File No. 333-63694
Filed under Rule 424B(3)

ING

GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY

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PROFILE OF

SMARTDESIGN ADVANTAGE

DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT

OCTOBER 31, 2001
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This Profile is a summary of some of the more important points that
you should know and consider before purchasing the Contract. The
Contract is more fully described in the full prospectus which
accompanies this Profile. Please read the prospectus carefully.
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1. THE ANNUITY CONTRACT

The Contract offered in this prospectus is a deferred combination variable and
fixed annuity contract between you and Golden American Life Insurance Company.
The Contract features a 2% premium credit option, which is currently available
only at Contract issue. The Contract provides a means for you to invest on a
tax-deferred basis in (i) one or more of 38 mutual fund investment portfolios
through our Separate Account B and/or (ii) in a fixed account of Golden American
with guaranteed interest periods. The investment portfolios are listed on page
5. We currently offer guaranteed interest periods of 6 months, 1, 3, 5, 7 and 10
years in the fixed account. We set the interest rates in the fixed account
(which will never be less than 3%) periodically. We may credit a different
interest rate for each interest period. The interest you earn in the fixed
account as well as your principal is guaranteed by Golden American as long as
you do not take your money out before the maturity date for the applicable
interest period. If you withdraw your money from the fixed account more than 30
days before the applicable maturity date, we will apply a market value
adjustment. A market value adjustment could increase or decrease your contract
value and/or the amount you take out. Generally, the investment portfolios are
designed to offer a better return than the fixed account. However, this is NOT
guaranteed. You may not make any money, and you can even lose the money you
invest in the investment portfolios.

The Contract offers a choice of death benefit options. You may choose from three
option packages which determine your death benefit, minimum premium and annual
free withdrawal. Your choice of option package will affect your mortality and
expense risk charge.

SMARTDESIGN ADVANTAGE PROFILE PROSPECTUS BEGINS AFTER
111195 PAGE 12 OF THIS PROFILE

The differences are summarized as follows:

-------------------------------- ------------------------------ ------------------------------ -----------------------------
OPTION PACKAGE I OPTION PACKAGE II OPTION PACKAGE III
-------------------------------- ------------------------------ ------------------------------ -----------------------------

-------------------------------- ------------------------------ ------------------------------ -----------------------------
MORTALITY AND EXPENSE RISK
CHARGE 1.45% 1.65% 1.80%
-------------------------------- ------------------------------ ------------------------------ -----------------------------
DEATH BENEFIT The greater of: The greatest of: The greatest of:
(1) the Standard Death (1) the Standard Death (1) the Standard Death
Benefit on the claim Benefit on the claim Benefit on the claim
date; or date; or date; or
(2) the contract value*. (2) the contract value*; or (2) the contract value*;
(3) the Annual Ratchet or
death benefit on the (3) the Annual Ratchet
claim date. death benefit; or
(4) the 5% Roll-Up death
benefit.
-------------------------------- -------------- --------------- --------------- -------------- --------------- -------------
MINIMUM INITIAL PURCHASE Non- Non- Non-
PAYMENT Qualified: Qualified: Qualified: Qualified: Qualified: Qualified:
$15,000 $1,500 $5,000 $1,500 $5,000 $1,500
-------------------------------- ------------------------------ ------------------------------ -----------------------------
FREE WITHDRAWALS 10% of your contract value 10% of your contract value 10% of your contract value
each contract year, each contract year, each contract year,
non-cumulative non-cumulative cumulative to a maximum 30%
-------------------------------- ------------------------------ ------------------------------ -----------------------------

* less credits added since or within 12 months prior to death

Please see "Purchase and Availability of the Contract", "Death Benefit During
the Accumulation Phase", and "Free Withdrawal Amount" for a complete description
of the features of each option package.

Subject to state availability, you may also elect, for an additional charge, an
earnings multiplier benefit rider. Please see page 6 for a description of any
applicable charge. The earnings multiplier benefit rider provides a separate
death benefit in addition to the death benefit provided under the option package
you select. For a description of the earnings multiplier benefit rider, please
see page 11. To find out about availability, check with our Customer Service
Center.

The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the income phase. The accumulation phase is the period
between the contract date and the date on which you start receiving the annuity
payments under your Contract. The amounts you accumulate during the accumulation
phase will determine the amount of annuity payments you will receive. The income
phase begins on the annuity start date, which is the date you start receiving
regular annuity payments from your Contract. You determine (1) the amount and
frequency of premium payments, (2) your investment allocations, (3) transfers
between investment options, (4) the type of annuity to be paid after the
accumulation phase, (5) the beneficiary who will receive the death benefits, (6)
the type of death benefit, and (7) the amount and frequency of withdrawals.

111195 2 SMARTDESIGN ADVANTAGE PROFILE

2. YOUR ANNUITY PAYMENTS (THE INCOME PHASE)

When you want to begin receiving payments from your contract, you may select
from the options available. The contract offers several income phase payment
options (see "The Income Phase"). In general, you may:

o Receive income phase payments for a specified period of time or for
life;

o Receive income phase payments monthly, quarterly, semi-annually or
annually;

o Select an income phase payment option that provides for payments to
your beneficiary; or

o Select income phase payments that are fixed or vary depending upon the
performance of the variable investment options you select.

3. PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)

The minimum initial payment to purchase the Contract, and the maximum age at
which you may purchase the Contract depend on the option package that you
select.

--------------------------- ------------------------------ ------------------------------- ----------------------------
OPTION PACKAGE I OPTION PACKAGE II OPTION PACKAGE III
--------------------------- ------------------------------ ------------------------------- ----------------------------

Minimum Initial Payment $15,000 (non-qualified) $5,000 (non-qualified) $5,000 (non-qualified)
$1,500 (qualified) $1,500 (qualified) $1,500 (qualified)
--------------------------- ------------------------------ ------------------------------- ----------------------------
Maximum Age to Purchase 85 80 80
--------------------------- ------------------------------ ------------------------------- ----------------------------

You may make additional premium payments until the contract anniversary after
your 86th birthday. The minimum additional premium payment we will accept is $50
regardless of the option package you select. Under certain circumstances, we may
waive the minimum initial and additional premium payment requirement. Any
initial or additional premium payment that would cause the contract value of all
annuities that you maintain with us to exceed $1,000,000 requires our prior
approval.

PREMIUM CREDIT OPTION. At the time of application you may elect the premium
credit option. If you so elect, a credit will be added to your Contract based on
all premium payments received within 60 days of the contract date ("initial
premium"). The credit will be a minimum of 2% of initial premium and will be
allocated among the investment options you have selected in proportion to your
initial premium. If available in your state at that time, prior to the third
contract anniversary and prior to every third contract anniversary thereafter,
you may elect to have a new credit added to your Contract. Each three year
period beginning with the addition of a premium credit is known as a "renewal
period". The credit will be a minimum of 2% of your contract value on the
applicable contract anniversary. Each new premium credit will be allocated among
your variable investment options in proportion to your contract value in the
variable investment options. If no contract value is then allocated to the
variable investment options, the new premium credit will be allocated to a
specially designated subaccount, currently the Liquid Asset Subaccount. If you
do not elect the premium credit option, we will discontinue the option on the
contract anniversary at the start of the next renewal period. Once you elect not
to renew the premium credit option, it cannot be subsequently resumed.

We will assess a charge for each premium credit which will be deducted from your
contract value for a period of up to three years following the addition of a
premium credit. The premium credit option charge will be deducted from your
contract value in both the subaccounts and the Fixed Account. The charge will
equal 0.60% of your contract value in the subaccounts on an annual basis and
will reduce the interest which would otherwise have been credited to your
contract value in the Fixed Account by 0.60% on an annual basis. See "Expenses."

111195 3 SMARTDESIGN ADVANTAGE PROFILE

If you anticipate that you will need to make withdrawals from your Contract
during the first three contract years, you may not want to elect the premium
credit option. Your sales representative can help you decide if the premium
credit option is right for you.

THE EXPENSES FOR A CONTRACT PROVIDING A PREMIUM
CREDIT, AS THIS CONTRACT DOES, MAY BE HIGHER THAN FOR CONTRACTS NOT PROVIDING A
PREMIUM CREDIT. OVER TIME, AND UNDER CERTAIN CIRCUMSTANCES, THE AMOUNT OF THE
PREMIUM CREDIT MAY BE MORE THAN OFFSET BY THE ADDITIONAL FEES AND CHARGES
ASSOCIATED WITH THE PREMIUM CREDIT.

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

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

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

4. THE INVESTMENT PORTFOLIOS

You can direct your money into (1) the fixed account with guaranteed interest
periods of 6 months, and 1, 3, 5, 7 and 10 years, and/or (2) into any one or
more of the following mutual fund investment portfolios through our Separate
Account B. The investment portfolios are described in the prospectuses for Aetna
GET Fund, Aetna Variable Portfolios, Inc., AIM Variable Insurance Funds,
Alliance Variable Products Series Fund, Inc., Brinson Series Trust, Fidelity
Variable Insurance Products Fund, Fidelity Variable Insurance Products Fund II,
The GCG Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen Series,
Pilgrim Variable Insurance Trust, Pilgrim Variable Products Trust, The PIMCO
Variable Insurance Trust, Pioneer Variable Contracts Trust, Portfolio Partners,
Inc., The Prudential Series Fund, Inc. and Putnam Variable Trust. Keep in mind
that while an investment in the fixed account earns a fixed interest rate, an
investment in any investment portfolio, depending on market conditions, may
cause you to make or lose money. The investment portfolios available under your
Contract are:

111195 4 SMARTDESIGN ADVANTAGE PROFILE

AETNA GET FUND JANUS ASPEN SERIES
Aetna GET Fund Janus Aspen Series Worldwide Growth
AETNA VARIABLE PORTFOLIOS, INC. Portfolio (Service Shares)
Aetna Index Plus Large Cap VP (Class S) PILGRIM VARIABLE INSURANCE TRUST
Aetna Index Plus Mid Cap VP (Class S) Pilgrim VIT Worldwide Growth Fund
Aetna Index Plus Small Cap VP (Class S) PILGRIM VARIABLE PRODUCTS TRUST
Aetna Value Opportunity VP (Class S) Pilgrim VP Convertible Portfolio (Class S)
AIM VARIABLE INSURANCE FUNDS Pilgrim VP Growth and Income Portfolio
AIM V.I. Dent Demographic Trends Fund (Class S)
(Series II) Pilgrim VP LargeCap Growth Portfolio
AIM V.I. Growth Fund (Series II) (Class S)
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. Pilgrim VP MagnaCap Portfolio (Class S)
AllianceBernstein Value Portfolio (Class B) THE PIMCO VARIABLE INSURANCE TRUST
Alliance Growth and Income Portfolio (Class B) PIMCO High Yield Bond Portfolio
Alliance Premier Growth Portfolio (Class B) PIONEER VARIABLE CONTRACTS TRUST
BRINSON SERIES TRUST Pioneer Fund VCT Portfolio (Class II)
Brinson Tactical Allocation Portfolio (Class I) Pioneer Small Company VCT Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND (Class II)
Fidelity VIP Equity-Income Portfolio PORTFOLIO PARTNERS, INC.
(Service Class 2) PPI MFS Capital Opportunities Portfolio
Fidelity VIP Growth Portfolio THE PRUDENTIAL SERIES FUND, INC.
(Service Class 2) Prudential Jennison Portfolio (Class II)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II SP Jennison International Growth Portfolio
Fidelity VIP II Contrafund Portfolio (Class II)
(Service Class 2) PUTNAM VARIABLE TRUST
THE GCG TRUST Putnam VT Growth and Income Fund
Core Bond Portfolio (Class IB)
Growth and Income Portfolio Putnam VT International Growth and Income
Liquid Asset Portfolio Fund (Class IB)
Research Portfolio Putnam VT Voyager Fund II Portfolio
Total Return Portfolio (Class IB)
Value Equity Portfolio
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-Financial Services Fund
INVESCO VIF-Health Sciences Fund
INVESCO VIF-Utilities Fund

RESTRICTED FUNDS. We may designate any investment option as a Restricted Fund
and limit the amount you may allocate or transfer to a Restricted Fund. We may
establish any such limitation, at our discretion, as a percentage of premium or
contract value or as a specified dollar amount and change the limitation at any
time. Currently, we have not designated any investment option as a Restricted
Fund. We may, with 30 days notice to you, designate any investment portfolio as
a Restricted Fund or change the limitations on existing contracts with respect
to new premiums added to such investment portfolio and also with respect to new
transfers to such investment portfolio. For more detailed information, see
"Restricted Funds" in the prospectus for the Contract.

5. EXPENSES

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 $30. We also deduct a charge for the

111195 5 SMARTDESIGN ADVANTAGE PROFILE

premium credit option, if elected. We deduct the mortality and expense risk
charge, the asset-based administrative charge, and the premium credit option
charge, if applicable, daily directly from your contact value in the investment
portfolios. We also deduct the premium credit option charge from your contract
value in the Fixed Account. We will also make a daily deduction, during the
guarantee period, of a guarantee charge, equal on an annual basis to the
percentage shown below, from amounts allocated to the GET Fund. The mortality
and expense risk charge and the asset-based administrative charge, on an annual
basis, are as follows:

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OPTION OPTION OPTION
PACKAGE I PACKAGE II PACKAGE III
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Mortality & Expense Risk Charge 1. 45% 1. 65% 1.80%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 1.60% 1.80% 1.95%
Optional Asset-Based Premium Credit Charge 0.60% 0.60% 0.60%
Total With Optional Premium Credit Charge 2.20% 2.40% 2.55%
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GET Fund Guarantee Charge* 0.50% 0.50% 0.50%
Total With Optional Premium Credit Charge
and GET Fund Guarantee Charge 2.70% 2.90% 3.05%
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* applied to amounts invested in the GET Fund investment option only

During the income phase, the Mortality & Expense Risk Charge, on an annual
basis, is equal to 1.25% of amounts invested in the subaccounts. The Premium
Credit Option Charge is also deducted during the income phase, if otherwise
applicable. There is currently no Administrative Charge during the income phase.
We reserve the right to impose a charge of up to 0.25% during the income phase
in the future. If we are imposing this charge when you enter the income phase,
it will apply to you during the entire income phase. See "The Income Phase-
Charges Deducted."

EARNINGS MULTIPLIER BENEFIT RIDER CHARGE

If you choose to purchase the earnings multiplier benefit rider, we will deduct
a separate quarterly charge for the rider on each quarterly contract anniversary
and pro rata when the rider terminates. We deduct the rider charge directly from
your contract value in the investment portfolios; if the value in the investment
portfolios is insufficient, the rider charge will be deducted from your contract
value in the fixed account. The quarterly rider charge is 0.0625% of the
contract value (0.25% annually).

Each investment portfolio has charges for investment management fees and other
expenses. These charges, which vary by investment portfolio, currently range
from 0.55 % to 1.64% annually (see following table) of the portfolio's average
daily net asset balance.

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

We deduct a surrender charge if you surrender your Contract or withdraw an
amount exceeding the free withdrawal amount. The free withdrawal amount for a
contract year is 10% of contract value, based on the contract value on the date
of withdrawal, less any prior withdrawals in that contract year. Under Option
Package III, any unused free withdrawal amount may carry forward to successive
contract years, but in no event would the free withdrawal amount at any time
exceed 30% of contract value. The following table shows the schedule of the
surrender charge that will apply. The surrender charge is a percent of each
premium payment withdrawn.

111195 6 SMARTDESIGN ADVANTAGE PROFILE

COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3+
SINCE PREMIUM PAYMENT | | |
SURRENDER CHARGE 6% | 5% | 4% | 0%

The following table is designed to help you understand the Contract charges. The
"Total Annual Insurance Charges" column is divided into two: One part reflects
the mortality and expense risk charge (based on Option Package III), the
asset-based administrative charge, the annual contract administrative charge as
0.04% (based on an average contract value of $80,000), and the earnings
multiplier benefit rider charge of 0.25%. The second part reflects the same
insurance charges, but without the rider charge. The "Total Annual Investment
Portfolio Charges" column reflects the portfolio charges for each portfolio
(after any applicable waivers or reductions) and is based on actual expenses as
of December 31, 2000, except for (i) portfolios that commenced operations during
2000 or 2001 where the charges have been estimated, and (ii) newly formed
portfolios where the charges have been estimated. Expenses for the GET Fund also
reflect the asset-based GET Fund guarantee charge of 0.50% of assets in the GET
Fund. Because a GET Fund series has a five year period to maturity, no GET Fund
expenses are included in the 10 year example for the GET Fund. The column "Total
Annual Charges" reflects the sum of the previous two columns. The columns under
the heading "Examples" show you how much you would pay under the Contract for a
1-year period and for a 10-year period.

As required by the Securities and Exchange Commission, the examples assume that
you invested $1,000 in a Contract that earns 5% annually and that you withdraw
your money at the end of Year 1 or at the end of Year 10 (based on Option
Package III). The 1 Year examples below include a 6% surrender charge. For Years
1 and 10, the examples show the total annual charges assessed during that time
and assume that you have elected Option Package III. For these examples, the
premium tax is assumed to be 0%.

111195 7 SMARTDESIGN ADVANTAGE PROFILE

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EXAMPLES:
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TOTAL ANNUAL TOTAL ANNUAL TOTAL CHARGES AT THE END OF:
INSURANCE CHARGES CHARGES 1 YEAR 10 YEARS
---------------- ---------------- -------------- ---------------
WITH W/O TOTAL ANNUAL WITH W/O WITH W/O WITH W/O
THE ANY INVESTMENT THE ANY THE ANY THE ANY
RIDER RIDER PORTFOLIO RIDER RIDER RIDER RIDER RIDER RIDER
INVESTMENT PORTFOLIO CHARGES CHARGE CHARGES CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE
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AETNA GET FUND
GET Fund 2.74% 2.49% 1.00% 3.74% 3.49% $98 $95 N/A* N/A*

AETNA VARIABLE PORTFOLIOS, INC.
Index Plus Large Cap VP 2.24% 1.99% 0.69% 2.93% 2.68% $90 $87 $325 $301
Index Plus Mid Cap VP 2.24% 1.99% 0.85% 3.09% 2.84% $91 $89 $340 $317
Index Plus Small Cap VP 2.24% 1.99% 0.85% 3.09% 2.84% $91 $89 $340 $317
Value Opportunity VP 2.24% 1.99% 1.00% 3.24% 2.99% $93 $90 $354 $331

AIM VARIABLE INSURANCE FUNDS
V.I. Dent Demographic
Trends 2.24% 1.99% 1.45% 3.69% 3.44% $97 $95 $394 $372
V.I. Growth 2.24% 1.99% 1.08% 3.32% 3.07% $93 $91 $361 $338

ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Bernstein Value 2.24% 1.99% 1.20% 3.44% 3.19% $95 $92 $372 $349
Growth and Income 2.24% 1.99% 0.95% 3.19% 2.94% $92 $90 $349 $326
Premier Growth 2.24% 1.99% 1.30% 3.54% 3.29% $96 $93 $381 $359

BRINSON SERIES TRUST
Tactical Allocation 2.24% 1.99% 0.98% 3.22% 2.97% $92 $90 $352 $329

FIDELITY VARIABLE INSURANCE PRODUCTS FUND
VIP Equity-Income 2.24% 1.99% 0.82% 3.06% 2.81% $91 $88 $337 $314
VIP Growth 2.24% 1.99% 0.90% 3.14% 2.89% $92 $89 $345 $321

FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
VIP II Contrafund 2.24% 1.99% 0.90% 3.14% 2.89% $92 $89 $345 $321

THE GCG TRUST
Core Bond 2.24% 1.99% 1.01% 3.25% 3.00% $93 $90 $355 $332
Growth and Income 2.24% 1.99% 1.11% 3.35% 3.10% $94 $91 $364 $341
Liquid Asset 2.24% 1.99% 0.55% 2.79% 2.54% $88 $86 $312 $288
Research 2.24% 1.99% 0.89% 3.13% 2.88% $92 $89 $344 $320
Total Return 2.24% 1.99% 0.89% 3.13% 2.88% $92 $89 $344 $320
Value Equity 2.24% 1.99% 0.95% 3.19% 2.94% $92 $90 $349 $326

INVESCO VARIABLE INVESTMENT FUNDS, INC.
Financial Services 2.24% 1.99% 1.09% 3.33% 3.08% $94 $91 $362 $339
Health Sciences 2.24% 1.99% 1.07% 3.31% 3.06% $93 $91 $360 $337
Utilities 2.24% 1.99% 1.22% 3.46% 3.21% $95 $92 $374 $351

JANUS ASPEN SERIES
Worldwide Growth 2.24% 1.99% 0.94% 3.18% 2.93% $92 $90 $348 $325

PILGRIM VARIABLE INSURANCE TRUST
Worldwide Growth 2.24% 1.99% 1.23% 3.47% 3.22% $95 $92 $375 $352

PILGRIM VARIABLE PRODUCTS TRUST
Convertible 2.24% 1.99% 1.10% 3.34% 3.09% $94 $91 $363 $340
Growth and Income 2.24% 1.99% 1.10% 3.34% 3.09% $94 $91 $363 $340
LargeCap Growth 2.24% 1.99% 1.10% 3.34% 3.09% $94 $91 $363 $340
MagnaCap 2.24% 1.99% 1.10% 3.34% 3.09% $94 $91 $363 $340

THE PIMCO VARIABLE INSURANCE TRUST
High Yield Bond 2.24% 1.99% 0.75% 2.99% 2.74% $90 $88 $331 $307

* Current GET Fund Series are available for 5 year guarantee periods only.
Therefore, no GET Fund expenses are included in the expense example
under 10 years.

111195 8 SMARTDESIGN ADVANTAGE PROFILE

PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT 2.24% 1.99% 0.93% 3.17% 2.92% $92 $90 $348 $324
Small Company VCT 2.24% 1.99% 1.50% 3.74% 3.49% $98 $95 $398 $377
PORTFOLIO PARTNERS, INC.

PPI MFS Capital
Opportunities 2.24% 1.99% 0.90% 3.14% 2.89% $92 $89 $345 $321

THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison 2.24% 1.99% 1.04% 3.28% 3.03% $93 $91 $358 $335
SP Jennison
International Growth 2.24% 1.99% 1.64% 3.88% 3.63% $99 $97 $410 $389

PUTNAM VARIABLE TRUST
Growth and Income 2.24% 1.99% 0.75% 2.99% 2.74% $90 $88 $331 $307
International Growth
and Income 2.24% 1.99% 1.22% 3.46% 3.21% $95 $92 $374 $351
Voyager Fund II 2.24% 1.99% 1.25% 3.49% 3.24% $95 $93 $377 $354

The "Total Annual Investment Portfolio Charges" column above reflects current
expense reimbursements for applicable investment portfolios. For more detailed
information, see "Fees and Expenses" in the prospectus for the Contract.

6. TAXES

Under a qualified Contract, your premiums are generally pre-tax contributions
and accumulate on a tax-deferred basis. Premiums and earnings are generally
taxed as income when you make a withdrawal or begin receiving annuity payments,
presumably when you are in a lower tax bracket.

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

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

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

7. WITHDRAWALS

You can withdraw your money at any time during the accumulation phase. You may
elect in advance to take systematic withdrawals which are described on page 12.
Withdrawals above the free withdrawal amount may be subject to a surrender
charge. We will apply a market value adjustment if you withdraw your money from
the fixed account more than 30 days before the applicable maturity date. Income
taxes and a penalty tax may apply to amounts withdrawn.

111195 9 SMARTDESIGN ADVANTAGE PROFILE

8. PERFORMANCE

The value of your Contract will fluctuate depending on the investment
performance of the portfolio(s) you choose. Because the Company did not commence
sales of the Contract prior to the date of this prospectus, the Contract has no
performance history.

9. DEATH BENEFIT

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

The death benefit may be subject to certain mandatory distribution rules
required by federal tax law.

There are three option packages available under your Contract. You select an
option package at the time of application. The differences in the death benefits
under the three option packages are summarized as follows:

DEATH BENEFIT The greater of: The greatest of: The greatest of:
1) the Standard Death 1) the Standard Death 1) the Standard Death
Benefit; or Benefit; or Benefit; or
2) the contract value*. 2) the contract value*; or 2) the contract value*;
3) the Annual Ratchet or
death benefit. 3) the Annual Ratchet
death benefit; or
4) the 5% Roll-Up death
benefit.
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* reduced by the amount of any credits added since or within 12 months
prior to death

Option Packages II and III are not available where a Contract is held by
joint owners.

For purposes of calculating the death benefits, certain investment portfolios
may be designated as "Special Funds." Selecting a Special Fund may limit or
reduce the death benefit. Currently, no investment portfolios have been
designated as Special Funds.

We may in the future stop or suspend offering any of the option packages to new
Contracts. A change in ownership of the Contract may affect the amount of the
death benefit. Please see ""Death Benefit Choices" in the prospectus for details
on the calculation of the death benefits and further details on the effect of
withdrawals and transfers to Special Funds on the calculation of the death
benefits.

111195 10 SMARTDESIGN ADVANTAGE PROFILE

TRANSFERABILITY. You may transfer from one option package to another.

o Transfers may only occur on a contract anniversary.

o A written request for the transfer must be received by us within 60
days before a contract anniversary.

o Certain minimum contract values must be met.

See "Transfers Between Option Packages" in the Prospectus for more information
on transferability and the impact of transfers between option packages on your
death benefit.

Note: In all cases described above, the amount of the death benefit could
be reduced by premium taxes owed and withdrawals not previously
deducted. All death benefits may not be available in every state.

We may, with 30 days notice to you, designate any investment portfolio as a
Special Fund on existing Contracts with respect to new premiums added to such
investment portfolio and also with respect to new transfers to such investment
portfolio. Keep in mind that selecting a Special Fund may limit or reduce the
death benefit.

For the period during which a portion of the contract value is allocated to a
Special Fund, we may, at our discretion, reduce the mortality and expense risk
charge attributable to that portion of the contract value. The reduced mortality
and expense risk charge will be applicable only during the period contract value
is allocated to a Special Fund.

EARNINGS MULTIPLIER BENEFIT RIDER. The earnings multiplier benefit rider is an
optional rider that provides a separate death benefit in addition to the death
benefit provided under the death benefit options available under the option
packages. The rider is subject to state availability and is available only for
issues ages 75 or under. It may be added at issue of the Contract or on the next
contract anniversary following introduction of the rider in a state, if later.
The date on which the rider is added is referred to as the "rider effective
date." The rider provides a benefit equal to a percentage of the gain under the
Contract, up to a gain equal to 300% of premiums adjusted for withdrawals
("Maximum Base"). Currently, where the rider is added at issue, the earnings
multiplier benefit is equal to 40% (25% for issue ages 70 and above) of the
lesser of: 1) the Maximum Base; and 2) the contract value on the date we receive
written notice and due proof of death, as well as required claims forms, minus
premiums adjusted for withdrawals. If the rider is added to a Contract after
issue, the earnings multiplier benefit is equal to 40% (25% for issue ages 70
and above) of the lesser of: 1) 300% of the contract value on the rider
effective date, plus subsequent premiums adjusted for subsequent withdrawals;
and 2) the contract value on the date we receive written notice and due proof of
death, as well as required claims forms, minus the sum of the contract value on
the rider effective date plus subsequent premiums adjusted for subsequent
withdrawals. The adjustment to the benefit for withdrawals is pro rata, meaning
that the benefit will be reduced by the proportion that the withdrawal bears to
the contract value at the time of the withdrawal.

There is an extra charge for this feature and once selected, it may not be
revoked. The earnings enhancement benefit rider does not provide a benefit if
there is no gain under the Contract. As such, the Company would continue to
assess a charge for the rider, even though no benefit would be payable at death
under the rider if there are no gains under the Contract. Please see 6 for a
description of the earnings multiplier benefit rider charge.

The rider is available for both non-qualified and qualified contracts. Please
see the discussions of possible tax consequences in sections titled "Individual
Retirement Annuities," "Taxation of Non-Qualified Contracts," "Taxation of
Qualified Contracts," and "Tax Consequences of Death Benefit Options," in the
prospectus.

111195 11 SMARTDESIGN ADVANTAGE PROFILE

10. OTHER INFORMATION

FREE LOOK. If you cancel the Contract within 10 days after you receive it,
you will receive a refund of the adjusted contract value. We determine your
contract value at the close of business on the day we receive your written
refund request. For purposes of the refund during the free look period, (i) we
adjust your contract value for any market value adjustment (if you have invested
in the fixed account), (ii) then we exclude any credit initially applied, and
(iii) then we include a refund of any charges deducted from your contract value.
Because of the market risks associated with investing in the portfolios and the
potential positive or negative effect of the market value adjustment, the
contract value returned may be greater or less than the premium payment you
paid. Some states require us to return to you the amount of the premium paid,
excluding any credit, (rather than the contract value) in which case you will
not be subject to investment risk during the free look period. Also, in some
states, you may be entitled to a longer free look period.

TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You can make
transfers among your investment portfolios and your investment in the fixed
account as frequently as you wish without any current tax implications.
Transfers to a GET Fund series may only be made during the offering period for
that GET Fund Series. See "GET Fund" on page 30 of the Prospectus. The minimum
amount for a transfer is $100. There is currently no charge for transfers, and
we do not limit the number of transfers allowed. The Company may, in the future,
charge a $25 fee for any transfer after the twelfth transfer in a contract year
or limit the number of transfers allowed. We also reserve the right to limit the
number of transfers you may make and may otherwise modify or terminate transfer
privileges if required by our business judgment or in accordance with applicable
law.

Keep in mind that if you transfer or otherwise withdraw your money from the
fixed account more than 30 days before the applicable maturity date, we will
apply a market value adjustment. A market value adjustment could increase or
decrease your contract value and/or the amount you transfer or withdraw.
Transfers between Special Funds and Non-Special Funds will impact your death
benefit and benefits under an optional benefit rider, if any. Also, a transfer
to a Restricted Fund 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. Transfers from Restricted Funds are not limited. If the
result of multiple transfers 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.
See "Restricted Funds" in the prospectus for more information.

