001 and 11% in 2000), retail facilities (20% in
2001 and 18% in 2000), and multi-family apartments (36% in 2001 and 10% in
2000). At September 30, 2001 and December 31, 2000, the yield on the Companies'
mortgage loan portfolio was 7.0% and 7.3%, respectively.

Mortgage loans on real estate represent 9.9% of the Companies' investment
portfolio at December 21, 2000. Mortgages outstanding at amortized cost were
$99.9 million at December 31, 2000 with an 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 September 30, 2001 and 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 $48.4 million during the first
nine months of 2001 and $19.1 million during 2000, due largely to an increase of
$45.9 million during the first nine months of 2001 and $14.6 million during 2000
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. Negative equity market returns during 2001 led to the increase in the
reinsurance reserves under this agreement. The remainder of the increase in 2000
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 were $10,000 and $38.8 million at September 30, 2001
and December 31, 2000, respectively. At December 31, 2000, the companies had a
receivable of $35.0 million related to a capital contribution from its parent
Equitable of Iowa. Most of the remaining balance at December 31, 2000 was due to
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 acquisition
of Equitable of Iowa and its subsidiaries by ING Groep N.V. ("ING") on October
24, 1997 (the "acquisition date"). The Companies' previous balances of DPAC and
VPIF were eliminated as of the acquisition date, and an asset representing VPIF
was established for all policies in force at the acquisition 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. Any expenses which
vary directly with the sales of the Companies' products are deferred and
amortized. At September 30, 2001, the Companies had DPAC and VPIF balances of
$635.7 million and $17.3 million, respectively ($635.1 million and $25.9
million, respectively, at December 31, 2000). During the first nine months of
2001 and 2000, VPIF was adjusted to increase amortization by $1,116,000 and by
$687,000, respectively, to reflect changes in the assumptions related to the
timing of estimated gross profits.

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 September 30, 2001 and December
31, 2000 was $14.8 million and $11.9 million, respectively.

Other assets increased $17.0 million during first nine months of 2001 and $29.5
million during 2000, due mainly to increases in the receivable for securities
sold.

At September 30, 2001, the Companies had $9.2 billion of separate account assets
compared to $9.8 billion at December 31, 2000. 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 September 30, 2001, the
Companies had total assets of $12.0 billion, relatively unchanged from December
31, 2000. At December 31, 2000, the Companies had total assets of $11.9 billion,
a 26.2% increase from December 31, 1999.

LIABILITIES. During the nine months ended September 30, 2001, future policy
benefits for annuity and interest sensitive life products increased $604.9
million, or 56.9%, to $1.7 billion reflecting net sales of the Companies' fixed
account net of transfers to the separate account options.

Separate account liabilities decreased $587.2 million, or 6.0% to $9.2 billion
at September 30, 2001. Net contributions to the separate account were more than
offset by a decrease in separate account liabilities resulting from the negative
equity market returns.

During the year ended December 31, 2000, 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 Life, which matures on December 17,
2026. As a result of the merger of Equitable Life into EIC, the surplus note is
now payable to EIC.

Amounts due to affiliates decreased $10.5 million or 52.6% to $9.4 million
during the first nine months of 2001. This is mainly due to the partial cash
settlement of a liability for the modified coinsurance agreement with Equitable
Life.

During the year ended December 31, 2000, 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 $26.0 million or 37.5% to $95.4 million during the
first nine months of 2001 due to the increase in the payable for securities
purchased. 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.

The Companies total liabilities increased $35 million, during the first nine
months 2001 and totaled $11.3 billion at September 30, 2001. 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 $131.0 million, or
22.4% from December 31, 2000 due to capital contributions from the Parent.
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 $190.4 million in the first nine
months of 2001 compared to net cash provided by operating activities of $142.9
million in the same period of 2000. 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 commissions and other deferrable expenses related to the
continued growth in the variable annuity products. For the nine months ended
September 30, 2001 and 2000, negative operating cash flows have been offset by
the effects of a modified coinsurance agreement entered into during the second
quarter of 2000 with Equitable Life. This resulted in a net cash settlement of
$192.5 million in the first nine months of 2001. For the nine months ended
September 30, 2000, this modified coinsurance resulted in a net cash settlement
of $214.7 million. Also contributing to the increase in net cash provided by
operating activities for the first nine months of 2001 as compared to 2000 is an
increase in reserves for guaranteed benefits due to the negative equity market
returns. 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 used in investing activities was $597.3 million during the first nine
months of 2001 compared to net cash provided by investing activities of $70.5
million in the same period of 2000. This increase in the net cash used in
investing activities is primarily due to net purchases of fixed maturities and
mortgage loans on real estate during the first nine months of 2001 versus net
sales in 2000. Net purchases of fixed maturities reached $504.1 million during
the first nine months of 2001 versus net sales of $53.1 million in the same
period of 2000. Net purchases of mortgage loans on real estate reached $115.4
million in the first nine months of 2000 versus net purchases of $4.7 million
during the same period in 2000. These investment purchases were mainly due to an
increase in sales of the Companies fixed account options, primarily from the
introduction of the Guarantee product in the fourth quarter of 2000.

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 provided by financing activities was $526.9 million during the first
nine months of 2001 compared to net cash used in financing activities of $162.4
million during the same period in 2000. In the first nine months of 2001, net
cash provided by financing activities was positively impacted by net fixed
account deposits of $965.3 million compared to $379.6 million in the same period
of 2000 due primarily to the introduction of the Guarantee product in the fourth
quarter of 2000. In addition, there was a decrease of $49.8 million in net
reallocations to Separate Accounts. In the first nine months of 2001, net cash
provided by financing activities was positively impacted by an increase in
capital contributions from the Parent. The Companies received $131.0 million and
$80.0 million of capital contributions from the Parent in the first nine months
of 2001 and 2000, respectively.

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. This revolving note payable was amended and restated in
April 2001 with an expiration date of May 31, 2002. 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 before reinsurance. 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. Currently, Golden American occupies
125,000 square feet of leased space. From January 1, 2001 to September 30, 2001,
First Golden's principal office was located in New York, New York, where certain
of the companies' records were maintained. The 2,568 square feet of office space
is leased through 2001. As of October 1, 2001, First Golden's principal office
moved to Woodbury, New York.

