1
As filed with the Securities and Exchange Commission on

April 28, 2000

Registration No. 333-95593
======================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------

Pre-Effective Amendment No. 1

Form S-6
---------------

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
----------------

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
(EXACT NAME OF REGISTRANT)
----------------

ACACIA NATIONAL LIFE INSURANCE COMPANY
(Depositor)
7315 Wisconsin Avenue
Bethesda, MD 20814
----------------

Robert-John H. Sands Senior Vice President
Corporate Secretary and General Counsel

Acacia National Life Insurance Company
7315 Wisconsin Avenue
Bethesda, MD 20855
-----------------

Title of Securities Being Registered: Securities of Unit Investment Trust

Approximate Date Of Proposed Public offering: As soon as practicable after the
effective date of the Registration Statement.

Flexible Premium Variable Life Insurance Policies--Registration of an indefinite
amount of securities pursuant to Rule 24f-2 under the Investment Company Act of
1940

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

RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS

ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS

1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Acacia National Variable Life Insurance Separate Account I
6 Acacia National Variable Life Insurance Separate Account I
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion of Substitution of Investments; Policy Benefits;
Policy Rights; Payment and Allocation of Premiums; General Provisions; Voting Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds - Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; The Alger American Fund, Calvert Variable Series, Inc.,
Deutsche Asset Management VIT Funds, Variable
Insurance Products Fund, Variable Insurance
Products Fund II, Franklin Templeton Variable
Insurance Products Trust, Neuberger Berman
Advisers Management Trust, Oppenheimer Variable
Account Funds, and Van Eck Worldwide Insurance Trust
17 Summary, Policy Rights
18 The Alger American Fund, Calvert Variable
Series, Inc., Deutsche Asset Management VIT
Funds, Variable Insurance Products Fund,
Variable Insurance Products Fund II, Franklin
Templeton Variable Insurance Products Trust,
Neuberger Berman Advisers Management Trust,
Oppenheimer Variable Account Funds, and Van Eck
Worldwide Insurance Trust
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights, Loan Benefits; General Provisions
22 Not Applicable
23 Safekeeping of the Separate Account's Assets
24 General Provisions
25 Acacia National Life Insurance Company
26 Not Applicable
27 Acacia National Life Insurance Company
28 Executive Officers and Directors of ANLIC; Acacia National Life Insurance
Company
29 Acacia National Life Insurance Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies

ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS

42 Not Applicable
43 Not Applicable
44 Cash Value, Payment and Allocation of Premium
45 Not Applicable
46 The Funds; Cash Value
47 The Funds
48 State Regulation of ANLIC
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Policy Benefits; Payment and Allocation of Premiums,
Charges and Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements

PROSPECTUS
[THE ACACIA GROUP LOGO]
Acacia National Life
Insurance Company

Executive Select -- A Flexible Premium Variable Universal Life 7315 Wisconsin
Avenue

Insurance Policy issued by Acacia National Life Insurance Company Bethesda, MD
20814
- --------------------------------------------------------------------------------

Executive Select is a flexible premium variable universal life insurance
Policy ("Policy"), issued by Acacia National Life Insurance Company ("ANLIC").
The Policy is designed primarily for an employer who is seeking a cost-effective
and tax-efficient means of informally funding a non-qualified deferred
compensation plan for its key executives. Like traditional life insurance
policies, an Executive Select Policy provides Death Benefits to Beneficiaries
and gives you, the Policy Owner, the opportunity to increase the Policy's value.
Unlike traditional policies, Executive Select lets you vary the frequency and
amount of premium payments, rather than follow a fixed premium payment schedule.
It also lets you change the level of Death Benefits as often as once each year.

An Executive Select Policy is different from traditional life insurance
policies in another important way: the Policy Owner selects how Policy premiums
will be invested. Although the Policy guarantees a minimum Death Benefit as long
as the Policy remains in force, the value of the Policy, as well as the actual
Death Benefit, will vary with the performance of investments you select.

The Investment Options available through Executive Select include
investment portfolios from The Alger American Fund, Deutsche Asset Management
VIT Funds, Variable Insurance Products Fund, Variable Insurance Products Fund
II, Calvert Variable Series, Inc., Franklin Templeton Variable Insurance
Products Trust, Neuberger Berman Advisers Management Trust, Oppenheimer Variable
Account Funds, and Van Eck Worldwide Insurance Trust. Each of these portfolios
has its own investment objective and policies. These are described in the
prospectuses for each investment portfolio which must accompany this Executive
Select prospectus. You may also choose to allocate premium payments to the Fixed
Account managed by ANLIC.

An Executive Select Policy will be issued after ANLIC accepts a prospective
Policy Owner's application. Generally, an application must specify a Death
Benefit no less than $100,000 ($50,000 if the Term Coverage Rider is attached to
the Policy). Policies are available on individuals ages 18 to 65 at the time of
purchase if guaranteed or simplified underwriting is used and ages 18 to 85 with
regular underwriting. An Executive Select Policy, once purchased, may generally
be canceled within 10 days after you receive it.

This Executive Select prospectus is designed to assist you in understanding
the opportunities and risks associated with the purchase of an Executive Select
Policy. Prospective Policy Owners are urged to read the prospectus carefully and
retain it for future reference.

This prospectus includes a summary of the most important features of the
Executive Select Policy, information about ANLIC, a list of the investment
portfolios to which you may allocate premium payments, and a detailed
description of the Executive Select Policy. The appendix to the prospectus
includes tables designed to illustrate how values and Death Benefits may change
with the investment experience of the Investment Options.

This prospectus must be accompanied by a prospectus for each of the
investment portfolios available through this Policy.

Although the Executive Select Policy is designed to provide life insurance,
an Executive Select Policy is considered to be a security. It is not a deposit
with, an obligation of, or guaranteed or endorsed by any banking institution,
nor is it insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. The purchase of an Executive Select Policy
involves investment risk, including the possible loss of principal. For this
reason, Executive Select may not be suitable for all businesses. A Policy
provides employers with a means of funding non-qualified deferred compensation
plans for their key associates. It may not be advantageous to purchase an
Executive Select Policy as a replacement for another type of life insurance or
as a way to obtain additional insurance protection if the purchaser already owns
another flexible premium variable universal life insurance policy on the
Insured. In addition, the tax consequences of continuing coverage beyond age 100
are uncertain, and the Policy Owner should consult a tax advisor as to the
potential consequences.

The Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains other information regarding registrants that
file electronically with the Securities and Exchange Commission.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

May 11, 2000

EXECUTIVE SELECT
1
5

TABLE OF CONTENTS

PAGE

DEFINITIONS................................................. 3
SUMMARY..................................................... 5
YEAR 2000................................................... 12
ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS................... 12
Acacia National Life Insurance Company................ 12
The Separate Account.................................. 12
Performance Information............................... 13
The Funds............................................. 13
Investment Objectives and Policies Of The Funds'
Portfolios........................................... 15
Addition, Deletion or Substitution of Investments..... 17
Fixed Account......................................... 18
POLICY BENEFITS............................................. 18
Purposes of the Policy................................ 18
Death Benefit Proceeds................................ 19
Death Benefit Options................................. 19
Methods of Affecting Insurance Protection............. 21
Duration of Policy.................................... 21
Accumulation Value.................................... 21
Payment of Policy Benefits............................ 22
POLICY RIGHTS............................................... 23
Loan Benefits......................................... 23
Surrenders............................................ 24
Partial Withdrawals................................... 24
Transfers............................................. 25
Systematic Programs................................... 25
Free Look Privilege................................... 26
PAYMENT AND ALLOCATION OF PREMIUMS.......................... 26
Issuance of a Policy.................................. 26
Premiums.............................................. 27
Allocation of Premiums and Accumulation Value......... 28
Policy Lapse and Reinstatement........................ 28
CHARGES AND DEDUCTIONS...................................... 29
Deductions From Premium Payments...................... 29
Charges From Accumulation Value....................... 29
Daily Charges Against the Separate Account............ 30
GENERAL PROVISIONS.......................................... 31
DISTRIBUTION OF THE POLICIES................................ 33
ADMINISTRATION.............................................. 34
FEDERAL TAX MATTERS......................................... 34
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS................ 37
THIRD PARTY SERVICES........................................ 37
VOTING RIGHTS............................................... 37
STATE REGULATION OF ANLIC................................... 38
EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC................... 38
LEGAL MATTERS............................................... 39
LEGAL PROCEEDINGS........................................... 40
EXPERTS..................................................... 40
ADDITIONAL INFORMATION...................................... 40
FINANCIAL STATEMENTS........................................ 40
ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE
ACCOUNT I
ACACIA NATIONAL LIFE INSURANCE COMPANY
APPENDICES.................................................. A-1

The Policy, certain Funds, and/or certain riders are not available in all
states.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON.

EXECUTIVE SELECT
2
6

DEFINITIONS

ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid.

ACCUMULATION VALUE - The total amount that the Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in Separate
Account I, the Fixed Account, and any Accumulation Value held in the General
Account which secures Outstanding Policy Debt.

ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy.

ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of Separate Account I to provide for expenses of ongoing
administrative services to the Policy Owners as a group.

ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.

ANLIC ("WE, US, OUR") - Acacia National Life Insurance Company, a Virginia stock
company. ANLIC's Home Office is located at 7315 Wisconsin Avenue, Bethesda, MD
20814.

BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are
payable upon the death of the Insured. (See the sections on Beneficiary and
Change of Beneficiary.)

COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection. The Cost of Insurance is calculated with
reference to an annual "Cost of Insurance Rate." This rate is based on the
Insured's gender (where applicable), Issue Age, Policy duration, and risk class.
The Cost of Insurance is part of the Monthly Deduction.

DEATH BENEFIT - The amount of insurance coverage provided under the selected
Death Benefit option of the Policy.

DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by
ANLIC of Satisfactory Proof of Death of the Insured while the Policy is in
force. It is equal to: (l) the Death Benefit; (2) plus additional life insurance
proceeds provided by any riders; (3) minus any Outstanding Policy Debt; (4)
minus any Accrued Expense Charges, including the Monthly Deduction through the
month of death.

FIXED ACCOUNT - An account that is a part of ANLIC's General Account to which
all or a portion of Net Premiums and transfers may be allocated for accumulation
at fixed rates of interest.

GENERAL ACCOUNT - The General Account of ANLIC includes all of ANLIC's assets
except those assets segregated into separate accounts such as Separate Account
I.

GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policy Owner's last known address. If the Policy Owner makes a payment
during the Grace Period such that the Net Cash Surrender Value of the Policy is
sufficient to pay the Monthly Deduction, the Policy will not lapse.

INSURED - The person whose life is insured under the Policy.

INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this Policy.

ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.

ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.

MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such Monthly Activity Date fall on a date other than a
Valuation Date, the Monthly Activity Date will be the next Valuation Date.

MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the
Monthly Activity Date. These deductions are equal to: (1) the current Cost of
Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any.

EXECUTIVE SELECT
3
7

MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the
overall assets of Separate Account I to provide for the risk that mortality and
expense costs may be greater than expected.

NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Outstanding
Policy Debt and any Accrued Expense Charges.

NET PREMIUM - Premium paid less the Percent of Premium Charge.

OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued
interest on Policy loans.

PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses such as premium-based taxes, expressed as a percentage of
the premium. (See the section on Deductions From Premium Payment.)

PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force.

POLICY - The flexible premium variable universal life insurance Policy offered
by ANLIC and described in this prospectus.

POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.

POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: (1) an earlier
Policy Date is specifically requested, or (2) there are additional premiums or
application amendments at time of delivery. (See the section on Issuance of a
Policy.)

POLICY OWNER - ("you, your") The owner of the Policy, as designated in the
application or as subsequently changed. If a Policy has been absolutely
assigned, the assignee is the Policy Owner. A collateral assignee is not the
Policy Owner.

POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date. A "Policy Month" is measured from the same date in each
succeeding month as the Policy Date.

SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted:
(1) A certified copy of the death certificate;
(2) A Claimant Statement;
(3) The Policy; and
(4) Any other information that ANLIC may reasonably require to establish the
validity of the claim.

SEPARATE ACCOUNT I - This term refers to Separate Account I, a separate
investment account established by ANLIC to receive and invest the Net Premiums
paid under the Policy and allocated by the Policy Owner to Separate Account I.
Separate Account I is segregated from the General Account and all other assets
of ANLIC.

SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policy Owner.

SUBACCOUNT - A subdivision of the Separate Account I. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.

SURRENDER - The termination of the Policy during the Insured's life for the Net
Cash Surrender Value.

VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.

VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.

EXECUTIVE SELECT
4
8

SUMMARY

The following summary of prospectus information and diagram of the Policy
should be read along with the detailed information found elsewhere in this
prospectus. Unless stated otherwise, this prospectus assumes that the Policy is
in force and that there is no Outstanding Policy Debt.

DIAGRAM OF POLICY

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

PREMIUM PAYMENTS

You can vary amount and frequency.
- ---------------------------------------------------

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

DEDUCTIONS FROM PREMIUMS

Percent of Premium Charge for Taxes -- currently 3.0% (maximum 5.0%)
- --------------------------------------------------------------------------------

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

NET PREMIUM

The net premium may be invested in the Fixed Account or in Separate Account I
which offers 25 different Subaccounts. The Subaccounts invest in the
corresponding portfolios of The Alger American Fund, Calvert Variable Series,
Inc., Deutsche Asset Management VIT Funds, Variable Insurance Products Fund,
Variable Insurance Product Fund II, Franklin Templeton Variable Insurance
Products Trust, Neuberger Berman Advisers Management Trust, Oppenheimer
Variable Account Funds, and Van Eck Worldwide Insurance Trust Funds.

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

DEDUCTIONS FROM ASSETS

Monthly Charge for Cost of Insurance and cost of any riders. The charge varies
by the Policy duration and the Issue Age, gender, and risk class of the
Insured. (See the Policy Schedule for rates.)Monthly per Policy charge for
administrative expenses:

CURRENT MAXIMUM
MONTHLY MONTHLY
CHARGE CHARGE
------- -------

Policy Year
1 $15.00 $15.00
2+ $ 7.00 $12.00

Monthly per $1000 charge for administrative expenses:

The first ten Policy Years (or for the life of the Policy where required by
state law), there is a monthly charge per $1000 of initial Specified Amount
(maximum monthly charge $1.97 per $1000). In addition, there is a monthly
charge per $1000 of each increase in Specified Amount for ten years from the
date of increase (or life of the Policy, where required) (maximum monthly
charge $1.97 per $1000). The per $1000 rates for both the initial Specified
Amount and each increase vary by Issue Age, gender, and risk class. (See the
Policy Schedule for rates.)

Daily charge from the Subaccounts (not deducted from the Fixed Account):

CURRENT ANNUAL MAXIMUM
CHARGE ANNUAL CHARGE
POLICY YEARS POLICY YEARS
-------------- --------------
1-15 16+ 1-15 16+
----- ----- ----- -----

Mortality and Expense Risk Charge 0.75% 0.30% 0.95% 0.50%
Asset-Based Administrative Expense Charge 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Combined annual rate of Subaccount daily charges 0.90% 0.45% 1.10% 0.65%

Fund expense charges, which ranged from 0.30% to 1.50% at the most recent
fiscal year end, are also deducted.

There is no surrender charge.
- --------------------------------------------------------------------------------

LIVING BENEFITS

You may make partial withdrawals, subject to certain restrictions. The Death
Benefit will be reduced by the amount of the partial withdrawal. Partial
withdrawals are subject to a maximum charge of the lesser of $50 (currently $25)
or 2% of the amount withdrawn. ANLIC guarantees up to 15 free transfers between
the Investment Options each Policy Year. After that, a $10 charge may be made
for each transfer. Under current practice, unlimited free transfers are
permitted.

You may Surrender the Policy at any time for its Net Cash Surrender Value.

RETIREMENT INCOME BENEFITS

Loans may be available on a more favorable interest rate basis after the tenth
Policy Year. Should the Policy lapse while loans are outstanding, the portion of
the loan attributable to earnings will become a taxable distribution. (See page
24.)

You may Surrender the Policy or make a partial withdrawal and take values as
payments under one or more of five different payment options.

DEATH BENEFITS

Generally, Death Benefit income is tax free to the Beneficiary. The Beneficiary
may be paid a lump sum or may select any of the five payment methods available
as retirement benefits.

EXECUTIVE SELECT
5
9

SUMMARY
The following summary is intended to highlight the most important features
of an Executive Select Policy that you, as a prospective Policy Owner, should
consider. You will find more detailed information in the main portion of the
prospectus; cross-references are provided for your convenience. Capitalized
terms are defined in the Definitions section that begins on page 3 of this
prospectus. This summary and all other parts of this prospectus are qualified in
their entirety by the terms of the Executive Select Policy, which is available
upon request from ANLIC.

WHO IS THE ISSUER OF AN EXECUTIVE SELECT POLICY?
ANLIC is the issuer of each Executive Select Policy. ANLIC enjoys a rating
of A (Excellent) from A.M. Best Company, a firm that analyzes insurance
carriers. A stock life insurance company organized in Virginia, ANLIC is a
wholly owned subsidiary of Acacia Life Insurance Company which is, in turn, a
second tier subsidiary of Ameritas Acacia Mutual Holding Company. (See the
section on Acacia National Life Insurance Company.)

WHAT IS THE PRIMARY PURPOSE OF PURCHASING AN EXECUTIVE SELECT POLICY?
The primary purpose of an Executive Select Policy is to serve as an
informal funding vehicle for various executive benefit arrangements. These
arrangements typically focus on one or more financial objectives, which can be
met by the following characteristics of the Executive Select Policy:

- - payment of a Death Benefit, which will never be less than the Specified Amount
the Policy Owner selects (See the section on Death Benefit Options.)

- - accessibility of Policy values through Policy loan, Surrender and withdrawal
features (See the section on Policy Rights.)