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

ADDITIONAL FEATURES. This Contract has other features you may be interested in.
These include:

Dollar Cost Averaging. This is a program that allows you to invest a
fixed amount of money in the investment portfolios each month, which may
give you a lower average cost per unit over time than a single one-time
purchase. Dollar cost averaging requires regular investments regardless of
fluctuating price levels, and does not guarantee profits or prevent losses
in a declining market. This option is currently available only if you have
$1,200 or more in the Liquid Asset investment portfolio or in the fixed
account with either a 6-month or 1-year guaranteed interest period.
Transfers from the fixed account under this program will not be subject to
a market value adjustment. If you invest in Restricted Funds, your ability
to dollar cost average may be limited. Please see "Transfers Among Your
Investments" in the prospectus for more complete information.

Systematic Withdrawals. During the accumulation phase, you can arrange
to have money sent to you at regular intervals throughout the year. Within
limits these withdrawals will not result in any surrender charge.
Withdrawals from your money in the fixed account under this program are
not subject to a market value adjustment. Of course, any applicable income
and penalty taxes will apply on amounts withdrawn. If you invest in
Restricted Funds, your systematic withdrawals may be affected. Please see
"Withdrawals" in the prospectus for more complete information.

111195 12 SMARTDESIGN ADVANTAGE PROFILE

Automatic Rebalancing. If your contract value is $10,000 or more, you
may elect to have the Company automatically readjust the money between
your investment portfolios periodically to keep the blend you select.
Investments in the fixed account are not eligible for automatic
rebalancing. If you invest in Restricted Funds, automatic rebalancing may
be affected. Please see "Transfers Among Your Investments" in the
prospectus for more complete information.

11. INQUIRIES

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

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

or your registered representative.

111195 13 SMARTDESIGN ADVANTAGE PROFILE

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--------------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY

SMARTDESIGN ADVANTAGE

DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
--------------------------------------------------------------------------------

OCTOBER 31, 2001

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

The Contract provides a means for you to invest your premium payments and
credits, if applicable, in one or more of 38 mutual fund investment portfolios.
You may also allocate premium payments and credits, if applicable, to our Fixed
Account with guaranteed interest periods. Your contract value will vary daily to
reflect the investment performance of the investment portfolio(s) you select and
any interest credited to your allocations in the Fixed Account. The investment
portfolios available under your Contract and the portfolio managers are listed
on the back of this cover.

We will credit your Fixed Interest Allocation(s) with a fixed rate of
interest. We set the interest rates periodically. We will not set the interest
rate to be less than a minimum annual rate of 3%. You may choose guaranteed
interest periods of 6 months, and 1, 3, 5, 7 and 10 years. The interest earned
on your money as well as your principal is guaranteed as long as you hold them
until the maturity date. If you take your money out 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.
You bear the risk that you may receive less than your principal if we make a
Market Value Adjustment. For Contracts sold in some states, not all Fixed
Interest Allocations or subaccounts are available. You have a right to return a
Contract within 10 days after you receive it for a refund of the adjusted
contract value, less credits we added, if applicable, (which may be more or less
than the premium payments you paid), or if required by your state, the original
amount of your premium payment. Longer free look periods apply in some states
and in certain situations.

This prospectus provides information that you should know before investing
and should be kept for future reference. A Statement of Additional Information
("SAI"), dated, October 31, 2001, has been filed with the Securities and
Exchange Commission ("SEC"). It is available without charge upon request. To
obtain a copy of this document, write to our Customer Service Center at P.O. Box
2700, West Chester, Pennsylvania 19380 or call (800) 366-0066, or access the
SEC's website (http://www.sec.gov). The table of contents of the SAI is on the
last page of this prospectus and the SAI is made part of this prospectus by
reference.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE. THE EXPENSES FOR A CONTRACT PROVIDING A
PREMIUM CREDIT, AS THIS CONTRACT DOES, MAY BE HIGHER THAN FOR CONTRACTS NOT
PROVIDING A PREMIUM CREDIT. OVER TIME, AND UNDER CERTAIN CIRCUMSTANCES, THE
AMOUNT OF THE PREMIUM CREDIT MAY BE MORE THAN OFFSET BY THE ADDITIONAL FEES AND
CHARGES ASSOCIATED WITH THE PREMIUM CREDIT.

AN INVESTMENT IN ANY SUBACCOUNT THROUGH THE AETNA GET FUND, AETNA VARIABLE
PORTFOLIOS, INC., AIM VARIABLE INSURANCE FUNDS, ALLIANCE VARIABLE PRODUCTS
SERIES FUND, INC., BRINSON SERIES TRUST, FIDELITY VARIABLE INSURANCE PRODUCTS
FUND, FIDELITY VARIABLE INSURANCE PRODUCTS FUND II, THE GCG TRUST, INVESCO
VARIABLE INVESTMENT FUNDS, INC., JANUS ASPEN SERIES, PILGRIM VARIABLE INSURANCE
TRUST, PILGRIM VARIABLE PRODUCTS TRUST, THE PIMCO VARIABLE INSURANCE TRUST,
PIONEER VARIABLE CONTRACTS TRUST, PORTFOLIO PARTNERS, INC., THE PRUDENTIAL
SERIES FUND, INC. OR PUTNAM VARIABLE TRUST 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 BY A CURRENT PROSPECTUS FOR THE AETNA
VARIABLE PORTFOLIOS, INC., AIM VARIABLE INSURANCE FUNDS, ALLIANCE VARIABLE
PRODUCTS SERIES FUND, INC., BRINSON SERIES TRUST, FIDELITY VARIABLE INSURANCE
PRODUCTS PORTFOLIOS, THE GCG TRUST, INVESCO VARIABLE INVESTMENT FUNDS, INC.,
JANUS ASPEN SERIES, PILGRIM VARIABLE INSURANCE TRUST, PILGRIM VARIABLE PRODUCTS
TRUST, PIMCO VARIABLE INSURANCE TRUST, PIONEER VARIABLE CONTRACTS TRUST,
PORTFOLIO PARTNERS, INC., THE PRUDENTIAL SERIES FUND AND PUTNAM VARIABLE TRUST.

--------------------------------------------------------------------------------
A LIST OF THE INVESTMENT PORTFOLIOS AND THE MANAGERS ARE LISTED
ON THE BACK OF THIS COVER.
--------------------------------------------------------------------------------
SmartDesign Advantage-111195

The investment portfolios available under your Contract and the portfolio
managers are:

AELTUS INVESTMENT MANAGEMENT, INC. INVESCO FUNDS GROUP, INC.
Aetna GET Fund INVESCO VIF-Financial Services Fund
Aetna Index Plus Large Cap VP (Class S) INVESCO VIF-Health Sciences Fund
Aetna Index Plus Mid Cap VP (Class S) INVESCO VIF-Utilities Fund
Aetna Index Plus Small Cap VP (Class S) JANUS CAPITAL CORPORATION
Aetna Value Opportunity VP (Class S) Growth and Income Portfolio
AIM ADVISORS, INC. Janus Aspen Series Worldwide Growth Portfolio
AIM V.I. Dent Demographic Trends Fund (Service Shares)
(Series II) JENNISON ASSOCIATES, LLC
AIM V.I. Growth Fund (Series II) Prudential Jennison Portfolio (Class II)
ALLIANCE CAPITAL MANAGEMENT L.P. SP Jennison International Growth Portfolio
AllianceBernstein Value Portfolio (Class B) (Class II)
Alliance Growth and Income Portfolio(Class B) MASSACHUSETTS FINANCIAL SERVICES COMPANY
Alliance Premier Growth Portfolio (Class B) PPI MFS Capital Opportunities Portfolio
BRINSON ADVISORS, INC. Research Portfolio
Brinson Tactical Allocation Portfolio (Class I) Total Return Portfolio
EAGLE ASSET MANAGEMENT, INC. PACIFIC INVESTMENT MANAGEMENT COMPANY
Value Equity Portfolio Core Bond Series
FIDELITY MANAGEMENT & RESEARCH COMPANY PIMCO High Yield Bond Portfolio
Fidelity VIP Equity-Income Portfolio PIONEER INVESTMENT MANAGEMENT, INC.
(Service Class 2) Pioneer Fund VCT Portfolio (Class II)
Fidelity VIP Growth Portfolio (Service Class 2) Pioneer Small Company VCT Portfolio (Class II)
Fidelity VIP II Contrafund Portfolio PUTNAM INVESTMENT MANAGEMENT, LLC
(Service Class 2) Putnam VT Growth and Income
ING INVESTMENT MANAGEMENT, LLC Portfolio (Class IB)
Liquid Asset Portfolio Putnam VT International Growth and Income
ING PILGRIM INVESTMENTS, LLC Portfolio (Class IB)
Pilgrim VP Convertible Portfolio (Class S) Putnam VT Voyager Fund II Portfolio (Class IB)
Pilgrim VP Growth and Income Portfolio
(Class S)
Pilgrim VP LargeCap Growth Portfolio(Class S)
Pilgrim VP MagnaCap Portfolio (Class S)
Pilgrim VIT Worldwide Growth Fund

The above mutual fund investment portfolios are purchased and held by
corresponding divisions of our Separate Account B. We refer to the
divisions as "subaccounts" and the money you place in the Fixed Account's
guaranteed interest periods as "Fixed Interest Allocations" in this
prospectus.

SmartDesign Advantage-111195

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

PAGE

Index of Special Terms................................... 1
Fees and Expenses........................................ 2
Performance Information.................................. 18
Accumulation Unit.................................. 18
Net Investment Factor.............................. 18
Condensed Financial Information.................... 19
Financial Statements............................... 19
Performance Information............................ 19
Golden American Life Insurance Company................... 20
The Trusts............................................... 20
Golden American Separate Account B....................... 22
The Investment Portfolios................................ 22
Investment Objectives.............................. 23
Investment Management Fees......................... 27
GET Fund........................................... 30
Restricted Funds................................... 30
The Fixed Interest Allocation............................ 31
Selecting a Guaranteed Interest Period............. 31
Guaranteed Interest Rates.......................... 32
Transfers from a Fixed Interest Allocation......... 32
Withdrawals from a Fixed Interest Allocation....... 33
Market Value Adjustment............................ 33
Special Funds............................................ 34
The Annuity Contract..................................... 34
Contract Date and Contract Year ................... 34
Annuity Start Date................................. 35
Contract Owner..................................... 35
Annuitant.......................................... 35
Beneficiary........................................ 36
Purchase and Availability of the Contract.......... 37
Crediting of Premium Payments...................... 37
Additional Credit to Premium....................... 38
Administrative Procedures.......................... 39
Contract Value..................................... 39
Cash Surrender Value............................... 40
Surrendering to Receive the Cash Surrender Value... 40
The Subaccounts.................................... 41
Addition, Deletion or Substitution of Subaccounts
and Other Changes................................ 41
The Fixed Account.................................. 41
Other Contracts....................................... 41
Other Important Provisions............................ 41
Withdrawals.............................................. 42
Regular Withdrawals................................ 42
Systematic Withdrawals............................. 42
IRA Withdrawals.................................... 44
Transfers Among Your Investments......................... 45
Transfers by Third Parties......................... 45
Dollar Cost Averaging.............................. 45
Automatic Rebalancing.............................. 47

SmartDesign Advantage-111195 i

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

PAGE

Death Benefit Choices.................................... 47
Death Benefit During the Accumulation Phase........ 47
Option Package I............................... 48
Option Package II.............................. 48
Option Package III............................. 48
Transfers Between Option Packages.............. 50
Earnings Multiplier Benefit Rider.............. 51
Death Benefit During the Income Phase.............. 51
Continuation After Death- Spouse................... 52
Continuation After Death- Non-Spouse............... 52
Required Distributions upon Contract Owner's
Death............................................ 53
Charges and Fees......................................... 53
Charge Deduction Subaccount........................ 53
Charges Deducted from the Contract Value........... 54
Surrender Charge............................... 54
Nursing Home Waiver............................ 54
Free Withdrawal Amount......................... 54
Surrender Charge for Excess Withdrawals........ 54
Premium Taxes.................................. 55
Administrative Charge.......................... 55
Transfer Charge................................ 55
Charges Deducted from the Subaccounts.............. 55
Mortality and Expense Risk Charge.............. 55
Asset-Based Administrative Charge.............. 55
Premium Credit Option Charge................... 55
Earnings Multiplier Benefit Charge............. 56
Trust Expenses..................................... 56
The Annuity Options...................................... 56
Initiating Payments................................ 56
What Affects Payment Amounts....................... 56
Fixed Payments..................................... 57
Variable Payments.................................. 57
Assumed Net Investment Rate........................ 57
Minimum Payment Amounts............................ 57
Restrictions on Start Dates and the Duration
of Payments...................................... 57
Charges Deducted................................... 58
Death Benefit During the Income Phase.............. 58
Beneficiary Rights................................. 58
Partial Entry into the Income Phase................ 58
Taxation........................................... 58
Payment Options.................................... 58
Terms to Understand................................ 58
Lifetime Income Phase Payment Options.............. 59
Nonlifetime Income Phase Payment Option............ 60
Other Contract Provisions................................ 60
Reports to Contract Owners......................... 60
Suspension of Payments............................. 60
In Case of Errors in Your Application.............. 60
Assigning the Contract as Collateral............... 60

SmartDesign Advantage-111195 ii

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

PAGE

Contract Changes-Applicable Tax Law................ 61
Free Look.......................................... 61
Group or Sponsored Arrangements.................... 61
Selling the Contract............................... 61
Other Information........................................ 62
Voting Rights...................................... 62
State Regulation................................... 62
Legal Proceedings.................................. 62
Legal Matters...................................... 63
Experts............................................ 63
Federal Tax Considerations............................... 63
More Information About Golden American Life Insurance
Company............................................ 71
Unaudited Financial Statements of Golden American Life
Insurance Company.................................. 94
Financial Statements of Golden American Life Insurance
Company............................................ 106
Statement of Additional Information
Table of Contents.................................. 133
Appendix A
Market Value Adjustment Examples................... A1
Appendix B
Surrender Charge for Excess Withdrawals Example.... B1
Appendix C
Withdrawal Adjustment for 5% Roll-Up Death Benefit
Examples........................................ C1
Appendix D
Projected Schedule of GET Fund Offerings........... D1

SmartDesign Advantage-111195 iii

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

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

SPECIAL TERM PAGE
Accumulation Unit 18
Annual Ratchet 49
Annuitant 35
Annuity Start Date 34
Cash Surrender Value 40
Contract Date 34
Contract Owner 34
Contract Value 39
Contract Year 34
Earnings Multiplier Benefit 51
Fixed Interest Allocation 31
Free Withdrawal Amount 54
GET Fund 29
Market Value Adjustment 33
Net Investment Factor 18
Restricted Funds 30
Rider Date 31
5% Roll-up 49
Special Funds 34
Standard Death Benefit 48

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

TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals

SmartDesign Advantage-111195 1

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

CONTRACT OWNER TRANSACTION EXPENSES*

Surrender Charge:

COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3+
SINCE PREMIUM PAYMENT | | |
SURRENDER CHARGE 6% | 5% | 4% | 0%

Transfer Charge............................. $25 per transfer,
if you make more than 12 transfers in a contract year **

* If you invested in a Fixed Interest Allocation, a Market Value
Adjustment may apply to certain transactions. This may increase or
decrease your contract value and/or your transfer or surrender
amount.

** We currently do not impose this charge, but may do so in the future.

ANNUAL CONTRACT ADMINISTRATIVE CHARGE*

Administrative Charge...................... $30
(We waive this charge if the total of your premium payments is $50,000 or
more or if your contract value at the end of a contract year is $50,000
or more.)

* We deduct this charge on each contract anniversary and on surrender.
There is currently no Administrative Charge during the income phase.
We reserve the right to impose a charge of up to 0.25% during the
income phase in the future. If we are imposing this charge when you
enter the income phase, it will apply to you during the entire income
phase.

SEPARATE ACCOUNT ANNUAL CHARGES*

-------------------------------------------------------------------------------
OPTION OPTION OPTION
PACKAGE I PACKAGE II PACKAGE III

-------------------------------------------------------------------------------
Mortality & Expense Risk Charge** 1. 45% 1. 65% 1.80%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 1.60% 1.80% 1.95%
Optional Asset-Based Premium Credit Charge 0.60% 0.60% 0.60%
Total With Optional Premium Credit Charge 2.20% 2.40% 2.55%
-------------------------------------------------------------------------------
GET Fund Guarantee Charge*** 0.50% 0.50% 0.50%
Total With Optional Premium Credit Charge
and GET Fund Guarantee Charge 2.70% 2.90% 3.05%
-------------------------------------------------------------------------------

* As a percentage of average daily assets in each subaccount. The
Separate Account Annual Charges are deducted daily.

** During the income phase, the Mortality & Expense Risk Charge, on an
annual basis, is equal to 1.25% of amounts invested in the
subaccounts. The Premium Credit Option Charge is also deducted during
the income phase, if otherwise applicable.

*** The GET Fund Guarantee Charge is deducted daily during the guarantee
period from amounts allocated to the GET Fund investment option.
Please see page 29 for a description of the GET Fund guarantee.

SmartDesign Advantage-111195 2

EARNINGS MULTIPLIER BENEFIT RIDER CHARGE*

Quarterly Charge........................... 0.0625% of contract value
(0.25% annually)

* We deduct the rider charge from the subaccounts in which you are
invested on each quarterly contract anniversary and pro rata on
termination of the Contract; if the value in the subaccounts is
insufficient, the rider charge will be deducted from the Fixed
Interest Allocation(s) nearest maturity, and the amount deducted may
be subject to a Market Value Adjustment.

THE AETNA GET FUND ANNUAL EXPENSES (AS A PERCENTAGE OF THE AVERAGE DAILY NET
ASSETS OF A PORTFOLIO):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS(1) REDUCTIONS REDUCTIONS
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

Aetna GET Fund (1) 0.60% 0.25% 0.15% 1.00% 0.00% 1.00%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) During the offering period, the Investment Advisory Fee is 0.25%.

THE AETNA VARIABLE PORTFOLIOS, INC. ANNUAL EXPENSES (AS A PERCENTAGE OF THE
AVERAGE DAILY NET ASSETS OF A PORTFOLIO):

Aetna Index Plus Large Cap
VP (Class S) (2) 0.35% 0.25% 0.09% 0.69% 0.00% 0.69%
Aetna Index Plus Mid Cap
VP (Class S) (3) 0.40% 0.25% 0.22% 0.87% 0.02% 0.85%
Aetna Index Plus Small Cap
VP (Class S) (3) 0.40% 0.25% 0.46% 1.11% 0.26% 0.85%
Aetna Value Opportunity
VP (Class S) (2) 0.60% 0.25% 0.15% 1.00% 0.00% 1.00%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) Because Class S shares are new, the expenses shown are based on
expenses incurred by Class R shareholders for the year ended
12/31/00, adjusted for differences in the distribution (12b-1) fee
applicable to Class S.

(2) Aeltus is contractually obligated through December 31, 2001 to
waive all or a portion of its investment advisory fees and/or its
administrative services fees and/or to reimburse a portion of other
expenses in order to maintain a certain expense ratio.

(3) Aeltus is contractually obligated through December 31, 2001 to
waive all or a portion of its investment advisory fees and/or its
administrative services fees and/or to reimburse a portion of other
expenses in order to ensure that the Portfolios' total operating
expenses do not exceed the percentage reflected under Net Fund
Annual Expenses.

SmartDesign Advantage-111195 3

THE AIM VARIABLE INSURANCE FUNDS EXPENSES (as a percentage of the average daily
net assets of a portfolio):

AIM V.I. Dent Demographic
Trends Fund (Series II) 0.62% 0.25% 0.76% 1.63% 0.18% 1.45%
AIM V.I. Growth Fund
(Series II) 0.61% 0.25% 0.22% 1.08% 0.00% 1.08%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) Based on estimated assets. The investment advisor has agreed to
waive fees and/or reimburse Rule 12b-1 distribution plan expenses
(excluding interest, taxes, dividend expense on short sales,
extraordinary items and increases in expense due to expense offset
arrangements, if any) to limit total Series II operating expenses
to 1.45% of average daily net assets until December 31, 2001.

THE ALLIANCE VARIABLE PRODUCTS SERIES FUND EXPENSES (as a percentage of the
average daily net assets of a portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

AllianceBernstein Value
(Class B) (1) 0.75% 0.25% 0.00% 1.00% 0.00% 1.00%
Alliance Growth and Income
(Class B) 0.63% 0.25% 0.00% 0.88% 0.00% 0.88%
Alliance Premier Growth
(Class B) 1.00% 0.25% 0.00% 1.25% 0.00% 1.25%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) Alliance Capital is contractually obligated through December 31,
2001 to waive all or a portion of its investment advisory fees
and/or its administrative services fees and/or to reimburse a
portion of other expenses in order to ensure that the Portfolio's
total operating expenses do not exceed the percentage reflected
under Net Fund Annual Expenses.

THE BRINSON SERIES TRUST EXPENSES (as a percentage of the average daily net
assets of a portfolio):

Brinson Tactical Allocation
(Class I) 0.50% 0.25% 0.00% 0.75% 0.00% 0.75%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

SmartDesign Advantage-111195 4

THE FIDELITY VARIABLE INSURANCE PRODUCTS FUND AND THE FIDELITY VARIABLE
INSURANCE PRODUCTS FUND II EXPENSES (as a percentage of the average daily net
assets of a portfolio):

Fidelity VIP Equity--
Income (2) (Service Class 2) 0.48% 0.25% 0.10% 0.83% 0.00% 0.83%
Fidelity VIP Growth (2)
(Service Class 2) 0.57% 0.25% 0.09% 0.91% 0.00% 0.91%
Fidelity VIP II Contrafund (3)
(Service Class 2) 0.57% 0.25% 0.10% 0.92% 0.00% 0.92%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) Actual annual class operating expenses were lower because a portion
of the brokerage commissions that each fund paid was used to reduce
the fund's expenses. In addition, through arrangements with each
fund's custodian, credits realized as a result of uninvested cash
balances are used to reduce a portion of the fund's custodian
expenses. These offsets may be discontinued at any time.

(2) Effective January 12, 2000, FMR has voluntarily agreed to reimburse
Service Class 2 of each fund to the extent that total operating
expense (excluding interest, taxes, certain securities lending
costs, brokerage commissions, and extraordinary expenses), as a
percentage of its average net assets, exceed 1.75%. This
arrangement may be discontinued by FMR at any time.

(3) Effective January 12, 2000, FMR has voluntarily agreed to reimburse
Service Class 2 of each fund to the extent that total operating
expense (excluding interest, taxes, certain securities lending
costs, brokerage commissions, and extraordinary expenses), as a
percentage of its average net assets, exceed 1.25%. This
arrangement may be discontinued by FMR at any time.

THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net assets
of a portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE(1) FEE EXPENSES(2) REDUCTIONS(3) REDUCTIONS REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

Core Bond 1.00% 0.00% 0.01% 1.01% 0.00% 1.01%
Growth and Income 1.10% 0.00% 0.01% 1.11% 0.00% 1.11%
Liquid Asset 0.54% 0.00% 0.01% 0.55% 0.00% 0.55%
Research 0.88% 0.00% 0.01% 0.89% 0.00% 0.89%
Total Return 0.88% 0.00% 0.01% 0.89% 0.00% 0.89%
Value Equity 0.94% 0.00% 0.01% 0.95% 0.00% 0.95%
-------------------------------------------------------------------------------------------------------------------------

(1) Fees decline as the total assets of certain combined portfolios
increase. See the prospectus for the GCG Trust for more information.

(2) Other expenses generally consist of independent trustees fees and
certain expenses associated with investing in international markets.
Other expenses are based on actual expenses for the year ended
December 31, 2000.

(3) Total Fund Annual Expenses are based on actual expenses for the fiscal
year ended December 31, 2000.

SmartDesign Advantage-111195 5

THE INVESCO VARIABLE INVESTMENT FUNDS, INC. EXPENSES (as a percentage of the
average daily net assets of a portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

INVESCO VIF - Financial (1)
Services 0.75% 0.00% 0.34% 1.09% 0.00% 1.09%
INVESCO VIF - Health (1)
Sciences 0.75% 0.00% 0.32% 1.07% 0.00% 1.07%
INVESCO VIF - Utilities (2)
Sciences 0.60%% 0.00% 0.81% 1.41% 0.19% 1.22%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) The Fund's actual Other Expenses and Total Fund Annual Expenses
were lower than the figures shown because its custodian fees were
reduced under an expense offset arrangement. Certain expenses of
the Fund were absorbed voluntarily by INVESCO pursuant to a
commitment between the Fund and INVESCO. This commitment may be
changed at any time following consultation with the board of
directors. After absorption, but excluding any expense offset
arrangements, the Fund's Other Expenses and Total Fund Annual
Expenses for the period ended December 31, 2000 were insignificant.

(2) The Fund's actual Other Expenses and Total Fund Annual Expenses
were lower than the figures shown because its custodian fees were
reduced under an expense offset arrangement. Certain expenses of
the Fund were absorbed voluntarily by INVESCO pursuant to a
commitment between the Fund and INVESCO. This commitment may be
changed at any time following consultation with the board of
directors. After absorption, but excluding any expense offset
arrangements, the Fund's Other Expenses and Total Fund Annual
Expenses for the fiscal year ended December 31, 2000 were 0.62% and
1.22%, respectively, of the Fund's average net assets.

THE JANUS ASPEN SERIES EXPENSES (as a percentage of the average daily net assets
of a portfolio):

Janus Aspen Series
Worldwide Growth
(Service Shares) 0.65% 0.25% 0.05% 0.95% 0.01% 0.94%
---------------------------------- ------------ ------------ ------------ ----------------- -------------- --------------

(1) Expenses are based upon expenses for the year ended December 31,
2000, restated to reflect a reduction in the management fee for the
portfolio. Expenses are stated both with and without contractual
waivers by Janus Capital. Waivers, if applicable, are first applied
against the management fee and then against other expenses, and
will continue until at least the next annual renewal of the
advisory agreement.

SmartDesign Advantage-111195 6

PILGRIM VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the average
daily net assets of the portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS(1) REDUCTIONS(2) REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

Pilgrim VIT Worldwide
Growth 1.00% 0.25% 1.72% 2.97% 1.74% 1.23%
-------------------------------------------------------------------------------------------------------------------------

(1) The table shows the estimated operating expenses for the Portfolio
as a ratio of expenses to average daily net assets. These estimates
are based on the Portfolio's actual operating expenses for its most
recent complete fiscal year and fee waivers to which the Adviser
has agreed for the Portfolio.

(2) ING Pilgrim Investments, LLC has entered into an expense limitation
contract with the Fund, under which it will limit expenses of the
Fund, excluding interest, taxes, brokerage and extraordinary
expenses through February 28, 2002. The expense limit for the Fund
is shown as Net Fund Annual Expenses. Fee waiver and/or
reimbursements by ING Pilgrim Investments, LLC may vary in order to
achieve such contractually obligated Net Fund Annual Expenses.

PILGRIM VARIABLE PRODUCTS TRUST ANNUAL EXPENSES (as a percentage of the average
daily net assets of the portfolio)(1):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

Pilgrim VP Convertible
(Class S) 0.75% 0.25% 0.25% 1.25% 0.15% 1.10%
Pilgrim VP Growth and
Income (Class S) 0.75% 0.25% 0.25% 1.25% 0.15% 1.10%
Pilgrim VP LargeCap Growth
(Class S) 0.75% 0.25% 0.25% 1.25% 0.15% 1.10%
Pilgrim VP MagnaCap
(Class S) 0.75% 0.25% 7.15% 8.15% 7.05% 1.10%
-------------------------------------------------------------------------------------------------------------------------

(1) Because Class S shares are new for each portfolio, the Other
Expenses for the MagnaCap Portfolio is based on Class R expenses of
the Portfolio. For all other Portfolios, which had not commenced
operations prior to the date of this prospectus, other expenses are
based on estimated amounts for the current fiscal year. ING Pilgrim
Investments, LLC has entered into expense limitation agreements
with each portfolio, under which it will limit expenses of the
portfolio, excluding interest, taxes, brokerage and extraordinary
expenses subject to possible reimbursement to ING. The expense
limit for each Portfolio is shown as Net Fund Annual Expenses. For
each Portfolio, the expense limits will continue through at least
December 31, 2001.

SmartDesign Advantage-111195 7

THE PIMCO VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS(1) REDUCTIONS REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

PIMCO High Yield Bond 0.25% 0.15% 0.35% 0.75% 0.00% 0.75%
-------------------------------------------------------------------------------------------------------------------------

(1) PIMCO has contractually agreed to reduce total annual portfolio
operating expenses to the extent they would exceed, due to the
payment of organizational expenses and Trustees' fees, 0.75% of
average daily net assets for the Portfolio. Under the Expense
Limitation Agreement, PIMCO may recoup these waivers and
reimbursements in future periods, not exceeding three years,
provided total expenses, including such recoupment, do not exceed
the annual expense limit.

THE PIONEER VARIABLE CONTRACTS TRUST EXPENSES (as a percentage of the average
daily net assets of the portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

Pioneer Fund VCT
(Class II) 0.65% 0.25% 0.03% 0.93% 0.00% 0.93%
Pioneer Small Company VCT
(Class II) (1) 0.75% 0.25% 0.60% 1.60% 0.10% 1.50%
-------------------------------------------------------------------------------------------------------------------------

(1) Pioneer has agreed not to impose all or a portion of its management
fee and, if necessary, to limit other ordinary operating expenses
to the extent required to reduce Class I expenses to 1.25% of the
average daily net assets attributable to Class I shares; the
portion of portfolio expenses attributable to Class II shares will
be reduced only to the extent such expenses are reduced for Class I
shares. Pioneer may subsequently recover reimbursed expenses from
the portfolio if the portfolio's expense ratio is less than the
expense limitation.

THE PORTFOLIO PARTNERS, INC. EXPENSES (as a percentage of the average daily net
assets of the portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS(1) REDUCTIONS REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

PPI MFS Capital
Opportunities 0.65% 0.00% 0.25% 0.90% 0.00% 0.90%
-------------------------------------------------------------------------------------------------------------------------

SmartDesign Advantage-111195 8

THE PRUDENTIAL SERIES FUND, INC. ANNUAL EXPENSES (as a percentage of the average
daily net assets of the portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS(2) REDUCTIONS
-------------------------------------------------------------------------------------------------------------------------

Prudential Jennison (Class II) 0.60% 0.25% 0.19% 1.04% 0.00% 1.04%
SP Jennison International
Growth (Class II) 0.85% 0.25% 0.54% 1.64% 0.00% 1.64%
-------------------------------------------------------------------------------------------------------------------------

(1) The 12b-1 fees for the Prudential Jennison Portfolio and the SP
Jennison International Growth Portfolio are imposed to enable the
portfolios to recover certain sales expenses, including
compensation to broker-dealers, the cost of printing prospectuses
for delivery to prospective investors and advertising costs for the
portfolio. Over a long period of time, the total amount of 12b-1
fees paid may exceed the amount of sales charges imposed by the
product.