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 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 June 30, 2001, Golden American had reinsurance treaties with
five unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the mortality risks and guaranteed death and living
benefits under its variable contracts. 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 $25,000,000
related to this agreement. Effective September 30, 2001, the agreement was
amended, and the letter of credit amount was revised to $60 million.
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.

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
September 30, 2001 levels, variable separate account funds, which represent 85%
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 September 30, 2001 levels, the
remaining 15% 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-dealer 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
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") $0.2 million for the first six months of 2001, $1.3
million for 2000, and $1.3 million for 1999 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 $17.2 million, $21.3 million and $10.1 million for the first six months of
2001 and 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 first nine months of 2001 and for the years ended December
31, 2000 and 1999, Golden American and First Golden incurred fees of $2.9
million, $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
$4.0 million for the first nine months of 2001 and $6.2 million for 2000 and
$6.1 million for 1999.

First Golden provides resources and services to DSI. Revenues for these services
totaled $0.1 million for the first nine months of 2001 and $0.2 million for 2000
and $0.4 for 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 the
first nine months of 2001 and $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 $0.3 million in the first
nine months of 2001 and $0.6 million for 2000 and $0.5 million for 1999.

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 $0.2 million for the first
nine months of 2001 and $0.3 million for 2000 and $0.2 million for 1999.

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 $0.08 million for the first nine
months of 2001 and $0.1 million for 2000 and $0.1 million for 1999.

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, 2001
and for 2000, Golden American incurred a fee of $12,000 and $7,000,
respectively, under this agreement. No annual fee was paid in 1999.

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 first nine months of 2001 and the years 2000
and 1999, commissions paid by Golden American to DSI (including commissions paid
by First Golden) aggregated $160.0 million, $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 Life 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 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 (45)          Chief Executive Officer and Director
Chris D. Schreier (45)            President
Barnett Chernow (50)              President and CEO, Investment Products Group
Myles R. Tashman (58)             Executive Vice President, General Counsel and
                                     Assistant Secretary
Wayne R. Huneke (50)              Director and Chief Financial Officer
Thomas J. McInerney (45)          Director
Mark A. Tullis (46)               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 (44)           Executive Vice President and Chief Actuary
David S. Pendergrass (41)         Vice President and Treasurer
David L. Jacobson (52)            Senior Vice President and Assistant Secretary
William L. Lowe (37)              Senior Vice President
Steven G. Mandel (42)             Senior Vice President and Chief Information
                                     Officer
Gary F. Haynes (56)               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. From 1998 to 2001, Mr. Chernow served as President of Golden
American and First Golden. 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.

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. 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. 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.

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.

These  officers  serve other roles to affiliated  companies  and these  salaries
include compensation for these services.
LONG-TERM
                                            ANNUAL COMPENSATION                 COMPENSATION
                                       ---------------------------        ---------------------------
                                                                           RESTRICTED      SECURITIES
NAME AND                                                                  STOCK AWARDS     UNDERLYING       ALL OTHER
PRINCIPAL POSITION           YEAR        SALARY          BONUS/1/         OPTIONS           OPTIONS       COMPENSATION/2/
------------------           ----      -----------     -----------        ------------     ----------     ---------------
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                1998      $   173,870     $     32,152            3,500
Chief 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.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
                                           % OF TOTAL                               REALIZABLE VALUE AT
                            NUMBER OF        OPTIONS                                  ASSUMED ANNUAL
                           SECURITIES      GRANTED TO                                 RATES OF STOCK
                           UNDERLYING       EMPLOYEES    EXERCISE                   PRICE APPRECIATION
                             OPTIONS        IN FISCAL     OR BASE    EXPIRATION      FOR OPTION TERM/3/
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.

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

For the Nine Months Ended September 30, 2001
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                  (Dollars in thousands, except per share data)
September 30, 2001       December 31, 2000
                                                                             ------------------       -----------------
ASSETS
Investments:
   Fixed maturities, available for sale, at fair value
     (cost: 2001 - $1,301,768; 2000 - $798,751)........................        $    1,329,414           $     792,578
   Equity securities, at fair value
   (cost: 2001 - $66; 2000 - $8,611)...................................                    52                   6,791
   Mortgage loans on real estate.......................................               215,059                  99,916
   Policy loans........................................................                14,454                  13,323
   Short-term investments..............................................                    --                  17,102
                                                                               --------------           -------------
Total investments......................................................             1,558,979                 929,710

Cash and cash equivalents..............................................               272,826                 152,880
Reinsurance recoverable................................................                21,891                  19,331
Reinsurance recoverable from affiliate.................................                60,500                  14,642
Due from affiliates....................................................                    10                  38,786
Accrued investment income..............................................                18,326                   9,606
Deferred policy acquisition costs......................................               635,737                 635,147
Value of purchased insurance in force .................................                17,286                  25,942
Current income taxes recoverable.......................................                     3                     511
Deferred income tax asset..............................................                 4,757                   9,047
Property and equipment, less allowances for depreciation of
   $9,337 in 2001 and $5,638 in 2000...................................                11,248                  14,404
Goodwill, less accumulated amortization of $14,798 in 2001
   and $11,964 in 2000.................................................               136,329                 139,163
Other assets...........................................................                48,989                  32,019
Separate account assets................................................             9,244,329               9,831,489
                                                                               --------------           -------------
Total assets...........................................................        $   12,031,210           $  11,852,677
                                                                               ==============           =============

LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
   Future policy benefits:
     Annuity and interest sensitive life products......................        $    1,667,756           $   1,062,891
     Unearned revenue reserve..........................................                 6,436                   6,817
   Other policy claims and benefits....................................                   810                      82
                                                                               --------------           -------------
                                                                                    1,675,002               1,069,790