- - ability to direct the manner in which the net premiums will be invested. So
long as the Policy is in force, the Policy Owner will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the value
of an Executive Select Policy will reflect your investment choices over the
life of the Policy.

An Executive Select Policy also includes an investment component. This
means that, so long as the Policy is in force, you will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the value of
an Executive Select Policy will reflect your investment choices over the life of
the Policy.

WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF AN EXECUTIVE SELECT POLICY?
Certain states impose premium and other taxes in connection with insurance
policies such as Executive Select. ANLIC may deduct up to 5.0% of each premium
as a Percent of Premium Charge. Currently, the charge is 3.0%.

Charges are deducted against the Accumulation Value to cover the Cost of
Insurance under the Policy and to compensate ANLIC for administering each
individual Executive Select Policy. These charges, which are part of the Monthly
Deduction, are calculated and deducted on each Monthly Activity Date. The Cost
of Insurance is calculated based on risk factors relating to the Insured as
reflected in relevant actuarial tables.

There are two separate charges for administration of the Policy -- a
monthly Administrative Expense Charge, and a daily Asset-Based Administrative
Expense Charge. The monthly Administrative Expense charge itself has three
components: (1) a per Policy charge; (2) a charge per $1000 of initial specified
amount; and (3) a charge per $1000 of each increase in specified amount.
Currently, the per Policy charge is $15 per month in the first Policy Year and
$7 per month thereafter. The per Policy portion of the Administrative Expense
Charge is levied throughout the life of the Policy and is guaranteed not to
increase above $15 per month in the first Policy Year and $12 per month
thereafter. During the first ten Policy Years (or for the life of the Policy
where required by state law), there is a monthly charge per $1000 of initial
Specified Amount. In addition, there is a monthly charge per $1000 of each
increase in Specified Amount for ten years from the date of increase (or life of
the Policy, where required). The per $1000 rates for both the initial Specified
Amount and each increase vary by Issue Age, gender, and risk class. The current
charge per $1000 is the same as the maximum charge. (See the section on Charges
from the Accumulation Value.)

EXECUTIVE SELECT
6
10

For its services in administering Separate Account I and Subaccounts and as
compensation for bearing certain mortality and expense risks, ANLIC is also
entitled to receive fees. These fees are calculated and deducted daily during
the first 15 Policy Years, at a combined current annual rate of 0.90% (maximum
1.10%) of the value of the net assets of Separate Account I. After the 15th
Policy Anniversary Date, the combined current annual rate will decrease to 0.45%
(maximum 0.65%) of the daily net assets of Separate Account I. These charges
will not be deducted from the amounts in the Fixed Account. (See the section on
Daily Charges Against the Separate Account.)

FUND EXPENSE SUMMARY. In addition to the charges against Separate Account I
described just above, management fees and expenses will be assessed by the fund
managers against the amounts invested in the various portfolios. No portfolio
fees will be assessed against amounts placed in the Fixed Account.

The information shown below was provided to ANLIC by the Funds and ANLIC
has not independently verified such information. Each of the Funds is managed by
an investment advisory organization that is entitled to receive a fee for its
services based on the value of the relevant portfolio's net assets. Each Fund,
other than the Calvert Social portfolios, is managed by an organization that is
not affiliated with ANLIC. The Calvert Social portfolios are managed by Calvert
Asset Management Company, Inc., an ANLIC affiliate. Other Calvert companies
provide administrative services to certain of the portfolios. Unless otherwise
noted, the amount of expenses, including the asset based advisory fee referred
to above, borne by each portfolio for the fiscal year ended December 31, 1999,
was as follows:

TOTAL
(Reflecting
INVESTMENT WAIVERS WAIVERS AND/OR
ADVISORY & 12B-1 OTHER AND/OR REIMBURSEMENTS,
PORTFOLIO MANAGEMENT EXPENSE EXPENSES TOTAL REIMBURSEMENTS IF ANY)
--------- ---------- ------- -------- ----- -------------- ---------------

ALGER AMERICAN(1)
Alger American Growth 0.75% -- 0.04% 0.79% -- 0.79%
Alger American MidCap Growth 0.80% -- 0.05% 0.85% -- 0.85%
Alger American Small
Capitalization 0.85% -- 0.05% 0.90% -- 0.90%
CALVERT SOCIAL(2)
Calvert Social Money Market 0.50% -- 0.17%(3) 0.67% -- 0.67%
Calvert Social Small Cap
Growth 1.00% -- 0.58%(3) 1.58% -- 1.58%
Calvert Social Mid Cap
Growth 0.90% -- 0.21%(3) 1.11% -- 1.11%
Calvert Social International
Equity 1.10% -- 0.50%(3) 1.60%(4) -- 1.60%
Calvert Social Balanced 0.70% -- 0.19%(3) 0.89% -- 0.89%
DEUTSCHE VIT(5)
Deutsche VIT Equity 500
Index 0.20% -- 0.23% 0.43% 0.13% 0.30%
Deutsche VIT Small Cap Index 0.35% -- 0.83% 1.18% 0.73% 0.45%
Deutsche VIT EAFE Equity
Index 0.45% -- 0.69% 1.15% 0.50% 0.65%
FIDELITY PORTFOLIOS(6)
VIP Equity-Income:
Service Class 2 0.48% 0.25% 0.10% 0.83% -- 0.83%(7)
VIP High Income:
Service Class 2 0.58% 0.25% 0.12% 0.95% -- 0.95%
VIP II Contrafund:
Service Class 2 0.58% 0.25% 0.12% 0.95% -- 0.95%(7)
FTVIP(8)
Templeton Asset Strategy
Fund(9) -- Class 2 0.60% 0.25%(10) 0.18% 1.03% -- 1.03%
Templeton International
Securities
Fund(11) -- Class 2 0.69% 0.25%(10) 0.19% 1.13% -- 1.13%

EXECUTIVE SELECT
7
11

NEUBERGER BERMAN AMT(12)
Neuberger Berman AMT Limited
Maturity Bond 0.65% -- 0.11% 0.76% -- 0.76%
Neuberger Berman AMT Growth 0.84% -- 0.08% 0.92% -- 0.92%
Neuberger Berman AMT
Partners.................. 0.80% -- 0.07% 0.87% -- 0.87%
OPPENHEIMER VARIABLE ACCOUNT
FUNDS(13)
Oppenheimer Aggressive
Growth Fund/VA............ 0.66% -- 0.01% 0.67% -- 0.67%
Oppenheimer Capital
Appreciation Fund/VA...... 0.68% -- 0.02% 0.70% -- 0.70%
Oppenheimer Main Street
Growth & Income Fund/VA... 0.73% -- 0.05% 0.78% -- 0.78%
Oppenheimer High Income
Fund/VA................... 0.74% -- 0.01% 0.75% -- 0.75%
Oppenheimer Strategic Bond
Fund/VA................... 0.74% -- 0.04% 0.78% -- 0.78%
VAN ECK(14)
Worldwide Hard Assets
Fund...................... 1.00% -- 0.26% 1.26% -- 1.26%

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

(1) Fred Alger Management, Inc. is manager to the Alger American portfolios.

(2) Calvert Asset Management Company, Inc., an affiliate of ANLIC, is
investment advisor of the Calvert Social Portfolios.

(3) "Other Expenses" reflect an indirect fee. Net fund operating expenses after
reductions for fees paid indirectly would be as follows:

Calvert Social Money Market 0.64%
Calvert Social Small Cap Growth 1.15%
Calvert Social Mid Cap Growth 1.02%
Calvert Social International Equity 1.50%
Calvert Social Balanced 0.86%

(4) Total expenses have been restated to reflect expenses expected to be
incurred in 2000, resulting from a change in 1999 to the administrative
services agreement, as approved by the shareholders.

(5) Bankers Trust Company is the investment advisor to the Deutsche VIT. For
its services, the investment advisor receives a fee that is a percentage of
each fund's average daily net assets. The investment advisor has entered
into agreements to waive and/or reimburse operating expenses, including its
fees, that exceed certain percentages of the funds' aggregate average daily
net assets. Any differences in amounts are due to rounding.

(6) Fidelity Management & Research Company is manager of VIP and VIP II
(Fidelity Portfolios). Service Class 2 expenses are based on estimated
expenses for the first year.

(7) A portion of the brokerage commissions certain portfolios pay was used to
reduce portfolio expenses. In addition, through arrangements with the
portfolios's custodian, credits realized as a result of uninvested cash
balances were used to reduce a portion of the portfolios's expenses. After
these reductions, the total operating expenses presented in the table for
these portfolios would have been as follows:

VIP Equity Income: Service Class 2 0.82%
VIP II Contrafund: Service Class 2 0.92%

EXECUTIVE SELECT
8
12

(8) Templeton Investment Counsel, Inc. is investment adviser to the FTVIP
funds.

(9) (Previously the Templeton Asset Allocation Fund) On 2/8/00, shareholders
approved a merger and reorganization that combined the fund with the
Templeton Global Asset Allocation Fund, effective 5/1/00. The shareholders
of that fund had approved new management fees, which apply to the combined
fund effective 5/1/00. The table shows restated total expenses based on the
new fees and the assets of the fund as of 12/31/99, and not the assets of
the combined fund. However, if the table reflected both the new fees and
the combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.60%, Distribution and Service Fees 0.25% Other
Expenses 0.14%, and Total Fund Operating Expenses 0.99%.

(10) The fund's class 2 distribution plan or "rule 12b-1 plan" is described in
the fund's prospectus. While the maximum amount payable under the fund's
12b-1 plan is 0.35% per year of the fund's average daily net assets, the
Board of Trustees of FTVIP has set the current rate at 0.25% per year.

(11) (Previously the Templeton International Fund) On 2/8/00, shareholders
approved a merger and reorganization that combined the fund with the
Templeton International Equity Fund, effective 5/1/00. The shareholders of
that fund had approved new management fees, which apply to the combined
fund effective 5/1/00. The table shows restated total expenses based on the
new fees and the assets of the fund as of 12/31/99, and not the assets of
the combined fund. However, if the table reflected both the new fees and
the combined assets, the fund's expenses after 5/1/00 would be estimated
as: Management Fees 0.65%, Distribution and Service Fees 0.25% Other
Expenses 0.20%, and Total Fund Operating Expenses 1.10%.

(12) Neuberger Berman Management Inc. ("NBMI") provides investment management
services to each Neuberger Berman AMT portfolio that include, among other
things, making and implementing investment decisions and providing
facilities and personnel necessary to operate the portfolio. NBMI provides
administrative services to each portfolio that include furnishing similar
facilities and personnel to the portfolio. With the portfolio's consent,
NBMI is authorized to subcontract some of its responsibilities under its
administration agreement with the portfolio to third parties. Each
portfolio bears all expenses of its operations other than those borne by
NBMI as administrator of the portfolio and as distributor of its shares.
Each portfolio bears all expenses of its operations other than those borne
by NBMI as investment manager of the series. These expenses include, but
are not limited to, for the portfolios and the series, legal and accounting
fees and compensation for trustees who are not affiliated with NBMI; for
the portfolios, transfer agent fees and the cost of printing and sending
reports and proxy materials to shareholders; and for the series, custodial
fees for securities. Any expenses which are not directly attributable to a
specific series are allocated on the basis of the net assets of the
respective series.

(13) OppenheimerFunds, Inc. serves as manager to the Oppenheimer portfolios.

(14) Van Eck Associates Corporation serves as investment adviser to the Van Eck
Worldwide Hard Assets Fund.

Expense reimbursement agreements are expected to continue in future years
but may be terminated at any time. As long as the expense limitations continue
for a portfolio, if a reimbursement occurs, it has the effect of lowering the
portfolio's expense ratio and increasing its total return.

ANLIC may receive administrative fees from the investment advisers of
certain Funds. ANLIC currently does not assess a separate charge against
Separate Account I or the Fixed Account for any federal, state or local income
taxes. ANLIC may, however, make such a charge in the future if income or gains
within Separate Account I will incur any federal, or any significant state or
local income tax liability, or if the federal, state or local tax treatment of
ANLIC changes.

HOW DOES THE INVESTMENT COMPONENT OF THE EXECUTIVE SELECT POLICY WORK?
ANLIC has established Separate Account I, which is separate from all other
assets of ANLIC, as a vehicle to receive and invest premiums received from
Executive Select Policy Owners and owners of certain other variable universal
life products offered by ANLIC. Separate Account I is divided into separate
Subaccounts. Each Subaccount invests exclusively in shares of one of the
investment portfolios available through Executive Select. Each Policy Owner may
allocate Net Premiums to one or more

EXECUTIVE SELECT
9
13

Subaccounts, or to ANLIC's Fixed Account in the initial application. These
allocations may be changed, without charge, by notifying ANLIC's Administrative
Office. The aggregate value of your interests in the Subaccounts, the Fixed
Account and any amount held in the General Account to secure Policy debt will
represent the Accumulation Value of your Executive Select Policy. (See the
Section on Accumulation Value.)

WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE EXECUTIVE SELECT POLICY?

The Investment Options available through Executive Select include 25
investment portfolios, each of which is a separate series of a mutual fund from:
The Alger American Fund ("Alger American Fund"); Calvert Variable Series, Inc.
("Calvert");Deutsche Asset Management VIT Funds ("Deutsche VIT"); Variable
Insurance Products Fund ("VIP") and Variable Insurance Products Fund II ("VIP
II") (collectively "Fidelity"); Franklin Templeton Variable Insurance Products
Trust ("FTVIP"); Neuberger Berman Advisers Management Trust (Neuberger Berman");
Oppenheimer Variable Account Funds ("Oppenheimer"); and Van Eck Worldwide
Insurance Trust ("Van Eck"). These portfolios are listed in the Fund Expense
Summary above.

Details about the investment objectives and policies of each of the
available investment portfolios and management fees and expenses appear in the
sections on Investment Objectives and Policies of the Funds' Portfolios and Fund
Expense Summary. In addition to the listed portfolios, you may also elect to
allocate Net Premiums to ANLIC's Fixed Account. (See the section on the Fixed
Account.)

HOW DOES THE LIFE INSURANCE COMPONENT OF AN EXECUTIVE SELECT POLICY WORK?
An Executive Select Policy provides for the payment of a minimum Death
Benefit upon the death of the Insured. The amount of the minimum Death
Benefit -- sometimes referred to as the Specified Amount of the Executive Select
Policy -- is chosen by you at the time your Executive Select Policy is
established. However, Death Benefit Proceeds -- the actual amount that will be
paid after ANLIC receives Satisfactory Proof of Death -- may vary over the life
of your Executive Select Policy, depending on which of the two available
coverage options you select.

If you choose Option A, Death Benefit Proceeds payable under your Executive
Select Policy will be the Specified Amount of your Executive Select Policy or
the applicable percentage of its Accumulation Value, whichever is greater. If
you choose Option B, Death Benefit Proceeds payable under your Executive Select
Policy will be the Specified Amount of your Executive Select Policy plus the
Accumulation Value of your Executive Select Policy, or if it is higher, the
applicable percentage of the Accumulation Value on the date of death. In either
case, the applicable percentage is based on the age of the Insured at the date
of death. (See the section on Death Benefit Options.)

ARE THERE ANY RISKS INVOLVED IN OWNING AN EXECUTIVE SELECT POLICY?
Yes. Over the life of the Executive Select Policy, the Subaccounts to which
you allocate your premiums will fluctuate with changes in the stock market and
overall economic factors. These fluctuations will be reflected in the
Accumulation Value of your Executive Select Policy and may result in loss of
principal. For this reason, the purchase of an Executive Select Policy may not
be suitable for all businesses. It may not be advantageous to purchase an
Executive Select Policy to replace or augment your existing insurance
arrangements. Appendix A includes tables illustrating the impact that
hypothetical market returns would have on Accumulation Values under an Executive
Select Policy (page A-1).

WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP AN EXECUTIVE SELECT POLICY IN
FORCE?
Like traditional life insurance policies, an Executive Select Policy
requires the payment of periodic premiums in order to keep the Policy in force.
You will be asked to establish a payment schedule before an Executive Select
Policy becomes effective.

The distinction between traditional life policies and an Executive Select
Policy is that an Executive Select Policy will not lapse simply because premium
payments are not made according to that payment schedule. However, an Executive
Select Policy will lapse, even if scheduled premium payments are made, if the
Net Cash Surrender Value of your Executive Select Policy falls below zero. (See
the section on Premiums.)

EXECUTIVE SELECT
10
14

HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED?
An Executive Select Policy will be issued after a completed application is
accepted, and the initial premium payment is received, by ANLIC at its
Administrative Office. ANLIC's Administrative Office is located at 5900 "O"
Street, P.O. Box 82550, Lincoln, NE 68501. The initial Net Premium will be
allocated on the Issue Date to the Subaccounts and/or the Fixed Account
according to the selections made in the application. When state or other
applicable law or regulation requires return of at least the premium payments,
should you return the Policy under the free-look privilege, the initial Net
Premium will be allocated to the Money Market Subaccount. Thirteen days after
the Issue Date, the Accumulation Value of the Policy will be allocated among the
Subaccounts and/or the Fixed Account according to the instructions in the
application. You have the right to examine the Executive Select Policy and
return it for a refund for a limited time, even after the Issue Date. (See the
section on Issuance of a Policy.)

You may make subsequent premium payments, although you are not required to
do so. ANLIC will send premium payment notices to you according to any schedule
you select. When ANLIC receives a premium payment at its Administrative Office,
we will deduct any applicable Percent of Premium Charge and allocate the Net
Premium to the Subaccounts and/or the Fixed Account according to your
selections. (See the sections on Premiums and Allocations of Premiums and
Accumulation Value.)

As already noted, Executive Select provides considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include the Cost
of Insurance needed to keep the Executive Select Policy in force; maximum
premium limitations established under the federal tax laws; and the impact that
reduced premium payments may have on the Net Cash Surrender Value of the
Executive Select Policy. (See the Section on Premiums.)