(2) Any reimbursement by the investment adviser of investment advisory
or other expenses is voluntary, and not a contractual obligation.

THE PUTNAM VARIABLE TRUST EXPENSES (as a percentage of the average daily net
assets of the portfolio):

-------------------------------------------------------------------------------------------------------------------------
TOTAL FUND NET FUND
DISTRIBUTION ANNUAL ANNUAL
AND/OR EXPENSES TOTAL EXPENSES
INVESTMENT SERVICE WITHOUT WAIVERS AFTER
ADVISORY (12B-1) OTHER WAIVERS OR OR WAIVERS OR
PORTFOLIO FEE FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS(1)
-------------------------------------------------------------------------------------------------------------------------

Putnam VT Growth and
Income (Class IB) 0.46% 0.25% 0.04% 0.75% 0.00% 0.75%
Putnam VT International
Growth and Income
(Class IB) 0.80% 0.25% 0.17% 1.22% 0.00% 1.22%
Putnam VT Voyager Fund II
(Class IB) (1) 0.70% 0.25% 0.30% 1.25% 0.00% 1.25%
-------------------------------------------------------------------------------------------------------------------------

(1) The portfolio began operation on September 29, 2000, so the Net Fund
Annual Expenses are estimated.

THE PURPOSE OF THE FOREGOING TABLES IS TO HELP YOU UNDERSTAND THE VARIOUS COSTS
AND EXPENSES THAT YOU WILL BEAR DIRECTLY AND INDIRECTLY. SEE THE PROSPECTUSES OF
THE AETNA GET FUND, AETNA VARIABLE PORTFOLIOS, INC., AIM VARIABLE INSURANCE
FUNDS, ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC., BRINSON SERIES TRUST,
FIDELITY VARIABLE INSURANCE PRODUCTS FUND, FIDELITY VARIABLE INSURANCE PRODUCTS
FUND II,, THE GCG TRUST, INVESCO VARIABLE INVESTMENT FUNDS, INC., JANUS ASPEN
SERIES, PILGRIM VARIABLE INSURANCE TRUST, PILGRIM VARIABLE PRODUCTS TRUST, THE
PIMCO VARIABLE INSURANCE TRUST, PIONEER VARIABLE CONTRACTS TRUST, PORTFOLIO
PARTNERS, INC., THE PRUDENTIAL SERIES FUND, INC. AND PUTNAM VARIABLE TRUST FOR
ADDITIONAL INFORMATION ON MANAGEMENT OR ADVISORY FEES AND IN SOME CASES ON OTHER
PORTFOLIO EXPENSES.

Premium taxes (which currently range from 0% to 3.5% of premium payments) may
apply, but are not reflected in the tables above or in the examples below.

SmartDesign Advantage-111195 9

EXAMPLES:

The following four examples are designed to show you the expenses you would pay
on a $1,000 investment that earns 5% annually. Each example assumes election of
Option Package III. The examples reflect the deduction of a mortality and
expense risk charge, an asset-based administrative charge, and the annual
contract administrative charge as an annual charge of 0.04% of assets (based on
an average contract value of $80,000). Expenses for the GET Fund also reflect
the asset-based GET Fund guarantee charge of 0.50% of assets in the GET Fund.
Because a GET Fund series has a five year period to maturity, no GET Fund
expenses are shown in the 10 year expense column for the GET Fund. Examples 1
and 2 also assume you elected the earnings multiplier benefit rider with a
charge of 0.25% of the contract value annually. Each example also assumes that
any applicable expense reimbursements of underlying portfolio expenses will
continue for the periods shown. If Option Package I or II is elected instead of
Option Package III used in the examples, the actual expenses will be less than
those represented in the examples. Note that surrender charges may apply if you
choose to annuitize your Contract within the first 3 contract years. Thus, in
the event you annuitize your Contract under circumstances which require a
surrender charge, you should refer to Examples 1 and 3 below which assume
applicable surrender charges.

SmartDesign Advantage-111195 10

Example 1:

If you surrender your Contract at the end of the applicable time period and
elected the earnings multiplier benefit rider, you would pay the following
expenses for each $1,000 invested:

-------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------------------------------------------------------

AETNA GET FUND
Aetna GET Fund $98 $154 $193 N/A*

AETNA VARIABLE PORTFOLIOS, INC.
Aetna Index Plus Large Cap VP $90 $131 $154 $325
Aetna Index Plus Mid Cap VP $91 $135 $162 $340
Aetna Index Plus Small Cap VP $91 $135 $162 $340
Aetna Value Opportunity VP $93 $140 $169 $354

AIM VARIABLE INSURANCE FUNDS
AIM V.I. Dent Demographic Trends $97 $153 $191 $394
AIM V.I. Growth $93 $142 $173 $361

ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
AllianceBernstein Value $95 $146 $179 $372
Alliance Growth and Income $92 $138 $167 $349
Alliance Premier Growth $96 $149 $184 $381

BRINSON SERIES TRUST
Brinson Tactical Allocation $92 $139 $168 $352

FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity VIP Equity-Income $91 $135 $161 $337
Fidelity VIP Growth $92 $137 $164 $345

FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP II Contrafund $92 $137 $164 $345

THE GCG TRUST
Core Bond $93 $140 $170 $355
Growth and Income $94 $143 $175 $364
Liquid Asset $88 $127 $147 $312
Research $92 $137 $164 $344
Total Return $92 $137 $164 $344
Value Equity $92 $138 $167 $349

INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-Financial Services $94 $142 $174 $362
INVESCO VIF-Health Sciences $93 $142 $173 $360
INVESCO VIF-Utilities $95 $146 $180 $374

JANUS ASPEN SERIES
Janus Aspen Series Worldwide Growth $92 $138 $166 $348

PILGRIM VARIABLE INSURANCE TRUST
Pilgrim VIT Worldwide Growth $95 $147 $180 $375

PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible $94 $143 $174 $363
Pilgrim VP Growth and Income $94 $143 $174 $363
Pilgrim VP LargeCap Growth $94 $143 $174 $363
Pilgrim VP MagnaCap $94 $143 $174 $363

* Current GET Fund Series are available for 5 year guarantee periods
only. Therefore, no GET Fund expenses are included in the expense
example under 10 years.

SmartDesign Advantage-111195 11

THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $90 $132 $157 $331

PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT $92 $138 $166 $348
Pioneer Small Company VCT $98 $154 $193 $398

PORTFOLIO PARTNERS, INC.
PPI MFS Capital Opportunities $92 $137 $164 $345

THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison $93 $141 $171 $358
SP Jennison International Growth $99 $158 $200 $410

PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $90 $132 $157 $331
Putnam VT International Growth
and Income $95 $146 $180 $374
Putnam VT Voyager $95 $147 $181 $377
-------------------------------------------------------------------------------------------------------------------

SmartDesign Advantage-111195 12

Example 2:

If you do not surrender your Contract at the end of the applicable time period
and elected the earnings multiplier benefit rider, you would pay the following
expenses for each $1,000 invested:

AETNA GET FUND
Aetna GET Fund $38 $114 $193 NA*

AETNA VARIABLE PORTFOLIOS, INC.
Aetna Index Plus Large Cap VP $30 $ 91 $154 $325
Aetna Index Plus Mid Cap VP $31 $ 95 $162 $340
Aetna Index Plus Small Cap VP $31 $ 95 $162 $340
Aetna Value Opportunity VP $33 $100 $169 $354

AIM VARIABLE INSURANCE FUNDS
AIM V.I. Dent Demographic Trends $37 $113 $191 $394
AIM V.I. Growth $33 $102 $173 $361

ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
AllianceBernstein Value $35 $106 $179 $372
Alliance Growth and Income $32 $ 98 $167 $349
Alliance Premier Growth $36 $109 $184 $381

BRINSON SERIES TRUST
Brinson Tactical Allocation $32 $ 99 $168 $352

FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity VIP Equity-Income $31 $ 95 $161 $337
Fidelity VIP Growth $32 $ 97 $164 $345

FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP II Contrafund $32 $ 97 $164 $345

THE GCG TRUST
Core Bond $33 $100 $170 $355
Growth and Income $34 $103 $175 $364
Liquid Asset $28 $ 87 $147 $312
Research $32 $ 97 $164 $344
Total Return $32 $ 97 $164 $344
Value Equity $32 $ 98 $167 $349

INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-Financial Services $34 $102 $174 $362
INVESCO VIF-Health Sciences $33 $102 $173 $360
INVESCO VIF-Utilities $35 $106 $180 $374

JANUS ASPEN SERIES
Janus Aspen Series Worldwide Growth $32 $ 98 $166 $348

PILGRIM VARIABLE INSURANCE TRUST
Pilgrim VIT Worldwide Growth $35 $107 $180 $375

PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible $34 $103 $174 $363
Pilgrim VP Growth and Income $34 $103 $174 $363
Pilgrim VP LargeCap Growth $34 $103 $174 $363
Pilgrim VP MagnaCap $34 $103 $174 $363

* Current GET Fund Series are available for 5 year guarantee periods
only. Therefore, no GET Fund expenses are included in the expense
example under 10 years.

SmartDesign Advantage-111195 13

THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $30 $ 92 $157 $331

PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT $32 $ 98 $166 $348
Pioneer Small Company VCT $38 $114 $193 $398

PORTFOLIO PARTNERS, INC.
PPI MFS Capital Opportunities $32 $ 97 $164 $345

THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison $33 $101 $171 $358
SP Jennison International Growth $39 $118 $200 $410

PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $30 $ 92 $157 $331
Putnam VT International Growth
and Income $35 $106 $180 $374
Putnam VT Voyager $35 $107 $181 $377
-------------------------------------------------------------------------------------------------------------------

SmartDesign Advantage-111195 14

Example 3:

If you surrender your Contract at the end of the applicable time period and did
not elect the earnings multiplier benefit rider, you would pay the following
expenses for each $1,000 invested:

AETNA GET FUND
Aetna GET Fund $95 $147 $181 N/A*

AETNA VARIABLE PORTFOLIOS, INC.
Aetna Index Plus Large Cap VP $87 $123 $142 $301
Aetna Index Plus Mid Cap VP $89 $128 $150 $317
Aetna Index Plus Small Cap VP $89 $128 $150 $317
Aetna Value Opportunity VP $90 $132 $157 $331

AIM VARIABLE INSURANCE FUNDS
AIM V.I. Dent Demographic Trends $95 $146 $179 $372
AIM V.I. Growth $91 $135 $161 $338

ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Alliance Bernstein Value $92 $138 $167 $349
Alliance Growth and Income $90 $131 $155 $326
Alliance Premier Growth $93 $141 $172 $359

BRINSON SERIES TRUST
Brinson Tactical Allocation $90 $132 $156 $329

FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity VIP Equity-Income $88 $127 $148 $314
Fidelity VIP Growth $89 $129 $152 $321

FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP II Contrafund $89 $129 $152 $321

THE GCG TRUST
Core Bond $90 $133 $158 $332
Growth and Income $91 $136 $163 $341
Liquid Asset $86 $119 $135 $288
Research $89 $129 $152 $320
Total Return $89 $129 $152 $320
Value Equity $90 $131 $155 $326

INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-Financial Services $91 $135 $162 $339
INVESCO VIF-Health Sciences $91 $135 $161 $337
INVESCO VIF-Utilities $92 $139 $168 $351

JANUS ASPEN SERIES
Janus Aspen Series Worldwide Growth $90 $131 $154 $325

PILGRIM VARIABLE INSURANCE TRUST
Pilgrim VIT Worldwide Growth $92 $139 $168 $352

PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible $91 $135 $162 $340
Pilgrim VP Growth and Income $91 $135 $162 $340
Pilgrim VP LargeCap Growth $91 $135 $162 $340
Pilgrim VP MagnaCap $91 $135 $162 $340

* Current GET Fund Series are available for 5 year guarantee periods
only. Therefore, no GET Fund expenses are included in the expense
example under 10 years.

SmartDesign Advantage-111195 15

THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $88 $125 $145 $307

PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT $90 $130 $154 $324
Pioneer Small Company VCT $95 $147 $181 $377

PORTFOLIO PARTNERS, INC.
PPI MFS Capital Opportunities $89 $129 $152 $321

THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison $91 $134 $159 $335
SP Jennison International Growth $97 $151 $188 $389

PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $88 $125 $145 $307
Putnam VT International Growth
and Income $92 $139 $168 $351
Putnam VT Voyager $93 $140 $169 $354
--------------------------------------------- ----------------- ---------------- ----------------- ----------------

SmartDesign Advantage-111195 16

Example 4:

If you do not surrender your Contract at the end of the applicable time period
and did not elect the earnings multiplier benefit rider, you would pay the
following expenses for each $1,000 invested:

AETNA GET FUND
Aetna GET Fund $35 $107 $181 N/A*

AETNA VARIABLE PORTFOLIOS, INC.
Aetna Index Plus Large Cap VP $27 $ 83 $142 $301
Aetna Index Plus Mid Cap VP $29 $ 88 $150 $317
Aetna Index Plus Small Cap VP $29 $ 88 $150 $317
Aetna Value Opportunity VP $30 $ 92 $157 $331

AIM VARIABLE INSURANCE FUNDS
AIM V.I. Dent Demographic Trends $35 $106 $179 $372
AIM V.I. Growth $31 $ 95 $161 $338

ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Alliance Bernstein Value $32 $ 98 $167 $349
Alliance Growth and Income $30 $ 91 $155 $326
Alliance Premier Growth $33 $101 $172 $359

BRINSON SERIES TRUST
Brinson Tactical Allocation $30 $ 92 $156 $329

FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity VIP Equity-Income $28 $ 87 $148 $314
Fidelity VIP Growth $29 $ 89 $152 $321

FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP II Contrafund $29 $ 89 $152 $321

THE GCG TRUST
Core Bond $30 $ 93 $158 $332
Growth and Income $31 $ 96 $163 $341
Liquid Asset $26 $ 79 $135 $288
Research $29 $ 89 $152 $320
Total Return $29 $ 89 $152 $320
Value Equity $30 $ 91 $155 $326

INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-Financial Services $31 $ 95 $162 $339
INVESCO VIF-Health Sciences $31 $ 95 $161 $337
INVESCO VIF-Utilities $32 $ 99 $168 $351

JANUS ASPEN SERIES
Janus Aspen Series Worldwide Growth $30 $ 91 $154 $325

PILGRIM VARIABLE INSURANCE TRUST
Pilgrim VIT Worldwide Growth $32 $ 99 $168 $352

PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible $31 $ 95 $162 $340
Pilgrim VP Growth and Income $31 $ 95 $162 $340
Pilgrim VP LargeCap Growth $31 $ 95 $162 $340
Pilgrim VP MagnaCap $31 $ 95 $162 $340

* Current GET Fund Series are available for 5 year guarantee periods
only. Therefore, no GET Fund expenses are included in the expense
example under 10 years.

SmartDesign Advantage-111195 17

THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $28 $ 85 $145 $307

PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT $30 $ 90 $154 $324
Pioneer Small Company VCT $35 $107 $181 $377

PORTFOLIO PARTNERS, INC.
PPI MFS Capital Opportunities $29 $ 89 $152 $321

THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison $31 $ 94 $159 $335
SP Jennison International Growth $37 $111 $188 $389

PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $28 $ 85 $145 $307
Putnam VT International Growth
and Income $32 $ 99 $168 $351
Putnam VT Voyager $33 $100 $169 $354
-------------------------------------------------------------------------------------------------------------------

THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN SUBJECT TO THE
TERMS OF YOUR CONTRACT. Compensation is paid for the sale of the Contracts. For
information about this compensation, see "Selling the Contract."

--------------------------------------------------------------------------------
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------

ACCUMULATION UNIT

We use accumulation units to calculate the value of a Contract. Each subaccount
of Separate Account B has its own accumulation unit value. The accumulation
units are valued each business day that the New York Stock Exchange is open for
trading. Their values may increase or decrease from day to day according to a
Net Investment Factor, which is primarily based on the investment performance of
the applicable investment portfolio. Shares in the investment portfolios are
valued at their net asset value.

THE NET INVESTMENT FACTOR

The Net Investment Factor is an index number which reflects certain charges
under the Contract and the investment performance of the subaccount. The Net
Investment Factor is calculated for each subaccount as follows:

1) We take the net asset value of the subaccount at the end of each
business day.

2) We add to (1) the amount of any dividend or capital gains distribution
declared for the subaccount and reinvested in such subaccount. We
subtract from that amount a charge for our taxes, if any.

3) We divide (2) by the net asset value of the subaccount at the end of
the preceding business day.

4) We then subtract the applicable daily mortality and expense risk
charge, the daily asset-based administrative charge and the daily
premium credit option charge, if applicable, from the subaccount and,
for the GET Fund subaccount only, the daily GET Fund guarantee charge.

Calculations for the subaccounts are made on a per share basis.

SmartDesign Advantage-111195 18

CONDENSED FINANCIAL INFORMATION

Because sales of the Contract had not commenced as of the date of this
prospectus, no condensed financial information is included. FINANCIAL STATEMENTS
The audited financial statements of Separate Account B for the year ended
December 31, 2000 are included in the Statement of Additional Information. The
unaudited condensed consolidated financial statements of Golden American for the
six months ended June 30, 2001 and the audited consolidated financial statements
of Golden American for the years ended December 31, 2000, 1999 and 1998 are
included in this prospectus.

PERFORMANCE INFORMATION

From time to time, we may advertise or include in reports to contract owners
performance information for the subaccounts of Separate Account B, including the
average annual total return performance, yields and other nonstandard measures
of performance. Such performance data will be computed, or accompanied by
performance data computed, in accordance with standards defined by the SEC.

Except for the Liquid Asset subaccount, quotations of yield for the subaccounts
will be based on all investment income per unit (contract value divided by the
accumulation unit) earned during a given 30-day period, less expenses accrued
during such period. Information on standard total average annual return
performance will include average annual rates of total return for 1, 5 and 10
year periods, or lesser periods depending on how long Separate Account B has
been investing in the portfolio. We may show other total returns for periods of
less than one year. Total return figures will be based on the actual historic
performance of the subaccounts of Separate Account B, assuming an investment at
the beginning of the period when the separate account first invested in the
portfolio and withdrawal of the investment at the end of the period, adjusted to
reflect the deduction of all applicable portfolio and current contract charges.
We may also show rates of total return on amounts invested at the beginning of
the period with no withdrawal at the end of the period. Total return figures
which assume no withdrawals at the end of the period will reflect all recurring
charges, but will not reflect the surrender charge. In addition, we may present
historic performance data for the investment portfolios since their inception
reduced by some or all of the fees and charges under the Contract. Such adjusted
historic performance includes data that precedes the inception dates of the
subaccounts of Separate Account B. This data is designed to show the performance
that would have resulted if the Contract had been in existence before the
separate account began investing in the portfolios.

Current yield for the Liquid Asset subaccount is based on income received by a
hypothetical investment over a given 7-day period, less expenses accrued, and
then "annualized" (i.e., assuming that the 7-day yield would be received for 52
weeks). We calculate "effective yield" for the Liquid Asset subaccount in a
manner similar to that used to calculate yield, but when annualized, the income
earned by the investment is assumed to be reinvested. The "effective yield" will
thus be slightly higher than the "yield" because of the compounding effect of
earnings. We calculate quotations of yield for the remaining subaccounts on all
investment income per accumulation unit earned during a given 30-day period,
after subtracting fees and expenses accrued during the period, assuming no
surrender.

We may compare performance information for a subaccount to: (i) the Standard &
Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue Money Market
Institutional Averages, or any other applicable market indices, (ii) other
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services (a widely used independent research firm which ranks
mutual funds and other investment companies), or any other rating service, and
(iii) the Consumer Price Index (measure for inflation) to determine the real
rate of return of an investment in the Contract. Our reports and promotional
literature may also contain other information including the ranking of any
subaccount based on rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by similar rating
services.

Performance information reflects only the performance of a hypothetical contract
and should be considered in light of other factors, including the investment
objective of the investment portfolio and market conditions. Please keep in mind
that past performance is not a guarantee of future results.

SmartDesign Advantage-111195 19

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

Equitable of Iowa is the holding company for Golden American, Directed Services,
Inc., the investment manager of the GCG Trust and the distributor of the
Contracts, and other interests. ING also owns 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.

--------------------------------------------------------------------------------
THE TRUSTS
--------------------------------------------------------------------------------

Aetna GET Fund is an open-end investment company authorized to issue multiple
series of shares. Shares of the series are offered to insurance company separate
accounts, including Golden American Separate Account B, that fund variable
annuity contracts. The address of Aetna GET Fund is 1475 Dunwoody Drive, West
Chester, PA 19380.

Aetna Variable Portfolios, Inc. is a mutual fund whose shares are offered to
insurance company separate accounts, including Golden American Separate Account
B, that fund both annuity and life insurance contracts and to certain
tax-qualified retirement plans. The address of Aetna Variable Portfolios, Inc.
is 151 Farmington Avenue, Hartford, Connecticut 06156-8962.

AIM Variable Insurance Funds is a mutual fund whose shares are currently offered
only to insurance company separate accounts. The address of AIM Variable
Insurance Funds is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.

Alliance Variable Products Series Fund, Inc. is also a mutual fund whose shares
are available to separate accounts of insurance companies, including Golden
American Separate Account B, for both variable annuity contracts and variable
life insurance policies. The address of Alliance Variable Products Series Fund,
Inc. is P.O. Box 1520, Secausus, NJ 07096-1520.

Brinson Series Trust is a mutual fund which offers shares only to insurance
company separate accounts, including Golden American Separate Account B, that
fund certain variable annuity and variable life insurance contracts. The address
of Brinson Series Trust is 51 West 52nd Street, New York, New York 10019-6114.

Fidelity Variable Insurance Products Fund and Fidelity Variable Insurance
Products Fund II is also a mutual fund which offers its shares only to separate
accounts of insurance companies that offer variable annuity and variable life
insurance products. Fidelity Variable Insurance Products Fund and Fidelity
Variable Insurance Products Fund II is located at 82 Devonshire Street, Boston,
MA 02109.

The GCG Trust is a mutual fund whose shares are offered to separate accounts
funding variable annuity and variable life insurance policies offered by Golden
American and other affiliated insurance companies. The GCG Trust may also sell
its shares to separate accounts of insurance companies not affiliated with
Golden

SmartDesign Advantage-111195 20

American. Pending SEC approval, shares of the GCG Trust may also be sold
to certain qualified pension and retirement plans. The address of the GCG Trust
is 1475 Dunwoody Drive, West Chester, PA 19380.

INVESCO Variable Investment Funds, Inc. is a mutual fund sold exclusively to
insurance company separate accounts for variable annuity and variable life
insurance contracts. The address of INVESCO Variable Investment Funds, Inc. is
P.O. Box 173706, Denver, Colorado 80217-3706.

Janus Aspen Series is a mutual fund whose shares are offered in connection with
investment in and payments under variable annuity contracts and variable life
insurance contracts, as well as certain qualified retirement plans. The address
of Janus Aspen Series is 100 Fillmore Street, Denver, Colorado 80206-4928.

The Pilgrim Variable Insurance Trust (formerly the ING Variable Insurance Trust)
is also a mutual fund whose shares are offered to separate accounts funding
variable annuity contracts offered by Golden American and other insurance
companies, both affiliated and unaffiliated with Golden American. The address of
Pilgrim Variable Insurance Trust is 40 North Central Avenue, Suite 1200,
Phoenix, AZ 85004.

The Pilgrim Variable Products Trust is also a mutual fund whose shares are
offered to separate accounts funding variable annuity contracts offered by
Golden American and other insurance companies, both affiliated and unaffiliated
with Golden American. The address of Pilgrim Variable Products Trust is 40 North
Central Avenue, Suite 1200, Phoenix, AZ 85004.

The PIMCO Variable Insurance Trust is also a mutual fund whose shares are
available to separate accounts of insurance companies, including Golden
American, for both variable annuity contracts and variable life insurance
policies and to qualified pension and retirement plans. The address of the PIMCO
Variable Insurance Trust is 840 Newport Center Drive, Suite 300, Newport Beach,
CA 92660.

Pioneer Variable Contracts Trust is an open-end management investment company.
Shares of the portfolios are offered primarily to insurance companies to fund
the benefits under variable annuity and variable life insurance contracts issued
by their companies. The address of Pioneer Variable Contracts Trust is 60 State
Street, Boston, Massachusetts 02109.

Portfolio Partners, Inc. is a mutual fund whose shares are offered only to
insurance companies to fund benefits under their variable annuity and variable
life insurance contracts. The address of Portfolio Partners, Inc. is 151
Farmington Avenue, Hartford, Connecticut 06156-8962.

The Prudential Series Fund, Inc. is also a mutual fund whose shares are
available to separate accounts funding variable annuity and variable life
insurance polices offered by The Prudential Insurance Company of America, its
affiliated insurers and other life insurance companies not affiliated with
Prudential, including Golden American. The address of the Prudential Series Fund
is 751 Broad Street, Newark, NJ 07102.

Putnam Variable Trust is a mutual fund whose shares are available for purchase
by separate accounts of insurance companies. The address of Putnam Variable
Trust is One Post Office Square, Boston, Massachusetts 02109.

In the event that, due to differences in tax treatment or other considerations,
the interests of contract owners of various contracts participating in the
Trusts conflict, we, the Boards of Trustees of the Aetna GET Fund, Brinson
Series Trust, Fidelity Variable Insurance Products Fund and Variable Insurance
Products Fund II, The GCG Trust, Janus Aspen Series, the Pilgrim Variable
Insurance Trust, the Pilgrim Variable Products Trust, the PIMCO Variable
Insurance Trust, Pioneer Variable Contracts Trust, and Putnam Variable Trust and
the Board of Directors of Aetna Variable Portfolios, Inc., Alliance Variable
Products Series Fund, Inc., INVESCO Variable Investment Funds, Inc., Portfolio
Partners, Inc. and Prudential Series Fund, and the management of Directed
Services, Inc. and any insurance companies participating in the Trusts will
monitor events to identify and resolve any material conflicts that may arise.

YOU WILL FIND MORE DETAILED INFORMATION ABOUT THE AETNA GET FUND, AETNA VARIABLE
PORTFOLIOS, INC., AIM VARIABLE INSURANCE FUNDS, ALLIANCE VARIABLE PRODUCTS
SERIES FUND, INC., BRINSON SERIES TRUST, FIDELITY VARIABLE INSURANCE PRODUCTS
FUND AND FIDELITY VARIABLE INSURANCE PRODUCTS FUND II, THE GCG TRUST, INVESCO
VARIABLE INVESTMENT FUNDS, INC., JANUS ASPEN SERIES, PILGRIM

SmartDesign Advantage-111195 21

VARIABLE INSURANCE TRUST, PILGRIM VARIABLE PRODUCTS TRUST, THE PIMCO VARIABLE
INSURANCE TRUST, PIONEER VARIABLE CONTRACTS TRUST, PORTFOLIO PARTNERS, INC., THE
PRUDENTIAL SERIES FUND, INC. AND PUTNAM VARIABLE TRUST IN THE ACCOMPANYING
PROSPECTUS FOR EACH TRUST. YOU SHOULD READ THEM CAREFULLY BEFORE INVESTING.

--------------------------------------------------------------------------------
GOLDEN AMERICAN SEPARATE ACCOUNT B
--------------------------------------------------------------------------------

Golden American Separate Account B ("Separate Account B") was established as a
separate account of the Company on July 14, 1988. It is registered with the SEC
as a unit investment trust under the Investment Company Act of 1940 as amended
(the "1940 Act"). Separate Account B is a separate investment account used for
our variable annuity contracts. We own all the assets in Separate Account B but
such assets are kept separate from our other accounts.

Separate Account B is divided into subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the Aetna GET Fund, Aetna
Variable Portfolios, Inc., A I M Variable Insurance Funds, Alliance Variable
Products Series Fund, Inc., Brinson Series Trust, Fidelity Variable Insurance
Products Fund and Variable Insurance Products Fund II, The GCG Trust, INVESCO
Variable Investment Funds, Inc., Janus Aspen Series, Pilgrim Variable Insurance
Trust, Pilgrim Variable Products Trust, the PIMCO Variable Insurance Trust,
Pioneer Variable Contracts Trust, Portfolio Partners, Inc., The Prudential
Series Fund and Putnam Variable Trust. Each investment portfolio has its own
distinct investment objectives and policies. Income, gains and losses, realized
or unrealized, of a portfolio are credited to or charged against the
corresponding subaccount of Separate Account B without regard to any other
income, gains or losses of the Company. Assets equal to the reserves and other
contract liabilities with respect to each are not chargeable with liabilities
arising out of any other business of the Company. They may, however, be subject
to liabilities arising from subaccounts whose assets we attribute to other
variable annuity contracts supported by Separate Account B. If the assets in
Separate Account B exceed the required reserves and other liabilities, we may
transfer the excess to our general account. We are obligated to pay all benefits
and make all payments provided under the Contracts.

NOTE: We currently offer other variable annuity contracts that invest in
Separate Account B but are not discussed in this prospectus. Separate Account B
may also invest in other investment portfolios which are not available under
your Contract. Under certain circumstances, we may make certain changes to the
subaccounts. For more information, see "The Annuity Contract -- Addition,
Deletion, or Substitution of Subaccounts and Other Changes."

--------------------------------------------------------------------------------
THE INVESTMENT PORTFOLIOS
--------------------------------------------------------------------------------

During the accumulation phase, you may allocate your premium payments and
contract value to any of the investment portfolios listed in the section below.
YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO ANY INVESTMENT
PORTFOLIO, AND YOU MAY LOSE YOUR PRINCIPAL.