Surplus notes..........................................................               245,000                 245,000
Revolving note payable.................................................                 1,400                      --
Due to affiliates......................................................                 9,429                  19,887
Other liabilities......................................................                95,356                  69,374
Separate account liabilities...........................................             9,244,329               9,831,489
                                                                               --------------           -------------
                                                                                   11,270,516              11,235,540
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..........................................               714,640                 583,640
   Accumulated other comprehensive income (loss).......................                 5,067                  (4,046)
   Retained earnings ..................................................                38,487                  35,043
                                                                               --------------           -------------
Total stockholder's equity.............................................               760,694                 617,137
                                                                               --------------           -------------
Total liabilities and stockholder's equity.............................        $   12,031,210           $  11,852,677
                                                                               ==============           =============
GOLDEN AMERICAN LIFE INSURANCE COMPANY
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                             (Dollars in thousands)

                                                                   For the Nine            For the Nine
                                                                   Months Ended            Months Ended
                                                                September 30, 2001      September 30, 2000
------------------      ------------------
Revenues:
   Annuity and interest sensitive life product charges.......      $   117,308              $  103,923
   Management fee revenue....................................           18,675                  16,827
   Net investment income.....................................           67,020                  47,896
   Realized losses on investments............................           (1,529)                 (4,546)
                                                                   -----------              ----------
                                                                       201,474                 164,100

Insurance benefits and expenses:
 Annuity and interest sensitive life benefits:
   Interest credited to account balances.....................          124,061               146,672
   Guaranteed benefits reserve change........................           16,615                      --
   Benefit claims incurred in excess of account balances.....           (5,557)                  1,680
 Underwriting, acquisition, and insurance expenses:
   Commissions...............................................          160,752               160,105
   General expenses..........................................           84,551                  61,194
   Insurance taxes, state licenses, and fees.................            5,030                   4,047
     Policy acquisition costs deferred.......................          (60,031)                (87,753)
     Amortization:
       Deferred policy acquisition costs.....................           40,214                  49,527
     Value of purchased insurance in force...................            4,097                   3,181
     Goodwill................................................            2,834                   2,834
   Expense and charges reimbursed under modified
      coinsurance agreements                                          (194,043)               (220,249)
                                                                   -----------              ----------
                                                                       181,523                 121,238
Interest expense.............................................           14,438                  14,976
                                                                   -----------              ----------
                                                                       195,961                 136,214
                                                                   -----------              ----------
Income before income taxes...................................            5,513                  27,886

Income taxes.................................................            2,069                   9,802
                                                                   -----------              ----------
Net income...................................................      $     3,444              $   18,084
                                                                   ===========              ==========
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Dollars in thousands)
For the Nine            For the Nine
                                                                   Months Ended            Months Ended
                                                                September 30, 2001      September 30, 2000
                                                                ------------------      ------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES...................       $     190,373           $    142,933

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
   Fixed maturities - available for sale....................             406,428                158,731
   Equity securities........................................               6,956                  5,196
   Mortgage loans on real estate............................             126,940                  5,118
   Policy loans - net.......................................                  --                    837
   Short-term investments - net.............................              17,102                 17,880
                                                                   -------------           ------------
                                                                         557,426                187,762

Acquisition of investments:
   Fixed maturities - available for sale....................            (910,534)              (105,606)
   Mortgage loans on real estate............................            (242,357)                (9,786)
   Policy loans - net.......................................              (1,131)                    --
                                                                   -------------           ------------
                                                                      (1,154,022)              (115,392)
Net purchases of property and equipment.....................                (745)                (1,898)
Issuance of reciprocal loan agreement receivables...........                  --                (16,900)
Receipt of repayment of reciprocal loan agreement
   receivables..............................................                  --                 16,900
                                                                   -------------           ------------
Net cash provided by(used in)  investing activities.........            (597,341)                70,472

FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement borrowings..........              29,300                177,900
Repayment of reciprocal loan agreement borrowings...........             (29,300)              (177,900)
Proceeds from revolving note payable........................               1,400                 66,100
Repayment of revolving note payable.........................                  --                (67,500)
Receipts from annuity and interest sensitive life
   policies credited to account balances....................           1,074,755                506,412
Return of account balances on annuity
   and interest sensitive life policies.....................            (109,462)              (126,803)
Net reallocations to Separate Accounts......................            (570,779)              (620,568)
Contribution from parent ...................................             131,000                 80,000
                                                                   -------------           ------------
Net cash provided by (used in) financing activities.........             526,914               (162,359)
                                                                   -------------           ------------

Increase  in cash and cash equivalents......................             119,946                 51,046

Cash and cash equivalents at beginning of period............             152,880                 76,690
                                                                   -------------           ------------

Cash and cash equivalents at end of period..................       $     272,826           $    127,736
                                                                   =============           ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for
   Interest.................................................       $      14,949           $     18,068
   Taxes....................................................       $           1           $         28
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               September 30, 2001

1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. All adjustments
were of a normal recurring nature, unless otherwise noted in Management's
Discussion and Analysis and the Notes to Financial Statements. Operating results
for the nine months ended September 30, 2001 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2001. These
financial statements should be read in conjunction with the financial statements
and related footnotes included in the Golden American Life Insurance Company's
annual report on Form 10-K for the year ended December 31, 2000.

CONSOLIDATION

The condensed 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 with
Golden American, collectively, the "Companies"). All significant intercompany
accounts and transactions have been eliminated.

ORGANIZATION

Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. ("EIC" or the "Parent"). EIC is an indirect wholly owned subsidiary of ING
Groep N.V., a global financial services holding company based in The
Netherlands.

SIGNIFICANT ACCOUNTING POLICIES

New Accounting Standards: As of January 1, 2001, the Companies adopted FAS No.
133, Accounting for Derivative Instruments and Hedging Activities, as amended
and interpreted by FAS No. 137, Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133,
FAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an Amendment of FASB Statement No. 133, and certain FAS No. 133
implementation issues. This standard, as amended, requires companies to record
all derivatives on the balance sheet as either assets or liabilities and measure
those instruments at fair value. The manner in which companies are to record
gains or losses resulting from changes in the fair values of those derivatives
depends on the use of the derivative and whether it qualifies for hedge
accounting.

Adoption of FAS No. 133 did not have a material effect on the Companies'
financial position or results of operations given the Companies' limited
derivative and embedded derivative holdings.