IS THE ACCUMULATION VALUE OF THE EXECUTIVE SELECT POLICY AVAILABLE WITHOUT
SURRENDER?
Yes. You may access the value of your Executive Select Policy in one of two
ways. After the first Policy Year, you may obtain a loan, secured by the
Accumulation Value of your Executive Select Policy. The maximum interest rate on
any such loan is 6% annually; the current rate is 5.5% annually. After the tenth
Policy Anniversary, you may borrow against a limited amount of the Net Cash
Surrender Value of your Executive Select Policy at a maximum annual interest
rate of 4%; the current rate for such loans is 3.5% annually. (See the section
on Loan Benefits.)

You may also access the value of your Executive Select Policy by making a
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). (See the section on Partial
Withdrawals.)

WHEN DOES THE EXECUTIVE SELECT POLICY TERMINATE?
You may terminate the Executive Select Policy by Surrendering the Policy
during the lifetime of the Insured for its Net Cash Surrender Value. If you
surrender the Policy in the first two Policy Years, we will refund a portion of
the Percent of Premium Charge deducted in the first Policy Year. As noted above,
the Executive Select Policy will terminate if you fail to maintain sufficient
Net Cash Surrender Value to cover Policy charges. (See the sections on
Surrenders and Premiums.)

EXECUTIVE SELECT
11
15

YEAR 2000

Like other insurance companies and their separate accounts, ANLIC and
Separate Account I could be adversely affected if the computer systems they rely
upon do not properly process date-related information and data involving the
years 2000 and after. This issue arose because both mainframe and PC-based
computer hardware and software have traditionally used two digits to identify
the year. For example, the year 1998 is input, stored and calculated as "98."
Similarly, the year 2000 would be input, stored and calculated as "00." If
computers assume this means 1900, it could cause errors in calculations,
comparisons, and other computing functions.

Like all insurance companies, ANLIC makes extensive use of dates and date
calculations. We began a corporate-wide Year 2000 (Y2K) project in mid-1997. Our
goal is to ensure that our computer systems continue to operate smoothly with no
service disruptions before, during or after the year 2000.

As of April 15, 2000, ANLIC has experienced no known Y2K problems. All of
our computer application and operating systems had been updated for the year
2000 by July 31, 1999. Continuous testing and monitoring throughout the
remainder of 1999 helped ANLIC continue to meet our contractual and service
obligations to our customers. In addition to our internal efforts, ANLIC is
working closely with vendors and other business partners to confirm that they
too are addressing Y2K issues on a timely basis. In the event we or our service
providers, vendors, financial institutions or others with which we conduct
business, fail to be Y2K compliant, there would be a materially adverse effect
on us.

Certain vendors and/or business partners, due to their exposure to foreign
markets, may face additional Y2K issues. Please see the Funds' prospectuses for
information on the Funds' preparedness for Y2K.

ANLIC, THE SEPARATE ACCOUNT AND THE FUNDS

ACACIA NATIONAL LIFE INSURANCE COMPANY
Acacia National Life Insurance Company ("ANLIC") is a stock life insurance
company organized in the Commonwealth of Virginia. ANLIC was incorporated on
December 9, 1974. ANLIC is currently licensed to sell life insurance in 46
states and the District of Columbia.

ANLIC is a wholly owned subsidiary of Acacia Life Insurance Company
("Acacia"), a District of Columbia stock company. Acacia is wholly owned by
Ameritas Holding Company, a subsidiary of Ameritas Acacia Mutual Holding
Company, a Nebraska mutual insurance holding company. The Administrative Offices
of both ANLIC and Acacia are at 5900 "O" Street, P.O. Box 81889, Lincoln,
Nebraska 68501. ANLIC's telephone number is 888-837-6791 and its website address
is www.acaciagroup.com.

On January 1, 1999, Ameritas Mutual Insurance Holding Company, a Nebraska
mutual insurance holding company and Acacia Mutual Holding Corporation, a
District of Columbia mutual holding corporation merged and became Ameritas
Acacia Mutual Holding Company ("Ameritas Acacia") a Nebraska mutual insurance
holding company. Both Ameritas Acacia and Ameritas Holding Company, an
intermediate holding company, are organized under the Nebraska Mutual Insurance
Holding Company Act. Ameritas Acacia and its subsidiaries had total statutory
assets at December 31, 1999 of over $6.3 billion and Acacia and its subsidiaries
had total assets as of December 31, 1999 of $1.7 billion.

THE SEPARATE ACCOUNT

Acacia National Variable Life Insurance Separate Account I ("Separate
Account I") was established under Virginia law on January 31, 1995. The assets
of Separate Account I are held by ANLIC segregated from all of ANLIC's other
assets, are not chargeable with liabilities arising out of any other business
which ANLIC may conduct, and income, gains, or losses of ANLIC. Although the
assets maintained in Separate Account I will not be charged with any liabilities
arising out of ANLIC's other business, all obligations arising under the
Policies are liabilities of ANLIC who will maintain assets in Separate Account I
of a total market value at least equal to the reserve and other contract
liabilities of Separate Account I. Separate Account I will at all times contain
assets equal to or greater than Accumulation Values invested in Separate Account
I. Nevertheless, to the extent assets in Separate Account I exceed

EXECUTIVE SELECT
12
16

ANLIC's liabilities in Separate Account I, the assets are available to cover the
liabilities of ANLIC's General Account. ANLIC may, from time to time, withdraw
assets available to cover the General Account obligations.

Separate Account I is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a
unit investment trust, which is a type of investment company. This does not
involve any SEC supervision of the management or investment policies or
practices of Separate Account I. For state law purposes, Separate Account I is
treated as a Division of ANLIC.

PERFORMANCE INFORMATION
Performance information for the Subaccounts of Separate Account I and the
Funds available for investment by Separate Account I may appear in
advertisements, sales literature, or reports to Policy Owners or prospective
purchasers. ANLIC may also provide a hypothetical illustration of Accumulation
Value, Net Cash Surrender Value and Death Benefit based on historical investment
returns of the Funds for a sample Policy based on assumptions as to age, gender
and other Policy specific assumptions.

ANLIC may also provide individualized hypothetical illustrations of
Accumulation Value, Net Cash Surrender Value and Death Benefit based on
historical investment returns of the Funds. These illustrations will reflect
deductions for Fund expenses and Policy and Separate Account I charges,
including the Monthly Deduction and Percent of Premium Charge. These
hypothetical illustrations will be based on the actual historical experience of
the Funds as if the Subaccounts had been in existence and a Policy issued for
the same periods as those indicated for the Funds.

THE FUNDS

There are currently 25 Subaccounts within Separate Account I available to
Policy Owners for new allocations. The assets of each Subaccount are invested in
shares of a corresponding portfolio of one of the following mutual Funds
(collectively, the "Funds"): The Alger American Fund; Calvert Variable Series,
Inc.; Deutsche Asset Management VIT Funds; Variable Insurance Products Fund;
Variable Insurance Products Fund II; Franklin Templeton Variable Insurance
Products Trust; Neuberger Berman Advisers Management Trust; Oppenheimer Variable
Account Funds; and Van Eck Worldwide Insurance Trust. Each Fund is registered
with the SEC under the Investment Company Act of 1940 as an open-end management
investment company.

The assets of each portfolio of the Funds are held separate from the assets
of the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.

The investment objectives and policies of each portfolio are summarized
below. There is no assurance that any of the portfolios will achieve their
stated objectives. More detailed information, including a description of
investment objectives, policies, restrictions, expenses and risks, is in the
prospectuses for each of the Funds, which must accompany or precede this
Prospectus. All underlying fund information, including Fund prospectuses, has
been provided to ANLIC by the underlying Funds. ANLIC has not independently
verified this information. One or more of the Portfolios may employ investment
techniques that involve certain risks, including investing in non-investment
grade, high risk debt securities, entering into repurchase agreements and
reverse repurchase agreements, lending portfolio securities, hedging
instruments, interest rate swaps, engaging in "short sales against the box,"
investing in instruments issued by foreign banks, entering into firm commitment
agreements and investing in warrants and restricted securities. For example, the
Calvert Social Balanced Portfolio may invest up to 20% of its assets in non-
investment grade obligations, commonly referred to as "junk bonds". Oppenheimer
High Income Fund/ VA may also invest in "junk bonds". In addition, certain of
the portfolios may invest in securities of foreign issuers, such as the Calvert
Variable Series, Inc. MidCap Portfolio which may invest up to 25% of its funds
in foreign securities.

Other portfolios invest primarily in the securities markets of developing
nations. Investments of this type involve different risks than investments in
more established economies, and will be affected by greater volatility of
currency exchange rates and overall economic and political factors. Such
portfolios include the

EXECUTIVE SELECT
13
17

Calvert Variable Series, Inc. Social International Equity Portfolio, and Van Eck
Worldwide Hard Assets Fund. The Van Eck Worldwide Hard Assets Fund will also
invest at least 25% of its total assets in "Hard Assets" including precious
metals, ferrous and non-ferrous metals, gas, petroleum, petrochemicals or other
hydrocarbons, forest products, real estate and other basic non-agricultural
commodities. It may invest up to 50% of its assets in any one of these sectors.
Therefore it may be subject to greater risks and market fluctuations than other
investment companies with more diversified portfolios. Further information about
the risks associated with investments in each of the Funds and their respective
portfolios is contained in the prospectus relating to that Fund. These
prospectuses, together with this prospectus, should be read carefully and
retained.

The investments in the Funds may be managed by Fund managers which manage
one or more other mutual funds that have similar names, investment objectives,
and investment styles as the Funds. You should be aware that the Funds are
likely to differ from the other mutual funds in size, cash flow pattern, and tax
matters. Thus, the holdings and performance of the Funds can be expected to vary
from those of the other mutual funds.

You should periodically consider the allocation among the Subaccounts in
light of current market conditions and the investment risks attendant to
investing in the Funds' various portfolios.

Separate Account I will purchase and redeem shares from the portfolios at
the net asset value. Shares will be redeemed to the extent necessary for ANLIC
to collect charges, pay the Net Cash Surrender Values, partial withdrawals, and
make policy loans or to transfer assets among Investment Options as you
requested. Any dividend or capital gain distribution received is automatically
reinvested in the corresponding Subaccount.

Since each of the Funds is designed to provide investment vehicles for
variable annuity and variable life insurance contracts of various insurance
companies and will be sold to separate accounts of other insurance companies as
investment vehicles for various types of variable life insurance policies and
variable annuity contracts, there is a possibility that a material conflict may
arise between the interests of Separate Account I and one or more of the
separate accounts of another participating insurance company. In the event of a
material conflict, the affected insurance companies agree to take any necessary
steps, including removing their separate account from the Funds, to resolve the
matter. The risks of such mixed and shared funding are described further in the
prospectuses of the Funds.

EXECUTIVE SELECT
14
18

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS' PORTFOLIOS

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

THE ALGER AMERICAN FUND
- -------------------------------------------------------------------------------------------------------------------
Alger American Focuses on growing companies that generally Seeks to provide long-term capital
Growth Portfolio have broad product lines, markets, appreciation.
financial resources and depth of
management. Under normal circumstances, the
portfolio invests primarily in the equity
securities of large companies. The
portfolio considers a large company to have
a market capitalization of $1 billion or
greater.
- -------------------------------------------------------------------------------------------------------------------
Alger American Focuses on midsize companies with promising Seeks to provide long-term capital
MidCap Growth growth potential. Under normal appreciation.
Portfolio circumstances, the portfolio invests
primarily in the equity securities of
companies having a market capitalization
within the range of companies in the S&P
MidCap 400 Index.
- -------------------------------------------------------------------------------------------------------------------
Alger American Small Focuses on small, fast-growing companies Seeks to provide long-term capital
Capitalization that offer innovative products, services or appreciation.
Portfolio technologies to a rapidly expanding
marketplace. Under normal circumstances,
the portfolio invests primarily in the
equity securities of small capitalization
companies. A small capitalization company
is one that has a market capitalization
within the range of the Russell 2000 Growth
Index or the S&P SmallCap 600 Index.
- -------------------------------------------------------------------------------------------------------------------
CALVERT VARIABLE SERIES, INC.
- -------------------------------------------------------------------------------------------------------------------
Social Money Market Invests in high quality, money market Seeks to provide current income by
Portfolio instruments, such as commercial paper, investing in enterprises that make a
variable rate demand notes, corporate, significant contribution to society
agency and taxable municipal obligations. through their products and services and
All investments must comply with the SEC through the way they do business.
money market fund requirements.*
- -------------------------------------------------------------------------------------------------------------------
Social Small Cap Invests at least 65% of assets in the Seeks to provide long-term capital
Growth Portfolio common stocks of small-cap companies. appreciation by investing primarily in
Returns in the portfolio will be mostly equity securities of companies that have
from the changes in the price of the small market capitalizations.
portfolio's holdings (capital
appreciation). The portfolio currently
defines small-cap companies as those with
market capitalization of $1 billion or less
at the time the portfolio initially
invests.*
- -------------------------------------------------------------------------------------------------------------------
Social Mid Cap Invests primarily in the common stocks of Seeks to provide long-term capital
Growth Portfolio mid- size companies. Returns in the appreciation by investing primarily in a
portfolio will be mostly from the changes nondiversified portfolio of the equity
in the price of the portfolio's holdings securities of mid-sized companies that are
(capital appreciation.) The portfolio undervalued but demonstrate a potential
currently defines mid-cap companies as for growth.
those within the range of market
capitalizations of the S&P's Mid-Cap 400
Index. Most companies in the Index have a
capitalization of $500 million to $10
billion.*
- -------------------------------------------------------------------------------------------------------------------
Social International Invests primarily in the common stocks of Seeks to provide a high total return
Equity Portfolio mid- to large-cap companies using a value consistent with reasonable risk by
approach. The portfolio identifies those investing primarily in a globally
countries with markets and economies that diversified portfolio for equity
it believes currently provide the most securities.
favorable climate for investing. The
portfolio invests primarily in more
developed economies and markets. No more
that 5% of Portfolio assets are invested in
the U.S.*
- -------------------------------------------------------------------------------------------------------------------
Social Balanced Typically invests about 60% of its assets Seeks to achieve a competitive total
Portfolio in stocks and 40% in bonds or other return through an actively managed
fixed-income investments. Stock investments portfolio of stocks, bonds and money
are primarily common stock in large-cap market instruments which offer income and
companies, while the fixed-income capital growth opportunity and which
investments are primarily a wide variety of satisfy the investment and social
investment grade bonds.* criteria.
- -------------------------------------------------------------------------------------------------------------------
*The portfolio invests with the philosophy
that long-term rewards to investors will
come from those organizations whose
products, services, and methods enhance the
human condition and the traditional
American values of individual initiative,
equality of opportunity and cooperative
effort. Investments are selected on the
basis of their ability to contribute to the
dual objectives of financial soundness and
social criteria.
- -------------------------------------------------------------------------------------------------------------------

EXECUTIVE SELECT
15
19

DEUTSCHE ASSET MANAGEMENT VIT FUNDS
- -------------------------------------------------------------------------------------------------------------------
Equity 500 Index The Fund will invest primarily in common Seeks to match, before expenses, the risk
Fund stocks of companies that comprise the and return characteristics of the S&P 500
Standard & Poor's 500 Composite Stock Price Index.
Index ("S&P 500 Index(R)"), which
emphasizes stocks of large U.S. companies.
The Fund may also use stock index futures
and options.
- -------------------------------------------------------------------------------------------------------------------
Small Cap Index Fund The Fund will invest primarily in common Seeks to match, before expenses, the risk
stocks of companies that comprise the and return characteristics of the Russell
Russell 2000 Small Stock Index ("Russell 2000 Index.
2000 Index(R)"), which emphasizes stocks of
small U.S. companies. The Fund may also use
stock index futures and options.
- -------------------------------------------------------------------------------------------------------------------
EAFE(R) Equity Index The Fund will invest primarily in common Seeks to match, before expenses, the risk
Fund stocks of companies that comprise the and return characteristics of the
Morgan Stanley Capital International EAFE EAFE(R)Index.
Index(R) ("EAFE Index(R)"), which
emphasizes stocks of companies in major
markets in Europe, Australia and the Far
East. The Fund may also use stock index
futures and options.
- -------------------------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- -------------------------------------------------------------------------------------------------------------------
VIP Equity-Income: Investing at least 65% in income-producing Seeks reasonable income. Will also
Service Class II equity securities, which tens to lead to consider the potential for capital
investments in large cap "value" stocks. appreciation. Seeks a yield which exceeds
the composite yield on the securities
comprising the Standard & Poor's 500.
- -------------------------------------------------------------------------------------------------------------------
VIP High Income: Investing at least 65% of total assets in Seeks a high level of current income while
Service Class II income- producing debt securities, also considering growth of capital.
preferred stocks and convertible
securities, with an emphasis on lower-
quality debt securities.
- -------------------------------------------------------------------------------------------------------------------
VIP II Contrafund: Investing primarily in common stocks. Seeks long-term capital appreciation.
Service Class II Investing in securities of companies whose
value it believes is not fully recognized
by the public.
- -------------------------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
- -------------------------------------------------------------------------------------------------------------------
Templeton Asset The fund will invest in equity securities High total return.
Strategy of companies of any nation, debt securities
of companies and governments of any nation,
and in money market instruments.
- -------------------------------------------------------------------------------------------------------------------
Templeton The fund will invest in the equity Long-term capital growth.
International securities of companies located outside the
Securities U.S., including emerging markets.
- -------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN ADVISORS MANAGEMENT TRUST
- -------------------------------------------------------------------------------------------------------------------
Limited Maturity The portfolio will invest in a diversified Seeks to provide the highest current
Bond Fund portfolio of fixed and variable debt income consistent with low risk to
securities and seeks to increase income and principal and liquidity.
preserve or enhance total return by
actively managing average portfolio
maturity in light of market conditions and
trends.
- -------------------------------------------------------------------------------------------------------------------
Growth Portfolio The portfolio invests mainly in common Seeks growth of capital.
stocks of mid-cap companies. It does not
seek to invest in securities that pay
dividends or interest, and such income is
incidental.
- -------------------------------------------------------------------------------------------------------------------
Partners Portfolio Principal series investments are common Seeks capital growth.
stocks of mid-to large-cap companies.
- -------------------------------------------------------------------------------------------------------------------