INVESTMENT OBJECTIVES

The investment objective of each investment portfolio is set forth below. You
should understand that there is no guarantee that any portfolio will meet its
investment objectives. Meeting objectives depends on various factors, including,
in certain cases, how well the portfolio managers anticipate changing economic
and market conditions. Separate Account B also has other subaccounts investing
in other portfolios which are not available to the Contract described in this
prospectus. YOU CAN FIND MORE DETAILED INFORMATION ABOUT THE INVESTMENT
PORTFOLIOS IN THE PROSPECTUSES FOR THE AETNA GET FUND, AETNA VARIABLE
PORTFOLIOS, INC., AIM VARIABLE INSURANCE FUNDS, ALLIANCE VARIABLE PRODUCTS
SERIES FUND, INC., BRINSON SERIES TRUST, FIDELITY VARIABLE INSURANCE PRODUCTS
FUND AND FIDELITY VARIABLE INSURANCE PRODUCTS FUND II, THE GCG TRUST, INVESCO
VARIABLE INVESTMENT FUNDS, INC., JANUS ASPEN SERIES, PILGRIM

SmartDesign Advantage-111195 22

VARIABLE INSURANCE
TRUST, PILGRIM VARIABLE PRODUCTS TRUST, THE PIMCO VARIABLE INSURANCE TRUST,
PIONEER VARIABLE CONTRACTS TRUST, PORTFOLIO PARTNERS, INC., THE PRUDENTIAL
SERIES FUND, INC. AND PUTNAM VARIABLE TRUST. YOU SHOULD READ THESE PROSPECTUSES
BEFORE INVESTING.

-------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
-------------------------------------------------------------------------

AETNA GET FUND
Aetna Get Fund Seeks to achieve maximum total
return without compromising a
minimum targeted return
(Targeted Return) by
participation in favorable
equity market performance
during the Guarantee Period.

During the Offering Period,
invests in short-term instruments.
During the Guarantee Period,
the Series will be allocated
between the:

Equity Component, invested in
common stocks included in the
Standard and Poor's 500 Index
(S&P 500) and futures contracts
on the S&P 500; and the

Fixed Component, invested
primarily in short- to
intermediate-duration U.S.
Government securities.
----------------------------------

AETNA VARIABLE PORTFOLIOS, INC.
Aetna Index Plus Large Cap Seeks to outperform the total
return performance of the
Standard & Poor's 500 Composite
Index (S&P 500), while
maintaining a market level of
risk.

Invests at least 80% of its net
assets in stocks included in the
S&P 500.
----------------------------------
Aetna Index Plus Mid Cap VP
(Class S) Seeks to outperform the total
return performance of the Standard
& Poor's MidCap 400 Index (S&P
400), while maintaining a market
level of risk.

Invests at least 80% of its net
assets in stocks included in the
S&P 400.
----------------------------------
Aetna Index Plus Small Cap VP
(Class S) Seeks to outperform the total
return performance of the Standard
& Poor's SmallCap 600 Index (S&P
600), while maintaining a market
level of risk.

Invests at least 80% of its net
assets in stocks included in the
S&P 600.
----------------------------------
Aetna Value Opportunity VP
(Class S) Seeks growth of capital
primarily through investment in a
diversified portfolio of common
stocks and securities convertible
into common stock.

Normally, invests at least 65%
of its total assets in common
stocks and securities convertible
into common stock.
----------------------------------

AIM VARIABLE INSURANCE FUNDS
AIM V.I. Dent Demographic Seeks to provide long-term growth
Trends (Series II) of capital.

Invests in securities
of companies that are likely to
benefit from changing demographic,
economic and lifestyle trends.
These securities may include common
stocks, convertible bonds,
convertible preferred stocks and
warrants of companies within a
broad range of market
capitalizations. The fund may also
invest up to 25% of its total
assets in foreign securities.
----------------------------------
AIM V.I. Growth (Series II) Seeks to provide long-term growth
of capital.

Invests primarily in seasoned and
better capitalized companies
considered to have strong earnings
momentum. The fund may invest up
to 25% of its assets in foreign
securities.
----------------------------------

SmartDesign Advantage-111195 23

-------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
-------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES
FUND, INC.
AllianceBernstein Value Seeks long-term growth of capital.
Portfolio (Class B)
Invests primarily in a
diversified portfolio of equity
securities of companies with
relatively large market
capitalizations that Alliance
believes are undervalued.
----------------------------------
Alliance Growth and Income Seeks reasonable current income
(Class B) and reasonable opportunity for
appreciation through investments
primarily in dividend-paying
common stocks of good quality.

Invests primarily in
dividend-paying common stocks of
large, well-established "blue chip"
companies. The Portfolio may also
invest in fixed-income and
convertible securities and
insecurities of foreign issuers.
----------------------------------
Alliance Premier Growth (Class B) Seeks growth of capital by pursuing
aggressive investment policies.

Invests primarily in equity
securities of U.S. companies.
Unlike most equity funds, the
Portfolio focuses on a relatively
small number of intensively
researched companies.
----------------------------------

BRINSON SERIES TRUST
Brinson Tactical Allocation Seeks total return, consisting of
long-term capital appreciation
and current income.

Assets allocated between:
Stock portion designed to track the
performance of the Standard &
Poor's 500 Composite Stock Index;
and Fixed income portion
consisting of either five-year
U.S. Treasury notes or U.s.
Treasury bills with remaining
maturities of 30 days.
----------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity VIP Equity-Income Seeks reasonable income. The fund
Portfolio (Service Class 2 ) will alsoconsider the potential
for capital appreciation.

Normally invests at least 65% of
total assets in income-producing
equity securities, which tends to
lead to investments in large cap
"value" stocks.
----------------------------------
Fidelity VIP Growth Portfolio
(Service Class 2) Seeks to achieve capital
appreciation.

Normally invests primarily in
common stocks, investing in
companies that management believes
have above-average growth
potential.
----------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity VIP II Contrafund
Portfolio (Service Class 2) Seeks long-term capital
appreciation.

Normally invests primarily in
common stocks, investing in
securities of companies whose
value management believes is not
fully recognized by the public.
----------------------------------

SmartDesign Advantage-111195 24

-------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
-------------------------------------------------------------------------
THE GCG TRUST
Core Bond Seeks maximum total return,
consistent with preservation of
capital and prudent investment
management.

Invests primarily in a
diversified portfolio of fixed
income instruments of varying
maturities. The average portfolio
duration of the Portfolio normally
varies within a three- to six-year
time frame.
----------------------------------
Growth and Income Seeks long-term capital growth
and current income.

Normally invests up to 75% of its
assets in equity securities
selected primarily for their growth
potential and at least 25% of its
assets in securities the portfolio
manager believes have income
potential.
----------------------------------
Liquid Asset Seeks high level of current income
consistent with the preservation
of capital and liquidity.

Invests primarily in obligations
of the U.S. Government and its
agencies and instrumentalities,
bank obligations, commercial
paper and short-term corporate
debt securities. All securities
will mature in less than one
year.
----------------------------------
Research Seeks long-term growth of capital
and future income.

Invests primarily in common stocks
or securities convertible into
common stocks of companies believed
to have better than average
prospects for long-term growth.
----------------------------------
Total Return Seeks above-average income
(compared to a portfolio entirely
invested in equity securities)
consistent with the prudent
employment of capital. Growth of
capital and income is a secondary
goal.

Invests primarily in a
combination of equity and fixed
income securities.
----------------------------------
Value Equity Seeks capital appreciation.
Dividend income is a secondary
objective.

Invests primarily in
common stocks of domestic and
foreign issuers which meet
quantitative standards relating to
financial soundness and high
intrinsic value relative to price.
----------------------------------
INVESCO VARIABLE INVESTMENT
FUNDS, INC.
INVESCO VIF - Financial Seeks to make an investment grow.
Services Fund
Invests primarily in equity
securities that INVESCO believes
will rise in price faster than
other securities, as well as in
options and other investments whose
values are based upon the values of
equity securities.
----------------------------------
INVESCO VIF - Health Seeks to make an investment grow.
Sciences Fund
Invests primarily in equity
securities of companies that
develop, produce or distribute
products or services related to
health care.
----------------------------------
INVESCO VIF - Utilities Fund Seeks to make an investment grow.
It also seeks current income.

Invests primarily in equity
securities of companies that
produce, generate, transmit or
distribute natural gas or
electricity, as well as
companies that provide
telecommunications services,
including local, long
distance and wireless, and
excluding broadcasting.
----------------------------------

SmartDesign Advantage-111195 25

-------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
-------------------------------------------------------------------------
JANUS ASPEN SERIES
Janus Aspen Series Seeks long-term growth of capital
Worldwide Growth Portfolio in a manner consistent with the
(Service Shares) preservation of capital.

Invests primarily in common stocks
of companies of any size located
throughout the world.
----------------------------------
PILGRIM VARIABLE INSURANCE TRUST
Pilgrim VIT Worldwide Growth Seeks to provide investors with
long-term capital appreciation.

Invests at least 65% of its total
assets in equity securities of
companies that have a well
recognized franchise, a
global presence and derive most of
their revenues from sales of
consumer goods.
----------------------------------
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Seeks maximum total return,
Portfolio (Class S) consisting of capital appreciation
and current income.

Normally, invests at least 65% of
its total assets in convertible
securities.
----------------------------------
Pilgrim VP Growth and
Income Portfolio (Class S) Seeks long-term
capital appreciation, with income
as a secondary objective.

Invests
at least 65% of its total assets in
common stocks of U.S. companies,
which may include dividend paying
securities and securities
convertible into shares of common
stocks.
----------------------------------
Pilgrim VP LargeCap Growth
Portfolio (Class S) Seeks long-term capital
appreciation.

Normally invests at least 65% of
its net assets in equity securities
of large U.S. companies that the
portfolio managers believe have
above-average prospects for growth.
----------------------------------
Pilgrim VP MagnaCap
(Class S) Seeks growth of capital, with
dividend income as a secondary
consideration.

Invests primarily in
equity securities of companies
meeting investment policy criteria
disciplined valuation criteria and
financial ability to have increased
dividends over the last decade.
Invests generally in companies
included in the largest 500 U.S.
companies.
----------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Seeks to maximize total return,
consistent with preservation of
capital and prudent investment
management.

Invests at least 65% of its assets
in a diversified portfolio of
junk bonds rated at least B by
Moody's Investor Services, Inc.
or Standard & Poor's
or, if unrated, determined by the
portfolio manager to be of
comparable quality.
----------------------------------
PIONEER VARIABLE CONTRACTS TRUST
Pioneer Fund VCT Portfolio Seeks reasonable income and
(Class II) capital growth.

Invests in a broad list of
carefully selected, reasonably
priced securities rather than in
securities whose prices reflect a
premium resulting from their
current market popularity. A major
portion of its assets is invested
in equity securities of primarily
U.S. companies.
----------------------------------

SmartDesign Advantage-111195 26

-------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
-------------------------------------------------------------------------
Pioneer Small Company VCT
Portfolio (Class II) Seeks capital growth.
Invests primarily in equity
securities of small companies, that
is, companies with market
capitalizations of less than $1
billion at the time of purchase.

Normally, invests at lest 65% of
total assets in these securities.
----------------------------------
PORTFOLIO PARTNERS, INC.
PPI MFS Capital Seeks capital appreciation.
Opportunities
Portfolio Invests primarily (at
least 65% of total assets) in
common stocks and related
securities, such as preferred
stock, convertible securities and
depositary receipts.
----------------------------------
THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison Seeks long-term growth of capital.
(Class II)
Invests primarily in companies
that have shown growth in earnings
and sales, high return on equity
and assets or other strong
financial data and are also
attractively valued in the opinion
of the manager. Dividend income
from investments will be
incidental.
----------------------------------
SP Jennison International Growth Seeks long-term growth of capital.
(Class II)
Invests primarily in
equity-related securities of
issuers located in at least five
different foreign countries.
----------------------------------
PUTNAM VARIABLE TRUST
Putnam VT Growth and Seeks capital growth and current
Income Fund (Class IB) income.

Invests mainly in
common stocks of U.S. companies
with a focus on value stocks that
offer the potential for capital
growth, current income, or both.
----------------------------------
Putnam VT International Seeks capital growth. Current
Growth and Income Fund income is a secondary objective.
(Class IB)
Invests mainly in common
stocks of companies outside the
United States. The fund invests
mainly in value stocks that offer
the potential for income.
----------------------------------
Putnam VT Voyager Fund II Seeks long-term growth of capital.
(Class IB)
Invests mainly in common stocks
of U.S. companies, with a focus
on growth stocks.
----------------------------------

INVESTMENT MANAGEMENT FEES

Aeltus Investment Management, Inc. ("Aeltus") serves as investment adviser of
the Aetna GET Fund Series and the each of the Portfolios of Aetna Variable
Portfolios, Inc. Aeltus is responsible for managing the assets of each Series
and Portfolio in accordance with its investment objective and policies, subject
to oversight by its Board. For its services, Aeltus is entitled to receive an
advisory fee, expressed as an annual rate based on the average daily net assets
of the Series or Portfolio.

AIM Advisors, Inc. (the advisor) serves as the advisor of the AIM V.I. Dent
Demographics Fund and the AIM V.I. Growth Fund. The advisor supervises all
aspects of the funds' operations and provides investment advisory services to
the funds, including the funds' investment advisory decisions, the execution of
securities transactions, and obtaining and evaluating economic, statistical and
financial information to formulate and implement investment programs for the
funds. H.S. Dent Advisors, Inc. serves as the subadvisor to the AIM V.I. Dent
Demographics Fund. For its services, the advisor receives compensation based on
each Fund's average net assets.

SmartDesign Advantage-111195 27

Alliance Capital Management, L.P. serves as adviser to each portfolio of the
Alliance Variable Products series Fund, Inc. Alliance provides investment
advisory services and order placement facilities for the Portfolios. For these
advisory services, Alliance is paid a fee based on a percentage of average net
assets of the Portfolios.

Brinson Advisors, Inc. serves as investment advisor
and administrator of the Brinson Series Trust. The fee paid to Brinson Advisors
is an annual effective rate based on the fund's average daily net assets.

Fidelity Management & Research company (FMR) serves as the manager for each of
the Fidelity Variable Insurance Products funds. Each fund pays a management fee
to FMR. As the manager, FMR is responsible for choosing each fund's investments
and handling its business affairs. Affiliates assist FMR with foreign
investments. The management fee is calculated and paid to FMR every month. The
fee is calculated by adding a group fee rate to an individual fund fee rate,
dividing by twelve, and multiplying the result by each fund's average net assets
throughout the month. The group fee is based on the average net assets of all
the funds advised by FMR. FMR may, from time to time, agree to reimburse a class
for management fees and other expenses above a specified limit. FMR retains the
ability to be repaid by a class if expenses fall below the specified limit prior
to the end of the fiscal year. Reimbursement arrangements, which may be
discontinued by FMR at any time, can decrease a class" expenses and boost its
performance.

Directed Services, Inc. serves as the overall manager to each portfolio of the
GCG Trust. The GCG Trust pays Directed Services a monthly fee for its investment
advisory and management services. The monthly fee is based on the average daily
net assets of an investment portfolio, and in some cases, the combined total
assets of certain grouped portfolios. Directed Services provides or procures, at
its own expense, the services necessary for the operation of the portfolio,
including retaining portfolio managers to manage the assets of the various
portfolios. Directed Services (and not the GCG Trust) pays each portfolio
manager a monthly fee for managing the assets of a portfolio, based on the
annual rates of the average daily net assets of a portfolio. For a list of the
portfolio managers, see the front cover of this prospectus. Directed Services
does not bear the expense of brokerage fees and other transactional expenses for
securities, taxes (if any) paid by a portfolio, interest on borrowing, fees and
expenses of the independent trustees, and extraordinary expenses, such as
litigation or indemnification expenses.

INVESCO Funds Group, Inc. (INVESCO) serves as investment adviser for each of the
Funds of INVESCO Variable Investment Funds, Inc. INVESCO performs a wide variety
of other services for the Funds, including administrative and transfer agency
functions. For its advisory services, INVESCO is paid an advisory fee based on
the Fund's average annual net assets. Janus Capital is the investment adviser to
the Worldwide Growth Portfolio of the Janus Aspen Series and is responsible for
the day-to-day management of the investment portfolio and other business affairs
of the Portfolio.

Janus Capital furnishes continuous advice and recommendations concerning the
Portfolio's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Portfolio, and may be reimbursed by
the Portfolio for its costs in providing those services. In addition, Janus
Capital employees serve as officers of the Trust and Janus Capital provides
office space for the Portfolio and pays the salaries, fees and expenses of all
Portfolio officers and those Trustees who are affiliated with Janus Capital.
Participating insurance companies that purchase the Portfolio's shares may
perform certain administrative services relating to the Portfolio and Janus
Capital or the Portfolio may pay those companies for such services. The
Portfolio pays Janus Capital a management fee which is calculated daily and paid
monthly. The Portfolio's advisory agreement spells out the management fee and
other expenses that the Portfolio must pay.

ING Pilgrim Investments, LLC ("ING Pilgrim") serves as the overall manager of
Pilgrim Variable Insurance Trust and Pilgrim Variable Products Trust. ING
Pilgrim supervises all aspects of the Trusts' operations and provides investment
advisory services to the portfolios of the Trusts, including engaging portfolio
managers, as well as monitoring and evaluating the management of the assets of
each portfolio by its portfolio manager. ING Pilgrim, as well as each portfolio
manager it engages, is a wholly owned indirect subsidiary of ING Groep N.V.
Except for agreements to reimburse certain expenses of the portfolio, ING
Pilgrim does not bear any portfolio expenses.

SmartDesign Advantage-111195 28

Pacific Investment Management Company ("PIMCO") serves as investment advisor to
each portfolio of the PIMCO Variable Insurance Trust. PIMCO provides the overall
business management and administrative services necessary for each portfolio's
operation. PIMCO provides or procures, at its own expense, the services and
information necessary for the proper conduct of business and ordinary operation
of each portfolio. The PIMCO Variable Insurance Trust pays PIMCO a monthly
advisory fee and a separate monthly administrative fee per year, each fee based
on the average daily net assets of each of the investment portfolios, for
managing the assets of the portfolios and for administering the PIMCO Variable
Insurance Trust. PIMCO does not bear the expense of brokerage fees and other
transactional expenses for securities, taxes (if any) paid by a portfolio,
interest on borrowing, fees and expense of the independent trustees, and
extraordinary expenses, such as litigation or indemnification expenses.

Pioneer Investment Management, Inc. (Pioneer) serves as investment adviser to
each portfolio of Pioneer Variable Contracts Trust. As adviser, Pioneer selects
each portfolio's investments and oversees the portfolios' operations. The
management fee is paid from the assets of the portfolio and is based on the
average daily net assets of the portfolio.

Aetna Life Insurance and Annuity Company serves as the investment adviser of
each Portfolio of Portfolio Partners, Inc., and each Portfolio has a
sub-adviser. The sub-adviser of the PPI MFS Capital Opportunities Portfolio is
Massachusetts Financial Services Company (MFS). The Adviser, subject to the
supervision of the Board of Directors of the Fund, acts as a "manager of
managers" for the Fund, and oversees the Fund's day-to-day operations and
manages the investment of each Portfolio. The Adviser may delegate to a
sub-adviser the responsibility for day-to-day management of the investments of
each Portfolio, subject to the Adviser's oversight. The Adviser also recommends
the appointment of additional or replacement sub-advisers to the Fund's
Directors. The Adviser receives advisory fees from each Portfolio as a
percentage of the average daily net assets of each Portfolio. Each sub-adviser,
subject to the supervision of the Adviser and the Directors, is responsible for
managing the assets of its respective Portfolio(s) in accordance with the
Portfolio's investment objective and policies. Each sub-adviser pays the
salaries and other related costs of personnel engaged in providing investment
advice, including office space, facilities and equipment. The Adviser pays each
sub-adviser a fee at an annual rate based on the average daily net asset value
of each Portfolio. The Adviser pays the sub-advisory fee out of its advisory
fee.

The Prudential Insurance Company of America ("Prudential") and its subsidiary,
Prudential Investments Fund Management LLC ("PIFM") serve as the overall
investment advisers to the Prudential Series Fund. Prudential and PIFM are
responsible for the management of the Prudential Series Fund and provide
investment advice and related services. For the Prudential Jennison Portfolio
and SP Jennison International Growth Portfolio, Prudential and PIFM engage
Jennison Associates LLC to serve as sub-adviser and to provide day-to-day
management. Prudential and PIFM pay the sub-adviser out of the fee they receive
from the Prudential Series Fund. Each portfolio pays its own administrative
costs.

Putnam Investment Management, LLC (Putnam Management) serves as the funds'
investment manager, responsible for making investment decisions for the funds
and managing the funds' other affairs and business. Each fund pays Putnam
Management a quarterly management fee for these services based on the fund's
average net assets.

Each portfolio deducts portfolio management fees and charges from the amounts
you have invested in the portfolios. In addition, four portfolios deduct a
service fee, which is used to compensate service providers for administrative
and contract holder services provided on behalf of the portfolios, and 21
portfolios deduct a distribution or 12b-1 fee, which is used to finance any
activity that is primarily intended to result in the sale of shares of the
applicable portfolio. Based on actual portfolio experience in 2000, together
with estimated costs for new portfolios, total estimated portfolio fees and
charges for 2001 range from 0.55% to 1.64%. See "Fees and Expenses" in this
prospectus.

We may receive compensation from the investment advisors, administrators and
distributors or directly from the portfolios in connection with administrative,
distribution or other services and cost savings attributable to our services. It
is anticipated that such compensation will be based on assets of the particular
portfolios attributable to the Contract. The compensation paid by advisors,
administrators or distributors may vary.

SmartDesign Advantage-111195 29

YOU CAN FIND MORE DETAILED INFORMATION ABOUT EACH PORTFOLIO INCLUDING ITS
MANAGEMENT FEES IN THE PROSPECTUS FOR EACH TRUST. YOU SHOULD READ THESE
PROSPECTUSES BEFORE INVESTING.

GET FUND

A GET Fund series may be available during the accumulation phase of the
Contract. We make a guarantee, as described below, when you allocate money into
a GET Fund series. Each GET Fund series has an offering period of three months
which precedes the guarantee period. The GET Fund investment option may not be
available under your Contract or in your state.

Various series of the GET Fund
may be offered from time to time, and additional charges will apply if you elect
to invest in one of these series. Please see Appendix D for a projected schedule
of GET Fund Series Offerings. The Company makes a guarantee when you direct
money into a GET Fund series. We guarantee that the value of an accumulation
unit of the GET Fund subaccount for that series under the Contract on the
maturity date will not be less than its value as determined after the close of
business on the last day of the offering period for that GET Fund series. If the
value on the maturity date is lower than it was on the last day of the offering
period, we will add funds to the GET Fund subaccount for that series to make up
the difference. This means that if you remain invested in the GET Fund series
until the maturity date, at the maturity date, you will receive no less than the
value of your separate account investment directed to the GET Fund series as of
the last day of the offering period, less any maintenance fees or any amounts
you transfer or withdraw from the GET Fund subaccount for that series. The value
of dividends and distributions made by the GET Fund series throughout the
guarantee period is taken into account in determining whether, for purposes of
the guarantee, the value of your GET Fund investment on the maturity date is no
less than its value as of the last day of the offering period. The guarantee
does not promise that you will earn the fund's minimum targeted return referred
to in the investment objective.

If you withdraw or transfer funds from a GET Fund series prior to the maturity
date, we will process the transactions at the actual unit value next determined
after we receive your request. The guarantee will not apply to these amounts or
to amounts deducted as a maintenance fee, if applicable.

Before the maturity date, we will send a notice to each contract owner who has
allocated amounts to the GET Fund series. This notice will remind you that the
maturity date is approaching and that you must choose other investment options
for your GET Fund series amounts. If you do not make a choice, on the maturity
date we will transfer your GET Fund series amounts to another available series
of the GET Fund that is then accepting deposits. If no GET Fund series is then
available, we will transfer your GET Fund series amounts to the fund or funds
that we designate.

Please see the GET Fund prospectus for a complete description of the GET Fund
investment option, including charges and expenses.

RESTRICTED FUNDS

We may designate any investment option as a Restricted Fund and limit the amount
you may allocate or transfer to a Restricted Fund. We may establish any such
limitation, at our discretion, as a percentage of premium or contract value or
as a specified dollar amount and change the limitation at any time. Currently,
we have not designated any investment option as a Restricted Fund. We may, with
30 days notice to you, designate any investment portfolio as a Restricted Fund
or change the limitations on existing contracts with respect to new premiums
added to such investment portfolio and also with respect to new transfers to
such investment portfolio. If a change is made with regard to designation as a
Restricted Fund or applicable limitations, such change will apply only to
transactions effected after such change.

We limit your investment in the Restricted Funds on both an aggregate basis for
all Restricted Funds and for each individual Restricted Fund. The aggregate
limits for investment in all Restricted Funds are expressed as a percentage of
contract value, percentage of premium and maximum dollar amount. Currently, your
investment in two or more Restricted Funds would be subject to each of the
following three limitations: no more than 30 percent of contract value, up to
100 percent of each premium and no more than $999,999,999. We may change these
limits, in our discretion, for new contracts, premiums, transfers or
withdrawals.

SmartDesign Advantage-111195 30

We also limit your investment in each individual Restricted Fund. The limits for
investment in each Restricted Fund are expressed as a percentage of contract
value, percentage of premium and maximum dollar amount. Currently, the limits
for investment in an individual Restricted Fund are the same as the aggregate
limits set forth above. We may change these limits, in our discretion, for new
contracts, premiums, transfers or withdrawals.

We monitor the aggregate and individual limits on investments in Restricted
Funds for each transaction (e.g. premium payments, reallocations, withdrawals,
dollar cost averaging). If the contract value in the Restricted Fund has
increased beyond the applicable limit due to market growth, we will not require
the reallocation or withdrawal of contract value from the Restricted Fund.
However, if an aggregate limit has been exceeded, withdrawals must be taken
either from the Restricted Funds or taken pro rata from all investment options
in which contract value is allocated, so that the percentage of contract value
in the Restricted Funds following the withdrawal is less than or equal to the
percentage of contract value in the Restricted Funds prior to the withdrawal.

We will not permit a transfer to the Restricted Funds to the extent that it
would increase the contract value in the Restricted Fund or in all Restricted
Funds to more than the applicable limits set forth above. We will not limit
transfers from Restricted Funds. If the result of multiple reallocations is to
lower the percentage of total contract value in Restricted Funds, the
reallocation will be permitted even if the percentage of contract value in a
Restricted Fund is greater than its limit.

Please see "Withdrawals" and "Transfers Among Your Investments" in this
prospectus for more information on the effect of Restricted Funds.

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

You may allocate premium payments and transfer your contract value to the
guaranteed interest periods of our Fixed Account at any time during the
accumulation period. 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 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,
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 IF
WE APPLY A MARKET VALUE ADJUSTMENT.

Assets supporting amounts allocated to the Fixed Account are available to fund
the claims of all classes of our customer, 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 under the
1940 Act.

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

SmartDesign Advantage-111195 31

information on DCA
Fixed Interest Allocations, see "Transfers Among Your Investments -- Dollar Cost
Averaging."

Your contract value in the Fixed Account is the sum of your Fixed Interest
Allocations and the interest credited as adjusted for any withdrawals (including
any Market Value Adjustment applied to such withdrawal), transfers or other
charges we may impose. 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 which 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 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. 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 Separate Account B. 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,
canceling 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 is 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

SmartDesign Advantage-111195 32

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."

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, in some cases, a surrender
charge. Be aware that withdrawals may have federal income tax consequences,
including a 10% penalty tax.

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 there is no 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 riders will be
reduced by any withdrawals you make from the Fixed Interest Allocations during
the period while the rider is in effect. See "Optional Riders."

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:

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

Where,

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

o "J" is equal to the following:

(1) If calculated for a Fixed Interest Allocation of 1 year or more,
then "J" is the Index Rate for a new Fixed Interest Allocation
with a guaranteed interest period equal to the time remaining in
the guaranteed interest period; or

(2) If calculated for a Fixed Interest Allocation of 6 months, then
"J" is the lesser of the Index Rate for a new Fixed Interest
Allocation with (i) a 6 month guaranteed interest period, or (ii)
a 1 year guaranteed interest period, at the time of calculation.

SmartDesign Advantage-111195 33

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 death benefit options.
Currently, no subaccounts have been designated as Special Funds. The Company
may, at any time, designate new and/or existing subaccounts as a Special Fund
with 30 days notice with respect to new premiums added or transfers to such
subaccounts. Such subaccounts will include those that, due to their volatility,
are excluded from the death benefit guarantees that may otherwise be provided.
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 one death benefit and
not another.

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

The Contract described in this prospectus is a deferred combination variable and
fixed annuity contract. The Contract provides a means for you to invest in one
or more of the available mutual fund portfolios of the AETNA GET FUND, AETNA
VARIABLE PORTFOLIOS, INC., AIM VARIABLE INSURANCE FUNDS, ALLIANCE VARIABLE
PRODUCTS SERIES FUND, INC., BRINSON SERIES TRUST, FIDELITY VARIABLE INSURANCE
PRODUCTS FUND, FIDELITY VARIABLE INSURANCE PRODUCTS FUND II, THE GCG TRUST,
INVESCO VARIABLE INVESTMENT FUNDS, INC., JANUS ASPEN SERIES, PILGRIM VARIABLE
INSURANCE TRUST, PILGRIM VARIABLE PRODUCTS TRUST, THE PIMCO VARIABLE INSURANCE
TRUST, PIONEER VARIABLE CONTRACTS TRUST, PORTFOLIO PARTNERS, INC., THE
PRUDENTIAL SERIES FUND, INC. AND PUTNAM VARIABLE TRUST through Separate Account
B. It also provides a means for you to invest in a Fixed Interest Allocation
through the Fixed Account.

CONTRACT DATE AND CONTRACT YEAR

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

SmartDesign Advantage-111195 34

ANNUITY START DATE

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

CONTRACT OWNER

You are the contract owner. You are also the annuitant unless another annuitant
is named in the application. You have the rights and options described in the
Contract. One or more persons may own the Contract. If there are multiple owners
named, the age of the oldest owner will determine the applicable death benefit
if such death benefit is available for multiple owners.

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

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

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

Any addition or deletion of a joint owner is treated as a change of owner which
may affect the amount of the death benefit. See "Change of Contract Owner or
Beneficiary" below. If you have elected Option Package II or III, and you add a
joint owner, if the older joint owner is attained age 85 or under, the death
benefit from the date of change will be the Option Package I death benefit. If
the older joint owner's attained age is 86 or over on the date of the ownership
change, the death benefit will be the cash surrender value. The mortality and
expense risk charge going forward will reflect the change in death benefit. If
you elected the earnings multiplier benefit rider, it will terminate if a joint
owner is added. Note that returning a Contract to single owner status will not
restore any death benefit or the earnings multiplier benefit. Unless otherwise
specified, the term "age" when used for joint owners shall mean the age of the
oldest owner.