The Companies chose to elect a transition date of January 1, 1999 for embedded
derivatives. Therefore, only those derivatives embedded in hybrid instruments
issued, acquired or substantively modified by the entity on or after January 1,
1999 are recognized as separate assets or liabilities. The cumulative effect of
the accounting change upon adoption was not material.

Accounting for Derivative Instruments and Hedging Activities: The Companies may
from time to time utilize various derivative instruments to manage interest rate
and price risk (collectively, market risk). The Companies have appropriate
controls in place, and financial exposures are monitored and managed by the
Companies as an integral part of their overall risk management program.
Derivatives are recognized on the balance sheet at their fair value.

The Companies occasionally purchase a financial instrument that contains a
derivative instrument that is "embedded" in the instrument. The Companies'
insurance products are also reviewed to determine whether they contain an
embedded derivative. The Companies assess whether the economic characteristics
of the
GOLDEN AMERICAN LIFE INSURANCE COMPANY
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               September 30, 2001

1.  BASIS OF PRESENTATION (continued)
embedded derivative are clearly and closely related to the economic
characteristics of the remaining component of the financial instrument or
insurance product (i.e., the host contract) and whether a separate instrument
with the same terms as the embedded instrument would meet the definition of a
derivative instrument. When it is determined that the embedded derivative
possesses economic characteristics that are not clearly and closely related to
the economic characteristics of the host contract and that a separate instrument
with the same terms would qualify as a derivative instrument, the embedded
derivative is separated from the host contract and carried at fair value. In
cases where the host contract is measured at fair value, with changes in fair
value reported in current period earnings, or the Companies are unable to
reliably identify and measure the embedded derivative for separation from its
host contract, the entire contract is carried on the balance sheet at fair value
and is not designated as a hedging instrument.

Pending Accounting Standards: In June 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards No. 141, "Business
Combinations", and No. 142, "Goodwill and Other Intangible Assets", effective
for fiscal years beginning after December 15, 2001. Under the new rules,
goodwill and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives. The Companies are required to adopt the new rules effective
January 1, 2002. The Companies are evaluating the impact of the adoption of
these standards and have not yet determined the effect of adoption on their
financial position and results of operations.

STATUTORY

Net loss for Golden American as determined in accordance with statutory
accounting practices was $206,801,000 and $6,017,000 for the nine months ended
September 30, 2001 and 2000, respectively. Total statutory capital and surplus
was $323,288,000 at September 30, 2001 and $406,923,000 at December 31, 2000.

The National Association of Insurance Commissioners has revised the Accounting
Practices and Procedures Manual, the guidance that defines statutory accounting
principles. The revised manual was 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 has resulted in changes to the accounting practices that the
Companies use to prepare their statutory-basis financial statements. The impact
of these changes to the Companies' statutory-basis capital and surplus as of
January 1, 2001 was not significant.

RECLASSIFICATIONS

Certain amounts in the prior period financial statements have been reclassified
to conform to the September 30, 2001 financial statement presentation.

2.  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. During the third quarters of 2001 and 2000, total comprehensive
income (loss) for the Companies amounted to $(4.8) million and $14.8 million,
respectively, and $12.6 million and $21.8 million for the nine months ended
September 30, 2001 and 2000, respectively. Other comprehensive income (loss)
excludes net investment gains (losses) included in net income which merely
represent transfers from unrealized to realized gains and losses. These amounts
totaled $231,000 and $(834,000) during the third quarters of 2001 and 2000,
respectively, and $45,000 and $(1.4) million for the nine months ended September
30, 2001 and 2000, respectively. Such amounts, which have been measured through
the date of sale, are net of income taxes and adjustments for the value of
purchased insurance in
GOLDEN AMERICAN LIFE INSURANCE COMPANY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

2.  COMPREHENSIVE INCOME (continued)
force and deferred policy acquisition costs totaling $160,000 and $(1,080,000)
for the third quarters of 2001 and 2000, respectively, and $56,000 and
$(3,121,000) for the nine months ended September 30, 2001 and 2000,
respectively.

3.  INVESTMENTS

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
September 30, 2001 and December 31, 2000. Fixed maturities included investments
in basic industrials (63% in 2001, 29% in 2000), conventional mortgage-backed
securities (10% in 2001, 20% in 2000), financial companies (8% in 2001, 14% in
2000), and other asset-backed securities (1% in 2001, 20% in 2000). Mortgage
loans on real estate have been analyzed by geographical location with
concentrations by state identified as Ohio (20% in 2001 and 4% in 2000) and
California (15% in 2001 and 15% in 2000). There are no other concentrations of
mortgage loans on real estate in any state exceeding ten percent at September
30, 2001. Mortgage loans on real estate have also been analyzed by collateral
type with significant concentrations identified in office buildings (22% in 2001
and 29% in 2000), industrial buildings (18% in 2001 and 11% in 2000), retail
facilities (20% in 2001 and 18% in 2000), and multi-family apartments (36% in
2001 and 10% in 2000).

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 impairment in value
appears to be other than temporary. During the first nine months of 2001, Golden
American determined that the carrying value of four bonds exceeded their
estimated net realizable value. As a result, during the nine months ended
September 30, 2001, Golden American recognized a total pre-tax loss of
$1,279,000 to reduce the carrying value of the bonds to their combined net
realizable value of $565,000.

4.  DERIVATIVE INSTRUMENTS

The Companies may from time to time utilize various derivative instruments to
manage interest rate and price risk (collectively, market risk). The Companies
have appropriate controls in place, and financial exposures are monitored and
managed by the Companies as an integral part of their overall risk management
program. Derivatives are recognized on the balance sheet at their fair value. At
September 30, 2001, the Companies did not utilize any such derivatives.

The estimated fair values and carrying amounts of the Companies' embedded
derivatives at September 30, 2001 were $0, net of reinsurance. The estimated
fair values and carrying amounts of the embedded derivatives on a direct basis,
before reinsurance, were $4.9 million.

The fair value of these instruments was estimated based on quoted market prices,
dealer quotations or internal estimates.