EXECUTIVE SELECT
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OPPENHEIMER VARIABLE ACCOUNT FUNDS
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer The portfolio will invest in securities of Seeks to achieve capital appreciation, by
Aggressive Growth companies believed to have relatively investing in "growth-type" companies.
Fund/VA favorable long-term prospects for
increasing demand for their goods or
services, or to be developing new products,
services or markets, and normally retain a
relatively larger portion of their earnings
for research, development and investment in
capital assets.
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital The portfolio will emphasize investments in Seeks capital appreciation by investing in
Appreciation securities of well-known and established securities of well known established
Fund/VA companies. Such securities generally have a companies.
history of earnings and dividends and are
issued by seasoned companies.
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Its equity investments may include common Seeks a high total return (which includes
Street Growth & stocks, preferred stocks, convertible growth in the value of its shares as well
Income Fund/VA securities and warrants. Its debt as current income) from equity and debt
securities may include U.S. government securities.
securities, foreign securities, and foreign
and domestic corporate bonds, notes, and
debentures.
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer High Investments in high yield fixed-income Seeks a high level of current income.
Income Fund/VA securities (including long-term debt and
preferred stock issues, including
convertible securities) believed by the
Manager not to involve undue risk. Fund
will assume certain risks in seeking high
yield including securities in the lower
ratings categories, commonly known as "junk
bonds".
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Income is principally derived from interest Seeks a high level of current income by
Strategic Bond on debt securities and the Fund seeks to investing primarily in a diversified
Fund/VA enhance such income by writing covered call portfolio of high yield fixed-income
options on debt securities. The Fund securities.
intends to invest primarily in (i) foreign
government and corporate debt securities
(ii) U.S. government securities, and (iii)
lower-rated high yield domestic debt
securities, commonly known as junk bonds.
- -------------------------------------------------------------------------------------------------------------------
VAN ECK WORLDWIDE INSURANCE TRUST
- -------------------------------------------------------------------------------------------------------------------
Worldwide Hard The Worldwide Hard Assets Fund will invest Seeks long-term capital appreciation by
Assets Fund at least 65% of its assets in "hard asset investing globally, primarily in "Hard
securities," defined as securities of Assets" securities. Income is a secondary
companies that derive at least 50% of gross consideration.
revenue or profit from exploration,
development, production or distribution of
precious metals, natural resources, real
estate or commodities. The fund may
concentrate as much as 50% of its assets in
any single "hard asset" sector.
- -------------------------------------------------------------------------------------------------------------------

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
ANLIC reserves the right, subject to applicable law, to add, delete,
combine or substitute investments in Separate Account I if, in our judgment,
marketing needs, tax considerations, or investment conditions warrant. This may
happen due to a change in law or a change in a Fund's objectives or
restrictions, or for some other reason. ANLIC may operate Separate Account I as
a management company under the 1940 Act, it may be deregistered under that Act
if registration is no longer required, or it may be combined with other ANLIC
separate accounts. ANLIC may also transfer the assets of Separate Account I to
another separate account. If necessary, we will notify the SEC and/or state
insurance authorities and will obtain any required approvals before making these
changes.

If any changes are made, ANLIC may, by appropriate endorsement, change the
Policy to reflect the changes. In addition, ANLIC may, when permitted by law,
restrict or eliminate any voting rights of Policy Owners or other persons who
have voting rights as to Separate Account I. ANLIC will determine the basis for
making any new Subaccounts available to existing Policy Owners.

You will be notified of any material change in the investment policy of any
Fund in which you have an interest.

EXECUTIVE SELECT
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FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium payments to
the Fixed Account, and you may also transfer monies between Separate Account I
and the Fixed Account. (See the section on Transfers.)

Payments allocated to the Fixed Account and transferred from Separate
Account I to the Fixed Account are placed in ANLIC's General Account. The
General Account includes all of ANLIC's assets, except those assets segregated
in ANLIC's separate accounts. ANLIC has the sole discretion to invest the assets
of the General Account, subject to applicable law. ANLIC bears an investment
risk for all amounts allocated or transferred to the Fixed Account, plus
interest credited thereto, less any deduction for charges and expenses. The
Policy Owner bears the investment risk that the declared rate, described below,
will fall to a lower rate after the expiration of a declared rate period

Because of exemptions and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 (the "1933
Act"), nor is the General Account registered as an investment company under the
Investment Company Act of 1940. Accordingly, neither the General Account nor any
interest in it is generally subject to the provisions of the 1933 or 1940 Act.
We understand that the staff of the SEC has not reviewed the disclosures in this
prospectus relating to the Fixed Account portion of the Policy; however, these
disclosures may be subject to generally applicable provisions of the federal
securities laws regarding the accuracy and completeness of statements made in
prospectuses.

ANLIC guarantees that it will credit interest at a declared rate of at
least 3.5%. ANLIC may, at its discretion, set a higher declared rate(s). Each
month ANLIC will establish the declared rate for the Policies with a Policy Date
or Policy Anniversary Date in that month. Each month is assumed to have 30 days,
and each year to have 360 days for purposes of crediting interest on the Fixed
Account. The Policy Owner will earn interest on the amounts transferred or
allocated to the Fixed Account at the declared rate effective for the month in
which the Policy was issued, which rate is guaranteed for the remainder of the
first Policy Year. During later Policy Years, all amounts in the Fixed Account
will earn interest at the declared rate in effect in the month of the last
Policy Anniversary. Declared interest rates may increase or decrease from
previous periods, but will not fall below 3.5%. ANLIC reserves the right to
change the declaration practice and the period for which a declared rate will
apply.

POLICY BENEFITS

The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from ANLIC.

PURPOSES OF THE POLICY
The Policy is designed to provide the Policy Owner with both lifetime
insurance protection on the life of the Insured and flexibility in the amount
and frequency of premium payments and with the level of life insurance proceeds
payable under the Policy.

You are not required to pay scheduled premiums to keep the Policy in force,
but you may, subject to certain limitations, vary the frequency and amount of
premium payments. You also may adjust the level of Death Benefits payable under
the Policy without having to purchase a new Policy by increasing (with evidence
of insurability) or decreasing the Specified Amount. Thus, as insurance needs or
financial conditions change, you have the flexibility to adjust life insurance
benefits and vary premium payments.

The Death Benefit may, and the Accumulation Value will, vary with the
investment experience of the chosen Subaccounts of Separate Account I. Thus the
Policy Owner benefits from any appreciation in value of the underlying assets,
but bears the investment risk of any depreciation in value. As a result, whether
or not a Policy continues in force may depend in part upon the investment
experience of the chosen Subaccounts. The failure to pay a Planned Periodic
Premium will not necessarily cause the Policy to lapse, but the Policy could
lapse even if Planned Periodic Premiums have been paid, depending upon the
investment experience of Separate Account I.

EXECUTIVE SELECT
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DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, ANLIC will pay the Death Benefit
Proceeds of the Policy upon Satisfactory Proof of Death, according to the Death
Benefit option in effect at the time of the Insured's death. The amount of the
Death Benefits payable will be determined at the end of the Valuation Period
during which the Insured's death occurs. The Death Benefit Proceeds may be paid
in a lump sum or under one or more of the payment options set forth in the
Policy. (See the section on Payment Options.)

Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or as subsequently changed. If
you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or if individually owned, to your estate.

DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options. The Policy Owner selects one
of the options in the application. The Death Benefit under either option will
never be less than the current Specified Amount of the Policy as long as the
Policy remains in force. (See the section on Policy Lapse and Reinstatement.)
The net amount at risk for Option A will generally be less than the net amount
at risk for Option B. If you choose Option A, your Cost of Insurance deduction
will generally be lower than if you choose Option B. (See the section on Charges
and Deductions.) The following graphs illustrate the differences in the two
Death Benefit options.

OPTION A.

[GRAPH]

Death Benefit Option A. Pays a Death Benefit
equal to the Specified Amount or the Accumulation
Value multiplied by the Death Benefit percentage (as
illustrated at Point A) whichever is greater.

Under Option A, the Death Benefit is the current Specified Amount of the
Policy or, if greater, the applicable percentage of Accumulation Value on the
date of death. The applicable percentage is 250% for Insureds with an Attained
Age 40 or younger on the Policy Anniversary Date prior to the date of death. For
Insureds with an Attained Age over 40 on that Policy Anniversary Date, the
percentage declines. For example, the percentage at Attained Age 40 is 250%, at
Attained Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%,
at Attained Age 80 is 105%, and Attained Age 90 is 105%. The applicable
percentage will never be less than 101%. Accordingly, under Option A the Death
Benefit will remain level at the Specified Amount unless the applicable
percentage of Accumulation Value exceeds the current Specified Amount, in which
case the amount of the Death Benefit will vary as the Accumulation Value varies.
Policy Owners who prefer to have favorable investment performance, if any,
reflected in higher Accumulation Value, rather than increased insurance
coverage, generally should select Option A.

EXECUTIVE SELECT
19
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OPTION B.

[GRAPH]

Death Benefit Option B. Pays a Death Benefit
equal to the Specified Amount plus the Policy's
Accumulation Value or the Accumulation Value
multiplied by the Death Benefit percentage,
whichever is greater.

Under Option B, the Death Benefit is equal to the current Specified Amount
plus the Accumulation Value of the Policy or, if greater, the applicable
percentage of the Accumulation Value on the date of death. The applicable
percentage is the same as under Option A: 250% for Insureds with an Attained Age
40 or younger on the Policy Anniversary Date prior to the date of death. For
Insureds with an Attained Age over 40 on that Policy Anniversary Date the
percentage declines. Accordingly, under Option B the amount of the Death Benefit
will always vary as the Accumulation Value varies (but will never be less than
the Specified Amount). Policy Owners who prefer to have favorable investment
performance, if any, reflected in increased insurance coverage, rather than
higher Accumulation Values, generally should select Option B.

CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed
once per year after the first Policy Year by sending ANLIC a written request.
The effective date of such a change will be the Monthly Activity Date on or
following the date the change is approved by ANLIC. A change may have federal
tax consequences.

If the Death Benefit option is changed from Option A to Option B, the
Specified Amount after the change will equal the Specified Amount before the
change less the Accumulation Value as of the date of the change. If the Death
Benefit option is changed from Option B to Option A, the Specified Amount under
Option A after the change will equal the Death Benefit under Option B on the
effective date of change.

No charges will be imposed upon a change in Death Benefit option, nor will
such a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the Cost of Insurance because this charge varies depending on the net
amount at risk (i.e. the amount by which the Death Benefit as calculated on a
Monthly Activity Date exceeds the Accumulation Value on that date). Changing
from Option B to Option A generally will decrease the net amount at risk in the
future, and will therefore decrease the Cost of Insurance. Changing from Option
A to Option B generally will result in an increase in the Cost of Insurance over
time because the Cost of Insurance Rate will increase with the Insured's age,
even though the net amount at risk will generally remain level. (See the
sections on Charges and Deductions and Federal Tax Matters.)

CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, a Policy Owner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the Cost of Insurance Rate and
the net amount at risk, both of which may affect a Policy Owner's Cost of
Insurance and have federal tax consequences. (See the sections on Charges and
Deductions and Federal Tax Matters.)

Any increase or decrease in the Specified Amount will become effective on
the Monthly Activity Date on or following the date a written request is approved
by ANLIC. The Specified Amount of a Policy may be changed only once per year and
ANLIC may limit the size of a change in a Policy Year. The Specified Amount
remaining in force after any requested decrease may not be less than $100,000
($50,000 if the Term Coverage Rider is attached to the Policy). After the
Insured reaches Attained Age 100, the Policy Owner may decrease the Specified
Amount to no less than $1000. If a decrease in the Specified

EXECUTIVE SELECT
20
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Amount makes the Policy not comply with the maximum premium limits required by
federal tax law, the decrease may be limited or the Accumulation Value may be
returned to you, at your election, to the extent necessary to meet the
requirements. (See the section on Premiums.) The Administrative Expense Charge
will include a monthly charge per $1000 of increase in Specified Amount for ten
years from the date of the increase.

Increases in the Specified Amount will be allowed after the first Policy
Year. For an increase in the Specified Amount, you must submit a written
supplemental application. ANLIC may also require additional evidence of
insurability. Although an increase need not necessarily be accompanied by an
additional premium, in certain cases an additional premium will be required to
put the requested increase in effect. (See the section on Premiums upon
Increases in Specified Amount.) The minimum amount of any increase is $25,000.
Generally an increase cannot be made if the Insured's Attained Age is over the
maximum age for the Insured's risk class. The increase may be subject to
guaranteed issue guidelines, if applicable.

In states which require Cost of Insurance charges to cease at a stated
Attained Age, the Specified Amount will decrease to $1000 when that age is
reached.

METHODS OF AFFECTING INSURANCE PROTECTION
You may increase or decrease the pure insurance protection provided by a
Policy -- the difference between the Death Benefit and the Accumulation
Value -- in several ways as your insurance needs change. These ways include
increasing or decreasing the Specified Amount of insurance, changing the level
of premium payments, and making a partial withdrawal of the Policy's
Accumulation Value. Certain of these changes may have federal tax consequences.
The consequences of each of these methods will depend upon the individual
circumstances.

DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value.
The Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the Monthly Deduction. (See the section on Charges from
Accumulation Value.) However, when the Net Cash Surrender Value is insufficient
to pay the Monthly Deduction and the Grace Period expires without an adequate
payment by the Policy Owner, the Policy will lapse and terminate without value.
(See the section on Policy Lapse and Reinstatement.)

ACCUMULATION VALUE
The Accumulation Value will reflect the investment performance of the
chosen Investment Options, the Net Premiums paid, any partial withdrawals, and
the charges assessed in connection with the Policy. You may Surrender the Policy
at any time and receive the Policy's Net Cash Surrender Value. (See the section
on Surrenders.) There is no guaranteed minimum Accumulation Value.

Accumulation Value is determined on each Valuation Date. On the Issue Date,
the Accumulation Value will equal the portion of any Net Premium allocated to
the Investment Options, reduced by the portion of the first Monthly Deduction
allocated to the Investment Options. (See the section on Allocation of Premiums
and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation
Value of the Policy will equal:

(1) The aggregate values belonging to the Policy in each of the Subaccounts
on the Valuation Date, determined by multiplying each Subaccount's unit
value by the number of Subaccount units you have allocated to the
Policy; plus

(2) The value of allocations to the Fixed Account; plus

(3) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus

(4) Any Net Premiums received on that Valuation Date; minus

(5) Any partial withdrawal, and its charge, made on that Valuation Date;
minus

(6) Any Monthly Deduction to be made on that Valuation Date.

EXECUTIVE SELECT
21
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In computing the Policy's Accumulation Value on the Valuation Date, the
number of Subaccount units allocated to the Policy is determined after any
transfers among Investment Options (and deduction of transfer charges), but
before any other Policy transactions, such as receipt of Net Premiums and
partial withdrawals. Because the Accumulation Value depends on a number of
variables, a Policy's Accumulation Value cannot be predetermined.

THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount is calculated
by:

(1) Multiplying the net asset value per share of each Fund portfolio on the
Valuation Date times the number of shares held by that Subaccount,
before the purchase or redemption of any shares on that Valuation Date;
minus

(2) A charge not exceeding an annual rate of 0.95% (years 1-15) or 0.50%
(years 16+) for mortality and expense risk; minus

(3) A charge not exceeding an annual rate of 0.15% for administrative
service expenses; minus

(4) Any taxes payable by Separate Account I; and

(5) Dividing the result by the total number of units held in the Subaccount
on the Valuation Date, before the purchase or redemption of any units
on that Valuation Date.

(See the section on Daily Charges Against the Separate Account I.)

VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which
the New York Stock Exchange ("NYSE") is open for trading. The net asset value
for each Fund portfolio is determined as of the close of regular trading on the
NYSE. The net investment return for each Subaccount and all transactions and
calculations with respect to the Policies as of any Valuation Date are
determined as of that time. A Valuation Period is the period between two
successive Valuation Dates, commencing at the close of the NYSE on each
Valuation Date and ending at the close of the NYSE on the next succeeding
Valuation Date.

PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven
days after ANLIC receives Satisfactory Proof of Death. Payments may be postponed
in certain circumstances. (See the section on Postponement of Payments.) The
Policy Owner may decide the form in which Death Benefit Proceeds will be paid.
During the Insured's lifetime, the Policy Owner may arrange for the Death
Benefit Proceeds to be paid in a lump sum or under one or more of the optional
methods of payment described below. Changes must be in writing and will revoke
all prior elections. If no election is made, ANLIC will pay Death Benefit
Proceeds or the Accumulation Value Benefit in a lump sum. When Death Benefit
Proceeds are payable in a lump sum and no election for an optional method of
payment is in force at the death of the Insured, the Beneficiary may select one
or more of the optional methods of payment. Further, if the Policy is assigned,
any amounts due to the assignee will first be paid in one sum. The balance, if
any, may be applied under any payment option. Once payments have begun, the
payment option may not be changed. (Also see the section on Surrenders.)

PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS. The minimum amount of each
payment is $100. If a payment would be less than $100, ANLIC has the right to
make payments less often so that the amount of each payment is at least $100.
Once a payment option is in effect, Death Benefit Proceeds will be transferred
to ANLIC's General Account. ANLIC may make other payment options available in
the future. For additional information concerning these options, see the Policy
itself. The following payment options are currently available:

INTEREST PAYMENT OPTION. ANLIC will hold any amount applied under this
option. Interest on the unpaid balance will be paid or credited each month
at a rate determined by ANLIC.

FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed
amount. Payments continue until the amount ANLIC holds runs out.

FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period
selected up to 20 years.