ANNUITANT

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

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

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

SmartDesign Advantage-111195 35

If there is no contingent annuitant when the annuitant dies before the annuity
start date and the contract owner is not an individual, we will pay the
designated beneficiary the death benefit then due. If a beneficiary has not been
designated, or if there is no designated beneficiary living, the contract owner
will be the beneficiary. If the annuitant was the sole contract owner and there
is no beneficiary designation, the annuitant's estate will be the beneficiary.

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

BENEFICIARY

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

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

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

You have the right to change beneficiaries during the annuitant's lifetime
unless you have designated an irrevocable beneficiary. You may also restrict a
beneficiary's right to elect an income phase payment option or receive a
lump-sum payment. If so, such rights or options will not be available to the
beneficiary. When an irrevocable beneficiary has been designated, you and the
irrevocable beneficiary may have to act together to exercise some of the rights
and options under the Contract.

CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime,
you may transfer ownership of a non-qualified Contract. A change in ownership
may affect the amount of the death benefit, the guaranteed minimum death benefit
and/or the death benefit option applied to the Contract, and the amount of the
earnings multiplier benefit, if applicable. The new owner's age, as of the date
of the change, will be used as the basis for determining the applicable benefits
and charges. The new owner's death will determine when a death benefit is
payable.

If you have elected Option Package I, the death benefit will continue
if the new owner is age 85 or under on the date of the ownership change. For
Option Package II or III, if the new owner is age 79 or under on the date that
ownership changes, the death benefit will continue. If the new owner is age 80
to 85, under Option Package II or III, the death benefit will end, and the death
benefit will become the Option Package I death benefit. For all death benefit
options, if the new owner's attained age is 86 or over on the date of the
ownership change, the death benefit will be the cash surrender value. The
mortality and expense risk charge going forward will reflect the change in death
benefit. Please note that once a death benefit has been changed due to a change
in owner, it will not be restored by a subsequent change to a younger owner.

If you have elected the earnings multiplier benefit rider, and the new owner is
under age 76, the rider will continue. The benefit and charge will be adjusted
to reflect the attained age of the new owner as the issue age. The Maximum Base
percentage in effect on the rider effective date will apply in calculating the
benefit. If the new owner is age 76 or over, the rider will terminate. If you
have not elected the earnings multiplier benefit rider, the new owner may not
add the rider upon the change of ownership.

You may also change the beneficiary. All requests for changes must be in writing
and submitted to our Customer Service Center in good order. The change will be
effective as of the day you sign the request. The change will not affect any
payment made or action taken by us before recording the change.

SmartDesign Advantage-111195 36

PURCHASE AND AVAILABILITY OF THE CONTRACT

There are three option packages available under the Contract. You select an
option package at the time of application. Each option package is unique. The
minimum initial payment to purchase the Contract and the maximum age at which
you may purchase the Contract depend on the option package that you elect.

Minimum Initial Payment $15,000 (non-qualified) $5,000 (non-qualified) $5,000 (non-qualified)
----------------------------- $1,500 (qualified) $1,500 (qualified)
$1,500 (qualified)
--------------------------- ------------------------------ ------------------------------- ----------------------------
Maximum Age to Purchase 85 80 80
--------------------------- ------------------------------ ------------------------------- ----------------------------

You may make additional premium payments up to the contract anniversary after
your 86th birthday. The minimum additional premium payment we will accept is $50
regardless of the option package you select. Under certain circumstances, we may
waive the minimum premium payment requirement. We may also change the minimum
initial or additional premium requirements for certain group or sponsored
arrangements. Any initial or additional premium payment that would cause the
contract value of all annuities that you maintain with us to exceed $1,000,000
requires our prior approval.

CREDITING OF PREMIUM PAYMENTS

We will process your initial premium and credits, if applicable, within 2
business days after receipt, if the application and all information necessary
for processing the Contract are complete. Subsequent premium payments will be
processed within 1 business day if we receive all information necessary. In
certain states we also accept initial and additional premium payments by wire
order. Wire transmittals must be accompanied by sufficient electronically
transmitted data. We may retain your initial premium payment for up to 5
business days while attempting to complete an incomplete application. If the
application cannot be completed within this period, we will inform you of the
reasons for the delay. We will also return the premium payment immediately
unless you direct us to hold the premium payment until the application is
completed.

We will allocate your initial payment according to the instructions you
specified. If a subaccount is not available or requested in error, we will make
inquiry about a replacement subaccount. If we are unable to reach you or your
representative, we will consider the application incomplete. For initial premium
payments, the payment will be credited at the accumulation unit value next
determined after we receive your premium payment and the completed application.
Once the completed application is received, we will allocate the payment to the
subaccounts and/or Fixed Interest Allocation specified by you within 2 business
days.

We will make inquiry to discover any missing information related to subsequent
payments. We will allocate the subsequent payment(s) pro rata according to the
current variable subaccount allocation unless you specify otherwise. Any fixed
allocation(s) will not be considered in the pro rata calculations. If a
subaccount is no longer available or requested in error, we will allocate the
subsequent payment(s) proportionally among the other subaccount(s) in your
current allocation or your allocation instructions. For any subsequent premium
payments, the payment and credit, if applicable, will be credited at the
accumulation unit value next determined after receipt of your premium payment
and instructions.

Once we allocate your premium payment and credit, if applicable, to the
subaccounts selected by you, we convert the premium payment

SmartDesign Advantage-111195 37

into accumulation units. We divide the amount of the premium payment allocated
to a particular subaccount by the value of an accumulation unit for the
subaccount to determine the number of accumulation units of the subaccount to be
held in Separate Account B with respect to your Contract. The net investment
results of each subaccount vary with its investment performance.

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

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

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

In some states, we may require that an initial premium designated for a
subaccount of Separate Account B or the Fixed Account be allocated with the
added credit, if applicable, to a subaccount specially designated by the Company
(currently, the Liquid Asset subaccount) during the free look period. After the
free look period, we will convert your contract value (your initial premium plus
any earnings less any expenses) into accumulation units of the subaccounts you
previously selected. The accumulation units will be allocated based on the
accumulation unit value next computed for each subaccount. Initial premiums
designated for Fixed Interest Allocations will be allocated to a Fixed Interest
Allocation with the guaranteed interest period you have chosen; however, in the
future we may allocate the premiums to the specially designated subaccount
during the free look period.

ADDITIONAL CREDIT TO PREMIUM

At the time of application, you may elect the premium credit option. If you so
elect, a credit will be added to your Contract based on all premium payments
received within 60 days of the contract date ("initial premium"). The credit
will be a minimum of 2% of the initial premium and will be allocated among each
subaccount and fixed interest allocation you have selected in proportion to your
initial premium in each investment option. If available in your state at that
time, prior to the third contract anniversary and prior to every third contract
anniversary thereafter, you may elect to have a new credit added to your
Contract. Each three year period beginning with the addition of a premium credit
is known as a "renewal period". The credit will be a minimum of 2% of your
contract value on the applicable contract anniversary.

At least 30 days prior to
the start of each renewal period, we will send you a letter and election form
containing information allowing you to make an informed decision with regard to
the election of the credit, including the amount of the proposed credit, the
cost of the credit and the benefits and detriments of electing the credit. You
may elect a new premium credit by forwarding a completed election form to our
Customer Service Center or by calling us at (800) 366-0066. We will implement
reasonable procedures to ensure that the election is made by the owner. If you
so elect, a new premium credit will be allocated among your variable investment
options in proportion to your contract value in the variable investment options.
If no contract value is then allocated to the variable investment options, the
new premium credit will be allocated to a specially designated subaccount,
currently the Liquid Asset Subaccount. If you do not elect the premium credit
option, we will discontinue the option on the contract anniversary at the start
of the next renewal period. Once you discontinue the premium credit option, it
cannot be subsequently resumed.

SmartDesign Advantage-111195 38

Currently, the premium credit option is available only if elected at the time of
application prior to issuance of the Contract. However, we reserve the right to
make the premium credit option available to inforce contract owners. We may
increase, decrease or discontinue the credit at the end of any renewal period at
our discretion. We will give you at least 45 days notice of any planned change
to the premium credit option.

There is a separate charge for the credit which is an asset-based charge
deducted daily from your contract value. Please see "Fees and Charges" for a
description of this charge.

The credit constitutes earnings (and not premiums paid by you) for federal tax
purposes.

We have submitted an application to the Securities and Exchange Commission for
exemptive relief with regard to the deduction of the premium credit under the
circumstances described below. Pending receipt of an exemptive order, we will
not deduct the credit from payments made to you or your beneficiary, other than
deducting the value of the credit on the day we receive your refund request from
amounts paid to you where you return your Contract within the free look period.
If your contract value on that day has increased or has stayed the same, we will
deduct the full dollar amount of the credit, plus the gain thereon, if
applicable, from the amount we pay you. If your contract value has decreased, we
will calculate the refund amount without the effect of negative performance on
the premium credit, to ensure that you do not bear any losses attributable to
the premium credit. This means that you receive any gains and we bear any losses
attributable to the premium credit during the free look period. Once an
exemptive order has been issued, we will deduct the credit as described below.

In any of the following circumstances, we deduct a credit from the amount we pay
to you or your beneficiary:

(1) If you return your Contract within the free look period, we will
deduct the credit from the refund amount;

(2) If a death benefit becomes payable, we will deduct any credits added
to your Contract since or within 12 months prior to death; and

(3) If you surrender your Contract, we will deduct any credit added to
your contract value within 3 years prior to surrender.

If we deduct a credit from any amount we pay to you, we will deduct the full
dollar amount of the credit. You will retain any gains, and you will also bear
any losses, that are attributable to the credit we deduct.

THERE MAY BE CIRCUMSTANCES UNDER WHICH THE CONTRACT OWNER MAY BE WORSE OFF FROM
HAVING RECEIVED A PREMIUM CREDIT. FOR EXAMPLE, THIS COULD OCCUR IF THE CONTRACT
OWNER RETURNS THE CONTRACT DURING THE APPLICABLE FREE LOOK PERIOD. UPON A FREE
LOOK, WE RECAPTURE THE PREMIUM CREDIT THAT HAD BEEN CREDITED. IF THE STATE LAW
PROVIDES THAT CONTRACT VALUE IS RETURNED ON A FREE LOOK, AND IF THE PERFORMANCE
OF THE APPLICABLE SUBACCOUNTS HAS BEEN NEGATIVE DURING THAT PERIOD, WE WILL
RETURN THE CONTRACT VALUE LESS THE PREMIUM CREDIT. THE NEGATIVE PERFORMANCE
ASSOCIATED WITH THE PREMIUM CREDIT WILL REDUCE THE CONTRACT VALUE MORE THAN IF
THE PREMIUM CREDIT HAD NOT BEEN APPLIED.

ADMINISTRATIVE PROCEDURES

We may accept a request for Contract service in writing, by telephone, or other
approved electronic means, subject to our administrative procedures, which vary
depending on the type of service requested and may include proper completion of
certain forms, providing appropriate identifying information, and/or other
administrative requirements. We will process your request at the contract value
next determined only after you have met all administrative requirements.

CONTRACT VALUE

We determine your contract value on a daily basis beginning on the contract
date. Your contract value is the sum of (a) the contract value in the Fixed
Interest Allocations, and (b) the contract value in each subaccount in which you
are invested.

SmartDesign Advantage-111195 39

CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value in your
Fixed Interest Allocation is the sum of premium payments and credits, if
applicable, allocated to the Fixed Interest Allocation under the Contract, plus
contract value transferred to the Fixed Interest Allocation, plus credited
interest, minus any transfers and withdrawals from the Fixed Interest Allocation
(including any Market Value Adjustment applied to such withdrawal), contract
fees, and premium taxes.

CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the contract value
in the subaccount in which you are invested is equal to the initial premium paid
and added credit, if applicable, that was designated to be allocated to the
subaccount. On the contract date, we allocate your contract value to each
subaccount and/or a Fixed Interest Allocation specified by you, unless the
Contract is issued in a state that requires the return of premium payments
during the free look period, in which case, the portion of your initial premium
and added credit, if applicable, not allocated to a Fixed Interest Allocation
may be allocated to a subaccount specially designated by the Company during the
free look period for this purpose (currently, the Liquid Asset subaccount).

On each business day after the contract date, we calculate the amount of
contract value in each subaccount as follows:

(1) We take the contract value in the subaccount at the end of the
preceding business day.

(2) We multiply (1) by the subaccount's Net Investment Factor since the
preceding business day.

(3) We add (1) and (2).

(4) We add to (3) any additional premium payments and credits, if
applicable, and then add or subtract any transfers to or from that
subaccount.

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

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 investment
results of the subaccounts in which you are invested and interest credited to
Fixed Interest Allocations and any Market Value Adjustment. We do not guarantee
any minimum cash surrender value. On any date during the accumulation phase, we
calculate the cash surrender value as follows: we start with your contract
value, then we adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, the annual contract
administrative fee, and any other charges incurred but not yet deducted.

SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE

You may surrender the Contract at any time while the annuitant is living and
before the annuity start date. A surrender will be effective on the date your
written request and the Contract are received at our Customer Service Center. We
will determine and pay the cash surrender value at the price next determined
after receipt of all paperwork required in order for us to process your
surrender. Once paid, all benefits under the Contract will be terminated. For
administrative purposes, we will transfer your money to a specially designated
subaccount (currently the Liquid Asset subaccount) prior to processing the
surrender. This transfer will have no effect on your cash surrender value. You
may receive the cash surrender value in a single sum payment or apply it under
one or more annuity options. We will usually pay the cash surrender value within
7 days.

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

SmartDesign Advantage-111195 40

THE SUBACCOUNTS

Each of the subaccounts of Separate Account B offered under this prospectus
invests in an investment portfolio with its own distinct investment objectives
and policies. Each subaccount of Separate Account B invests in a corresponding
portfolio of the Aetna GET Fund, Aetna Variable Portfolios, Inc., AIM Variable
Insurance Funds, Alliance Variable Products Series Fund, Inc., Brinson Series
Trust, Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance
Products Fund II, The GCG Trust, INVESCO Variable Investment Funds, Inc., Janus
Aspen Series, Pilgrim Variable Insurance Trust, Pilgrim Variable Products Trust,
The PIMCO Variable Insurance Trust, Pioneer Variable Contracts Trust, Portfolio
Partners, Inc., The Prudential Series Fund, Inc. and Putnam Variable Trust.

ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHANGES

We may make additional subaccounts available to you under the Contract. These
subaccounts will invest in investment portfolios we find suitable for your
Contract. We may also withdraw or substitute investment portfolios, subject to
the conditions in your Contract and compliance with regulatory requirements.

We may amend the Contract to conform to applicable laws or governmental
regulations. If we feel that investment in any of the investment portfolios has
become inappropriate to the purposes of the Contract, we may, with approval of
the SEC (and any other regulatory agency, if required) substitute another
portfolio for existing and future investments. If you have elected the dollar
cost averaging, systematic withdrawals, or automatic rebalancing programs or if
you have other outstanding instructions, and we substitute or otherwise
eliminate a portfolio which is subject to those instructions, we will execute
your instructions using the substitute or proposed replacement portfolio unless
you request otherwise. The substitute or proposed replacement portfolio may have
higher fees and charges than any portfolio it replaces.

We also reserve the right to: (i) deregister Separate Account B under the 1940
Act; (ii) operate Separate Account B as a management company under the 1940 Act
if it is operating as a unit investment trust; (iii) operate Separate Account B
as a unit investment trust under the 1940 Act if it is operating as a managed
separate account; (iv) restrict or eliminate any voting rights as to Separate
Account B; and (v) combine Separate Account B with other accounts.

We will, of course, provide you with written notice before any of these changes
are effected.

THE FIXED ACCOUNT

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

OTHER CONTRACTS

We offer other variable annuity contracts that also invest in the same
investment portfolios of the Trusts. These contracts have different charges that
could affect their performance, and may offer different benefits more suitable
to your needs. To obtain more information about these other contracts, contact
our Customer Service Center or your registered representative.

OTHER IMPORTANT PROVISIONS

See "Withdrawals," "Transfers Among Your Investments," "Death Benefit," "Charges
and Fees," "The Annuity Options" and "Other Contract Provisions" in this
prospectus for information on other important provisions in your Contract.

SmartDesign Advantage-111195 41

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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. If any single withdrawal or the sum of withdrawals exceeds the Free
Withdrawal Amount, you may incur a surrender charge. There is no surrender
charge if, during each contract year, the amount withdrawn is 10% or less of
your contract value on the date of the withdrawal, less prior withdrawals during
that contract year. Under Option Package III, any unused percentage of the 10%
Free Withdrawal Amount from a contract year will carry forward into successive
contract years, based on the percentage remaining at the time of the last
withdrawal in that contract year. In no event will the Free Withdrawal Amount at
any time exceed 30% of contract value.

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 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 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 will apply a Market Value Adjustment to any withdrawal from your Fixed
Interest Allocation taken more than 30 days before its maturity date. Definitive
guidance on the proper federal tax treatment of the Market Value Adjustment has
not been issued. You may want to discuss the potential tax consequences of a
Market Value Adjustment with your tax adviser. If the aggregate percentage cap
on allocations to the Restricted Funds has been exceeded, any subsequent
withdrawals must be taken so that the percentage of contract value in the
Restricted Funds following the withdrawal would not be greater than the
percentage of contract value in the Restricted Funds prior to the withdrawal. If
a requested withdrawal would cause the percentage cap to be exceeded, the amount
of the withdrawal in excess of the cap would be taken pro rata from all variable
subaccounts.

For administrative purposes, we will transfer your money to a specially
designated subaccount (currently, the Liquid Asset subaccount) prior to
processing the withdrawal. This transfer will not affect the withdrawal amount
you receive.

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

You may choose to receive automatic systematic withdrawal payments (1) from the
contract value in the subaccounts in which you are invested, or (2) from the
interest earned in your Fixed Interest Allocations. Systematic withdrawals may
be taken monthly, quarterly or annually. If you have contract value allocated to
one or more Restricted Funds, and you elect to receive systematic withdrawals
from the subaccounts in which you are invested, the systematic withdrawals must
be taken pro rata from all subaccounts in which contract value is invested. If
you do not have contract value allocated to a Restricted Fund and choose
systematic withdrawals on a non pro rata basis, we will monitor the withdrawals
annually. If you subsequently allocate contract value to one or more Restricted
Funds, we will require you to take your systematic withdrawals on a pro rata
basis from all subaccounts in which contract value is invested.

You decide when you would like systematic payments to start as long as it starts
at least 28 days after your contract date. You also select the date on which the
systematic withdrawals will be made, but this date

SmartDesign Advantage-111195 42

cannot be later than the 28th day of the month. If you have elected to receive
systematic withdrawals but have not chosen a date, we will make the withdrawals
on the same calendar day of each month as your contract date. If your contract
date is after the 28th day of the month, your systematic withdrawal will be made
on the 28th day of each month.

Each systematic withdrawal amount must be a minimum of $100. The amount of your
systematic withdrawal can either be (1) a fixed dollar amount, or (2) an amount
based on a percentage of the contract value. Both forms of systematic
withdrawals are subject to the following maximum, which is calculated on each
withdrawal date:

FREQUENCY MAXIMUM PERCENTAGE
Monthly 0.833%
Quarterly 2.50%
Annually 10.00%

If your systematic withdrawal is a fixed dollar amount and the amount to be
withdrawn would exceed the applicable maximum percentage of your premium
payments not previously withdrawn on any withdrawal date, we will automatically
reduce the amount withdrawn so that it equals such percentage. Thus, your fixed
dollar systematic withdrawals will never exceed the maximum percentage. If you
want fixed dollar systematic withdrawals to exceed the maximum percentage and
are willing to incur associated surrender charges, consider the Fixed Dollar
Systematic Withdrawal Feature which you may add to your regular systematic
withdrawal program.

If your systematic withdrawal is based on a percentage of contract value and the
amount to be withdrawn based on that percentage would be less than $100, we will
automatically increase the amount to $100 as long as it does not exceed the
maximum percentage. If the systematic withdrawal would exceed the maximum
percentage, we will send the amount, and then automatically cancel your
systematic withdrawal option.

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 Allocations under the Fixed Dollar Systematic Withdrawal Feature
are available only in connection with Section 72(q) or 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.

You may change the amount or percentage of your systematic withdrawal once each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal date. If you submit a subsequent premium payment after you have
applied for systematic withdrawals, we will not adjust future withdrawals under
the systematic withdrawal program unless you specifically request that we do so.

The systematic withdrawal option may commence in a contract year where a regular
withdrawal has been taken but you may not change the amount or percentage of
your withdrawals in any contract year during which you have previously taken a
regular withdrawal. You may not elect the systematic withdrawal option if you
are taking IRA withdrawals.

FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar
Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal
program. This feature allows you to receive a systematic withdrawal in a fixed
dollar amount regardless of any surrender charges or Market Value Adjustments.
Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar
Systematic Withdrawal Feature are available only in connection with Section
72(q) or 72(t) distributions. You choose the amount of the fixed systematic
withdrawals, which may total up to an annual maximum of 10% of your contract
value as determined on the day we receive your election of this feature. The
maximum limit will not be recalculated when you make additional premium
payments, unless you instruct us to do so.

SmartDesign Advantage-111195 43

We will assess a surrender charge on the withdrawal date if the withdrawal
exceeds the maximum limit as calculated on the withdrawal date. 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 apply the surrender charge and any Market Value Adjustment directly to your
contract value (rather than to the systematic withdrawal) so that the amount of
each systematic withdrawal remains fixed.

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

IRA WITHDRAWALS

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

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

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

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

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

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

SmartDesign Advantage-111195 44

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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. Transfers to a GET Fund series may only be made
during the offering period for that GET Fund series. We currently do not charge
you for transfers made during a contract year, but reserve the right to charge
$25 for each transfer after the twelfth transfer in a contract year. We also
reserve the right to limit the number of transfers you may make and may
otherwise modify or terminate transfer privileges if required by our business
judgment or in accordance with applicable law. 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.

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.

To make a transfer, you must notify our Customer Service Center and all other
administrative requirements must be met. Any transfer request received after
4:00 p.m. eastern time or the close of the New York Stock Exchange will be
effected on the next business day. Separate Account B and the Company will not
be liable for following instructions communicated by telephone or other approved
electronic means that we reasonably believe to be genuine. We may require
personal identifying information to process a request for transfer made over the
telephone, over the internet or other approved electronic means.

TRANSFERS BY THIRD PARTIES

As a convenience to you, we currently allow you to give third parties the right
to effect transfers on your behalf. However, when the third party makes
transfers for many contract owners, the result can be simultaneous transfers
involving large amounts of contract values. Such transfers can disrupt the
orderly management of the investment portfolios available to the Contract, can
result in higher costs to contract owners, and may not be compatible with the
long term goals of contract owners. We require third parties making multiple,
simultaneous or large volume transfers to execute a third party service
agreement with us prior to executing such transfers. Therefore, we may at any
time exercise our business judgment and limit or discontinue accepting transfers
made by a third party. We will notify any third party whose transfers are
limited or discontinued by telephone, facsimile or email according to our
records, followed by a letter. These limits may be based on, among other
criteria, the amount of the aggregate trade or the available investment options
for which third parties may make trades on behalf of multiple contract owners.

We may establish additional procedures or change existing procedures at any time
in the exercise of our business judgment.

DOLLAR COST AVERAGING

You may elect to participate in our dollar cost averaging program if you have at
least $1,200 of contract value in the (i) Liquid Asset subaccount, or (ii) a
Fixed Interest Allocation with either a 6-month or a 1-year guaranteed interest
period. These subaccounts or 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

SmartDesign Advantage-111195 45

subaccounts selected by you. We also may offer DCA Fixed Interest Allocations,
which are 6-month and 1-year Fixed Interest Allocations available exclusively
for use with the dollar cost averaging program. The DCA Fixed Interest
Allocations require a minimum premium payment of $1,200 directed into a DCA
Fixed Interest Allocation. Transfers made pursuant to a dollar cost averaging
program do not count toward the 12 transfer limit on free transfers.

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
other 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.

Unless you have a DCA Fixed Interest Allocation, you elect the dollar amount you
want transferred under this program. Each monthly transfer must be at least
$100. If your source account is the Limited Maturity Bond subaccount, the Liquid
Asset subaccount or a 1-year Fixed Interest Allocation, the maximum amount that
can be transferred each month is your contract value in such source account
divided by 12. If your source account is a 6-month Fixed Interest Allocation,
the maximum amount that can be transferred each month is your contract value in
such source account divided by 6. You may change the transfer amount once each
contract year. If you have a DCA Fixed Interest Allocation, there is no minimum
or maximum transfer amount; we will transfer all your money allocated to that
source account into the subaccount(s) in equal payments over the selected
6-month or 1-year period. The last payment will include earnings accrued over
the course of the selected period. If you make an additional premium payment
into a Fixed Interest Allocation subject to dollar cost averaging, the amount of
your transfers under the dollar cost averaging program remains the same, unless
you instruct us to increase the transfer amount.

Transfers from a Fixed Interest Allocation or a DCA Fixed Interest Allocation
under the dollar cost averaging program are not subject to a Market Value
Adjustment. However, if you terminate the dollar cost averaging program for a
DCA Fixed Interest Allocation and there is money remaining in the DCA Fixed
Interest Allocation, we will transfer the remaining money to the Liquid Asset
subaccount. Such transfer will trigger a Market Value Adjustment if the transfer
is made more than 30 days before the maturity date of the DCA Fixed Interest
Allocation.

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 to 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 or DCA Fixed Interest Allocation
may not participate in the dollar cost averaging program and in systematic
withdrawals at the same time.

You are permitted to transfer contract value to a Restricted Fund, subject to
the limitations described above in this section and in "The Investment
Portfolios." Compliance with the individual and aggregate Restricted Fund limits
will be reviewed when the dollar cost averaging program is established.
Transfers under the dollar cost averaging program must be within those limits.
We will not review again your dollar cost averaging election for compliance with
the individual and aggregate limits for investment in the Restricted Funds
except in the case of the transactions described below.

o Amount added to source account: If you add amounts to the
source account which would increase the amount to be
transferred under the dollar cost averaging program, we will
review the amounts to be transferred to ensure that the
individual and aggregate limits are not being exceeded. If
such limits would be exceeded, we will require that the dollar
cost averaging transfer amounts be changed to ensure that the
transfers are within the limits

SmartDesign Advantage-111195 46

based on the then current
allocation of contract value to the Restricted Fund(s) and the
then current value of the amount designated to be transferred
to that Restricted Fund(s).

o Additional premium paid: Up to the individual Restricted Fund
percentage limit may be allocated to a Restricted Fund. If
more than the individual limit has been requested to be
allocated to a Restricted Fund, we will look at the aggregate
limit, subtract the current allocation to Restricted Funds,
and subtract the current value of amounts to be transferred
under the dollar cost averaging program to Restricted Funds.
The excess, if any, is the maximum that may be allocated pro
rata to Restricted Funds.

o Reallocation request is made while the dollar cost averaging
program is active: If the reallocation would increase the
amount allocated to Restricted Funds, the maximum that may be
so allocated is the individual Restricted Fund percentage
limit, less the current allocation to Restricted Funds and
less the current value of any remaining amounts to be
transferred under the dollar cost averaging program to the
Restricted Funds.

We may in the future offer additional subaccounts or withdraw any subaccount or
Fixed Interest Allocation to or from the dollar cost averaging program, stop
offering DCA Fixed Interest Allocations 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.

AUTOMATIC REBALANCING

If you have at least $10,000 of contract value invested in the subaccounts of
Separate Account B, you may elect to have your investments in the subaccounts
automatically rebalanced. You are permitted to reallocate between Restricted and
non-Restricted Funds, subject to the limitations described above in this section
and in "The Investment Portfolios." If the reallocation would increase the
amount allocated to the Restricted Funds, the maximum that may be so allocated
is the individual Restricted Fund percentage limit, less the current allocation
to all Restricted Funds. Transfers made pursuant to automatic rebalancing do not
count toward the 12 transfer limit on free transfers.

We will transfer funds under your Contract on a quarterly, semi-annual, or
annual calendar basis among the subaccounts to maintain the investment blend of
your selected subaccounts. The minimum size of any allocation must be in full
percentage points. Rebalancing does not affect any amounts that you have
allocated to the Fixed Account. The program may be used in conjunction with the
systematic withdrawal option only if withdrawals are taken pro rata. Automatic
rebalancing is not available if you participate in dollar cost averaging.
Automatic rebalancing will not take place during the free look period.

To participate in automatic rebalancing, send satisfactory notice to our
Customer Service Center. We will begin the program on the last business day of
the period in which we receive the notice. You may cancel the program at any
time. The program will automatically terminate if you choose to reallocate your
contract value among the subaccounts or if you make an additional premium
payment or partial withdrawal on other than a pro rata basis. Additional premium
payments and partial withdrawals effected on a pro rata basis will not cause the
automatic rebalancing program to terminate.

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DEATH BENEFIT CHOICES
--------------------------------------------------------------------------------

DEATH BENEFIT DURING THE ACCUMULATION PHASE

During the accumulation phase, a death benefit, and earnings multiplier benefit,
if elected, is payable when either the annuitant (when a contract owner is not
an individual), the contract owner or the first of joint owners (under Option
Package I only) dies. Assuming you are the contract owner, your beneficiary will
receive a death benefit unless the beneficiary is your surviving spouse and
elects to continue the Contract. The death benefit paid depends on the option
package you have chosen. The death benefit value is calculated as of the claim
date (the close of the business day on which we receive written notice and due
proof of death, as well as any required paperwork, at our Customer Service
Center). If your beneficiary elects

SmartDesign Advantage-111195 47

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

You may select one of the option packages described below which will determine
the death benefit payable. Option Package I is available only if the contract
owner and the annuitant are not more than 85 years old at the time of purchase.
Option Packages II and III are available only if the contract owner and
annuitant are not more than 80 years old at the time of purchase. Option
Packages II and III are not available where the Contract is held by joint
owners. A change in ownership of the Contract may affect the amount of the death
benefit payable.

The death benefit may be subject to certain mandatory distribution rules
required by federal tax law.

The death benefit depends upon the option package in effect on the date the
contract owner dies.