5.  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. The
Companies paid commissions to DSI totaling $51,551,000 and $159,949,000 in the
third quarter and the first nine months of 2001, respectively ($47,073,000 and
$156,325,000, respectively, for the same periods of 2000).
GOLDEN AMERICAN LIFE INSURANCE COMPANY
   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
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 third quarter and nine months
ended September 30, 2001, the fee was $5,749,000 and $17,282,000, respectively
($6,521,000 and $15,579,000, respectively, for the same periods of 2000).

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 managed by ING IM. The fee is payable quarterly. For the
third quarter and the first nine months of 2001, the Companies incurred fees of
$1,204,000 and $2,905,000, respectively, under this agreement ($596,000 and
$1,870,000, respectively, for the same periods of 2000).

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. For the nine months ended September 30, 2001 and 2000,
Golden American incurred a fee of $12,000 and $7,000, respectively, under this
agreement.

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 $1,360,000 and $4,079,000 for the
third quarter and nine months ended September 30, 2001, respectively ($1,534,000
and $4,810,000, respectively, for the same periods of 2000).

The Companies have a service agreement with Equitable Life in which Equitable
Life provides administrative and financial related services. Under this
agreement with Equitable Life, the Companies incurred expenses of $80,000 and
$232,000 for the third quarter and nine months ended September 30, 2001,
respectively ($339,000 and $1,006,000, respectively, for the same periods in
2000).

During 2001, the State of Delaware Insurance Department approved expense sharing
agreements with ING America Insurance Holdings for administrative, management,
financial, and information technology services. Under these agreements with ING
America Insurance Holdings, Golden American incurred expenses of $20.7 million
for the nine months ended September 30, 2001.

First Golden provides resources and services to DSI. Revenues for these
services, which reduced general expenses incurred by First Golden, totaled
$5,000 and $139,000 for the third quarter and nine months ended September 30,
2001, respectively ($54,000 and $162,000, respectively, for the same periods in
2000).

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 $0 and $478,000 for the third
quarter and nine months ended September 30, 2001, respectively ($117,000 and
$387,000, respectively, for the same periods in 2000).

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 $93,000 and $292,000 for
the third quarter and nine months ended September 30, 2001, respectively
($145,000 and $463,000, respectively, for the same periods in 2000).
GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
Golden American provides 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 $112,000 and $245,000 for
the third quarter and nine months ended September 30, 2001, respectively
($65,000 and $173,000, respectively, for the same periods in 2000).

The Companies provide resources and services to Southland Life Insurance
Company, an affiliate. Revenues for these services, which reduced general
expenses incurred by the Companies, totaled $34,000 and $97,000 for the third
quarter and nine months ended September 30, 2001, respectively ($26,000 and
$78,000, respectively, for the same periods in 2000).

For the third quarter of 2001, the Companies received premiums, net of
reinsurance, for variable products sold through eight affiliates, Locust Street
Securities, Inc. ("LSSI"), Vestax Securities Corporation ("Vestax"), DSI,
Multi-Financial Securities Corporation ("Multi-Financial"), IFG Network
Securities, Inc. ("IFG"), Washington Square Securities, Inc. ("Washington
Square"), PrimeVest Financial ("PrimeVest"), and Compulife Investor Services,
Inc. ("Compulife") of $28.8 million, $8.7 million, $0.2 million, $6.6 million,
$3.1 million, $25.0 million, $9.8 million and $1.5 million, respectively ($6.0
million, $0.7 million, $0, $2.1 million, $2.7 million, $0, $0, and $0,
respectively, for the same period of 2000). For the first nine months of 2001,
the Companies received premiums, net of reinsurance for variable products sold
through eight affiliates, LSSI, Vestax, DSI, Multi-Financial, IFG, Washington
Square, PrimeVest, and Compulife of $66.7 million, $21.6 million, $0.6 million,
$15.6 million, $8.6 million, $53.9 million, $20.7 million, and $5.3 million,
respectively ($73.0 million, $29.0 million, $0.8 million, $23.2 million, $11.0
million, $0, $0, and $0, respectively, for the same period of 2000).

For the third quarter and nine months ended September 30, 2001, First Golden
received premiums for fixed annuities products sold through Washington Square of
approximately $0.3 million and $0.8 million, respectively.

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 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 $31.6 million and $192.5 million for the third quarter and the
nine months ended September 30, 2001, respectively ($102.9 million and $214.7
million for the same periods in 2000). This was offset by a decrease in deferred
acquisition costs of $50.1 million and $210.9 million, respectively, for the
third quarter and the nine months ended September 30, 2001 ($103.7 million and
$213.0 million for the same periods in 2000). At September 30, 2001, Golden
American had a receivable from Equitable Life of $1.9 million due to the timing
of the cash settlement for the modified coinsurance agreement. As at December
31, 2000, Golden American had a payable of $16.3 million under the 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 minimum guaranteed death
benefits and minimum guaranteed living benefits of variable annuities issued
after January 1, 2000. An irrevocable letter of credit was obtained through Bank
of New York in the amount of $60.0 million related to this agreement. Under this
agreement, Golden American recorded a reinsurance recoverable of $60.5 million
and $14.6 million at September 30, 2001 and December 31, 2000, respectively.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
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 of 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 $0 and
$91,000 for the third quarters of 2001 and 2000, respectively, and $25,000 and
$427,000 for the nine months ended September 30, 2001 and 2000, respectively. At
September 30, 2001, Golden American did not have any borrowings or receivables
from ING AIH under this agreement.

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 $1,031,000 and
$1,020,000 for the third quarters of 2001 and 2000, respectively, and $3,059,000
and $3,076,000 for the nine months ended September 30, 2001 and 2000,
respectively.

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
$704,000 and $696,000 for the third quarters of 2001 and 2000, respectively, and
$2,089,000 and $2,271,000 for the first nine months of 2001 and 2000,
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 $1,465,000 and $1,449,000 for the third quarters of
2001 and 2000, respectively, and $4,347,000 and $4,355,000 for the first nine
months of 2001 and 2000, respectively. 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 $1,096,000 and $1,088,000 for the third quarters of
2001 and 2000, respectively, and $3,254,000 and $3,263,000 for the first nine
months of 2001 and 2000, respectively.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

5.  RELATED PARTY TRANSACTIONS (continued)
On December 17, 1996, Golden American issued an 8.25% surplus note in the amount
of $25,000,000 to Equitable of Iowa Companies. 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 $516,000 for the third
quarters of 2001 and 2000, respectively, and $1,547,000 for the first nine
months of 2001 and 2000, respectively.