EXECUTIVE SELECT
22
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If the beneficiary is a natural person, the following payment options are
also currently available:

LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life of a
named person. Payments will continue for the lifetime of that person.
Variations provide for guaranteed payments for a period of time.

JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
lives of two named persons. While both are living, one payment will be made
each month. When one dies, the same payment will continue for the lifetime
of the other.

As an alternative to the above payment options, Death Benefits Proceeds may
be paid in any other manner approved by ANLIC. Further, one of ANLIC's
affiliates may make payments under the above payment options. If an affiliate
makes the payment, it will do so according to the request of the Policy Owner,
using the rules set out above.

POLICY RIGHTS

LOAN BENEFITS

LOAN PRIVILEGES. The Policy Owner may borrow an amount up to the current
Net Cash Surrender Value less twelve times the most recent Monthly Deduction, at
regular or reduced loan rates (described below). Loans usually are funded within
seven days after receipt of a written request. The loan may be repaid at any
time while the Insured is living. Policy Owners in certain states may borrow
100% of the Net Cash Surrender Value after deducting Monthly Deductions and any
interest on Policy loans that will be due for the remainder of the Policy Year.
Loans may have tax consequences. (See the section on Federal Tax Matters).

LOAN INTEREST. ANLIC charges interest to Policy Owners at regular and
reduced rates. Regular loans will accrue interest on a daily basis at a rate of
up to 6% per year; currently the interest rate on regular Policy loans is 5.5%.
Each year after the tenth Policy Anniversary Date, the Policy Owner may borrow a
limited amount of the Net Cash Surrender Value at a reduced interest rate. For
those loans, interest will accrue on a daily basis at a rate of up to 4% per
year; the current reduced loan rate is 3.5%. The amount available at the reduced
loan rate is:

(1) The Accumulation Value, minus

(2) Total premiums paid minus any partial withdrawals previously taken,
minus

(3) Any Outstanding Policy Debt held at a reduced loan rate.

However, this amount may not exceed the maximum loan amount described above.
(See the section on Loan Privileges.) If unpaid when due, interest will be added
to the amount of the loan and bear interest at the same rate. The Policy Owner
earns 3.5% interest on the Accumulation Values held in the General Account
securing the loans.

EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to
the amount of the loan will be transferred from the Investment Options to the
General Account as security for the loan. The Accumulation Value transferred
will be allocated from the Investment Options according to the instructions you
give when you request the loan. The minimum amount which can remain in a
Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options. In any Policy Year that
loan interest is not paid when due, ANLIC will add the interest due to the
principal amount of the Policy loan on the next Policy Anniversary. This loan
interest due will be transferred from the Investment Options as set out above.
No charge will be made for these transfers. A Policy loan will permanently
affect the Accumulation Value and may permanently affect the amount of the Death
Benefits, even if the loan is repaid.

Interest earned on amounts held in the General Account will be allocated to
the Investment Options on each Policy Anniversary in the same proportion that
Net Premiums are being allocated to those Investment Options at the time. Upon
repayment of loan amounts, the portion of the repayment allocated

EXECUTIVE SELECT
23
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in accordance with the repayment of loan provision (see below) will be
transferred to increase the Accumulation Value in that Investment Option.

OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of
all Policy loans and accrued interest on Policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value less any Accrued Expense Charges, the Policy
Owner must pay the excess. ANLIC will send a notice of the amount which must be
paid. If you do not make the required payment within the 61 days after ANLIC
sends the notice, the Policy will terminate without value ("lapse".) Should the
Policy lapse while Policy loans are outstanding, the portion of the loans
attributable to earnings will become taxable. You may lower the risk of a Policy
lapsing while loans are outstanding as a result of a reduction in the market
value of investments in the Subaccounts by investing in a diversified group of
lower risk investment portfolios and/or transferring the funds to the Fixed
Account and receiving a guaranteed rate of return. Should you experience a
substantial reduction, you may need to lower anticipated withdrawals and loans,
repay loans, make additional premium payments, or take other action to avoid
Policy lapse. A lapsed Policy may later be reinstated. (See the section on
Policy Lapse and Reinstatement.)

REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is
outstanding are treated as repayment of the debt only if the Policy Owner so
requests. As a loan is repaid, the Accumulation Value in the General Account
securing the repaid loan will be allocated among the Subaccounts and the Fixed
Account in the same proportion that Net Premiums are being allocated at the time
of repayment.

SURRENDERS
At any time during the lifetime of the Insured, the Policy Owner may
withdraw a portion of the Accumulation Value or Surrender the Policy by sending
a written request to ANLIC. The amount available for Surrender is the Net Cash
Surrender Value at the end of the Valuation Period when the Surrender request is
received at ANLIC's Administrative Office. Surrenders will generally be paid
within seven days of receipt of the written request. (See the section on
Postponement of Payments.) Surrenders may have tax consequences. Once a Policy
is Surrendered, it may not be reinstated. (See the section on Tax Treatment of
Policy Proceeds.)

If the Policy is being Surrendered in its entirety, the Policy itself must
be returned to ANLIC along with the request. ANLIC will pay the Net Cash
Surrender Value. Coverage under the Policy will terminate as of the date of a
total Surrender. A Policy Owner may elect to have the amount paid in a lump sum
or under a payment option. (See the section on Payment Options.)

If you surrender the Policy in the first two Policy Years, we will refund a
portion of the Percent of Premium Charge deducted in the first Policy Year. The
applicable portion is 100% in the first Policy Year and 50% in the second Policy
Year.

PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may
not be less than $500. After a partial withdrawal, the Net Cash Surrender Value,
not including any percent of premium refund, must be at least $1,000 or an
amount sufficient to maintain the Policy in force for the remainder of the
Policy Year.

The amount paid will be deducted from the Investment Options according to
your instructions when you request the withdrawal. However, the minimum amount
remaining in a Subaccount as a result of the allocation is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options.

The Death Benefit will be reduced by the amount of any partial withdrawal
and may affect the way the Cost of Insurance is calculated and the amount of
pure insurance protection under the Policy. (See the sections on Monthly
Deduction -- Cost of Insurance and Death Benefit Options -- Methods of Affecting
Insurance Protection.) If Death Benefit option B is in effect, the Specified
Amount will not change, but the Accumulation Value will be reduced.

EXECUTIVE SELECT
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A fee which does not exceed the lesser of $50 or 2% of the amount withdrawn
is deducted from the Accumulation Value. Currently, the charge is the lesser of
$25 or 2% of the amount withdrawn. (See the section on Partial Withdrawal
Charge.)

TRANSFERS

Accumulation Value may be transferred among the Subaccounts of Separate
Account I and to the Fixed Account as often as desired. However, you may make
only one transfer out of the Fixed Account per Policy Year. We may limit the
transfer period to the 30 day period following the Policy Anniversary Date. The
transfers may be ordered in person, by mail, by telephone or, when available,
through our website. The total amount transferred each time must be at least
$250, or the balance of the Subaccount, if less. The minimum amount that may
remain in a Subaccount or the Fixed Account after a transfer is $100. The first
15 transfers per Policy Year will be permitted free of charge. After that, a
transfer charge of $10 may be imposed each additional time amounts are
transferred. Currently, no charge is imposed for additional transfers. This
charge will be deducted pro rata from each Subaccount (and, if applicable, the
Fixed Account) in which the Policy Owner is invested. (See the section on
Transfer Charge.)

Additional restrictions on transfers may be imposed at the Fund level.
Specifically, Fund managers may have the right to refuse sales, or suspend or
terminate the offering of portfolio shares, if they determine that such action
is necessary in the best interests of the portfolio's shareholders. If a Fund
manager refuses a transfer for any reason, the transfer will not be allowed.
ANLIC will not be able to process the transfer if the Fund manager refuses.

Transfers resulting from Policy loans will not be subject to a transfer
charge and will not be counted towards the guaranteed 15 free transfers per
Policy Year. ANLIC may at any time revoke or modify the transfer privilege,
including the minimum amount transferable.

Transfers out of the Fixed Account, unless part of the dollar cost
averaging systematic program described below, are limited to one per Policy
Year. Transfers out of the Fixed Account are limited to the greater of (1) 25%
of the Fixed Account attributable to the Policy; (2) the largest transfer made
by the Policy Owner out of the Fixed Account during the last 13 months; or (3)
$1,000. This provision is not available while dollar cost averaging from the
Fixed Account.

The privilege to initiate transactions by telephone or through our website,
when available, will be made available to Policy Owners automatically. The
registered representative designated on the application will have the authority
to initiate telephone transfers. ANLIC will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and if it does
not, ANLIC may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures ANLIC follows for transactions initiated by
telephone include, but are not limited to, requiring the Policy Owner to provide
the Policy number at the time of giving transfer instructions; ANLIC's tape
recording of all telephone transfer instructions; and ANLIC providing written
confirmation of telephone transactions.

When available procedures for making transfers through our website can be
accessed at the Internet address stated in the Acacia National Life Insurance
Company section of this prospectus.

SYSTEMATIC PROGRAMS
ANLIC may offer systematic programs as discussed below. These programs will
be subject to administrative guidelines ANLIC may establish from time to time.
We will count your transfers in these programs when determining whether any
transfer fee applies. Lower minimum amounts may be allowed to transfer as part
of a systematic program. No other separate fee is assessed when one of these
options is chosen. All other normal transfer restrictions, as described above,
also apply.

You can request participation in the available programs when purchasing the
Policy or at a later date. You can change the allocation percentage or
discontinue any program by sending written notice or calling the Administrative
Office. Other scheduled programs may be made available. ANLIC reserves the right
to modify, suspend or terminate such programs at any time. Participation in any
systematic program will automatically terminate upon death of the Insured. Use
of systematic programs may not be advantageous, and does not guarantee success.

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PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can
instruct ANLIC to reallocate the Accumulation Value among the Subaccounts (but
not the Fixed Account) on a systematic basis according to your specified
allocation instructions.

DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can
instruct ANLIC to automatically transfer, on a systematic basis, a predetermined
amount or specified percentage from the Fixed Account or the Money Market
Subaccount to any other Subaccount(s). Dollar cost averaging is permitted from
the Fixed Account if each monthly transfer is no more than 1/36th of the value
of the Fixed Account at the time dollar cost averaging is established.

EARNINGS SWEEP. This program permits systematic redistribution of earnings
among Investment Options.

For more information on asset allocation programs, see Appendix B.

FREE-LOOK PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10
days after ANLIC delivers a notice of your right of cancellation, or within 45
days of completing Part I of the application, whichever is later. When allowed
by state law, the amount of the refund is the Net Premiums allocated to the
Investment Options, adjusted by investment gains and losses, plus the sum of all
charges deducted from premiums paid. Otherwise, the amount of the refund will
equal the gross premiums paid. To cancel the Policy, you should mail or deliver
it to the selling agent, or to ANLIC at its Administrative Office. A refund of
premiums paid by check may be delayed until the check has cleared your bank.
(See the section on Postponement of Payments.)

PAYMENT AND ALLOCATION OF PREMIUMS

ISSUANCE OF A POLICY

Individuals wishing to purchase a Policy must complete an application and
submit it to ANLIC's Administrative Office (5900 "O" Street, P.O. Box 82550,
Lincoln, Nebraska 68501). With guaranteed or simplified underwriting, a Policy
will be issued to individuals ages 18 to 65 on their nearest birthday. With
regular underwriting, a Policy will generally be issued only to individuals age
18 to 85 on their nearest birthday who supply satisfactory evidence of
insurability to ANLIC. Preferred class regular issue Policies are available only
for ages 18 to 75. Acceptance of a regular underwriting application is subject
to ANLIC's underwriting rules, and ANLIC reserves the right to reject an
application for any reason.

The Policy Date is the effective date for all coverage in the original
application. The Policy Date is used to determine Policy Anniversary Dates,
Policy Years and Policy Months. The Issue Date is the date that all financial,
contractual and administrative requirements have been met and processed for the
Policy. The Policy Date and the Issue Date will be the same unless: (1) an
earlier Policy Date is specifically requested, or (2) additional premiums or
application amendments are needed. When there are additional requirements before
issue (see below) the Policy Date will be the date the Policy is sent for
delivery and the Issue Date will be the date the requirements are met.

When all required premiums and application amendments have been received by
ANLIC in its Administrative Office, the Issue Date will be the date the Policy
is mailed to you or sent to the agent for delivery to you. When application
amendments or additional premiums need to be obtained upon delivery of the
Policy, the Issue Date will be when the Policy receipt and federal funds (monies
of member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received and available to ANLIC, and the application
amendments are received and reviewed in ANLIC's Administrative Office. The
initial Net Premium will be allocated on the Issue Date to the Subaccounts
and/or the Fixed Account according to the selections made in the application.
When state or other applicable law or regulation requires return of at least the
premium payments if you return the Policy under the free-look privilege, the
initial Net Premium will be allocated to the Money Market Subaccount. Then,
thirteen days after the Issue Date, the Accumulation Value of the Policy will be
allocated among the Subaccounts and/or Fixed Account according to the
instructions in the application.

Subject to approval, a Policy may be backdated, but the Policy Date may not
be more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue

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Age results in lower Cost of Insurance Rates. If a Policy is backdated, the
minimum initial premium required will include sufficient premium to cover the
backdating period. Monthly deductions will be made for the period the Policy
Date is backdated.

Conditional receipt coverage may be available prior to the Policy Date,
provided that certain conditions are met, upon the completion of an application
and the payment of the required premium at the time of the application. The
maximum total amount of insurance which will be payable pursuant to all
conditional receipts received by the applicant as a result of pending
applications with ANLIC and its affiliates is limited to the smaller of:

(1) The total amount of insurance applied for with ANLIC and its
affiliates; or

(2) $250,000 minus the total amount of insurance in force with ANLIC and
its affiliates, but not less than zero.

As used above, total amount of insurance includes any amounts payable under
any Accidental Death Benefit provision.

PREMIUMS
No insurance will take effect before the minimum initial premium payment is
received by ANLIC in federal funds. Subsequent premiums are payable at ANLIC's
Administrative Office. A Policy Owner has flexibility in determining the
frequency and amount of premiums. However, unless you have paid sufficient
premiums to pay the Monthly Deduction and Percent of Premium Charge, the Policy
may have a zero Net Cash Surrender Value and lapse. (See the section on Policy
Benefits, Purposes of the Policy.)

PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may
determine a Planned Periodic Premium schedule that provides for the payment of
level premiums at selected intervals. You are not required to pay premiums
according to this schedule. You have considerable flexibility to alter the
amount and frequency of premiums paid. ANLIC reserves the right to limit the
number and amount of additional or unscheduled premium payments.

You may also change the frequency and amount of Planned Periodic Premiums
by sending a written request to the Administrative Office, although ANLIC
reserves the right to limit any increase. Premium payment notices will be sent
annually, semi-annually or quarterly, depending upon the frequency of the
Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not
guarantee that the Policy remains in force. Instead, the duration of the Policy
depends upon the Policy's Net Cash Surrender Value. (See the section on Duration
of the Policy.) Even if Planned Periodic Premiums are paid, the Policy will
lapse any time the Net Cash Surrender Value is insufficient to pay the Monthly
Deduction, and the Grace Period expires without a sufficient payment. (See the
section on Policy Lapse and Reinstatement.)

PREMIUM LIMITS. ANLIC's current minimum premium limit is $45, $15 if paid
by automatic bank draft. ANLIC currently has no maximum premium limit, other
than the current maximum premium limits established by federal tax laws. ANLIC
reserves the right to change any premium limit. In no event may the total of all
premiums paid, both planned and unscheduled, exceed the current maximum premium
limits established by federal tax laws. (See the section on Tax Status of the
Policy.)

If at any time a premium is paid which would result in total premiums
exceeding the current maximum premium limits, ANLIC will accept only that
portion of the premium which will make total premiums equal the maximum. Any
part of the premium in excess of that amount will be returned or applied as
otherwise agreed and no further premiums will be accepted until allowed by the
current maximum premium limits allowed by law. ANLIC may require additional
evidence of insurability if any premium payment would result in an increase in
the Policy's net amount at risk on the date the premium is received.

PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the
Accumulation Value of the Policy at the time of an increase in the Specified
Amount of the Policy and the amount of the increase requested by the Policy
Owner, an additional premium payment may be required. ANLIC will notify you of
any premium required to fund the increase, which premium must be made in a
single payment. The

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Accumulation Value of the Policy will be immediately increased by the amount of
the payment, less the applicable Percent of Premium Charge.

ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policy
Owner allocates Net Premiums to one or more Subaccounts and/or to the Fixed
Account. Allocations must be whole number percentages and must total 100%. The
allocation of future Net Premiums may be changed without charge by providing
proper notification to the Administrative Office. If there is any Outstanding
Policy Debt at the time of a payment, ANLIC will treat the payment as a premium
payment unless you instruct otherwise by proper written notice.

The initial Net Premium will be allocated on the Issue Date to the
Subaccounts and/or the Fixed Account according to the selections made in the
application. When state or other applicable law or regulation requires return of
at least the premium payments if you return the Policy under the free-look
privilege, the initial Net Premium will be allocated to the Money Market
Subaccount. Then, thirteen days after the Issue Date, the Accumulation Value of
the Policy will be allocated among the Subaccounts and/or Fixed Account
according to the instructions in the application. Premium payments received by
ANLIC prior to the Issue Date are held in the General Account until the Issue
Date and are credited with interest at a rate determined by ANLIC for the period
from the date the payment has been converted into federal funds and is available
to ANLIC. In no event will interest be credited prior to the Policy Date.

The Accumulation Value of the Subaccounts will vary with the investment
performance of these Subaccounts and you, as the Policy Owner, will bear the
entire investment risk. This will affect the Policy's Accumulation Value, and
may affect the Death Benefit as well. You should periodically review your
allocations of premiums and values in light of market conditions and overall
financial planning requirements.

POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period expires without a sufficient payment. The
Grace Period is 61 days from the date ANLIC mails a notice that the Grace Period
has begun. ANLIC will notify you at the beginning of the Grace Period by mail
addressed to your last known address on file with ANLIC.

The notice will specify the premium required to keep the Policy in force.
The required premium will equal the amount necessary to cover the Monthly
Deductions and Percent of Premium Charges for the three Policy Months after
commencement of the Grace Period. Failure to pay the required premium within the
Grace Period will result in lapse of the Policy. If the Insured dies during the
Grace Period, any overdue Monthly Deductions and Outstanding Policy Debt will be
deducted from the Death Benefit Proceeds. (See the section on Charges and
Deductions.)

REINSTATEMENT. A lapsed Policy may be reinstated any time within three
years (five years in Missouri) after the beginning of the Grace Period. We will
reinstate the Policy based on the Insured's risk class at the time of the
reinstatement.

Reinstatement is subject to the following:

(1) Evidence of insurability of the Insured satisfactory to ANLIC
(including evidence of insurability of any person covered by a rider to
reinstate the rider);

(2) Any Outstanding Policy Debt on the date of lapse will be reinstated
with interest due and accrued;

(3) The Policy cannot be reinstated if it has been Surrendered for its full
Net Cash Surrender Value;

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(4) The minimum premium required at reinstatement is the greater of:

(a) the amount necessary to raise the Net Cash Surrender Value as of the
date of reinstatement to equal to or greater than zero; or

(b) three times the current Monthly Deduction.

The amount of Accumulation Value on the date of reinstatement will equal:

(1) The amount of the Net Cash Surrender Value on the date of lapse,
increased by

(2) The premium paid at reinstatement, less

(3) The Percent of Premium Charge.

If any Outstanding Policy Debt is reinstated, that debt will be held in
ANLIC's General Account. Accumulation Value calculations will then proceed as
described under the section on Accumulation Value.

The effective date of reinstatement will be the first Monthly Activity Date
on or next following the date of approval by ANLIC of the application for
reinstatement.

CHARGES AND DEDUCTIONS

Charges will be deducted in connection with the Policy to compensate ANLIC
for: (1) providing the insurance benefits set forth in the Policy and any
optional insurance benefits added by rider; (2) administering the Policy and
payment of applicable taxes; (3) assuming certain risks in connection with the
Policy; and (4) incurring expenses in distributing the Policy. The nature and
amount of these charges are described more fully below. The charges are
determined by us according to our expectations of future experience for
mortality, lapse, interest and expenses. If our expectations of future
experience for mortality, lapse, interest and expenses change, we may increase
or decrease charges where permitted by the Policy, but we will never charge more
than the maximum amount specified in the Policy. Any change in the charges will
apply to all Insureds of the same age, gender, and risk class and whose Policies
have been in effect for the same length of time.

DEDUCTIONS FROM PREMIUM PAYMENTS
PERCENT OF PREMIUM CHARGE. A deduction of up to 5.0% of the premium is made
from each premium payment; currently the charge is 3.0%. The deduction is
intended to partially offset the premium taxes imposed by the states and their
subdivisions, and to help defray the tax cost due to capitalizing certain Policy
acquisition expenses as required under applicable federal tax laws. (See the
section on Federal Tax Matters.) ANLIC does not expect to derive a profit from
the Percent of Premium Charge. If you Surrender the Policy in the first two
Policy Years, we will refund a portion of the Percent of Premium Charge deducted
in the first Policy Year. The applicable portion is 100% in the first Policy
Year and 50% in the second Policy Year.

CHARGES FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on
each Monthly Activity Date thereafter from the Accumulation Value of the Policy
to compensate ANLIC for administrative expenses and insurance provided. These
charges will be allocated from the Investment Options in accordance with your
instructions. If no instructions are given the charges will be allocated
pro-rata among the Investment Options. Each of these charges is described in
more detail below.

ADMINISTRATIVE EXPENSE CHARGE. To compensate ANLIC for the ordinary
administrative expenses expected to be incurred in connection with a Policy, we
deduct an Administrative Expense Charge based on the Specified Amount and the
Policy duration. Currently, the per Policy charge is $15 per month in the first
Policy Year and $7 per month thereafter. The per Policy portion of the
Administrative Expense Charge is levied throughout the life of the Policy and is
guaranteed not to increase above $15 per month in the first Policy Year and $12
per month thereafter. During the first ten Policy Years (or for the life of the
Policy where required by state law), there is a monthly charge per $1000 of
initial Specified Amount. In addition, there is a monthly charge per $1000 of
each increase in Specified Amount for ten years from the date of increase (or
life of the Policy, where required). The per $1000 rates for both the initial

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Specified Amount and each increase vary by Issue Age, gender, and risk class.
The current charge per $1000 is the same as the maximum charge. (See the Policy
Schedule for rates.)

COST OF INSURANCE. Because the Cost of Insurance depends upon several
variables, the cost for each Policy Month can vary from month to month. ANLIC
will determine the monthly Cost of Insurance by multiplying the applicable Cost
of Insurance Rate by the Net Amount at Risk for each Policy Month. The net
amount at risk on any Monthly Activity Date is based on the amount by which the
Death Benefit which would have been payable on that Monthly Activity Date
exceeds the Accumulation Value on that date.

COST OF INSURANCE RATE. The Annual Cost of Insurance Rates are based on the
Insured's gender, Issue Age, Policy duration and risk class. The rates will vary
depending upon tobacco use and other risk factors. For the initial Specified
Amount, the Cost of Insurance Rates will not exceed those shown in the Schedule
of Guaranteed Annual Cost of Insurance Rates shown in the schedule pages of the
Policy. These guaranteed rates are based on the Insured's Attained Age and are
equal to the 1980 Insurance Commissioners Standard Ordinary Male and Female
Mortality Tables without smoker distinction. The maximum rates for the
table-rated substandard Insureds are based on a multiple (shown in the schedule
pages of the Policy) of the above rates. We may add flat extra ratings to an
Insured to reflect higher mortality risk. Any change in the Cost of Insurance
Rates will apply to all Insureds of the same age, gender, risk class and whose
Policies have been in effect for the same length of time.

The Cost of Insurance Rates, Policy charges, and payment options for
Policies issued in Montana, and perhaps other states or in connection with
certain employee benefit arrangements, are issued on a gender-neutral (unisex)
basis. The unisex rates will be higher than those applicable to females and
lower than those applicable to males.

If the rating class for any increase in the Specified Amount is not the
same as the rating class at issue, the Cost of Insurance Rate used after such
increase will be a composite rate based upon a weighted average of the rates of
the different rating classes. Decreases may be reflected in the Cost of
Insurance Rate, as discussed earlier.

The actual charges made during the Policy year will be shown in the annual
report delivered to Policy Owners.

RATING CLASS. The rating class of the Insured will affect the Cost of
Insurance Rate. ANLIC currently places Insureds into both standard rating
classes and substandard rating classes that involve a higher mortality risk. In
an otherwise identical Policy, Insureds in the standard rating class will have a
lower Cost of Insurance Rate than Insureds in a rating class with higher
mortality risks.

TRANSFER CHARGE. Currently there is no charge for transfers among the
Investment Options in excess of 15 per Policy Year. A charge of $10 (guaranteed
not to increase) for each transfer in excess of 15 may be imposed to compensate
ANLIC for the costs of processing the transfer. Since the charge reimburses
ANLIC only for the cost of processing the transfer, ANLIC does not expect to
make any profit from the transfer charge. This charge will be deducted pro rata
from each Subaccount (and, if applicable, the Fixed Account) in which the Policy
Owner is invested. The transfer charge will not be imposed on transfers that
occur as a result of Policy loans or the exercise of exchange rights.

PARTIAL WITHDRAWAL CHARGE. A charge will be imposed for each partial
withdrawal. This charge will compensate ANLIC for the administrative costs of
processing the requested payment and in making necessary calculations for any
reductions in Specified Amount which may be required because of the partial
withdrawal. This charge is currently the lesser of $25 or 2% of the amount
withdrawn (guaranteed not to be greater than the lesser of $50 or 2% of the
amount withdrawn). A partial withdrawal charge is not assessed when a Policy is
Surrendered.

DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value
of the net assets of Separate Account I to compensate ANLIC for mortality and
expense risks assumed in connection with the Policy. This daily charge from
Separate Account I is currently at the rate of 0.002050% (equivalent to an
annual rate of 0.75%) for Policy Years 1-15 and will not exceed 0.95% annually.
After the fifteenth Policy

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Year the daily charge will be applied at the rate of 0.000820% (equivalent to an
annual rate of 0.30%) and will not exceed 0.50% annually. The daily charge will
be deducted from the net asset value of Separate Account I, and therefore the
Subaccounts, on each Valuation Date. Where the previous day or days was not a
Valuation Date, the deduction on the Valuation Date will be the applicable daily
rate multiplied by the number of days since the last Valuation Date. No
Mortality and Expense Risk Charges will be deducted from the amounts in the
Fixed Account.

ANLIC believes that this level of charge is within the range of industry
practice for comparable flexible premium variable universal life policies. The
mortality risk assumed by ANLIC is that Insureds may live for a shorter time
than calculated, and that the aggregate amount of Death Benefits paid will be
greater than initially estimated. The expense risk assumed is that expenses
incurred in issuing and administering the Policies will exceed the
administrative charges provided in the Policies.

An Asset-Based Administrative Expense Charge will also be deducted from the
value of the net assets of Separate Account I on a daily basis. This charge is
applied at a rate of 0.000409% (equivalent to 0.15% annually). The rate of this
charge will never exceed 0.15% annually. No Asset-Based Administrative Expense
Charge will be deducted from the amounts in the Fixed Account.

Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various Subaccounts
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account. (See the Summary section for the Fund Expense Summary.)

GENERAL PROVISIONS

THE CONTRACT. The Policy, the application, any supplemental applications,
and any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by ANLIC. No agent has
the authority to alter or modify any of the terms, conditions or agreements of
the Policy or to waive any of its provisions. The rights and benefits under the
Policy are summarized in this prospectus; however prospectus disclosure
regarding the Policy is qualified in its entirety by the Policy itself, a copy
of which is available upon request from ANLIC.

CONTROL OF POLICY. The Policy Owner is as shown in the application or
subsequent written endorsement. Subject to the rights of any irrevocable
Beneficiary and any assignee of record, all rights, options, and privileges
belong to the Policy Owner. If the Policy Owner is a natural person, upon the
death of the Policy Owner, all rights, options, and privileges pass to any
successor-owner or owners, if living; otherwise to the estate of the last Policy
Owner to die.

BENEFICIARY. Policy Owners may name both primary and contingent
Beneficiaries in the application. Payments will be shared equally among
Beneficiaries of the same class unless otherwise stated. If a Beneficiary dies
before the Insured, payments will be made to any surviving Beneficiaries of the
same class; otherwise to any Beneficiaries of the next class; otherwise to the
Policy Owner; otherwise to the estate of the Policy Owner, if a natural person.

CHANGE OF BENEFICIARY. The Policy Owner may change the Beneficiary by
written request at any time during the Insured's lifetime unless otherwise
provided in the previous designation of Beneficiary. The change will take effect
as of the date the change is recorded at the Administrative Office. ANLIC will
not be liable for any payment made or action taken before the change is
recorded.

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CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy Owner
of the Policy or assign Policy rights, an assignment of the Policy must be made
in writing and filed with ANLIC at its Administrative Office. Any such
assignment is subject to Outstanding Policy Debt. The change will take effect as
of the date the change is recorded at the Administrative Office, and ANLIC will
not be liable for any payment made or action taken before the change is
recorded. Payment of Death Benefit Proceeds is subject to the rights of any
assignee of record. A collateral assignment is not a change of ownership.

PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any
debt to ANLIC and then to the interest of any assignee of record. The balance of
any Death Benefit Proceeds shall be paid in one sum to the designated
Beneficiary unless an Optional Method of Payment is selected. If no Beneficiary
survives the Insured, the Death Benefit Proceeds shall be paid in one sum to the
Policy Owner. If the Policy Owner is a natural person and is no longer living,
the Death Benefit Proceeds shall be paid to any successor-owner, if living;
otherwise to the Policy Owner's estate. Any proceeds payable upon Surrender
shall be paid in one sum unless an Optional Method of Payment is elected.

INCONTESTABILITY. ANLIC cannot contest the Policy or reinstated Policy
during the Insured's lifetime after it has been in force for two years from the
Policy Date (or reinstatement effective date). After the Policy Date, ANLIC
cannot contest an increase in the Specified Amount or addition of a rider during
the Insured's lifetime, after such increase or addition has been in force for
two years from its effective date. However, this two year provision shall not
apply to riders with their own contestability provision.

MISSTATEMENT OF AGE AND GENDER. If the age or gender of the Insured or any
person insured by rider has been misstated, the amount of the Death Benefit and
any added riders provided will be those that would be purchased by the most
recent deduction for the Cost of Insurance and the cost of any additional riders
at the Insured's correct age or gender. The Death Benefit Proceeds will be
adjusted correspondingly.

SUICIDE. The Policy does not cover suicide within two years of the Policy
Date unless otherwise provided by a state's Insurance law. If the Insured, while
sane or insane, commits suicide within two years after the Policy Date, ANLIC
will pay only the premiums received less any partial withdrawals, the cost for
riders and any outstanding Policy debt. If the Insured, while sane or insane,
commits suicide within two years after the effective date of any increase in the
Specified Amount, ANLIC's liability with respect to such increase will only be
its total Cost of Insurance applicable to the increase. The laws of Missouri
provide that death by suicide at any time is covered by the Policy, and further
that suicide by an insane person may be considered an accidental death.

POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, Policy loans, benefits payable at death, and transfers may be
postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed other
than customary weekend and holiday closings, or trading on the NYSE is
restricted as determined by the SEC; (2) the SEC by order permits postponement
for the protection of Policy Owners; (3) an emergency exists, as determined by
the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
Separate Account I's net assets; or (4) Surrenders, loans or partial withdrawals
from the Fixed Account may be deferred for up to 6 months from the date of
written request. Payments under the Policy of any amounts derived from premiums
paid by check may be delayed until such time as the check has cleared the Policy
Owner's bank.

REPORTS AND RECORDS. ANLIC will maintain all records relating to the
Separate Account I and will mail to the Policy Owner, at the last known address
of record, within 30 days after each Policy Anniversary, an annual report which
shows the current Accumulation Value, Net Cash Surrender Value, Death Benefit,
premiums paid, Outstanding Policy Debt and other information. Quarterly
statements are also mailed detailing Policy activity during the calendar
quarter. Instead of receiving an immediate confirmation of transactions made
pursuant to some types of periodic payment plan (such as a dollar cost averaging
program, or payment made by automatic bank draft or salary reduction
arrangement), the Policy Owner may receive confirmation of such transactions in
their quarterly statements. The Policy Owner should review the information in
these statements carefully. All errors or corrections must be reported to ANLIC
immediately to assure proper crediting to the Policy. ANLIC will assume all
transactions are accurately reported on quarterly statements unless ANLIC is
notified otherwise within 30 days after

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receipt of the statement. The Policy Owner will also be sent a periodic report
for the Funds and a list of the portfolio securities held in each portfolio of
the Funds.

ADDITIONAL INSURANCE BENEFITS (RIDERS.) Subject to certain requirements,
one or more of the following additional insurance benefits may be added to a
Policy by rider. All riders are not available in all states. The cost, if any,
of additional insurance benefits will be deducted as part of the Monthly
Deduction. (See the section on Charges From Accumulation Value -- Monthly
Deduction.)

TERM COVERAGE RIDER. You may increase the total coverage by adding a
term insurance rider, at issue, on the Insured person's life. The death
benefit provided by the rider adjusts over time.

If you purchase this rider, the total specified amount is the total of
the specified amount for the base Policy plus the specified amount for this
rider. We generally restrict the total specified amount at issue to an
amount not more than ten times the base Policy specified amount. For
example, if the base Policy specified amount is $100,000, then the maximum
total specified amount we allow is $1,000,000.

The death benefit for the term insurance rider is the difference
between the total death benefit and the base Policy death benefit. (See the
section on Death Benefit Options.) The total death benefit depends upon
which Death Benefit option is in effect. If Option A is in effect, the
total death benefit is the greater of (1) the total specified amount, or
(2) the Accumulation Value multiplied by the appropriate Death Benefit
percentage. If Option B is in effect, the total death benefit is the
greater of (1) the total specified amount plus the Accumulation Value, or
(2) the Accumulation Value multiplied by the appropriate Death Benefit
percentage.

Over time, it is possible that the base Policy Death Benefit could
grow and cause a corresponding reduction in the term rider death benefit.
If the base Policy Death Benefit becomes equal to the total death benefit,
the term rider death benefit drops to zero, but it will never be less than
zero. Even if the death benefit for the rider is reduced to zero, the rider
remains in effect until you remove it from the Policy. Therefore, if later
the base Policy death benefit is reduced below the total death benefit, the
rider death benefit reappears to maintain the total death benefit.

There is no defined premium for a given amount of term insurance
coverage. Instead, we deduct a monthly cost of insurance charge from the
Accumulation Value. The cost of insurance for this rider is calculated as
the monthly cost of insurance rate for the rider coverage multiplied by the
term death benefit in effect that month. The cost of insurance rates will
be determined by us from time to time. They will be based on the Insured's
gender, Issue Age, Policy duration ,and risk class. The monthly maximum
cost of insurance rates for this rider will be in the Policy.

Subject to certain limitations, after the first Policy Year you may
decrease the specified amount for this rider. The specified amount
remaining in force for this rider after any requested decrease may not be
less than $50,000. You may terminate all coverage under this rider at any
time after the first Policy Year. You may not increase the specified amount
of this rider nor add this rider to your Policy after issue. Coverage under
this rider is not convertible.

You may select only one of the following riders:

WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides
for the waiver of Monthly Deductions for the Policy and all riders while
the Insured is disabled.