The
differences are summarized as follows:

DEATH BENEFIT The greater of: The greatest of: The greatest of:
------------------------------- (1) the Standard Death (1) the Standard Death (1) the Standard Death
ON DEATH OF THE Benefit on the claim Benefit on the claim Benefit on the claim
OWNER: date; or date; or date; or
(2) the contract value*. (2) the contract value*; or (2) the contract value*;
(3) the Annual Ratchet or
death benefit on the (3) the Annual Ratchet
claim date. death benefit; or
(4) the 5% Roll-Up death
benefit.
-------------------------------- ------------------------------ ------------------------------ -----------------------------

* less credits added since or within 12 months prior to death

Currently, no investment portfolios are designated as "Special Funds." We may,
with 30 days notice to you, designate any investment portfolio as a Special Fund
on existing contracts with respect to new premiums added to such investment
portfolio and also with respect to new transfers to such investment portfolio.
Selecting a Special Fund may limit or reduce the death benefit.

For the period during which a portion of the contract value is allocated to a
Special Fund, we may at our discretion reduce the mortality and expense risk
charge attributable to that portion of the contract value. The reduced mortality
and expense risk charge will be applicable only during that period.

We use the Base Death Benefit to help determine the minimum death benefit
payable under each of the death benefits described below. You do not elect the
Base Death Benefit. The Base Death Benefit is equal to the greater of:

1) the contract value minus any credits added since or within 12 months
prior to death; and

2) the cash surrender value.

SmartDesign Advantage-111195 48

The STANDARD DEATH BENEFIT equals the GREATER of the Base Death Benefit and the
SUM of 1) and 2), LESS 3):

1) the contract value allocated to Special Funds; and

2) the Standard Minimum Guaranteed Death Benefit for amounts allocated to
Non-Special Funds;

3) any initial credit added since or within 12 months prior to death.

The Standard Minimum Guaranteed Death Benefit equals:

1) the initial premium payment plus the initial credit, if applicable,
allocated to Special and Non-Special Funds, respectively;

2) increased by premium payments, and adjusted for transfers, allocated
to Special and Non-Special Funds, respectively, after issue; and

3) reduced by a pro rata adjustment for any withdrawal or transfer taken
from the Special and Non-Special Funds, respectively.

In the event of transfers from Special to Non-Special funds, the increase in the
Minimum Guaranteed Death Benefit of the Non-Special Fund will equal the lesser
of the reduction in the Minimum Guaranteed Death Benefit in the Special Fund and
the contract value transferred. In the event of transfers from Non-Special to
Special Funds, the increase in the Minimum Guaranteed Death Benefit of the
Special Fund will equal the reduction in the Minimum Guaranteed Death Benefit in
the Non-Special Fund.

The 5% ROLL-UP DEATH BENEFIT, equals the GREATER of:

1) the Standard Death Benefit; and

2) the sum of the contract value allocated to Special Funds and the 5%
Roll-Up Minimum Guaranteed Death Benefit for Non-Special Funds less
any initial credit added since or within 12 months prior to death.

The 5% Roll-Up Minimum Guaranteed Death Benefit for Special and Non-Special
Funds equals the lesser of:

1) premiums, plus the initial credit, if applicable, adjusted for
withdrawals and transfers, accumulated at 5% until the earlier of
attainment of age 90 or reaching the cap (equal to 3 times all premium
payments and the initial credit, if applicable, as reduced by
adjustments for withdrawals) and thereafter at 0%, and

2) the cap.

A pro rata adjustment to the 5% Roll-Up Minimum Guaranteed Death Benefit is made
for any withdrawals. The amount of the pro rata adjustment for withdrawals from
Non-Special Funds will equal (a) times (b) divided by (c): where (a) is the 5%
Roll-Up Minimum Guaranteed Death Benefit for Non-Special Funds prior to the
withdrawal; (b) is the contract value of the withdrawal; and (c) is the contract
value allocated to Non-Special Funds before the withdrawal. The amount of the
pro rata adjustment for withdrawals from Special Funds will equal (a) times (b)
divided by (c): where (a) is the 5% Roll-Up Minimum Guaranteed Death Benefit for
Special Funds prior to the withdrawal; (b) is the contract value of the
withdrawal; and (c) is the contract value allocated to Special Funds before the
withdrawal. Please see Appendix C for examples of the pro rata withdrawal
adjustment for withdrawals other than special withdrawals.

Transfers from Special to Non-Special Funds will reduce the 5% Roll-Up Minimum
Guaranteed Death Benefit and the cap for Special Funds on a pro rata basis. The
resulting increase in the 5% Roll-Up Minimum Guaranteed Death Benefit in the
Non-Special Funds will equal the lesser of the reduction in the 5% Roll-Up
Minimum Guaranteed Death Benefit in the Special Funds and the contract value
transferred. The increase in the cap for Non-Special Funds will equal the
reduction in the cap for Special Funds.

SmartDesign Advantage-111195 49

Transfers from Non-Special to Special Funds will reduce the 5% Roll-Up Minimum
Guaranteed Death Benefit and the cap in the Non-Special Funds on a pro rata
basis. The resulting increase in the 5% Roll-Up Minimum Guaranteed Death Benefit
and the cap for the Special Funds will equal the reduction in the 5% Roll-Up
Minimum Guaranteed Death Benefit and the cap for the Non-Special Funds,
respectively.

The ANNUAL RATCHET ENHANCED DEATH BENEFIT equals the GREATER of:

1) the Standard Death Benefit; and

2) the sum of the contract value allocated to Special Funds and the
Annual Ratchet Minimum Guaranteed Death Benefit allocated to
Non-Special Funds, less any initial credit added since or within 12
months prior to death.

The Annual Ratchet Minimum Guaranteed Death Benefit equals:

1) the initial premium plus the initial credit, if applicable, allocated
at issue to Special and Non-Special Funds, respectively;

2) increased dollar for dollar by any premium, allocated after issue to
Special and Non-Special Funds, respectively;

3) for Non-Special Funds, adjusted on each anniversary that occurs on or
prior to attainment of age 90 to the greater of the Annual Ratchet
Minimum Guaranteed Death Benefit for Non-Special Funds from the prior
anniversary (adjusted for new premiums, partial withdrawals allocated
to Non-Special Funds, and transfers between Special and Non-Special
Funds) and the current contract value allocated to Non-Special Funds
before crediting of any applicable renewal credit;

4) for Special Funds, adjusted on each anniversary that occurs on or
prior to attainment of age 90 to the greater of the Annual Ratchet
Minimum Guaranteed Death Benefit for Special Funds from the prior
anniversary (adjusted for new premiums, partial withdrawals allocated
to Special Funds, and transfers between Special and Non-Special Funds)
and the current contract value allocated to Special Funds before
crediting of any applicable renewal credit.

Withdrawals reduce the Annual Ratchet Minimum Guaranteed Death Benefit on a pro
rata basis, based on the amount withdrawn from the Special and Non-Special
Funds, respectively. The amount of the pro rata adjustment for withdrawals from
Non-Special Funds will equal (a) times (b) divided by (c): where (a) is the
Annual Ratchet Minimum Guaranteed Death Benefit for Non-Special Funds prior to
the withdrawal; (b) is the contract value of the withdrawal; and (c) is the
contract value allocated to Non-Special Funds before withdrawal. The amount of
the pro rata adjustment for Special Funds will equal (a) times (b) divided by
(c): where (a) is the Annual Ratchet Minimum Guaranteed Death Benefit for
Special Funds prior to the withdrawal; (b) is the contract value of the
withdrawal; and (c) is the contract value allocated to Special Funds before the
withdrawal.

Transfers from Special to Non-Special Funds will reduce the Annual Ratchet
Minimum Guaranteed Death Benefit for Special Funds on a pro rata basis. The
resulting increase in the Annual Ratchet Minimum Guaranteed Death Benefit in the
Non-Special Funds will equal the lesser of the reduction in the Annual Ratchet
Minimum Guaranteed Death Benefit in the Special Funds and the contract value
transferred.

Transfers from Non-Special to Special Funds will reduce the Annual Ratchet
Minimum Guaranteed Death Benefit for Non-Special Funds on a pro rata basis. The
resulting increase in the Annual Ratchet Minimum Guaranteed Death Benefit for
the Special Funds will equal the reduction in the Annual Ratchet Minimum
Guaranteed Death Benefit for the Non-Special Funds.

Note: In all cases described above, the amount of the death benefit could be
reduced by premium taxes owed and withdrawals not previously deducted. The
enhanced death benefits may not be available in all states.

TRANSFERS BETWEEN OPTION PACKAGES. You may transfer from one option package to
another on each contract anniversary. A written request for such transfer must
be received at our Customer Service Center

SmartDesign Advantage-111195 50

within 60 days prior to the contract anniversary. No transfers between option
packages are permitted: 1) after you attain age 80; or 2) if the Contract is
owned by joint owners.

The following minimum contract values must be met:

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

TRANSFERS TO OPTION PACKAGE I TRANSFERS TO OPTION PACKAGES II
OR III
------------------------------ ---------------- ----------------- ---------------- -----------------

MINIMUM CONTRACT VALUE Non- Non-
Qualified: Qualified: Qualified: Qualified:
$15,000 $1,500 $5,000 $1,500
------------------------------ ---------------- ----------------- ---------------- -----------------

If you transfer from Option I to Option II or Option III, the minimum guaranteed
death benefit for Special and Non-Special Funds will equal the contract value
for Special and Non-Special Funds, respectively, on the effective date of the
transfer. On a transfer to Option Package III, the then current roll-up cap will
be allocated to Special and Non-Special Funds in the same percentage as the
allocation of contract value on the effective date of the transfer. A change of
owner may cause an option package transfer on other than a contract anniversary.

There is an extra charge for this feature and once selected, it may not be
revoked. The earnings enhancement benefit rider does not provide a benefit if
there is no gain under the Contract. As such, the Company would continue to
assess a charge for the rider, even though no benefit would be payable at death
under the rider if there are no gains under the Contract. Please see page 3 for
a description of the earnings multiplier benefit rider charge.

DEATH BENEFIT DURING THE INCOME PHASE

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

SmartDesign Advantage-111195 51

CONTINUATION AFTER DEATH -- SPOUSE

If at the contract owner's death, the surviving spouse of the deceased contract
owner is the beneficiary and such surviving spouse elects to continue the
contract as his or her own the following will apply:

If the guaranteed death benefit as of the date we receive due proof of death,
minus the contract value also on that date, is greater than zero, we will add
such difference to the contract value. Such addition will be allocated to the
variable subaccounts in proportion to the contract value in the subaccounts,
unless we are directed otherwise. If there is no contract value in any
subaccount, the addition will be allocated to the Liquid Asset subaccount, or
its successor. Such addition to contract value will not affect the guaranteed
death benefit.

The death benefits under each of the available options will continue based on
the surviving spouse's age on the date that ownership changes. If death occurs
within 12 months of a credit being applied, the credit will not be forfeited
upon spousal continuation, and the premium credit option charge will continue.
The credit will be subject to recapture upon surrender of the Contract, unless
forfeited previously. If death occurs more than 12 months after the last credit
was applied, any premium credit option charge will be waived for the remainder
of the current three year period. The credit will not be subject to recapture
upon surrender of the Contract.

At subsequent surrender, any surrender charge applicable to premiums paid prior
to the date we receive due proof of death of the contract owner will be waived.
Any premiums paid later will be subject to any applicable surrender charge.

Any addition to contract value, as described above, is available only to the
spouse of the owner as of the date of death of the owner if such spouse under
the provisions of the contract elects to continue the contract as his or her
own.

If you elected the earnings multiplier benefit rider, and the benefit would
otherwise be payable, the benefit will be added to the contract value and
allocated among the variable subaccounts in proportion to the contract value in
the subaccounts, unless we are directed otherwise. If there is no contract value
in any subaccount, the benefit will be allocated to the Liquid Asset subaccount,
or its successor. The crediting of the earnings multiplier benefit will not be
included in either the minimum guaranteed death benefit or guaranteed living
benefit calculations.

The earnings multiplier benefit rider will continue, if the surviving spouse is
eligible based on his or her attained age. If the surviving spouse is older than
the maximum rider issue age, the rider will terminate. The Maximum Base and the
percentages will be reset based on the adjusted contract value. The calculation
of the benefit going forward will be: 1) based on the attained age of the spouse
at the time of the ownership change using current values as of that date; 2)
computed as if the rider was added to the Contract after issue and after the
increase; and 3) based on the Maximum Base and percentages in effect on the
rider effective date. However, we may in the future permit the surviving spouse
to elect to use the then current Maximum Base and percentages in the benefit
calculation.

CONTINUATION AFTER DEATH -- NON SPOUSE

If the beneficiary or surviving joint owner is not the spouse of the owner, the
contract may continue in force subject to the required distribution rules of the
Internal Revenue Code (the "Code"). See next section, "Required Distributions
upon Contract Owner's Death."

If you elected the earnings multiplier benefit rider, and the benefit would
otherwise be payable, the benefit will be added to the contract value and
allocated among the variable subaccounts in proportion to the contract value in
the subaccounts, unless we are directed otherwise. If there is no contract value
in any subaccount, the benefit will be allocated to the Liquid Asset subaccount,
or its successor. The earnings multiplier benefit rider then terminates, whether
or not a benefit was payable under the terms of the rider.

SmartDesign Advantage-111195 52

REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH

We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.

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

Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is
the deceased owner's surviving spouse, then such spouse may elect to continue
the Contract under the same terms as before the contract owner's death. Upon
receipt of such election from the spouse at our Customer Service Center: (1) all
rights of the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become the owner
of the Contract and will also be treated as the contingent annuitant, if none
has been named and only if the deceased owner was the annuitant; and (3) all
rights and privileges granted by the Contract or allowed by Golden American will
belong to the spouse as contract owner of the Contract. This election will be
deemed to have been made by the spouse if such spouse makes a premium payment to
the Contract or fails to make a timely election as described in this paragraph.
If the owner's beneficiary is a nonspouse, the distribution provisions described
in subparagraphs (a) and (b) above, will apply even if the annuitant and/or
contingent annuitant are alive at the time of the contract owner's death.

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

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

If a Contract has joint owners we will consider the date of death of the first
joint owner as the death of the contract owner and the surviving joint owner
will become the contract owner of the Contract. If any contract owner is not an
individual, the death of an annuitant shall be treated as the death of the
owner.

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

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

CHARGE DEDUCTION SUBACCOUNT

You may elect to have all charges against your contract value deducted directly
from a single subaccount designated by the Company. Currently we use the Liquid
Asset subaccount for this purpose. If you do not elect this option, or if the
amount of the charges is greater than the amount in the designated subaccount,

SmartDesign Advantage-111195 53

the charges will be deducted as discussed below. You may cancel this option at
any time by sending satisfactory notice to our Customer Service Center.

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

SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a
"surrender charge") if you surrender your Contract or if you take a withdrawal
in excess of the Free Withdrawal Amount during the 3-year period from the date
we receive and accept a premium payment. The surrender charge is based on a
percentage of each premium payment withdrawn. This charge is intended to cover
sales expenses that we have incurred. The surrender charge is deducted from the
remaining contract value, not from the amount you requested as a withdrawal. We
may in the future reduce or waive the surrender charge in certain situations and
will never charge more than the maximum surrender charges. The percentage of
premium payments deducted at the time of surrender or excess withdrawal depends
on the number of complete years that have elapsed since that premium payment was
made. We determine the surrender charge as a percentage of each premium payment
withdrawn as follows:

COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3+
SINCE PREMIUM PAYMENT | | |
SURRENDER CHARGE 6% | 5% | 4% | 0%

NURSING HOME WAIVER. You may withdraw all or a portion of your contract
value without a surrender charge if:

(1) more than one contract year has elapsed since the contract date;

(2) the withdrawal is requested within three years of your admission to a
licensed nursing care facility; and

(3) you have spent at least 45 consecutive days in such nursing care
facility.

We will not waive the early withdrawal charge if you were in a nursing care
facility for at least one day during the two week period immediately preceding
or following the contract date. It will also not apply to Contracts where
prohibited by state law.

FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount is 10% of contract
value, based on the contract value on the date of the withdrawal. Under Option
Package III, any unused percentage of the 10% Free Withdrawal Amount from a
contract year will carry forward into successive contract years, based on the
percentage remaining at the time of the last withdrawal in that contract year.
In no event will the free withdrawal amount at any time exceed 30% of contract
value.

SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge
for excess withdrawals. We consider a withdrawal to be an "excess withdrawal"
when the amount you withdraw in any contract year exceeds the Free Withdrawal
Amount. Where you are receiving systematic withdrawals, any combination of
regular withdrawals taken and any systematic withdrawals expected to be received
in a contract year will be included in determining the amount of the excess
withdrawal. Such a withdrawal will be considered a partial surrender of the
Contract and we will impose a surrender charge and any associated premium tax.
We will deduct such charges from the contract value in proportion to the
contract value in each subaccount or Fixed Interest Allocation from which the
excess withdrawal was taken. In instances where the excess withdrawal equals the
entire contract value in such subaccounts or Fixed Interest Allocations, we will
deduct charges proportionately from all other subaccounts and Fixed Interest
Allocations in which you are invested. ANY WITHDRAWAL FROM A FIXED INTEREST
ALLOCATION MORE THAN 30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET
VALUE ADJUSTMENT.

SmartDesign Advantage-111195 54

For the purpose of calculating the surrender charge for an excess withdrawal: a)
we treat premiums as being withdrawn on a first-in, first-out basis; and b)
amounts withdrawn which are not considered an excess withdrawal are not
considered a withdrawal of any premium payments. We have included an example of
how this works in Appendix B. Earnings for purposes of calculating the surrender
charge for excess withdrawals may not be the same as earnings under federal tax
law.

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

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

ADMINISTRATIVE CHARGE. We deduct an annual administrative charge on each
Contract anniversary, or if you surrender your Contract prior to a Contract
anniversary, at the time we determine the cash surrender value payable to you.
The amount deducted is $30 per Contract unless waived under conditions
established by Golden American. We deduct the charge proportionately from all
subaccounts in which you are invested. If there is no contract value in those
subaccounts, we will deduct the charge from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity dates until
the charge has been paid.

TRANSFER CHARGE. We currently do not deduct any charges for transfers made
during a contract year. We have the right, however, to assess up to $25 for each
transfer after the twelfth transfer in a contract year. If such a charge is
assessed, we would deduct the charge from the subaccounts and the Fixed Interest
Allocations from which each such transfer is made in proportion to the amount
being transferred from each such subaccount and Fixed Interest Allocation unless
you have chosen to have all charges deducted from a single subaccount. The
charge will not apply to any transfers due to the election of dollar cost
averaging, automatic rebalancing and transfers we make to and from any
subaccount specially designated by the Company for such purpose.

CHARGES DEDUCTED FROM THE SUBACCOUNTS

MORTALITY AND EXPENSE RISK CHARGE. The mortality and expense risk charge is
deducted each business day. The amount of the mortality and expense risk charge
depends on the option package you have elected. The charge is deducted on each
business day based on the assets you have in each subaccount. The charge for
each option package, on an annual basis, is equal to 1.45% for Option Package I,
1.65% for Option Package II, and 1.80% for Option Package III, of the assets you
have in each subaccount. The charge is deducted each business day at the daily
rate of .004002% (Option Package I),.004558% (Option Package II), or .004976%
(Option Package III), respectively. In the event there are any profits from the
mortality and expense risk charge, we may use such profits to finance the
distribution of contracts.

ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based
administrative charge, on an annual basis, is equal to 0.15% of the assets you
have in each subaccount. The charge is deducted on each business day at the rate
of .000411%from your assets in each subaccount. This charge is deducted daily
from your assets in each subaccount.

PREMIUM CREDIT OPTION CHARGE. The amount of the asset-based premium credit
option charge, on an annual basis, is equal to 0.60% of the assets you have in
each subaccount. The charge is deducted on each business day at the rate of
.0001649% for 3 years following each credit from your assets in each subaccount.
This charge will also be deducted from amounts allocated to the Fixed Account,
resulting in a 0.60% reduction in the interest which would otherwise have been
credited to your contract during the three contract years following each credit
if you had not elected the premium credit option.

SmartDesign Advantage-111195 55

EARNINGS MULTIPLIER BENEFIT CHARGE. So long as the rider is in effect, we
will deduct a separate quarterly charge for the rider through a pro rata
reduction of the contract value of the subaccounts in which you are invested.
The quarterly charge for the earnings multiplier benefit rider is 0.0625% (0.25%
annually). If there is insufficient contract value in the subaccounts, we will
deduct the charges from your Fixed Interest Allocations, starting with the
allocation nearest its maturity date. If that is insufficient, we will deduct
the charge from the allocation next nearest its maturity date, and so on. We
deduct the rider charge on each quarterly contract anniversary in arrears,
meaning the first charge will be deducted on the first quarterly anniversary
following the rider effective date. If you surrender or annuitize your Contract,
we will deduct a pro rata portion of the charge for the current quarter based on
the current contract value immediately prior to the surrender or annuitization.
For a description of the rider, see "The Earnings Multiplier Benefit Rider."

TRUST EXPENSES

Each portfolio deducts portfolio management fees and charges from the amounts
you have invested in the portfolios. In addition, five portfolios deduct a
service fee, which is used to compensate service providers for administrative
and contract holder services provided on behalf of the portfolios, and six
portfolios deduct a distribution or 12b-1 fee, which is used to finance any
activity that is primarily intended to result in the sale of shares of the
applicable portfolio. Based on actual portfolio experience in 2000, together
with estimated costs for new portfolios, total estimated portfolio fees and
charges for 2001 range from 0.55% to 1.86%. See "Fees and Expenses" in this
prospectus.

Additionally, we may receive compensation from the investment advisers,
administrators or distributors of the portfolios in connection with
administrative, distribution, or other services and cost savings experienced by
the investment advisers, administrators or distributors. It is anticipated that
such compensation will be based on assets of the particular portfolios
attributable to the Contract. Some advisers, administrators or distributors may
pay us more than others.

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

During the income phase, you stop contributing dollars to your contract and
start receiving payments from your accumulated contract value. INITIATING
PAYMENTS. At least 30 days prior to the date you want to start receiving
payments, you must notify us in writing of all of the following:

o Payment start date;

o Income phase payment option (see the income phase payment options
table in this section);

o Payment frequency (i.e., monthly, quarterly, semi-annually or
annually);

o Choice of fixed, and, if available at the time an income phase payment
option is selected, variable or a combination of both fixed and
variable payments; and

o Selection of an assumed net investment rate (only if variable payments
are elected).

Your Contract will continue in the accumulation phase until you properly start
income phase payments. Once an income phase payment option is selected, it may
not be changed. Our current annuity options provide only for fixed payments.

WHAT AFFECTS PAYMENT AMOUNTS? Some of the factors that may affect the amount of
your income phase payments include: your age; gender; contract value; the income
phase payment option selected; the number of guaranteed payments (if any)
selected; whether you select fixed, variable or a combination of both fixed and
variable payments; and, for variable payments, the assumed net investment rate
selected. Variable payments are not currently available.

SmartDesign Advantage-111195 56

FIXED PAYMENTS. Amounts funding fixed income phase payments will be held in the
Company's general account. The amount of fixed payments does not vary with
investment performance over time.

VARIABLE PAYMENTS. Amounts funding your variable income phase payments will be
held in the subaccount(s) you select. Not all subaccounts available during the
accumulation phase may be available during the income phase. Payment amounts
will vary depending upon the performance of the subaccounts you select. For
variable income phase payments, you must select an assumed net investment rate.
Variable payments are not currently available.

ASSUMED NET INVESTMENT RATE. If you select variable income phase payments, you
must also select an assumed net investment rate of either 5% or 3 1/2%. If you
select a 5% rate, your first income phase payment will be higher, but subsequent
paymenTs will increase only if the investment performance of the subaccounts you
selected is greater than 5% annually, after deduction of fees. Payment amounts
will decline if the investment performance is less than 5%, after deduction of
fees.

If you select a 3 1/2% rate, your first income phase payment will be lower and
subsequent payments will increase more rapidLy or decline more slowly depending
upon changes to the net investment rate of the subaccounts you selected. For
more information about selecting an assumed net investment rate, call us for a
copy of the SAI.

MINIMUM PAYMENT AMOUNTS. The income phase payment option you select must result
in:

o A first income phase payment of at least $50; and

o Total yearly income phase payments of at least $250.

If your contract value is too low to meet these minimum payment amounts, you
will receive one lump-sum payment. Unless prohibited by law, we reserve the
right to increase the minimum payment amount based on increases reflected in the
Consumer Price Index-Urban (CPI-U) since July 1, 1993.

RESTRICTIONS ON START DATES AND THE DURATION OF PAYMENTS. Income phase payments
may not begin during the first contract year, or, unless we consent, later than
the later of:

o The first day of the month following the annuitant's 85th birthday; or

o The tenth anniversary of the last premium payment made to your
Contract.

Income phase payments will not begin until you have selected an income phase
payment option. If income phase payments begin within the first contract year,
it will be treated as a surrender, and surrender charges may apply. Failure to
select an income phase payment option by the later of the annuitant's 85th
birthday or the tenth anniversary of your last premium payment may have adverse
tax consequences. You should consult with a qualified tax adviser if you are
considering delaying the selection of an income phase payment option before the
later of these dates.

For qualified contracts only, income phase payments may not extend beyond:

(a) The life of the annuitant;

(b) The joint lives of the annuitant and beneficiary;

(d) A guaranteed period greater than the joint life expectancies of the
annuitant and beneficiary.

When income phase payments start, the age of the annuitant plus the number of
years for which payments are guaranteed may not exceed 100.

If income phase payments start when the annuitant is at an advanced age, such as
over 85, it is possible that the Contract will not be considered an annuity for
federal tax purposes.

See "FEDERAL TAX CONSIDERATIONS" for further discussion of rules relating to
income phase payments.

SmartDesign Advantage-111195 57

CHARGES DEDUCTED.

o If variable income phase payments are selected, we make a daily
deduction for mortality and expense risks from amounts held in the
subaccounts. Therefore, if you choose variable income phase
payments and a nonlifetime income phase payment option, we still
make this deduction from the subaccounts you select, even though we
no longer assume any mortality risks. The amount of this charge, on
an annual basis, is equal to 1.25% of amounts invested in the
subaccounts. See "Fees and Expenses."

o There is currently no administrative expense charge during the
income phase. We reserve the right, however, to charge an
administrative expense charge of up to 0.25% during the income
phase. If imposed, we deduct this charge daily from the subaccounts
corresponding to the funds you select. If we are imposing this
charge when you enter the income phase, the charge will apply to
you during the entire income phase. See "Fees and Expenses."

o If you elected the premium credit option and variable income phase
payments, we may also deduct the premium credit option charge. We
deduct this charge daily during the first seven contract years from
the subaccounts corresponding to the funds you select. If fixed
income phase payments are selected, this charge may be reflected in
the income phase payment rates. See "Fees and Expenses."

DEATH BENEFIT DURING THE INCOME PHASE. The death benefits that may be available
to a beneficiary are outlined in the income phase payment options table below.
If a lump-sum payment is due as a death benefit, we will make payment within
seven calendar days after we receive proof of death acceptable to us and the
request for the payment in good order at our Customer Service Center. If
continuing income phase payments are elected, the beneficiary may not elect to
receive a lump sum at a future date unless the income phase payment option
specifically allows a withdrawal right. We will calculate the value of any death
benefit at the next valuation after we receive proof of death and a request for
payment. Such value will be reduced by any payments made after the date of
death.

BENEFICIARY RIGHTS. A beneficiary's right to elect an income phase payment
option or receive a lump-sum payment may have been restricted by the contract
owner. If so, such rights or options will not be available to the beneficiary.

PARTIAL ENTRY INTO THE INCOME PHASE. You may elect an income phase payment
option for a portion of your contract value, while leaving the remaining portion
invested in the accumulation phase. Whether the Tax Code considers such payments
taxable as income phase payments or as withdrawals is currently unclear;
therefore, you should consult with a qualified tax adviser before electing this
option. The same or different income phase payment option may be selected for
the portion left invested in the accumulation phase.

TAXATION. To avoid certain tax penalties, you or your beneficiary must meet the
distribution rules imposed by the Tax Code. Additionally, when selecting an
income phase payment option, the Tax Code requires that your expected payments
will not exceed certain durations. See "FEDERAL TAX CONSIDERATIONS".

PAYMENT OPTIONS.

The following table lists the income phase payment options and accompanying
death benefits available during the income phase. We may offer additional income
phase payment options under the Contract from time to time. Once income phase
payments begin, the income phase payment option selected may not be changed.

TERMS TO UNDERSTAND:

ANNUITANT(S): The person(s) on whose life expectancy(ies) the income phase
payments are based.

BENEFICIARY(IES): The person(s) or entity(ies) entitled to receive a death
benefit, if any, under the income phase payment option selected.

SmartDesign Advantage-111195 58

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LIFETIME INCOME PHASE PAYMENT OPTIONS
-----------------------------------------------------------------------------------------------------------------------

Life Income LENGTH OF PAYMENTS: For as long as the annuitant lives. It is possible that only one payment
will be made if the annuitant dies prior to the second payment's due date.
---------------------------------------------------------------------------------------------
DEATH BENEFIT--NONE: All payments end upon the annuitant's death.
------------------------ ----------------------------------------------------------------------------------------------
Life Income-- LENGTH OF PAYMENTS: For as long as the annuitant lives, with payments guaranteed for your
Guaranteed choice of 5 to 30 years or as otherwise specified in the contract.
Payments DEATH BENEFIT--PAYMENT TO THE BENEFICIARY: If the annuitant dies before we have made all the
guaranteed payments, we will continue to pay the beneficiary the remaining payments.
------------------------ ----------------------------------------------------------------------------------------------
Life Income-- LENGTH OF PAYMENTS: For as long as either annuitant lives. It is possible that only one
Two Lives payment will be made if both annuitants die before the second payment's due date.
CONTINUING PAYMENTS: When you select this option you choose for:
a) 100%, 66 2/3% or 50% of the payment to continue to the surviving annuitant after
the first death; or
b) 100% of the payment to continue to the
annuitant on the second annuitant's
death, and 50% of the payment to continue
to the second annuitant on the
annuitant's death.