Stockholder's Equity: During the third quarter and the first nine months of
2001, Golden American received capital contributions from its Parent of
$124,000,000 and $131,000,000, respectively ($0 and $80,000,000, respectively,
for the same periods in 2000).

6.  COMMITMENTS AND CONTINGENCIES

Reinsurance: At September 30, 2001, the Companies had reinsurance treaties with
five unaffiliated reinsurers and three affiliated reinsurers covering a
significant portion of the minimum guaranteed death and living benefits under
its variable contracts as of September 30, 2001. Golden American remains liable
to the extent its reinsurers do not meet their obligations under the reinsurance
agreements.

At September 30, 2001 and December 31, 2000, the Companies had net receivables
of $82,391,000 and $33,973,000, respectively, for reinsurance claims, reserve
credits, or other receivables from these reinsurers. These net receivables were
comprised of $2,955,000 and $1,820,000, respectively, for claims recoverable
from reinsurers, $4,024,000 and $4,007,000, respectively, for a payable for
reinsurance premiums, $60,500,000 and $14,642,000, respectively, for reserve
credits, and $22,960,000 and $21,518,000, respectively, for a receivable from an
unaffiliated reinsurer. Included in the accompanying financial statements are
net considerations to reinsurers of $8,593,000 for the third quarter of 2001 and
$21,211,000 for the first nine months of 2001 compared to $6,564,000 and
$14,472,000 for the same periods in 2000. Also included in the accompanying
financial statements are net policy benefits of $13,314,000 for the third
quarter of 2001 and $25,091,000 for the first nine months of 2001 compared to
$1,122,000 and $2,957,000 for the same period in 2000.

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 after
January 1, 2000, excluding those with an interest rate guarantee. For the nine
months ended September 30, 2001, Golden American had received a total settlement
of $192.5 million under this agreement, compared to $214.7 million for the same
period in 2000. The carrying value of the separate account liabilities covered
under this agreement represent 26.3% of total separate account liabilities
outstanding at September 30, 2001, compared to 17.1% at September 30, 2000.
Golden American remains liable to the extent Equitable Life does not meet its
obligations under the agreement. The accompanying financial statements 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 minimum
guaranteed death benefits and minimum guaranteed living benefits of variable
annuities issued after January 1, 2000. An irrevocable letter of credit was
obtained through Bank of New York in the amount of $60,000,000 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 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.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
                               September 30, 2001

6.  COMMITMENTS AND CONTINGENCIES  (continued)
Investment Commitments: At September 30, 2001, outstanding commitments to fund
mortgage loans totaled $35,000,000. There were no outstanding commitments to
fund mortgage loans at December 31, 2000.

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 offset 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 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. The Companies charged
to expense $2,000 in guaranteed fund assessments in the first nine months of
2001 and 2000. At September 30, 2001 and December 31, 2000, the Companies have
an undiscounted reserve $2,430,000 to cover future assessments (net of related
anticipated premium tax offsets), and have established an asset totaling
$691,000 and $733,000, 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. As of September 30, 2001, the Companies had one
investment (other than bonds issued by agencies of the United States government)
exceeding ten percent of stockholder's equity. The Companies' asset growth, net
investment income, and cash flow are primarily generated from the sale of
variable and fixed 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 on the Companies' financial condition. One
broker/dealer generated 10% of the Companies' net sales during the third quarter
of 2001 (27% by two broker/dealers in the same period of 2000). One
broker/dealer generated 10% of the Companies' net sales during the first nine
months of 2001 (12% by one broker/dealer in the same period of 2000). The
Premium Plus product generated 47% and 50% of the Companies' sales during the
third quarter of 2001 and the first nine months of 2001 (73% and 74% in the same
periods of 2000). The ES II product generated 16% of the Companies' sales during
the third and the first nine months of 2001 (12% in the same periods of 2000).
The Guarantee product, introduced in the fourth quarter of 2000, generated 11%
and 16% of the Companies' sales during the third quarter and the first nine
months of 2001.

Revolving Note Payable: To enhance short-term liquidity, the Companies
established revolving notes payable with SunTrust Bank, Atlanta (the "Bank").
These revolving notes payable were amended and restated in April 2001 with an
expiration date of May 31, 2002. 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 notes accrue
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 third
quarters ended September 30, 2001 and 2000, the
Companies incurred interest expense of $118,000 and $0, respectively. During the
nine months ended September 30, 2001 and 2000, the Companies incurred interest
expense of $117,000 and $36,000, respectively. At September 30, 2001 and
December 31, 2000, the Companies had borrowings of $1,400,000 and $0,
respectively, under these agreements.

7.  MERGER OF FIRST GOLDEN WITH RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
On September 25, 2001, the Board of Directors of First Golden approved a plan of
merger to merge First Golden into ReliaStar Life Insurance Company of New York
("ReliaStar of NY"). The merger is anticipated to be effective on January 1,
2002 (the "merger date"), subject to the approval of the Insurance Department of
the State of New York, which has the discretion, as deemed necessary, to hold a
public hearing with regard to the merger. If approved, on the merger date, First
Golden will cease to exist and will be succeeded by ReliaStar of NY.
-------------------------------------------------------------------------------
         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
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.
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.
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.
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.
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.
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 accounts ............    (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.
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
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
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).
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
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.
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)
                                          ========       ========      ========
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.
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
                                               ========     ========     ========      ========
GOLDEN AMERICAN LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

3.   INVESTMENT OPERATIONS (continued)

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.

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.
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
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).
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
                                               ========    ========    ========
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.
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
                                                   ======     ======     ======
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.
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.
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.
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).
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
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.
--------------------------------------------------------------------------------
                                   APPENDIX A
--------------------------------------------------------------------------------

                        MARKET VALUE ADJUSTMENT EXAMPLES

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

      Assume $100,000 was allocated to a Fixed Interest Allocation 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 this Fixed Interest Allocation have been made. CALCULATE THE MARKET
VALUE ADJUSTMENT

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

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

     3.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0825)           -1 ] = $9,700

     Therefore, the amount paid to you on full surrender is $114,530
($124,230 - $9,700 ).