TOTAL DISABILITY RIDER. This rider provides for the payment by ANLIC
of a disability benefit in the form of premiums while the Insured is
disabled. The benefit amount may be chosen by the Policy Owner at the issue
of the rider. In addition, while the Insured is totally disabled, the Cost
of Insurance for the rider will not be deducted from Accumulation Value.

DISTRIBUTION OF THE POLICIES

The principal underwriter for the Policies is The Advisors Group, Inc.
("TAG"), a second tier wholly owned subsidiary of Acacia Life Insurance Company
and an affiliate of ANLIC. TAG is registered as a

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broker-dealer with the SEC and is a member of the National Association of
Securities Dealers ("NASD"). ANLIC pays TAG for acting as the principal
underwriter under an Underwriting Agreement.

TAG offers its clients a wide variety of financial products and services
and has the ability to execute stock and bond transactions on a number of
national exchanges. TAG also serves as principal underwriter for ANLIC's
variable annuities and variable life contracts. It also has executed selling
agreements with a variety of mutual funds, issuers of unit investment trusts,
and direct participation programs.

The Policies are sold through Registered Representatives of TAG or other
broker-dealers which have entered into selling agreements with ANLIC or TAG.
These Registered Representatives are also licensed by state insurance officials
to sell ANLIC's variable life policies. Each of the broker-dealers with a
selling agreement is registered with the SEC and is a member of the NASD. In
1999, TAG received gross variable universal life compensation of $3,480,522 and
retained $7,200 in underwriting fees, and $0 in brokerage commissions on ANLIC's
variable universal life policies.

Under these selling agreements, ANLIC pays commission to the
broker-dealers, which in turn pay commissions to the registered representative
who sells this Policy. The commission may equal an amount up to 30% of premium
in the first Policy Year and up to 12% of premium in renewal years.
Broker-dealers may also receive a service fee up to an annualized rate of .50%
of the Accumulation Value beginning in the sixth Policy Year. Compensation
arrangements may vary among broker-dealers. In addition, ANLIC may also pay
override payments, expense allowances, bonuses, wholesaler fees, and training
allowances. Registered Representatives who meet certain production standards may
receive additional compensation. ANLIC may reduce or waive the sales charge
and/or other charges on any Policy sold to directors, officers or employees of
ANLIC or any of its affiliates, employees and registered representatives of any
broker dealer that has entered into a sales agreement with ANLIC or TAG and the
spouses or children of the above persons. In no event will any such reduction or
waiver be permitted where it would be unfairly discriminatory to any person.

ADMINISTRATION

ANLIC has contracted with Ameritas Life Insurance Corp. ("Ameritas"),
having its principal place of business at 5900 "O" Street, Lincoln, Nebraska
68501 for it to provide ANLIC with certain administrative services for the
flexible premium variable life policies. Ameritas is an affiliate of ANLIC and a
member of the Ameritas Acacia family of companies. Pursuant to the terms of a
Service Agreement, Ameritas will act as record keeping Service Agent for the
policies and riders for an initial term of three years and any subsequent
renewals thereof. Ameritas under the direction of ANLIC will perform
Administrative functions including issuance of policies for reinstatement, term
conversion, plan changes and guaranteed insurability options, generation of
billing and posting of premium, computation of valuations, calculation of
benefits payable, maintenance of administrative controls over all activities,
correspondence, and data, and providing management reports to ANLIC.

FEDERAL TAX MATTERS

The following discussion provides a general description of the federal
income tax considerations associated with the Policy and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
laws except premium taxes (See discussion in the section on Percent of Premium
Charge). This discussion is based upon ANLIC's understanding of the relevant
laws at the time of filing. Counsel and other competent tax advisors should be
consulted for more complete information before a Policy is purchased. ANLIC
makes no representation as to the likelihood of the continuation of present
federal income tax laws nor of the interpretations by the Internal Revenue
Service. Federal tax laws are subject to change and thus tax consequences to the
Insured, Policy Owner or Beneficiary may be altered.

(1) TAXATION OF ANLIC. ANLIC is taxed as a life insurance company under
Part I of Subchapter L of the Internal Revenue Code of 1986, (the
"Code"). At this time, since Separate Account I is not a separate
entity from ANLIC, and its operations form a part of ANLIC, it will not
be taxed separately as a "regulated investment company" under
Subchapter M of the Code. Net investment income and realized net
capital gains on the assets of Separate Account I are

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reinvested and automatically retained as a part of the reserves of the
Policy and are taken into account in determining the Death Benefit and
Accumulation Value of the Policy. ANLIC believes that Separate Account
I net investment income and realized net capital gains will not be
taxable to the extent that such income and gains are retained as
reserves under the Policy.

ANLIC does not currently expect to incur any federal income tax
liability attributable to Separate Account I with respect to the sale
of the Policies. Accordingly, no charge is being made currently to
Separate Account I for federal income taxes. If, however, ANLIC
determines that it may incur such taxes attributable to Separate
Account I, it may assess a charge for such taxes against Separate
Account I.

ANLIC may also incur state and local taxes (in addition to premium
taxes for which a deduction from premiums is currently made). At
present, they are not charges against Separate Account I. If there is a
material change in state or local tax laws, charges for such taxes
attributable to Separate Account I, if any, may be assessed against
Separate Account I.

(2) TAX STATUS OF THE POLICY. The Code (Section 7702) includes a definition
of a life insurance contract for federal tax purposes which places
limitations on the amount of premiums that may be paid for the Policy
and the relationship of the Accumulation Value to the Death Benefit.
ANLIC believes that the Policy meets the statutory definition of a life
insurance contract. If the Death Benefit of a Policy is changed, the
applicable defined limits may change. In the case of a decrease in the
Death Benefit, a partial withdrawal, a change in Death Benefit option,
or any other such change that reduces future benefits under the Policy
during the first 15 years after a Policy is issued and that results in
a cash distribution to the Policy Owners in order for the Policy to
continue complying with the Section 7702 defined limits on premiums and
Accumulation Values, such distributions may be taxable in whole or in
part as ordinary income to the Policy Owner (to the extent of any gain
in the Policy) as prescribed in Section 7702.

The Code (Section 7702A) also defines a "modified endowment
contract" for federal tax purposes. If a life insurance policy is
classified as a modified endowment contract, distributions from it
(including loans) are taxed as ordinary income to the extent of any
gain. This Policy will become a "modified endowment contract" if the
premiums paid into the Policy fail to meet a 7-pay premium test as
outlined in Section 7702A of the Code.

Certain benefits the Policy Owner may elect under this Policy may
be material changes affecting the 7-pay premium test. These include,
but are not limited to, changes in Death Benefits and changes in the
Specified Amount. Should the Policy become a "modified endowment
contract" partial withdrawals, full Surrenders, assignments, pledges,
and loans (including loans to pay loan interest) under the Policy will
be taxable to the extent of any gain under the Policy. A 10% penalty
tax also applies to the taxable portion of any distribution made prior
to the taxpayer's age 59 1/2. The 10% penalty tax does not apply if the
distribution is made because the taxpayer becomes disabled as defined
under the Code or if the distribution is paid out in the form of a life
annuity on the life of the taxpayer or the joint lives of the taxpayer
and Beneficiary. One may avoid a Policy becoming a modified endowment
contract by, among other things, not making excessive payments or
reducing benefits. Should you deposit excessive premiums during a
Policy Year, that portion that is returned by ANLIC within 60 days
after the Policy Anniversary Date will reduce the premiums paid to
avoid the Policy becoming a modified endowment contract. All modified
endowment policies issued by ANLIC to the same Policy Owner in any 12
month period are treated as one modified endowment contract for
purposes of determining taxable gain under Section 72(e) of the
Internal Revenue Code. Any life insurance policy received in exchange
for a modified endowment contract will also be treated as a modified
endowment contract. You should contact a competent tax professional
before paying additional premiums or making other changes to the Policy
to determine whether such payments or changes would cause the Policy to
become a modified endowment contract.

The Code (Section 817(h)) also authorizes the Secretary of the
Treasury (the "Treasury") to set standards by regulation or otherwise
for the investments of Separate Account I to be "adequately
diversified" in order for the Policy to be treated as a life insurance
contract for federal tax purposes. If the Policy is not treated as life
insurance because it fails the

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diversification requirements, the Policy Owner is then subject to
federal income tax on gain in the Policy as it is earned. Separate
Account I, through the Funds, intends to comply with the
diversification requirements prescribed by the Treasury in regulations
published in the Federal Register on March 2, 1989, which affect how
the Fund's assets may be invested.

While Calvert, an ANLIC affiliate, is the trust for certain of the
portfolios, ANLIC does not have control over any of the Funds or their
investments. However, ANLIC believes that the Funds will be operated in
compliance with the diversification requirements of the Internal
Revenue Code. Thus, ANLIC believes that the Policy will be treated as a
life insurance contract for federal tax purposes.

In connection with the issuance of regulations relating to the
diversification requirements, the Treasury announced that such
regulations do not provide guidance concerning the extent to which
policy owners may direct their investments to particular divisions of a
separate account. Regulations in this regard may be issued in the
future. It is not clear what these regulations will provide nor whether
they will be prospective only. It is possible that when regulations are
issued, the Policy may need to be modified to comply with such
regulations. For these reasons, ANLIC reserves the right to modify the
Policy as necessary to prevent the Policy Owner from being considered
the owner of the assets of Separate Account I or otherwise to qualify
the Policy for favorable tax treatment.

The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.

(3)TAX TREATMENT OF POLICY PROCEEDS. ANLIC believes that the Policy will be
treated in a manner consistent with a fixed benefit life insurance
policy for federal income tax purposes. Thus, ANLIC believes that the
Death Benefit will generally be excludable from the gross income of the
Beneficiary under Section 101(a)(1) of the Code and the Policy Owner
will not be deemed to be in constructive receipt of the Accumulation
Value under the Policy until its actual Surrender. However, in the event
of certain cash distributions under the Policy resulting from any change
which reduces future benefits under the Policy, the distribution may be
taxed in whole or in part as ordinary income (to the extent of gain in
the Policy.) See previous discussion on Tax Status of the Policy. In
addition, certain exceptions apply to the general rule that death
benefit proceeds are non-taxable. Federal, state, and local tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policy Owner and Beneficiary.

ANLIC also believes that loans received under a Policy will be
treated as debt of the Policy Owner and that no part of any loan under a
Policy will constitute income to the Policy Owner so long as the Policy
remains in force, unless the Policy becomes a "modified endowment
contract." See discussion of modified endowment contract distributions
in the section on Tax Status of the Policy. Should the Policy lapse
while Policy loans are outstanding the portion of the loans attributable
to earnings will become taxable. Generally, interest paid on any loan
under a Policy owned by an individual will not be tax-deductible.

Except for policies with respect to a limited number of key persons
of an employer (both as defined in the Internal Revenue Code), and
subject to applicable interest rate caps and debt limits, the Health
Insurance Portability and Accountability Act of 1996 (the "Health
Insurance Act") generally repealed the deduction for interest paid or
accrued after October 13, 1995 on loans from corporate owned life
insurance policies on the lives of officers, employees or persons
financially interested in the taxpayer's trade or business. Certain
transitional rules for then existing debt are included in the Health
Insurance Act. The transitional rules included a phase-out of the
deduction for debt incurred (1) before January 1, 1996, or (2) before
January 1, 1997, for policies entered into in 1994 or 1995. The
phase-out of the interest expense deduction occurred over a transition
period between October 13, 1995 and January 1, 1999. There is also a
special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of
1997 ("TRA '97"), further expanded the interest deduction disallowance
for businesses by providing, with respect to policies issued after June
8, 1997, that no deduction is allowed for interest paid or accrued on
any debt with respect to life insurance covering the life of any
individual (except as noted above under pre-'97 law with respect to key
persons and pre-June 21, 1986 policies). Any material

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change in a policy (including a material increase in the death benefit)
may cause the policy to be treated as a new policy for purposes of this
rule. TRA '97 also provides that no deduction is permissible for
premiums paid on a life insurance policy if the taxpayer is directly or
indirectly a beneficiary under the policy. Also under TRA '97 and
subject to certain exceptions, for policies issued after June 8, 1997,
no deduction is allowed for that portion of a taxpayer's interest
expense that is allocable to unborrowed policy cash values. This
disallowance generally does not apply to policies owned by natural
persons. BUSINESSES CONTEMPLATING THE PURCHASE OF A NEW POLICY OR A
CHANGE TO AN EXISTING POLICY SHOULD CONSULT A QUALIFIED TAX ADVISOR
REGARDING THE TAX IMPLICATIONS OF THESE RULES FOR THEIR PARTICULAR
SITUATIONS.

The right to change Policy Owners (See the section on General
Provisions.) and the provision for partial withdrawals (See the section
on Partial Withdrawals.) may have tax consequences depending on the
circumstances of such exchange, change, or partial withdrawal. Upon
complete Surrender, if the amount received plus any Outstanding Policy
Debt exceeds the total premiums paid (the "basis") that are not treated
as previously withdrawn by the Policy Owner, the excess generally will
be taxed as ordinary income.

Federal, state and local tax consequences of ownership or receipt
of Death Benefit Proceeds depend on applicable law and the circumstances
of each Policy Owner or Beneficiary. In addition, the tax consequences
of using the Policy in non-qualified deferred compensation, salary
continuance, split-dollar insurance, and executive bonus plans may vary
depending on the particular facts and circumstances of the arrangement.
Further, if the Policy is used in connection with tax-qualified
retirement plans, certain limitations prescribed by the Internal Revenue
Service on, and rules with respect to the taxation of, life insurance
protection provided through such plans may apply. The advice of
qualified tax counsel should be sought in connection with use of life
insurance in non-qualified or qualified plans.

YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION ON FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO YOUR
PARTICULAR SITUATION

SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS

ANLIC holds the assets of Separate Account I. The assets are kept
physically segregated and held separately and apart from the General Account
assets, except for the Fixed Account. ANLIC maintains records of all purchases
and redemptions of Funds' shares by each of the Subaccounts.

THIRD PARTY SERVICES

ANLIC is aware that certain third parties are offering investment advisory,
asset allocation, money management and timing services in connection with the
Policies. Except for Model Asset Allocation Programs (which include automatic
rebalancing) offered through Ibbotsen Associates (See Appendix B.), ANLIC does
not engage third parties to offer such services. In certain cases, ANLIC has
agreed to honor transfer instructions from other such services where it has
received powers of attorney, in a form acceptable to it, from the Policy Owners
participating in the service. Firms or persons offering such services do so
independently from any agency relationship they may have with ANLIC for the sale
of Policies. ANLIC takes no responsibility for the investment allocations and
transfers transacted on a Policy Owner's behalf by such third parties or any
investment allocation recommendations made by such parties. Policy Owners should
be aware that fees paid for such services are separate and in addition to fees
paid under the Policies.

VOTING RIGHTS

ANLIC is the legal holder of the shares held in the Subaccounts of Separate
Account I and as such has the right to vote the shares, to elect Directors of
the Funds, and to vote on matters that are required by the Investment Company
Act of 1940 and upon any other matter that may be voted upon at a shareholder
meeting. To the extent required by law, ANLIC will vote all shares of each of
the Funds held in Separate Account I at regular and special shareholder meetings
of the Funds according to instructions received from Policy Owners based on the
number of shares held as of the record date for such meeting.

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The number of Fund shares in a Subaccount for which instructions may be
given by a Policy Owner is determined by dividing the Accumulation Value held in
that Subaccount by the net asset value of one share in the corresponding
portfolio of the Fund. Fractional shares will be counted. Fund shares held in
each Subaccount for which no timely instructions from Policy Owners are received
and Fund shares held in each Subaccount which do not support Policy Owner
interests will be voted by ANLIC in the same proportion as those shares in that
Subaccount for which timely instructions are received. Voting instructions to
abstain on any item to be voted will be applied on a pro rata basis to reduce
the votes eligible to be cast. Should applicable federal securities laws or
regulations permit, ANLIC may elect to vote shares of the Fund in its own right.

DISREGARD OF VOTING INSTRUCTION. ANLIC may, if required by state insurance
officials, disregard voting instructions if those instructions would require
shares to be voted to cause a change in the subclassification or investment
objectives or policies of one or more of the Funds' portfolios, or to approve or
disapprove an investment adviser or principal underwriter for the Funds. In
addition, ANLIC itself may disregard voting instructions that would require
changes in the investment objectives or policies of any portfolio or in an
investment adviser or principal underwriter for the Funds, if ANLIC reasonably
disapproves those changes in accordance with applicable federal regulations. If
ANLIC does disregard voting instructions, it will advise Policy Owners of that
action and its reasons for the action in the next annual report or proxy
statement to Policy Owners.

STATE REGULATION OF ANLIC

ANLIC, a stock life insurance company organized under the laws of Virginia,
is subject to regulation by the Bureau of Insurance, State Corporation
Commission of the Commonwealth of Virginia ("Virginia Bureau of Insurance"). On
or before March 1 of each year an NAIC convention blank covering the operations
and reporting on the financial condition of ANLIC and Separate Account I as of
December 31 of the preceding year must be filed with the Virginia Bureau of
Insurance. Periodically, the Virginia Bureau of Insurance examines the
liabilities and reserves of ANLIC and Separate Account I.

In addition, ANLIC is subject to the insurance laws and regulations of
other states within which it is licensed or may become licensed to operate. The
Policies offered by the prospectus are available in the various states as
approved. Generally, the insurance department of any other state applies the
laws of the state of domicile in determining permissible investments.

EXECUTIVE OFFICERS AND DIRECTORS OF ANLIC

This list shows name and position(s) with ANLIC followed by the principal
occupations for the last five years. Where an individual has held more than one
position with an organization during the last 5-year period, the last position
held has been given.