DEATH BENEFIT--NONE: All payments end upon the death of both annuitants.
------------------------ ----------------------------------------------------------------------------------------------
Life Income-- LENGTH OF PAYMENTS: For as long as either annuitant lives, with payments guaranteed from 5
Two Lives-- to 30 years or as otherwise specified in the contract.
Guaranteed CONTINUING PAYMENTS: 100% of the payment to continue to the surviving annuitant after the
Payments first death.
DEATH BENEFIT--PAYMENT TO THE BENEFICIARY: If both
annuitants die before we have made all the
guaranteed payments, we will continue to pay the
beneficiary the remaining payments.
------------------------ ----------------------------------------------------------------------------------------------
Life Income--Cash LENGTH OF PAYMENTS: For as long as the annuitant lives.
Refund Option (limited DEATH BENEFIT--PAYMENT TO THE BENEFICIARY: Following
availability--fixed the annuitant's death, we will pay a lump sum payment
payments only) equal to the amount originally applied to the income phase payment option
payments only) (less any applicable premium tax) and less the total amount
of income payments paid.
------------------------ ----------------------------------------------------------------------------------------------
Life Income--Two LENGTH OF PAYMENTS: For as long as either annuitant lives.
Lives--Cash Refund CONTINUING PAYMENTS: 100% of the payment to continue after the first death.
Option (limited DEATH BENEFIT--PAYMENT TO THE BENEFICIARY: When both annuitants die we will pay a lump-sum
availability--fixed payment equal to the amount applied to the income phase payment option (less any applicable
payments only) premium tax) and less the total amount of income payments paid.
------------------------ ----------------------------------------------------------------------------------------------

SmartDesign Advantage-111195 59

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NONLIFETIME INCOME PHASE PAYMENT OPTION
-----------------------------------------------------------------------------------------------------------------------

Nonlifetime-- LENGTH OF PAYMENTS: You may select payments for 5 to 30 years (15 to 30 years if you elected
Guaranteed the premium bonus option). In certain cases a lump-sum payment may be requested at any time
Payments (see below).
DEATH BENEFIT--PAYMENT TO THE BENEFICIARY: If the annuitant dies before we make all the
guaranteed payments, we will continue to pay the beneficiary the remaining payments.
-----------------------------------------------------------------------------------------------------------------------

LUMP-SUM PAYMENT: If the "Nonlifetime--Guaranteed Payments" option is
elected with variable payments, you may request at any time that all or a
portion of the present value of the remaining payments be paid in one lump
sum. Any such lump-sum payments will be treated as a withdrawal during the
accumulation phase and we will charge any applicable surrender charge.
Lump-sum payments will be sent within seven calendar days after we receive
the request for payment in good order at our Customer Service Center.

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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS

We will send you a quarterly report within 31 days after the end of each
calendar quarter. The report will show the contract value, cash surrender value,
and the death benefit as of the end of the calendar quarter. The report will
also show the allocation of your contract value and reflects the amounts
deducted from or added to the contract value since the last report. You have 30
days to notify our Customer Service Center of any errors or discrepancies
contained in the report or in any confirmation notices. We will also send you
copies of any shareholder reports of the investment portfolios in which Separate
Account B invests, as well as any other reports, notices or documents we are
required by law to furnish to you.

SUSPENSION OF PAYMENTS

The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
is closed; (2) when trading on the New York Stock Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in Separate Account B may not reasonably occur or so that the Company may
not reasonably determine the value of Separate Account B's net assets; or (4)
during any other period when the SEC so permits for the protection of security
holders. We have the right to delay payment of amounts from a Fixed Interest
Allocation for up to 6 months.

IN CASE OF ERRORS IN YOUR APPLICATION

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

ASSIGNING THE CONTRACT AS COLLATERAL

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

SmartDesign Advantage-111195 60

CONTRACT CHANGES -- APPLICABLE TAX LAW

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

FREE LOOK

You may cancel your Contract within your 10-day free look period. We deem the
free look period to expire 15 days after we mail the Contract to you. Some
states may require a longer free look period. To cancel, you need to send your
Contract to our Customer Service Center or to the agent from whom you purchased
it. We will refund the contract value. For purposes of the refund during the
free look period, (i) we adjust your contract value for any Market Value
Adjustment (if you have invested in the fixed account), (ii) then, if
applicable, we exclude any credit initially applied, and (iii) then we include a
refund of any charges deducted from your contract value. Because of the market
risks associated with investing in the portfolios and the potential positive or
negative effect of the market value adjustment, the contract value returned may
be greater or less than the premium payment you paid. Some states require us to
return to you the amount of the paid premium (rather than the contract value) in
which case you will not be subject to investment risk during the free look
period. In these states, your premiums designated for investment in the
subaccounts may be allocated during the free look period to a subaccount
specially designated by the Company for this purpose (currently, the Liquid
Asset subaccount). We may, in our discretion, require that premiums designated
for investment in the subaccounts from all other states as well as premiums
designated for a Fixed Interest Allocation be allocated to the specially
designated subaccount during the free look period. Your Contract is void as of
the day we receive your Contract and cancellation request. We determine your
contract value at the close of business on the day we receive your written
request. If you keep your Contract after the free look period and the investment
is allocated to a subaccount specially designated by the Company, we will put
your money in the subaccount(s) chosen by you, based on the accumulation unit
value next computed for each subaccount, and/or in the Fixed Interest Allocation
chosen by you.

GROUP OR SPONSORED ARRANGEMENTS

For certain group or sponsored arrangements, we may reduce any surrender,
administration, and mortality and expense risk charges. We may also change the
minimum initial and additional premium requirements, or offer an alternative or
reduced death benefit.

SELLING THE CONTRACT

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

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

We pay sales commissions to Directed Services for the sale of the Contracts.
Directed Services passes through the entire amount of the sales commission to
the broker-dealer whose registered representative sold the Contract. The maximum
sales commission payable will be approximately 7.25% of the initial and any
additional premium payment. This commission may be returned if the Contract is
not continued through the first Contract Year.

SmartDesign Advantage-111195 61

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UNDERWRITER COMPENSATION
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NAME OF PRINCIPAL UNDERWRITER AMOUNT OF COMMISSION TO BE OTHER
PAID COMPENSATION
Directed Services, Inc. The equivalent of a Reimbursement of any
combination of a percentage covered expenses
of premium payments and a incurred
percentage of the contract by registered
value up to a maximum of 7.25% representatives
------------------------------ in connection
with the
distribution
of the Contracts.
------------------------------ ------------------------------- -----------------------------

Certain sales agreements may provide for a different combination of percentage
of commission at the time of sale and annual trail commission under which one of
the percentages could exceed that shown above.

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

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

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OTHER INFORMATION
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VOTING RIGHTS

We will vote the shares of a Trust owned by Separate Account B according to your
instructions. However, if the 1940 Act or any related regulations should change,
or if interpretations of it or related regulations should change, and we decide
that we are permitted to vote the shares of a Trust in our own right, we may
decide to do so.

We determine the number of shares that you have in a subaccount by dividing the
Contract's contract value in that subaccount by the net asset value of one share
of the portfolio in which a subaccount invests. We count fractional votes. We
will determine the number of shares you can instruct us to vote 180 days or less
before a Trust shareholder meeting. We will ask you for voting instructions by
mail at least 10 days before the meeting. If we do not receive your instructions
in time, we will vote the shares in the same proportion as the instructions
received from all contracts in that subaccount. We will also vote shares we hold
in Separate Account B which are not attributable to contract owners in the same
proportion.

STATE REGULATION

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

LEGAL PROCEEDINGS

The Company, like other insurance companies, may be involved in lawsuits,
including class action lawsuits. In some class action and other lawsuits
involving insurers, substantial damages have been sought and/or

SmartDesign Advantage-111195 62

material settlement payments have been made. We believe that currently there are
no pending or threatened lawsuits that are reasonably likely to have a
materially adverse impact on the Company 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, and Separate Account B at December 31, 2000 and the related statements of
operations and changes in net assets for the periods disclosed in the financial
statements, appearing in this prospectus or in the SAI and 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 SAI and 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.

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

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

TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED

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

TAX STATUS OF THE CONTRACTS

DIVERSIFICATION REQUIREMENTS. The Code requires that the investments of a
variable account be "adequately diversified" in order for nonqualified Contracts
to be treated as annuity contracts for federal income tax purposes. It is
intended that Separate Account B, through the subaccounts, will satisfy these
diversification requirements.

INVESTOR CONTROL. In certain circumstances, owners of variable annuity
contracts have been considered for federal income tax purposes to be the owners
of the assets of the separate account supporting their contracts due to their
ability to exercise investment control over those assets. When this is the case,
the

SmartDesign Advantage-111195 63

contract owners have been currently taxed on income and gains attributable
to the separate account assets. There is little guidance in this area, and some
features of the Contracts, such as the flexibility of a contract owner to
allocate premium payments and transfer contract values, have not been explicitly
addressed in published rulings. While we believe that the Contracts do not give
contract owners investment control over Separate Account B assets, we reserve
the right to modify the Contracts as necessary to prevent a contract owner from
being treated as the owner of the Separate Account B assets supporting the
Contract.

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

Other rules may apply to Qualified Contracts.

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

TAX TREATMENT OF ANNUITIES

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

TAXATION OF NON-QUALIFIED CONTRACTS

NON-NATURAL PERSON. The owner of any annuity contract who is not a natural
person generally must include in income any increase in the excess of the
contract value over the "investment in the contract" (generally, the premiums or
other consideration you paid for the contract less any nontaxable withdrawals)
during the taxable year. There are some exceptions to this rule and a
prospective contract owner that is not a natural person may wish to discuss
these with a tax adviser. The following discussion generally applies to
Contracts owned by natural persons.

WITHDRAWALS. When a withdrawal from a non-qualified Contract occurs, the
amount received will be treated as ordinary income subject to tax up to an
amount equal to the excess (if any) of the contract value (unreduced by the
amount of any surrender charge) immediately before the distribution over the
contract owner's investment in the Contract at that time. Credits constitute
earnings (not premiums) for federal tax purposes and are not included in the
owner's investment in the Contract. The tax treatment of market value
adjustments is uncertain. You should consult a tax adviser if you are
considering taking a withdrawal from your Contract in circumstances where a
market value adjustment would apply. In the case of a surrender under a
non-qualified Contract, the amount received generally will be taxable only to
the extent it exceeds the contract owner's investment in the Contract.

SEPARATE ACCOUNT CHARGES. It is possible that the Internal Revenue Service
may take a position that charges for certain optional benefits and riders are
deemed to be taxable distributions to you. In particular, the Internal Revenue
Service may treat the quarterly charges deducted for the earnings multiplier
benefit rider as taxable withdrawals, which might also be subject to a tax
penalty if the withdrawal occurs before you reach age 59 1/2. Although we do not
believe thAt the charges we deduct for the earnings multiplier benefit rider or
any other optional benefit or rider provided under the Contract should be
treated as taxable withdrawals, you should consult your tax advisor prior to
selecting any optional benefit or rider under the Contract.

SmartDesign Advantage-111195 64

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

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

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

o attributable to the taxpayer's becoming disabled; or

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

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

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

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

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

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

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

TAXATION OF QUALIFIED CONTRACTS

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

SmartDesign Advantage-111195 65

The IRS could come to a determination that rider charges are taxable
distributions to you. Although we do not believe that a rider charge under the
Contract should be treated as a taxable withdrawal, you should consult your tax
advisor prior to selecting any rider or endorsement under the Contract.

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

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

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

CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS

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

INDIVIDUAL RETIREMENT ANNUITIES

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

SmartDesign Advantage-111195 66

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

IRA's generally may not invest in life insurance contracts. We do not believe a
death benefit under an annuity contract that is equal to the greater of premiums
paid (less withdrawals) or contact value will be treated as life insurance.
However, the enhanced death benefits and earnings multiplier benefit under this
Contract may exceed the greater of premiums paid (less withdrawals) and contract
value. We have previously received IRS approval of the form of the Contract,
including the enhanced death benefit feature, for use as an IRA. THE CONTRACT
WITH BOTH ENHANCED DEATH BENEFITS AND THE EARNINGS MULTIPLIER BENEFIT HAS BEEN
FILED WITH THE IRS FOR APPROVAL FOR USE AS AN IRA. HOWEVER, THERE IS NO
ASSURANCE THAT THE IRS WILL GIVE THIS APPROVAL OR THAT THE CONTRACT MEETS THE
QUALIFICATION REQUIREMENTS FOR AN IRA. Although we regard the enhanced death
benefit options and earnings multiplier benefit as investment protection
features that should not have an adverse tax effect, it is possible that the IRS
could take a contrary position regarding tax qualification, which could result
in the immediate taxation of amounts held in the Contract and the imposition of
penalty taxes. YOU SHOULD CONSULT YOUR TAX ADVISOR IF YOU ARE CONSIDERING ADDING
AN ENHANCED DEATH BENEFIT OR EARNINGS MULTIPLIER BENEFIT TO YOUR CONTRACT IF IT
IS AN IRA.

ROTH IRA

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

TAX SHELTERED ANNUITIES

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

LOANS

Loans may be available if you are under age 70 1/2 and purchased your contract
in connection with a non-ERISA plan qualifiEd under Section 403(b) of the Code
("TSA"). If your contract was issued in connection with a TSA and the terms of
your plan permit, you may take a loan from us, using your Cash Surrender Value
as collateral for the loan. Loans are subject to the terms of the Contract, the
plan and the Code. You are responsible for monitoring the amount and number of
loans outstanding at any one time under your TSA, whether under our contracts or
those of other carriers. We may modify the terms of a loan to comply with
changes in applicable law. WE URGE YOU TO CONSULT WITH A QUALIFIED TAX ADVISOR
PRIOR TO EFFECTING A LOAN TRANSACTION UNDER YOUR CONTRACT.

LOAN PROCEDURES. You must complete a loan application in order to effect a
loan. You may submit a loan application at any time after the free look period
and before the annuity start date. There is a loan fee

SmartDesign Advantage-111195 67

(currently $25) per loan, payable at the time of the loan. If the loan amount
plus the loan fee exceeds the maximum loan amount, the fee will be deducted from
the loan proceeds.

In order to secure your loan, on the effective date of your loan, we will
transfer an amount equal to the principal amount of your loan into an account
called the "TSA Special Fixed Account." You must indicate your choice of
variable and fixed accounts from which amounts will be transferred to the TSA
Special Fixed Account. If no choice is indicated, amounts will be transferred on
a pro rata basis from your variable accounts. If amounts allocated to the
variable accounts are not sufficient, amounts will be transferred from the fixed
accounts on a nearest to maturity basis.

Amounts transferred from the TSA Special Fixed Account upon loan repayments
will be transferred to the variable accounts in proportion to the contract value
so allocated. If no contract value is allocated to the variable accounts, such
transfers will be made to the Liquid Asset subaccount.

No withdrawals are permitted unless there has been a Distributable Event.
Distributable Events are the following:

1) attainment of age 59 1/2;

2) separation from service;

3) death; or

4) disability.

You must notify us when a separation from service has occurred. No withdrawals
are permitted from the TSA Special Fixed Account, other than an automatic
withdrawal to pay off a defaulted loan. See "Loan Default," below.

MINIMUM AND MAXIMUM LOAN AMOUNTS. You may borrow a minimum of $1,000,
unless we are required by law to allow a lesser minimum amount. We currently
allow no more than 2 loans per Contract at any time. The maximum loan amount for
a new loan is the lesser of (1) and (2), minus any outstanding loan balance,
where

1) is 50% of the Cash Surrender Value, and

2) is $50,000 minus the excess of the highest outstanding loan balance
during the past 12 months over the loan balance on the date of the new
loan.

INTEREST. The balance in the TSA Special Fixed Account is credited with
interest until the loan is repaid in full. The current annual effective interest
rate is 3.5%. The guaranteed minimum interest rate is 3%. Rates are guaranteed
for one year. Each loan will have a separate TSA Special Fixed Account, and each
may have a different interest crediting rate.

You will be charged interest on the outstanding loan balance at an annual
effective interest rate of 6%. Interest will be charged in arrears. Interest
charges accrue on your outstanding loan balance daily beginning on the effective
date of your loan.

LOAN REPAYMENT. Loans must be repaid within 5 years. However, if the loan
is used to purchase your principal residence, it must be repaid within 15 years.
You must identify your payments as premium payments or they will be treated as
loan repayments. You may choose whether to make your loan repayments quarterly
or monthly. Currently, loans must be repaid by electronic funds transfer ("EFT")
or pre-authorized check ("PAC"), unless we have approved another form of
payment.

If your loan repayment is late, and the loan would otherwise be in default,
we will make a withdrawal in an amount sufficient to keep the loan from going
into default. The withdrawals will be made on a pro rata basis from all of the
variable accounts to which contract value is then allocated. If there is not
enough contract value in the variable accounts, the withdrawal will be made from
the fixed accounts on a nearest to

SmartDesign Advantage-111195 68

maturity basis, and any amount withdrawn may be subject to a Market Value
Adjustment. This will only be done if:

1) there has been a Distributable Event;

2) the amount available for withdrawal is equal to or exceeds the
necessary amount plus any applicable withdrawal charges; and

3) you have authorized us to do so in the loan agreement.

If any of these conditions is not met, the loan will be considered to be in
default, and default procedures will be performed.

LOAN DEFAULT. When your loan is in default, you may pay off the loan, or
the loan will be repaid through an automatic withdrawal from your contract
value, as described below.

1. Loan Repaid

For loans in default status, we will accept repayment only in the
amount necessary to pay off the loan balance in full.

2. Loan Not Repaid

The defaulted loan balance continues to accrue interest until there
has been a Distributable Event, at which time the defaulted loan
balance plus accrued interest will be repaid by automatic
withdrawal. The defaulted loan balance will be considered a Deemed
Distribution. If a Distributable Event has occurred prior to
default, the defaulted loan balance plus accrued interest is repaid
by automatic withdrawal upon default. The automatic withdrawal will
apply first to the TSA Special Fixed Account, then pro rata to the
variable accounts and then to the fixed accounts on a nearest to
maturity basis. Surrender charges and any market value adjustments
will be applied as applicable to such withdrawals. In either case
the Deemed Distribution or withdrawal will be considered a
currently taxable event, and may be subject to federal income tax
withholding and the federal early withdrawal penalty tax.

OVERLOANS. An overloan occurs when the total outstanding loan balance(s)
exceeds the Cash Surrender Value. If this occurs, we will send you a letter
requesting payment of an amount which will take the loan out of overloan status.
If after 30 days, the overloan status has not been corrected, the loan will be
considered in default. If a Distributable Event occurred, the Contract will
terminate without value. If a Distributable Event has not occurred, the Contract
will continue in force, interest continues to accrue and the loan continues.
Upon the occurrence of a Distributable Event while the loan is still in overloan
status, the Contract will terminate without value.

EFFECT OF LOAN ON OTHER CONTRACT FEATURES. The following contract features will
be impacted by any outstanding loan balance:

1) Withdrawals and Charges: The rules concerning maximum withdrawal
amounts, free partial withdrawals, systematic withdrawals and waiver
of administrative charges will be determined by reducing the otherwise
applicable amounts by the amount of any outstanding loan balance.

2) Death Benefits, Earnings Multiplier Benefit, Annuitization and
Surrenders: The outstanding loan balance is deducted from any amounts
otherwise payable and in determining the amount available for
annuitization.

3) Riders:

a) Minimum Guaranteed Income Benefit ("MGIB") Rider. Upon exercising
the MGIB rider, the MGIB Base is reduced by an amount equal to
the ratio of the outstanding loan balance to the contract value
multiplied by the MGIB Base.

SmartDesign Advantage-111195 69

b) Minimum Guaranteed Withdrawal Benefit ("MGWB") Rider. The portion
of the contract value used to pay off the outstanding loan
balance will reduce the MGWB Withdrawal Account. We do not
recommend the MGWB rider if loans are contemplated.

c) Minimum Guaranteed Accumulation Benefit ("MGAB") Rider.
Generally, loan repayment periods should not extend into the
3-year period preceding the end of the Waiting Period, because
transfers made within such 3-year period reduce the MGAB Base and
the MGAB Charge Base pro rata based on the percentage of contract
value transferred. Transfers between the TSA Special Fixed
Account and the variable accounts will not be excluded from this
treatment.

TAX CONSEQUENCES OF DEATH BENEFIT OPTIONS

THE CONTRACT INCLUDES DEATH BENEFIT OPTIONS THAT IN SOME CASES MAY EXCEED THE
GREATER OF THE PREMIUM PAYMENTS OR THE CONTRACT VALUE ("ENHANCED DEATH
BENEFIT"). THE IRS HAS NOT RULED WHETHER AN ENHANCED DEATH BENEFIT COULD BE
CHARACTERIZED AS AN INCIDENTAL BENEFIT, THE AMOUNT OF WHICH IS LIMITED IN ANY
CODE SECTION 401(A) PENSION OR PROFIT-SHARING PLAN OR CODE SECTION 403(B)
TAX-SHELTERED ANNUITY. EMPLOYERS USING THE CONTRACT MAY WANT TO CONSULT THEIR
TAX ADVISER REGARDING SUCH LIMITATION.

Further, the IRS has not addressed in a ruling of general applicability whether
a death benefit provision such as the Enhanced Death Benefit provisions in the
Contract comport with IRA or Roth IRA qualification requirements. A tax advisor
should be consulted.

OTHER TAX CONSEQUENCES

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

POSSIBLE CHANGES IN TAXATION

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

SmartDesign Advantage-111195 70

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MORE INFORMATION ABOUT GOLDEN AMERICAN LIFE INSURANCE COMPANY
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SELECTED FINANCIAL DATA

The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for Golden American should be read in
conjunction with the financial statements and notes thereto included in this
prospectus. On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of Equitable of Iowa
Companies ("Equitable of Iowa"), according to a merger agreement among Equitable
of Iowa, PFHI and ING Groep N.V. (the "ING acquisition"). On August 13, 1996,
Equitable of Iowa acquired all of the outstanding capital stock of BT Variable,
Inc., then the parent of Golden American (the "Equitable acquisition"). For
financial statement purposes, the ING acquisition was accounted for as a
purchase effective October 25, 1997 and the Equitable acquisition was accounted
for as a purchase effective August 14, 1996. As a result, the financial data
presented below for periods after October 24, 1997, are presented on the
Post-Merger new basis of accounting, for the period August 14, 1996 through
October 24, 1997, are presented on the Post-Acquisition basis of accounting, and
for August 13, 1996 and prior periods are presented on the Pre-Acquisition basis
of accounting.

SELECTED GAAP BASIS FINANCIAL DATA
(IN THOUSANDS)
POST-MERGER

----------------------------------------------------------------------------------
For the Period For the Period
January 31, For the Year For the Year For the Year October 25,
2001 through Ended Ended Ended 1997 through
June 30, December 31, December 31, December 31, December 31,
2001 2000 1999 1998 1997
-------------- ------------ ------------ ------------ --------------

Annuity and Interest
Sensitive Life

Product Charges................. $ 84,284 $ 144,877 $ 82,935 $ 39,119 $ 3,834
Net Income (Loss) before
Federal Income Tax ............. $ 19,842 $ 32,862 $ 19,737 $ 10,353 $ (279)
Net Income (Loss)................... $ 12,135 $ 19,180 $ 11,214 $ 5,074 $ (425)
Total Assets........................ $ 12,848,283 $ 11,852,677 $ 9,392,857 $ 4,754,623 $ 2,446,395
Total Liabilities................... $ 12,206,786 $ 11,235,540 $ 8,915,008 $ 4,400,729 $ 2,219,082
Total Stockholder's Equity.......... $ 641,497 $ 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

SmartDesign Advantage-111195 71

BUSINESS ENVIRONMENT

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

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

RESULTS OF OPERATION

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

PREMIUMS

PERCENTAGE DOLLAR
FOR THE SIX MONTHS ENDED JUNE 30 2001 CHANGE CHANGE 2000
------- ---------- ------ ----
(Dollars in millions)

Variable annuity premiums:
Separate account................................. $ 39.2 (94.9)% $(726.5) $ 765.7
Fixed account.................................... 720.9 103.9 367.3 353.6
Total variable annuity premiums...................... 760.1 (32.1) (359.2) 1,119.3
Fixed annuity premiums............................... 1.6 -- 1.6 --
Variable life premiums............................... 1.0 -- -- 1.0
------- ----- ------- --------
Total premiums....................................... $ 762.7 (31.9)% $(357.6) $1,120.3
======= ===== ======= ========

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 decreased 32.1% during the first
six months of 2001 compared to the same period of 2000. This decrease is
primarily due to ceded variable annuity separate account premiums of $1.2
billion and $0.9 billion for the first six months of 2001 and 2000,
respectively, under modified coinsurance agreements. Also contributing to the
decrease in variable annuity premiums is a reduction of $462.0 million in
variable annuity separate account premiums from the Premium Plus product in the
first three months of 2001 as compared to the first three months of 2000.
Offsetting these decreases is an increase in fixed account premiums from $353.6
million in 2000 to $720.9 million in 2001. This increase is

SmartDesign Advantage-111195 72

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
$358.0 million in the first six months of 2001. During the first six 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 six months
ended June 30, 2001 totaled $72.4 million, or 10% of total premiums ($131.4
million, or 12% from a significant broker/dealer for the six months ended June
30, 2000). Gross premiums for variable products from a significant broker/dealer
having at least ten percent of total sales for the six months ended June 30,
2001, totaled $214.6 million, or 11% of total gross premiums ($450.0 million, or
22%, from two significant broker/dealers for the six months ended June 30,
2000).

REVENUES

PERCENTAGE DOLLAR
FOR THE SIX MONTHS ENDED JUNE 30 2001 CHANGE CHANGE 2000
------- ---------- ------ ----
(Dollars in millions)

Annuity and interest sensitive life product
charges.......................................... $84.3 20.9% $14.6 $ 69.7
Management fee revenue............................... 12.4 26.2 2.6 9.8
Net investment income................................ 42.8 34.6 11.0 31.8
Realized losses on investments....................... (1.9) (27.2) 0.7 (2.6)
------ ----- ----- ------
$137.6 26.5% $28.9 $108.7
====== ===== ===== ======

Total revenues increased 26.5% in the first six months of 2001 from the same
period in 2000. Annuity and interest sensitive life product charges increased
20.9% in the first six 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 $11.5 million and $9.0 million for the first six months of 2001
and 2000, respectively. This increase was due to the increasing average assets
in the variable separate accounts and renegotiation of the fee paid by DSI to
Golden American during the third quarter of 2000.

Net investment income increased 34.6% in the first six months of 2001 due to a
growth in invested assets from June 30, 2000 mainly related to the introduction
of the Guarantee product. The Companies had $1.9 million of realized losses on
the sale of investments in the first six months of 2001, compared to losses of
$2.6 million in the same period of 2000.

EXPENSES

Total insurance benefits and expenses increased $23.3 million, or 27.4%, to
$108.2 million in the first six months of 2001 from the same period in 2000.
Interest credited to account balances decreased $9.9 million, or 9.9%, to $90.2
million in the first six months of 2001. The premium credit on the Premium Plus
product decreased $23.3 million to $50.3 million at June 30, 2001 and the bonus
interest on the fixed account decreased $0.6 million to $4.2 million at June 30,
2001. These decreases were 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.

Commissions decreased $3.6 million, or 3.2%, to $108.6 million in the first six
months of 2001. Insurance taxes, state licenses, and fees increased $0.6
million, or 21.2%, to $3.5 million in the first six 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.

SmartDesign Advantage-111195 73

General expenses increased $16.8 million, or 41.8%, to $57.0 million in the
first six 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. Also contributing to this increase in general
expenses are additional cost allocations during the first six months of 2001.
The increase in general expenses was partially offset by reimbursements received
from DSI, Equitable Life Insurance Company of Iowa ("Equitable Life"), 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 six months of 2001 and 2000, the value of purchased insurance
in force ("VPIF") was adjusted to increase amortization by $245,000 and
$707,000, 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 June 30, 2001 is $2.0
million for the remainder of 2001, $3.4 million in 2002, $3.0 million in 2003,
$2.5 million in 2004, $1.8 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 $6.1
million, or 17.1%, in the first six months of 2001. Deferred policy acquisition
costs decreased $72.8 million, or 74.5%, for the six months ended June 30, 2001.
The decrease in the amortization and the amount of policy acquisition costs
deferred 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.

Expenses and charges reimbursed to Golden American under modified coinsurance
agreements increased from $115.8 million for the six months in 2000 to $162.7
million during the first six months in 2001. This was 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, $160.9
million in expenses and charges were reimbursed during the first six months of
2001. This reimbursement offset deferred policy acquisition costs and
non-deferrable costs related to policies reinsured under this agreement.

Interest expense decreased 6.0%, or $0.6 million, to $9.5 million in the first
six months of 2001. Interest expense on a $25 million surplus note issued
December 1996 and expiring December 2026 was $1.0 million for the first six
months of 2001, unchanged from the same period of 2000. Interest expense on a
$60 million surplus note issued in December 1998 and expiring December 2028 was
$2.2 million for the first six months of 2001, unchanged from the same period of
2000. Interest expense on a $75 million surplus note, issued September 1999 and
expiring September 2029 was $2.9 million for the first six months of 2001 and
2000. Interest expense on a $50 million surplus note, issued December 1999 and
expiring December 2029 was $2.0 million for the first six months of 2001 and
$2.1 million in 2000. Interest expense on a $35 million surplus note issued
December 1999 and expiring December 2029 was $1.4 million for the first six
months of 2001 and $1.6 million in 2000. Golden American also paid $25,000 in
2001 and $284,000 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 $1,000 and $36,000 for the first
six months of 2001 and 2000, respectively.

INCOME

Net income was $12.1 million for the first six months of 2001, an increase of
$4.0 million, or 50.2% from the same period of 2000.

Comprehensive income for the first six months of 2001 was $17.4 million, an
increase of $10.4 million from comprehensive income of $7.0 million in the same
period of 2000.

SmartDesign Advantage-111195 74

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

SmartDesign Advantage-111195 75

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

SmartDesign Advantage-111195 76

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.

SmartDesign Advantage-111195 77

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

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 $11.1
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.

SmartDesign Advantage-111195 78

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,

SmartDesign Advantage-111195 79

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 50.1% and 48.4%, respectively, during
the first six 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 June 30, 2001 and December 31, 2000, the Companies investments had a yield of
6.7%. The Companies estimate the total investment portfolio, excluding policy
loans, had a fair value approximately equal to 100.4% and 99.3% of amortized
cost value at June 30, 2001 and December 31, 2000, respectively.