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

      Assume $100,000 was allocated to a Fixed Interest Allocation 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 this Fixed Interest Allocation have been made. CALCULATE THE MARKET
VALUE ADJUSTMENT

     1.   The contract value of the Fixed Interest Allocation on the date of
          surrender is $124,230 ($100,000 x 1.0753)

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

     3.   Market Value Adjustment =
                                     2,555/365
          $124,230 x [( 1.07/1.0625 )           -1 ]= $6,270

     Therefore, the amount paid to you on full surrender is $130,500
($124,230 + $6,270 ).

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

      Assume $200,000 was allocated to a Fixed Interest Allocation 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 $114,530 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 this Fixed Interest Allocation have been made.

Fixed Account-121472                   A1
First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.

     1.   The contract value of the Fixed Interest Allocation on the date of
          withdrawal is $248,459 ( $200,000 x 1.0753 )

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

     3.   Amount that must be withdrawn =

                                    2,555/365
          [ $114,530 / (1.07/1.0825)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0825)           -1 ] = $9,700

     Therefore, the amount of the withdrawal paid to you is $114,530, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $114,530, and also reduced by the Market Value Adjustment of $9,700,
for a total reduction in the Fixed Interest Allocation of $124,230.

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

      Assume $200,000 was allocated to a Fixed Interest Allocation 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 $130,500 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 this Fixed Interest Allocation have been made.

     First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.

     1.   The contract value of Fixed Interest Allocation on the date of
          surrender is $248,459 ( $200,000 x 1.0753)

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

     3.   Amount that must be withdrawn =

                                    2,555/365
          [ $130,500 / (1.07/1.0625)           ] = $124,230

     Then calculate the Market Value Adjustment on that amount.

     4.   Market Value Adjustment =

                                   2,555/365
          $124,230 x [(1.07/1.0625)           -1 ] = $$6,270

     Therefore, the amount of the withdrawal paid to you is $130,500, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $130,500, but increased by the Market Value Adjustment of $6,270,
for a total reduction in the Fixed Interest Allocation of $124,230.

Fixed Account-121472                   A2
ING VARIABLE ANNUITIES

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY

            Golden American Life Insurance Company is a stock company
                             domiciled in Delaware.
--------------------------------------------------------------------------------
Fixed Account--121472                                                02/12/2002
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     Underwriting Agreement Between Golden American and
           Directed Services, Inc. incorporated by reference to
           Item 16(a)(1) of Amendment No. 1 to a Registration Statement
           for Golden American filed with the Securities and Exchange
           Commission ("SEC") on September 24, 1997 (File No. 333-28765).

     3(a)  Certificate of Amendment of the Restated Articles of
           Incorporation of Golden American incorporated by reference
           to Item 16(a)(3)(a) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     3(b)  By-Laws of Golden American incorporated by reference to
           Item 16(a)(3)(b) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     3(c)  Resolution of Board of Directors for Powers of Attorney
           incorporated by reference to Item 16(a)(3)(c) of Amendment
           No. 5 to a Registration Statement for Golden American filed
           with the SEC on April 23, 1999 (File No. 333-28765).

     4(a)  Individual Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(a) of
           Amendment No. 5 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-28765).

     4(b)  Group Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(b) of
           Amendment No. 5 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-28765).

     4(c)  Individual Deferred Variable Annuity Contract incorporated
           by reference to Item 16(a)(4)(c) of Amendment No. 5 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-28765).

     4(d)  Individual Retirement Annuity Rider Page incorporated by
           reference to Item 16(a)(4)(d) of Amendment No. 1 to a
           Registration Statement for Golden American filed with the
           SEC on September 24, 1997 (File No. 333-28765).

     4(e)  Individual Deferred Combination Variable and Fixed
           Annuity Application incorporated by reference to
           Item 16(a)(4)(e) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           December 3, 1999 (File No. 333-28765).

     4(f)  Group Deferred Combination Variable and Fixed
           Annuity Enrollment Form incorporated by reference to
           Item 16(a)(4)(f) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           December 3, 1999 (File No. 333-28765).

     4(g)  Individual Deferred Variable Annuity Application
           incorporated by reference to Item 16(a)(4)(g) of
           Amendment No. 5 to a Registration Statement for
           Golden American filed with the SEC on December 3, 1999
           (File No. 333-28765).

     4(h)  Roth Individual Retirement Annuity Rider
           incorporated by reference to Item 16(a)(4)(h) of
           Amendment No. 2 to a Registration Statement for
           Golden American filed with the SEC on February 12, 1998
           (File No. 333-28765).

     4(i)  Minimum Guaranteed Accumulation Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(i) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(j)  Minimum Guaranteed Income Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(j) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(k)  Minimum Guaranteed Withdrawal Benefit Rider (REV)
           incorporated by reference to Item 16(a)(4)(k) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(l)  Living Benefit Endorsement (Inforce Riders)
           incorporated by reference to Item 16(a)(4)(l) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(m)  Death Benefit Endorsement No.1 (REV) (7% Solution Enhanced)
           incorporated by reference to Item 16(a)(4)(m) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(n)  Death Benefit Endorsement No.2 (REV) (Ratchet Enhanced)
           incorporated by reference to Item 16(a)(4)(n) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(o)  Death Benefit Endorsement No.3 (REV) (Standard)
           incorporated by reference to Item 16(a)(4)(o) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(p)  Death Benefit Endorsement No.4 (REV) (Max 7 Enhanced)
           incorporated by reference to Item 16(a)(4)(p) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(q)  Death Benefit Endorsement No.5 (Base Death Benefit)
           incorporated by reference to Item 16(a)(4)(q) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(r)  Death Benefit Endorsement No.6 (Inforce Contracts)
           incorporated by reference to Item 16(a)(4)(r) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(s)  Earnings Enhancement Death Benefit Rider
           incorporated by reference to Item 16(a)(4)(s) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     4(t)  Individual Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(a) of
           Amendment No. 3 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-51353).