Fixed Maturities: At June 30, 2001, the Companies had fixed maturities with an
amortized cost of $1.2 billion and an estimated fair value of $1.2 billion. The
Companies classify 100% of securities as available for sale. Net unrealized
appreciation of fixed maturities of $5.2 million was comprised of gross
appreciation of $13.9 million and gross depreciation of $8.7 million. Net
unrealized holding gains on these securities, net of adjustments for VPIF, DPAC,
and deferred income taxes of $1.2 million, were included in stockholder's equity
at June 30, 2001.

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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") ($589.9
million or 48.1% at June 30, 2001 and $519.9 million or 65.1% at December 31,
2000), that are rated BBB+ to BBB- by Standard & Poor's ($239.7 million or 19.6%
at June 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 ($118.5 million or 9.6% at June 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 ($278.0 million or 22.7% at June 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 6.9% and 6.8% at
June 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 June 30, 2001, the amortized cost value of the Companies' total investments
in below investment grade securities, excluding mortgage-backed securities, was
$133.3 million, or 8.9%, 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 June
30, 2001, the yield at amortized cost on the Companies' below investment grade
portfolio was 8.4% compared to 6.9% 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 $131.2 million, or
98.4% of amortized cost value, at June 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 six months of 2001 and the year ended December 31, 2000, fixed
maturities designated as available for sale with a combined amortized cost of
$233.3 million and $211.3 million, respectively, were sold, called, or repaid by
their issuers. In total, net pre-tax losses from sales, calls, and repayments of

fixed maturities amounted to $0.5 million in the first six months to June 2001.
During the first six months of 2001, Golden American determined that the
carrying value of three impaired bonds exceeded their estimated net realizable
value. As a result, at June 30, 2001, Golden American recognized a total pre-tax
loss of approximately $679,000 to reduce the carrying value of the bonds to
their net realizable value of $365,000. 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: 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 10.0% and
9.9% of the Companies' investment portfolio at June 30, 2001 and December 31,
2000, respectively. Mortgages outstanding were $150.6 million at June 30, 2001
with an estimated fair value of $151.1 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 June 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 (17% in 2001 and 4% in 2000) and California (16% in 2001 and 15% in 2000).
There are no other concentrations of mortgage loans on real estate in any state
exceeding ten percent at June 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 (24% in 2001 and 29% in 2000),
industrial buildings (27% in 2001 and 35% in 2000), retail facilities (24% in
2001 and 18% in 2000), and multi-family apartments (21% in 2001 and 10% in
2000). At June 30, 2001 and December 31, 2000, the yield on the Companies'
mortgage loan portfolio was 7.1% and 7.3%, respectively.

Mortgage loans on real estate represent 9.9% of the Companies' investment
portfolio. Mortgages outstanding at amortized cost were $99.9 million at
December 31, 2000 with an 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 June 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 $9.4 million during the first
six months of 2001 and $19.1 million during 2000, due largely to an increase of
$6.8 million during the first six 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. 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.

SmartDesign Advantage-111195 82

Amounts due from affiliates were $68,000 and $38.8 million at June 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 Group") 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 June 30, 2001, the Companies had DPAC and VPIF
balances of $624.6 million and $22.3 million, respectively ($635.1 million and
$25.9 million, respectively, at December 31, 2000). During the first six months
of 2001 and 2000, VPIF was adjusted to increase amortization by $245,000 and by
$707,000, 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 June 30, 2001 and December 31,
2000 was $13.9 million and $11.9 million, respectively.

Other assets increased $22.3 million during first six months of 2001 and $29.5
million during 2000, due mainly to increases in the receivable for securities
sold.

At June 30, 2001, the Companies had $10.4 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 June 30, 2001, the Companies had total assets of $12.8 billion, an 8.4%
increase 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 six months ended June 30, 2001, future policy benefits
for annuity and interest sensitive life products increased $393.9 million, or
37.1%, to $1.5 billion reflecting net sales of the Companies' fixed account
net of transfers to the separate account options.

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.

SmartDesign Advantage-111195 83

Amounts due to affiliates decreased $4.8 million or 24.0% to $15.1 million
during the first six 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 $42.0 million or 60.6% to $111.4 million during the
first six 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 $971.2 million or 8.6%, during the
first six months 2001 and totaled $12.2 billion at June 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 $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 $165.0 million in the first six
months of 2001 compared to net cash provided by operating activities of $33.3
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 six months ended June 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 $160.9 million in
the first six months of 2001. For the six months ended June 30, 2000, this
modified coinsurance resulted in a net cash settlement of $111.8 million. Also
contributing to this increase in net cash provided by operating activities is an
increase in the payable for securities purchased at June 30, 2001. 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.

SmartDesign Advantage-111195 84

Net cash used in investing activities was $486.4 million during the first six
months of 2001 compared to net cash provided by investing activities of $39.5
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 six months of 2001 versus net
sales in 2000. Net purchases of fixed maturities reached $428.6 million during
the first six months of 2001 versus net sales of $22.2 million in the same
period of 2000. Net purchases of mortgage loans on real estate reached $50.9
million in the first six months of 2000 versus net purchases of $5.6 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 $309.4 million during the first
six months of 2001 compared to net cash used in financing activities of $25.7
million during the same period in 2000. In the first six months of 2001, net
cash provided by financing activities was positively impacted by net fixed
account deposits of $663.5 million compared to $267.8 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 $49.6 million in net
reallocations to Separate Accounts. In the first six months of 2001, net cash
provided by financing activities was negatively impacted by a decrease in
capital contributions from the Parent as well as a decrease in the amount of
proceeds received from reciprocal loan agreement borrowings. The Companies
received $7.0 million and $80.0 million of capital contributions from the Parent
in the first six months of 2001 and 2000, respectively. During the first six
months of 2000, the Companies received a net amount of $40.0 million from
reciprocal loan agreement borrowings.

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.

SmartDesign Advantage-111195 85

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. Golden American's New York subsidiary
is housed in leased space in New York, New York. The Companies intend to
spend approximately $3.9 million on capital needs for 2001.

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

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

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.

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.

SmartDesign Advantage-111195 86

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
year end 2000 levels, variable separate account funds, which represent 88% of
the in force as of June 30, 2001, pass the risk in underlying fund performance
to the contractholder (except for certain minimum guarantees). With respect to
interest rate movements up or down 100 basis points from year end 2000 levels,
the remaining 12% of the in force as of June 30, 2001 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.

SmartDesign Advantage-111195 87

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 $11.5 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 six
months of 2001 and for the years ended December 31, 2000 and 1999, Golden
American and First Golden incurred fees of $1.7 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
$2.7 million for the first six months of 2001 and $6.2 million for 2000 and $6.1
million for 1999.

The Companies provide resources and services to DSI. Revenues for these services
totaled $0.1 million for the first six 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 six months of 2001 and $0.5 million for 2000 and $0.2 million for 1999.

SmartDesign Advantage-111195 88

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 $0.2 million in the first
six 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 $0.1 million for the first
six 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 $0.06 million for the first six
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 six months of 2001 and the years 2000
and 1999, commissions paid by Golden American to DSI (including commissions paid
by First Golden) aggregated $108.3 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.

SmartDesign Advantage-111195 89

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 and Assistant Secretary

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:

SmartDesign Advantage-111195 90

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

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

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

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

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

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

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

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

Ms. Paula Cludray-Engelke was elected Secretary of Golden American in March,
2001. From October, 1985 to October, 2000

Ms. Cludray-Engelke served with ReliaStar Life Insurance Company (f/k/a
Northwestern National Life Insurance Company) in various compliance positions.
From October, 2000 to the present she has served as an Attorney with ING US
Legal Services.

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

Mr. E. Robert Koster was elected Senior Vice President of Golden American and
Senior Vice President and Chief Financial Officer of First Golden in September,
1998. From September, 1998 to March, 2001, he was

SmartDesign Advantage-111195 91

also Chief Financial Officer of Golden American. From August, 1984 to September,
1998 he has held various positions with ING companies in The Netherlands.

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

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

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

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

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

Mr. 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.

SmartDesign Advantage-111195 92

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.

SmartDesign Advantage-111195 93

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

For the Six Months Ended June 30, 2001

SmartDesign Advantage-111195 94

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

June 30, 2001 December 31, 2000
------------- -----------------
ASSETS

Investments:

Fixed maturities, available for sale, at fair value
(cost: 2001 - $1,226,036; 2000 - $798,751)........................ $ 1,231,210 $ 792,578
Equity securities, at fair value
(cost: 2001 - $66; 2000 - $8,611)................................... 58 6,791
Mortgage loans on real estate....................................... 150,620 99,916
Policy loans........................................................ 13,910 13,323
Short-term investments.............................................. 30,297 17,102
----------- -----------
Total investments...................................................... 1,426,095 929,710

Cash and cash equivalents.............................................. 140,894 152,880
Reinsurance recoverable................................................ 21,975 19,331
Reinsurance recoverable from affiliate................................. 21,400 14,642
Due from affiliates.................................................... 68 38,786
Accrued investment income.............................................. 16,364 9,606
Deferred policy acquisition costs...................................... 624,624 635,147
Value of purchased insurance in force ................................. 22,286 25,942
Current income taxes recoverable....................................... 221 511
Deferred income tax asset.............................................. 994 9,047
Property and equipment, less allowances for depreciation of
$8,298 in 2001 and $5,638 in 2000................................... 11,384 14,404
Goodwill, less accumulated amortization of $13,853 in 2001
and $11,964 in 2000................................................. 137,274 139,163
Other assets........................................................... 54,367 32,019
Separate account assets................................................ 10,370,337 9,831,489
----------- -----------
Total assets........................................................... $12,848,283 $11,852,677
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY Policy liabilities and accruals:

Future policy benefits:
Annuity and interest sensitive life products...................... $ 1,456,796 $ 1,062,891
Unearned revenue reserve.......................................... 6,550 6,817
Other policy claims and benefits.................................... 177 82
----------- -----------
1,463,523 1,069,790

Surplus notes.......................................................... 245,000 245,000
Revolving note payable................................................. 1,400 --
Due to affiliates...................................................... 15,121 19,887
Other liabilities...................................................... 111,405 69,374
Separate account liabilities........................................... 10,370,337 9,831,489
----------- -----------
12,206,786 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.......................................... 590,640 583,640
Accumulated other comprehensive income (loss)....................... 1,179 (4,046)
Retained earnings .................................................. 47,178 35,043
----------- -----------
Total stockholder's equity............................................. 641,497 617,137
----------- -----------
Total liabilities and stockholder's equity............................. $12,848,283 $11,852,677
=========== ===========

See accompanying notes.

SmartDesign Advantage-111195 95

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

For the Six For the Six
Months Ended Months Ended
June 30, 2001 June 30, 2000
------------- -------------
Revenues:

Annuity and interest sensitive life product charges................. $ 84,284 $ 69,734
Management fee revenue.............................................. 12,438 9,856
Net investment income............................................... 42,771 31,775
----------- ----------
Realized losses on investments...................................... (1,919) (2,637)
137,574 108,728

Insurance benefits and expenses: Annuity and interest sensitive life benefits:

Interest credited to account balances............................... 90,153 100,068
Benefit claims incurred in excess of account balances............... 2,851 3,211
Underwriting, acquisition, and insurance expenses:
Commissions......................................................... 108,600 112,158
General expenses.................................................... 56,989 40,179
Insurance taxes, state licenses, and fees........................... 3,528 2,910
Policy acquisition costs deferred................................. (24,925) (97,724)
Amortization:
Deferred policy acquisition costs............................... 29,632 35,757
Value of purchased insurance in force............................. 2,175 2,278
Goodwill.......................................................... 1,889 1,889
Expense and charges reimbursed under modified
coinsurance agreements (162,668) (115,792)
----------- ----------
108,224 84,934
Interest expense....................................................... 9,508 10,115
----------- ----------
117,732 95,049
----------- ----------
Income before income taxes............................................. 19,842 13,679

Income taxes........................................................... 7,707 5,602
----------- ----------
Net income............................................................. $ 12,135 $ 8,077
=========== ==========

See accompanying notes.

SmartDesign Advantage-111195 96

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

For the Six For the Six
Months Ended Months Ended
June 30, 2001 June 30, 2000
------------- -------------

NET CASH PROVIDED BY OPERATING ACTIVITIES.............................. $ 165,012 $ 33,298

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
Fixed maturities - available for sale............................... 229,916 123,182
Equity securities................................................... 6,894 5,195
Mortgage loans on real estate....................................... 60,621 3,281
Policy loans - net.................................................. -- 1,732
Short-term investments - net........................................ -- 17,880
------------- ------------
297,431 151,270

Acquisition of investments:
Fixed maturities - available for sale............................... (658,495) (100,936)
Mortgage loans on real estate....................................... (111,532) (8,887)
Policy loans - net.................................................. (587) --
Short term investments - net........................................ (13,195) --
------------- ------------
(783,809) (109,823)
Net sale (purchase) of property and equipment.......................... 18 (1,974)
Issuance of reciprocal loan agreement receivables...................... -- (16,900)
Receipt of repayment of reciprocal loan agreement receivables.......... -- 16,900
------------- ------------
Net cash (used in) provided by investing activities.................... (486,360) 39,473

FINANCING ACTIVITIES

Proceeds from reciprocal loan agreement borrowings..................... 29,300 177,900
Repayment of reciprocal loan agreement borrowings...................... (29,300) (137,900)
Proceeds from revolving note payable................................... 1,400 54,800
Repayment of revolving note payable.................................... -- (56,200)
Receipts from annuity and interest sensitive life
policies credited to account balances............................... 734,162 355,662
Return of account balances on annuity
and interest sensitive life policies................................ (70,613) (87,841)
Net reallocations to Separate Accounts................................. (362,587) (412,150)
Contribution from parent .............................................. 7,000 80,000
------------- ------------
Net cash provided by (used in) financing activities.................... 309,362 (25,729)
------------- ------------
Increase (decrease) in cash and cash equivalents....................... (11,986) 47,042

Cash and cash equivalents at beginning of period....................... 152,880 76,690
------------- ------------
Cash and cash equivalents at end of period............................. $ 140,894 $ 123,732
============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest............................... $ 9,475 $ 12,649

See accompanying notes.

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GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 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 six months ended June 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 embedded derivative are clearly and closely related to the economic
characteristics of the remaining

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

1. BASIS OF PRESENTATION (continued)
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 $54,982,000 and $12,235,000 for the six months ended
June 30, 2001 and 2000, respectively. Total statutory capital and surplus was
$360,926,000 at June 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 June 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 second quarters of 2001 and 2000, total comprehensive
income for the Companies amounted to $2.7 million and $6.4 million,
respectively, and $17.4 million and $7.0 million for the six months ended June
30, 2001 and 2000, respectively. Other comprehensive income excludes net
investment losses included in net income which merely represent transfers from
unrealized to realized gains and losses. These amounts totaled $883,000 and
$120,000 during the second quarters of 2001 and 2000, respectively, and $185,000
and $588,000 for the six months ended June 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 force and deferred
policy acquisition costs totaling $1,736,000 and $(1,200,000) for the second
quarters of 2001 and 2000, respectively, and $(104,000) and $(2,041,000) for the
six months ended June 30, 2001 and 2000, respectively.

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

3. INVESTMENTS

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 quarter of 2001, Golden
American determined that the carrying value of three bonds exceeded their
estimated net realizable value. As a result, during the six months ended June
30, 2001, Golden American recognized a total pre-tax loss of $679,000 to reduce
the carrying value of the bonds to their combined net realizable value of
$365,000.

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
June 30, 2001, the Companies did not utilize any such derivatives. The estimated
fair values and carrying amounts of the Companies' embedded derivatives at June
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
$1.1 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 $52,514,000 and $108,398,000 in the
second quarter and the first six months of 2001, respectively ($53,398,000 and
$109,252,000, respectively, for the same periods of 2000).

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 second quarter and six months
ended June 30, 2001, the fee was $5,831,000 and $11,533,000, respectively
($4,740,000 and $9,058,000, 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
second quarter and the first six months of 2001, the Companies incurred fees of
$858,000 and $1,701,000, respectively, under this agreement ($616,000 and
$1,274,000, 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

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

5. RELATED PARTY TRANSACTIONS (continued)
variable annuity policies have been invested. The calculation of the annual fee
is based on risk based capital. On June 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 $2,719,000 for the
second quarter and six months ended June 30, 2001, respectively ($1,708,000 and
$3,276,000, 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, the Companies incurred expenses of $77,000 and $152,000 for the
second quarter and six months ended June 30, 2001, respectively ($355,000 and
$667,000, respectively, for the same periods in 2000).

First Golden provides resources and services to DSI. Revenues for these
services, which reduced general expenses incurred by First Golden, totaled
$8,000 and $134,000 for the second quarter and six months ended June 30, 2001,
respectively ($56,000 and $108,000, 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 $430,000 and $478,000 for the
second quarter and six months ended June 30, 2001, respectively ($165,000 and
$270,000, 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 $97,000 and $199,000 for
the second quarter and six months ended June 30, 2001, respectively ($149,000
and 318,000, respectively, for the same periods in 2000).

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 $79,000 and $133,000 for the
second quarter and six months ended June 30, 2001, respectively ($56,000 and
$108,000, 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 $63,000 for the second
quarter and six months ended June 30, 2001, respectively ($26,000 and $52,000,
respectively, for the same periods in 2000).

For the second 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 $28,500,000, $9,100,000, $200,000, $5,900,000, $3,900,000,
$21,600,000, $7,900,000 and $2,200,000, respectively ($9,500,000, $6,900,000,
$100,000, $2,800,000, $1,500,000, $0, $0, and $0, respectively, for the same
period of 2000). For the first six 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 $37,900,000, $12,900,000, $400,000, $9,000,000,
$5,500,000, $28,900,000, $11,000,000, and $3,700,000, respectively ($67,000,000,
$28,300,000, $800,000, $21,100,000, $8,300,000, $0, $0, and $0, respectively,
for the same period of 2000).

For the second quarter and six months ended June 30, 2001, First Golden received
premiums for fixed annuities products sold through Washington Square. of
approximately $450,000 and $550,000, respectively.

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

5. RELATED PARTY TRANSACTIONS (continued)
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 $50.2 million and $160.9 million for the second quarter and the
six months ended June 30, 2001, respectively ($111.8 million for the second
quarter and the six months ended June 30, 2000). This was offset by a decrease
in deferred acquisition costs of $52.7 million and $160.8 million, respectively,
for the same periods ($109.3 million during the second quarter and the first six
months in 2000). At June 30, 2001, Golden American had a payable to Equitable
Life of $10.0 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 $25.0 million related to this agreement. Under this
agreement, Golden American recorded a reinsurance recoverable of $21.4 million
and $14.6 million at June 30, 2001 and December 31, 2000, respectively.

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
$254,000 for the second quarters of 2001 and 2000, respectively, and $25,000 and
$336,000 for the six months ended June 30, 2001 and 2000, respectively. At June
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 $1,020,000 and
$1,022,000 for the second quarters of 2001 and 2000, respectively, and
$2,028,000 and $2,056,000 for the six months ended June 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
$696,000 and $698,000 for the seconds quarters of 2001 and 2000, respectively,
and $1,385,000 and $1,575,000 for the first six months of 2001 and 2000,
respectively.

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

5. RELATED PARTY TRANSACTIONS (continued)
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 $1,449,000 and $1,453,000 for the second quarters
of 2001 and 2000, respectively, and $2,882,000 and $2,906,000 for the first six
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 $1,085,000 and $1,087,000 for the second quarters
of 2001 and 2000, respectively, and $2,157,000 and $2,175,000 for the first six
months of 2001 and 2000, respectively.

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 $515,000 for the second
quarters of 2001 and 2000, respectively, and $1,031,000 for the first six months
of 2001 and 2000, respectively.

Stockholder's Equity: During the second quarter and the first six months of
2001, Golden American received capital contributions from its Parent of
$7,000,000 ($0 and $80,000,000, respectively, for the same periods in 2000).

6. COMMITMENTS AND CONTINGENCIES

Reinsurance: At June 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 June 30, 2001. Golden American remains liable to the extent its
reinsurers do not meet their obligations under the reinsurance agreements.

At June 30, 2001 and December 31, 2000, the Companies had net receivables of
$43,375,000 and $33,973,000, respectively, for reinsurance claims, reserve
credits, or other receivables from these reinsurers. These net receivables were
comprised of $1,350,000 and $1,820,000, respectively, for claims recoverable
from reinsurers, $2,546,000 and $4,007,000, respectively, for a payable for
reinsurance premiums, $21,400,000 and $14,642,000, respectively, for reserve
credits, and $23,171,000 and $21,518,000, respectively, for a receivable from an
unaffiliated reinsurer. Included in the accompanying financial statements are
net considerations to reinsurers of $5,962,000 for the second quarter of 2001
and $12,618,000 for the first six months of 2001 compared to $5,271,000 and
$7,908,000 for the same periods in 2000. Also included in the accompanying
financial statements are net policy benefits of $1,834,000 for the second
quarter of 2001 and $11,777,000 for the first six months of 2001 compared to
$1,278,000 and $1,835,000 for the same period in 2000.

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

6. COMMITMENTS AND CONTINGENCIES (continued)
separate account liabilities outstanding at June 30, 2001. 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 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.

Investment Commitments: At June 30, 2001, outstanding commitments to fund
mortgage loans totaled $65,620,000. 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 $1,000 in guaranteed fund assessments in the second quarter of 2001
and $2,000 for the first six months of 2001 compared to $1,000 and $2,000 for
the same periods in 2000. At June 30, 2001 and December 31, 2000, the Companies
have an undiscounted reserve of $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 June 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 second
quarter of 2001 (24% by two broker/dealers in the same period of 2000). One
broker/dealer generated 10% of the Companies' net sales during the first six
months of 2001 (12% by one broker/dealer in the same period of 2000). The
Premium Plus product generated 54% and 52% of the Companies' sales during

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

6. COMMITMENTS AND CONTINGENCIES (continued)
the second quarter of 2001 and the first six months of 2001 (74% and 75% in the
same periods of 2000). The Guarantee product, introduced in the fourth quarter
of 2000, generated 13% and 18% of the Companies' sales during the second quarter
and the first six months of 2001. The ES II product generated 19% and 16% of the
Companies' sales during the second and the first six months of 2001 (12% and 11%
in the same periods of 2000).

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 second
quarters ended June 30, 2001 and 2000, the Companies incurred interest expense
of $0 and $8,000, respectively. During the six months ended June 30, 2001 and
2000, the Companies incurred interest expense of $1,000 and $36,000,
respectively. At June 30, 2001 and December 31, 2000, the Companies had
borrowings of $1,400,000 and $0, respectively, under these agreements.

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

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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

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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).

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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

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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.

SmartDesign Advantage-111195 117

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)
======== ======== ========

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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.

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

SmartDesign Advantage-111195 120

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

3. INVESTMENT OPERATIONS (continued)

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

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

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

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

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

4. COMPREHENSIVE INCOME

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

SmartDesign Advantage-111195 121

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

SmartDesign Advantage-111195 122

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).

SmartDesign Advantage-111195 123

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

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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.

SmartDesign Advantage-111195 125

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

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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.

SmartDesign Advantage-111195 127

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 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.

SmartDesign Advantage-111195 128

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.

SmartDesign Advantage-111195 129

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).

SmartDesign Advantage-111195 130

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.

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.

SmartDesign Advantage-111195 131

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.

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.

SmartDesign Advantage-111195 132

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STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

TABLE OF CONTENTS

ITEM PAGE
Introduction............................................. 1
Description of Golden American Life Insurance Company.... 1
Safekeeping of Assets.................................... 1
The Administrator........................................ 1
Independent Auditors..................................... 1
Distribution of Contracts................................ 1
Performance Information.................................. 2
IRA Partial Withdrawal Option............................ 9
Other Information........................................ 9
Financial Statements of Separate Account B............... 10

PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE STATEMENT OF
ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE PROSPECTUS. ADDRESS
THE FORM TO OUR CUSTOMER SERVICE CENTER; THE ADDRESS IS SHOWN ON THE PROSPECTUS
COVER.

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

PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT B.

Please Print or Type:

--------------------------------------------------
NAME

--------------------------------------------------
SOCIAL SECURITY NUMBER

--------------------------------------------------
STREET ADDRESS

--------------------------------------------------
CITY, STATE, ZIP

SmartDesign Advantage-111195 10/15/2001
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SmartDesign Advantage-111195 133

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APPENDIX A
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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
surrender is
3
$124,230 ($100,000 x 1.075 )

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

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

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

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

Assume $100,000 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
3
$124,230 ($100,000 x 1.075 )

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

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

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

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

Assume $200,000 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 $112,695 is requested 3
years into the guaranteed interest period; that the then Index Rate ("J") for a
7 year guaranteed interest period is 8%; and that no prior transfers or
withdrawals affecting this Fixed Interest Allocation have been made.

SMARTDESIGN ADVANTAGE-111195 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
3
$248,459 ( $200,000 x 1.075 )

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

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

Then calculate the Market Value Adjustment on that amount.

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

Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $112,695, as requested. The Fixed Interest Allocation will be reduced
by the amount of the withdrawal, $112,695, and also reduced by the Market Value
Adjustment of $11,535, for a total reduction in the 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 $128,371 requested 3 years into
the guaranteed interest period; that the then Index Rate ("J") for a 7 year
guaranteed interest period is 6%; and that no prior transfers or withdrawals
affecting 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
3
$248,459 ( $200,000 x 1.075 )

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

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

Then calculate the Market Value Adjustment on that amount.

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

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

SMARTDESIGN ADVANTAGE-111195 A2

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APPENDIX B
--------------------------------------------------------------------------------

SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE

The following assumes you made an initial premium payment of $10,000 and
additional premium payments of $10,000 in each of the second and third contract
years, for total premium payments under the Contract of $30,000. It also assumes
a withdrawal at the end of the third contract year of 30% of the contract value
of $35,000 and that Option Package I was selected.

In this example, $3,500 (10% of contract value) is the maximum free withdrawal
amount that you may withdraw without a surrender charge. The total withdrawal
would be $10,500 ($35,000 x .30). Therefore, $7,000 (10,500 - 3,500) is
considered an excess withdrawal of a part of the initial premium payment of
$10,000 and would be subject to a 4% surrender charge of $280 ($7,000x .04).
This example does not take into account any Market Value Adjustment or deduction
of any premium taxes.

SMARTDESIGN ADVANTAGE-111195 B1

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APPENDIX C
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WITHDRAWAL ADJUSTMENT FOR 5% ROLL-UP DEATH BENEFIT EXAMPLES

(NEEDS TO BE REVISED)
EXAMPLE #1: THE CONTRACT VALUE (AV) IS LOWER THAN THE DEATH BENEFIT

Assume a premium payment of $100,000, AV at the time of withdrawal of
$80,000 and a 5% Roll-Up minimum guarantee death benefit ("MGDB") at the time of
withdrawal of $120,000. A total withdrawal of $20,000 is made.

Calculate the Effect of the Withdrawal

Pro rata Withdrawal Adjustment to MGDB = $30,000 ($120,000 *
($20,000 / $80,000))

MGDB after Pro rata Withdrawal = $90,000 ($120,000 - $30,000)

AV after Pro rata Withdrawal = $60,000 ($80,000 - $20,000)

EXAMPLE #2: THE CONTRACT VALUE (AV) IS GREATER THAN THE DEATH BENEFIT

Assume a premium payment of $100,000, AV at the time of withdrawal of
$160,000 and a 5% Roll-Up minimum guarantee death benefit ("MGDB") at the time
of withdrawal of $120,000. A total withdrawal of $20,000 is made.

Calculate the Effect of the Withdrawal

Pro rata Withdrawal Adjustment to MGDB = $15,000 ($120,000 *
($20,000 / $160,000))

MGDB after Pro rata Withdrawal = $105,000 ($120,000 - $15,000)

AV after Pro rata Withdrawal = $140,000 ($160,000 - $20,000)

SMARTDESIGN ADVANTAGE-111195 C1

EXAMPLE #3: THE CONTRACT VALUE (AV) IS EQUAL TO THE DEATH BENEFIT

Assume a premium payment of $100,000, AV at the time of withdrawal of
$120,000 and a 5% Roll-Up minimum guarantee death benefit ("MGDB") at the time
of withdrawal of $120,000. A total withdrawal of $27,000 is made.

Calculate the Effect of the Withdrawal

Pro rata Withdrawal Adjustment to MGDB = $20,000 ($120,000 *
($20,000 / $120,000))

MGDB after Pro rata Withdrawal = $100,000 ($120,000 - $20,000)

AV after Pro rata Withdrawal = $100,000 ($120,000 - $20,000)

SMARTDESIGN ADVANTAGE-111195 C2

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APPENDIX D
--------------------------------------------------------------------------------

PROJECTED SCHEDULE OF GET FUND OFFERINGS

OFFERING DATES GUARANTEE DATES
-------------- ---------------
GET P....... 09/18/01 - 12/12/01 12/13/01 - 12/15/06

GET Q....... 12/13/01 - 03/14/02 03/15/02 - 03/16/07

GET R....... 03/15/02 - 06/13/02 06/14/02 - 06/15/07

SMARTDESIGN ADVANTAGE-111195 D1

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ING VARIABLE ANNUITIES

GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company
domiciled in Delaware.
--------------------------------------------------------------------------------
SmartDesign Advantage-111195 10/31/2001

File No. 333-63694
Filed under Rule 424B(3)

ING VARIABLE ANNUITIES
Golden American Life Insurance Company
Separate Account B of Golden American Life Insurance Company

PROSPECTUS SUPPLEMENT
Dated November 6, 2001

Supplement to the Prospectus
Dated October 31, 2001 for
Deferred Combination Variable and Fixed Annuity Contracts
issued by Golden American Life Insurance Company
("SmartDesign Advantage Prospectus")

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

You should keep this supplement with your Profile and Prospectus.

The effective date of this Profile, Prospectus and Statement of Additional
Information is November 6, 2001. Therefore, wherever October 31, 2001 appears in
those documents, it should be replaced with November 6, 2001.

The footnote to, "Annual Contract Administrative Charge" appearing on page 3 of
the Prospectus is hereby deleted and replaced with the following footnote:

* We deduct this charge on each contract anniversary and on surrender. This
charge may be different during the income phase. See "The Annuity
Options--Charges Deducted."

SD Advantage- 111522 11/6/01