     4(u)  Group Deferred Combination Variable and Fixed Annuity
           Contract incorporated by reference to Item 16(a)(4)(b) of
           Amendment No. 3 to a Registration Statement for Golden
           American filed with the SEC on April 23, 1999
           (File No. 333-51353).

     4(v)  Individual Deferred Variable Annuity Contract incorporated
           by reference to Item 16(a)(4)(c) of Amendment No. 3 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-51353).

     5     Opinion and Consent of Myles R. Tashman

     10(a) Administrative Services Agreement between Golden American
           and Equitable Life Insurance Company of Iowa
           incorporated by reference to Item 16(a)(10)(b) of
           Amendment No. 4 to a Registration Statement for
           Golden American filed with the SEC on April 29, 1998
           (File No. 333-28765).

     10(b) Service Agreement between Golden American and Directed
           Services, Inc. incorporated by reference to
           Item 16(a)(10)(c) of Amendment No. 4 to a Registration
           Statement for Golden American filed with the SEC on
           April 29, 1998 (File No. 333-28765).

     10(c) Asset Management Agreement between Golden American and
           ING Investment Management LLC. incorporated by reference
           to Item 16(a)(10)(d) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     10(d) Reciprocal Loan Agreement between Golden American and
           ING America Insurance Holdings, Inc. incorporated by
           reference to Item 16(a)(10)(e) of Amendment No. 5 to a
           Registration Statement for Golden American filed with the
           SEC on April 23, 1999 (File No. 333-28765).

     10(e) Revolving Note Payable between Golden American and
           SunTrust Bank incorporated by reference to
           Item 16(a)(10)(f) of Amendment No. 5 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 1999 (File No. 333-28765).

     10(f) Surplus Note, dated December 17, 1996, between Golden
           American and Equitable of Iowa Companies incorporated
           by reference to Item 16(a)(10)(g) of Amendment No. 8
           to a Registration Statement for Golden American filed
           with the SEC on April 26, 2000 (File No. 333-28765).

     10(g) Surplus Note, dated December 330, 1998, between Golden
           American and Equitable Life Insurance Company of Iowa
           incorporated by reference to Item 16(a)(10)(h) of
           Amendment No. 8 to a Registration Statement for Golden
           American filed with the SEC on April 26, 2000
           (File No. 333-28765).

     10(h) Surplus Note, dated September 30, 1999, between Golden
           American and ING AIH incorporated by reference to
           Item 16(a)(10)(i) of Amendment No. 8 to a Registration
           Statement for Golden American filed with the SEC on
           April 26, 2000 (File No. 333-28765).

     10(i) Surplus Note, dated December 8, 1999, between Golden
           American and First Columbine Life Insurance Company
           incorporated by reference to Item 16(a)(10)(j) of
           Amendment No. 7 to a Registration Statement for Golden
           American filed with the SEC on January 27, 2000
           (File No. 333-28765).

     10(j) Surplus Note, dated December 8, 1999, between Golden
           American and Equitable of Iowa companies incorporated
           by reference to Item 16(a)(10)(k) of Amendment No. 7 to
           a Registration Statement for Golden American filed with
           the SEC on January 27, 2000 (File No. 333-28765).

     10(k) Reinsurance Agreement, dated June 30, 2000, between
           Golden American and Equitable Life Insurance Company
           of Iowa incorporated by reference to Item 16(a)(10)(o)
           of Amendment No. 9 to a Registration Statement for Golden
           American filed with the SEC on September 13, 2000
           (File No. 333-28765).

     10(l) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of July 31, 2000 incorporated by
           reference to Item 16(a)(10)(p) of Amendment No. 9 to a
           Registration Statement for Golden American filed with
           the SEC on September 13, 2000 (File No. 333-28765).

     10(m) Reinsurance Agreement, effective 01/01/00, between Golden
           American and Security Life of Denver International Limited
           incorporated by reference to Item 16(a)(10)(q) of
           Amendment No. 11 to a Registration Statement for
           Golden American filed with the SEC on April 23, 2001
           (File No. 333-28765).

     10(n) Letter of Credit between Security Life of Denver
           International Limited and The Bank of New York for the
           benefit of Golden American incorporated by reference to
           Item 16(a)(10)(r) of Amendment No. 11 to a Registration
           Statement for Golden American filed with the SEC on
           April 23, 2001 (File No. 333-28765).

     10(o) Renewal of Revolving Note Payable between Golden American
           and SunTrust Bank as of April 30, 2000 incorporated by
           reference to Item 16(a)(10)(u) of Amendment No. 12 to a
           Registration Statement for Golden American filed with
           the SEC on October 26, 2001 (File No. 333-28765).

     10(p) Amendment to Reinsurance Agreement, amendment dated
           September 28, 2001, between Golden American and Security
           Life of Denver International Limited incorporated by
           reference to Item 16(a)(10)(v) of Amendment No. 12 to a
           Registration Statement for Golden American filed with
           the SEC on October 26, 2001 (File No. 333-28765).

     10(q) Form of Services Agreement among Golden American
           Life Insurance Company and ING affiliated
           Insurance Companies

     10(r) Form of Services Agreement between Golden
           American Life Insurance Company and ING North
           American Insurance Corporation, Inc.

     10(s) Form of Shared Services Center Agreement among
           ING North American Insurance Corporation, Inc.
           and ING affiliated Insurance Companies

     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 Item 5 of this
            Part II, together with the Opinion of Myles R. Tashman.

     24    Powers of Attorney.
(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 31st day of December, 2001.

                                     GOLDEN AMERICAN LIFE
                                     INSURANCE COMPANY
                                     (Registrant)

                                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
December 31, 2001.

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

                              Director and Chief Executive
--------------------          Officer
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

10(q)     Form of Services Agreement among Golden American
          Life Insurance Company and ING affiliated
          Insurance Companies                                        EX-99.B10Q

10(r)     Form of Services Agreement between Golden
          American Life Insurance Company and ING North
          American Insurance Corporation, Inc.                       EX-99.B10R

10(s)     Form of Shared Services Center Agreement among
          ING North American Insurance Corporation, Inc.
          and ING affiliated Insurance Companies                     EX-99.B10S

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