CHARLES T. NASON, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER*
Vice Chairman of Board and President, Director: Ameritas Acacia Mutual Holding
Company
Vice Chairman of Board and President, Director: Ameritas Holding Company
Chairman of the Board and Chief Executive Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

ROBERT W. CLYDE, PRESIDENT AND CHIEF OPERATING OFFICER*
Executive Vice President, Director: Ameritas Acacia Mutual Holding Company
Executive Vice President, Director: Ameritas Holding Company
President and Chief Operating Officer: Acacia Life Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

HALUK ARITURK, SENIOR VICE PRESIDENT, PRODUCT MANAGEMENT AND ADMINISTRATION**
Senior Vice President, Product Management and Administration: Acacia Life
Insurance Company Executive Vice President, Ameritas Acacia Shared Services
Center: Ameritas Life Insurance Corp. Formerly: Senior Vice President,
Operations and Chief Actuary: Acacia Life Insurance Company.

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JOANN M. MARTIN, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, DIRECTOR**
Senior Vice President, Chief Financial Officer and Corporate Treasurer: Ameritas
Acacia Mutual Holding Company and Ameritas Holding Company
Senior Vice President and Chief Financial Officer: Acacia Life Insurance Company

Senior Vice President and Chief Financial Officer: Ameritas Life Insurance Corp.

Also serves as officer and /or director of subsidiaries and/or affiliates of
Ameritas Life Insurance Corp.

BRIAN J. OWENS, SENIOR VICE PRESIDENT, CAREER DISTRIBUTION*
Senior Vice President, Career Distribution: Acacia Life Insurance Company;
Director: The Advisors Group, Inc.

BARRY C. RITTER, SENIOR VICE PRESIDENT AND CHIEF INFORMATION OFFICER**
Senior Vice President and Chief Information Officer, Acacia Life Insurance
Company
Senior Vice President -- Information Services: Ameritas Life Insurance Corp.

ROBERT-JOHN H. SANDS, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE
SECRETARY*
Senior Vice President and General Counsel: Ameritas Acacia Mutual Holding
Company
Senior Vice President and General Counsel: Ameritas Holding Company
Senior Vice President, General Counsel and Corporate Secretary: Acacia Life
Insurance Company
Also serves as a Director of direct and indirect subsidiaries of Acacia Life
Insurance Company.

JANET L. SCHMIDT, SENIOR VICE PRESIDENT, HUMAN RESOURCES*
Senior Vice President and Director of Human Resources: Ameritas Acacia Mutual
Holding Company Senior Vice President and Director of Human Resources: Ameritas
Holding Company
Senior Vice President, Human Resources: Acacia Life Insurance Company

RICHARD W. VAUTRAVERS, SENIOR VICE PRESIDENT AND CORPORATE ACTUARY**
Senior Vice President and Corporate Actuary: Ameritas Life Insurance Corp.
Senior Vice President and Corporate Actuary: Acacia Life Insurance Company

WILLIAM W. LESTER, VICE PRESIDENT AND TREASURER**
Treasurer: Ameritas Life Insurance Corp.
Also serves as officer of subsidiaries of Ameritas Life Insurance Corp.
Vice President and Treasurer, Acacia Life Insurance Company

RENO J. MARTINI, DIRECTOR***
Senior Vice President, Calvert Group, Ltd.
- ---------------
* The principal business address of each person is Acacia National Life
Insurance Company, 7315 Wisconsin Avenue, Bethesda, Maryland 20814.

** The principal business address of each person is Ameritas Life Insurance
Corp., 5900 "O" Street, Lincoln, Nebraska 68510.

*** The principal business address of each person is Calvert Group, Ltd., 4550
Montgomery Avenue, Bethesda, Maryland 20814.

LEGAL MATTERS

All matters of Virginia law pertaining to the Policies, including the
validity of the Policy and ANLIC's right to issue the Policy under Virginia
Insurance Law, have been passed upon by Robert-John H. Sands, Senior Vice
President and General Counsel of ANLIC.

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LEGAL PROCEEDINGS

There are no legal proceedings to which Separate Account I is a party or to
which the assets of the Separate Account I are subject. ANLIC is not involved in
any litigation that is of material importance in relation to its total assets or
that relates to Separate Account I.

EXPERTS

The statutory basis financial statements of ANLIC as of December 31, 1999
and for the year then ended, and the financial statements of the subaccounts of
Separate Account I as of December 31, 1999 and for the year then ended, included
in this prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports appearing herein, and are included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The statutory basis financial statements of ANLIC as of December 31, 1998
and for the year then ended, and the financial statements of the subaccounts of
Separate Account I for each of the two years in the period ended December 31,
1998, included in this prospectus have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their reports appearing herein, and
are included in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

Actuarial matters included in this prospectus have been examined by Russell
J. Wiltgen, Vice President -- Individual Product Management, of Ameritas Life
Insurance Corp., as stated in the opinion filed as an exhibit to the
registration statement.

ADDITIONAL INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning Separate Account I, ANLIC and the Policy offered hereby.
Statements contained in this Prospectus as to the contents of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.

FINANCIAL STATEMENTS

The financial statements of ANLIC which are included in this prospectus
should be considered only as bearing on the ability of ANLIC to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in Separate Account I.

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INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company
Bethesda, Maryland

We have audited the accompanying statement of net assets of each of the
subaccounts of Acacia National Variable Life Insurance Separate Account I
(comprising, respectively, the Social Money Market Portfolio, Social Balanced
Portfolio, Social Small Cap Growth Portfolio, Social Mid Cap Growth Portfolio,
and Social International Equity Portfolio of the Calvert Variable Series, Inc.;
the Growth Portfolio, MidCap Growth Portfolio, and Small Capitalization
Portfolio of the Alger American Fund; the Stock Index Portfolio of the Dreyfus
Stock Index Fund; the Limited Maturity Bond Portfolio, and the Growth Portfolio
of the Neuberger & Berman Advisers Management Trust; the International Stock
Fund II Portfolio, and Discovery Fund II Portfolio of the Strong Variable
Insurance Funds, Inc.; the Worldwide Hard Assets Portfolio of the Van Eck
Worldwide Insurance Trust; and the Capital Appreciation Portfolio, Aggressive
Growth Portfolio, Growth and Income Portfolio, High Income Portfolio, and
Strategic Bond Portfolio of the Oppenheimer Variable Accounts Fund) as of
December 31, 1999, and the related statements of operations and changes in net
assets for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1999. 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 our audit provides a reasonable basis for our opinion.

In our opinion, such 1999 financial statements present fairly, in all material
respects, the financial position of each of the subaccounts constituting Acacia
National Variable Life Insurance Separate Account I as of December 31, 1999, and
the results of its operations and changes in net assets for the year then ended,
in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Lincoln, Nebraska
April 7, 2000

F-I- 1
45

[PRICEWATERHOUSECOOPERS LOGO]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Acacia National Life Insurance Company and Contract
Owners of Acacia National Variable Life Insurance Separate Account I

In our opinion, the accompanying statements of operations and changes in net
assets present fairly, in all material respects, the results of their operations
and changes in their net assets of each of the following sub-accounts comprising
the Acacia National Variable Life Insurance Separate Account I (the Account):
the Social Money Market Portfolio, Social Balanced Portfolio, Social Small Cap
Growth Portfolio, Social Mid Cap Growth Portfolio, and Social International
Equity Portfolio of the Calvert Variable Series, Inc.; the Growth Portfolio,
MidCap Growth Portfolio, and Small Capitalization Portfolio of The Alger
American Fund; the Stock Index Portfolio of the Dreyfus Stock Index Fund; the
Limited Maturity Bond Portfolio, and Growth Portfolio of the Neuberger & Berman
Advisers Management Trust; the Advantage Fund II, Asset Allocation Fund II,
International Stock Fund II Portfolio, and Discovery Fund II Portfolio of the
Strong Variable Insurance Funds, Inc.; the Worldwide Hard Assets Portfolio of
the Van Eck Worldwide Insurance Trust; and the Capital Appreciation Portfolio,
Aggressive Growth Portfolio, Growth and Income Portfolio, High Income Portfolio,
and Strategic Bond Portfolio of the Oppenheimer Variable Accounts Fund for each
of the periods presented in the years ended December 31, 1998 and 1997, in
conformity with accounting principles generally accepted in the United States.
The financial statements are the responsibility of the Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

[/s/ PRICEWATERHOUSECOOPERS LLP]

Washington, D.C.
April 30, 1999

F-I- 2
46

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENT OF NET ASSETS
DECEMBER 31, 1999

INVESTMENT DUE (TO)/FROM
AT NET ASSET GENERAL
VALUE ACCOUNT TOTAL
------------ ------------- -----------

ASSETS
CALVERT VARIABLE SERIES, INC.
Social Money Market Portfolio -- 1,593,462.820 shares at
$1.00 per share (cost $1,593,463)....................... $1,593,463 $11,356 $ 1,604,819
Social Balanced Portfolio -- 150,081.351 shares at $2.169
per share (cost $322,380)............................... 325,527 5,122 330,649
Social Small Cap Growth Portfolio -- 10,561.351 shares at
$13.27 per share (cost $119,854)........................ 140,149 36 140,185
Social Mid Cap Growth Portfolio -- 9,034.095 shares at
$30.03 per share (cost $269,942)........................ 271,294 47 271,341
Social International Equity Portfolio -- 29,100.595 shares
at $25.66 per share (cost $641,008)..................... 746,721 3,890 750,611
THE ALGER AMERICAN FUND:
Growth Portfolio -- 82,340.183 shares at $64.38 per share
(cost $4,009,881)....................................... 5,301,060 4,776 5,305,836
MidCap Growth Portfolio -- 55,027.791 shares at $32.23 per
share (cost $1,399,016)................................. 1,773,545 (1,860) 1,771,685
Small Capitalization Portfolio -- 73,412.631 shares at
$55.15 per share (cost $3,008,216)...................... 4,048,707 5,921 4,054,628
DREYFUS STOCK INDEX FUND:
Stock Index Portfolio -- 346,564.572 shares at $38.45 per
share (cost $10,584,530)................................ 13,325,408 24,551 13,349,959
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
Limited Maturity Bond Portfolio -- 235,622.603 shares at
$13.24 per share (cost $3,133,285)...................... 3,119,644 21,108 3,140,752
Growth Portfolio -- 72,247.130 shares at $37.27 per share
(cost $1,744,031)....................................... 2,692,651 29,495 2,722,146
STRONG VARIABLE INSURANCE FUNDS, INC.:
International Stock Fund II Portfolio -- 310,700.181
shares at $16.37 per share (cost $2,859,587)............ 5,086,161 13,561 5,099,722
Discovery Fund II Portfolio -- 36,560.925 shares at $11.38
per share (cost $408,153)............................... 416,063 2,048 418,111
VAN ECK WORLDWIDE INSURANCE TRUST:
Worldwide Hard Assets Portfolio -- 94,197.681 shares at
$10.96 per share (cost $1,022,812)...................... 1,032,407 1,746 1,034,153
OPPENHEIMER VARIABLE ACCOUNTS FUND:
Capital Appreciation Portfolio -- 86,724.242 shares at
$49.84 per share (cost $3,441,580)...................... 4,322,337 -- 4,322,337
Aggressive Growth Portfolio -- 39,022.477 shares at $82.31
per share (cost $1,768,125)............................. 3,211,939 24,156 3,236,095
Growth and Income Portfolio -- 54,758.167 shares at $24.63
per share (cost $1,152,379)............................. 1,348,694 3,110 1,351,804
High Income Portfolio -- 65,811.897 shares at $10.72 per
share (cost $708,959)................................... 705,503 3,845 709,348
Strategic Bond Portfolio -- 101,576.323 shares at $4.97
per share (cost $525,198)............................... 504,835 (112) 504,723
-----------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS.............. $50,118,904
===========

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

F-I- 3
47

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

CALVERT VARIABLE SERIES, INC.
--------------------------------------
SOCIAL
SOCIAL SOCIAL SMALL CAP
MONEY MARKET BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------

1999
INVESTMENT INCOME:
Dividend distributions received........................... $43,128 $ 7,030 $ 52
Mortality and expense risk charge......................... 7,218 1,511 839
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 35,910 5,519 (787)
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- 24,085 --
Net change in unrealized appreciation (depreciation)...... 12,253 1,900 23,977
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 12,253 25,985 23,977
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $48,163 $31,504 $23,190
======= ======= =======
1998
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $21,621 $ 3,409 $ 1,105
Mortality and expense risk charge......................... 4,679 308 588
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 16,942 3,101 517
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. 99 611 (2,513)
Net change in unrealized appreciation (depreciation)...... 3,000 1,900 (1,616)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 3,099 2,511 (4,129)
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $20,041 $ 5,612 $(3,612)
======= ======= =======
1997
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 7,942 $ 1,565 $ 4,107
Mortality and expense risk charge......................... 4,111 72 355
------- ------- -------
NET INVESTMENT INCOME (LOSS)................................ 3,831 1,493 3,752
------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. -- 204 (1,773)
Net change in unrealized appreciation (depreciation)...... 440 (515) (2,228)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS.............................. 440 (311) (4,001)
------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 4,271 $ 1,182 $ (249)
======= ======= =======

- ---------------
(1) Commenced business May, 1997

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

F-I- 4
48

DREYFUS STOCK
CALVERT VARIABLE SERIES, INC. THE ALGER AMERICAN FUND INDEX FUND
------------------------------ --------------------------------------- -------------
SOCIAL
SOCIAL INTERNATIONAL MIDCAP SMALL
MID CAP GROWTH EQUITY GROWTH GROWTH CAPITALIZATION STOCK INDEX
PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ---------- --------- -------------- -------------

$ -- $ 380 $ 4,285 $ -- $ -- $ 111,343
1,517 3,400 28,150 9,224 21,737 75,772
------- -------- ---------- -------- ---------- ----------
(1,517) (3,020) (23,865) (9,224) (21,737) 35,571
------- -------- ---------- -------- ---------- ----------
20,944 52,658 292,559 152,575 303,027 98,876
2,980 113,538 882,734 257,406 903,837 1,835,918
------- -------- ---------- -------- ---------- ----------
23,924 166,196 1,175,293 409,981 1,206,864 1,934,794
------- -------- ---------- -------- ---------- ----------
$22,407 $163,176 $1,151,428 $400,757 $1,185,127 $1,970,365
======= ======== ========== ======== ========== ==========
$13,549 $ 15,115 $ 232,531 $ 40,068 $ 173,190 $ 130,875
594 990 14,481 5,140 12,562 38,276
------- -------- ---------- -------- ---------- ----------
12,955 14,125 218,050 34,928 160,628 92,599
------- -------- ---------- -------- ---------- ----------
2,455 1,263 98,690 13,059 4,107 184,713
(1,025) (5,285) 297,960 98,503 62,991 729,209
------- -------- ---------- -------- ---------- ----------
1,430 (4,022) 396,650 111,562 67,098 913,922
------- -------- ---------- -------- ---------- ----------
$14,385 $ 10,103 $ 614,700 $146,490 $ 227,726 $1,006,521
======= ======== ========== ======== ========== ==========
$ 1,160 $ 1,968 $ 5,840 $ 2,687 $ 27,461 $ 43,942
28 50 5,914 1,692 6,075 11,588
------- -------- ---------- -------- ---------- ----------
1,132 1,918 (74) 995 21,386 32,354
------- -------- ---------- -------- ---------- ----------
100 4 39,995 11,425 9,397 112,714
(603) (2,540) 95,625 15,140 70,132 146,383
------- -------- ---------- -------- ---------- ----------
(503) (2,536) 135,620 26,565 79,529 259,097
------- -------- ---------- -------- ---------- ----------
$ 629 $ (618) $ 135,546 $ 27,560 $ 100,915 $ 291,451
======= ======== ========== ======== ========== ==========

F-I- 5
49

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

NEUBERGER & BERMAN STRONG VARIABLE
ADVISERS MANAGEMENT TRUST INSURANCE FUNDS, INC.
--------------------------- ------------------------
LIMITED ASSET
MATURITY BOND GROWTH ADVANTAGE ALLOCATION
PORTFOLIO PORTFOLIO FUND II(2) FUND II(2)
-------------- --------- ---------- ----------

1999
INVESTMENT INCOME:
Dividend distributions received................ $132,944 $ -- $ -- $ --
Mortality and expense risk charge.............. 20,050 14,860 -- --
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 112,894 (14,860) -- --
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on distributions............. -- 88,404 -- --
Net change in unrealized appreciation
(depreciation).............................. (30,899) 857,225 -- --
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... (30,899) 945,629 -- --
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 81,995 $930,769 $ -- $ --
======== ======== ==== =======
1998
INVESTMENT INCOME:
Dividend and capital gains distributions
received.................................... $ 58,873 $188,569 $ -- $ --
Mortality and expense risk charge.............. 12,750 9,585 -- --
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 46,123 178,984 -- --
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from redemptions of
fund shares................................. 1,107 (18,723) -- --
Net change in unrealized appreciation
(depreciation).............................. (2,543) 22,943 -- --
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... (1,436) 4,220 -- --
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 44,687 $183,204 $ -- $ --
======== ======== ==== =======
1997
INVESTMENT INCOME:
Dividend and capital gains distributions
received.................................... $ 20,653 $ 23,873 $359 $ 6,377
Mortality and expense risk charge.............. 4,295 3,395 49 516
-------- -------- ---- -------
NET INVESTMENT INCOME (LOSS)..................... 16,358 20,478 310 5,861
-------- -------- ---- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) from redemptions of
fund shares................................. 1,905 16,065 (38) 11,629
Net change in unrealized appreciation
(depreciation).............................. 15,273 59,454 52 2,621
-------- -------- ---- -------
NET GAIN (LOSS) ON INVESTMENTS................... 17,178 75,519 14 14,250
-------- -------- ---- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $ 33,536 $ 95,997 $324 $20,111
======== ======== ==== =======

- ---------------
(1) Commenced business May, 1997

(2) Subaccount closed November, 1997.

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

F-I- 6
50

VAN ECK
STRONG VARIABLE WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST OPPENHEIMER VARIABLE ACCOUNTS FUND
------------------------- --------------- ------------------------------------------
INTERNATIONAL DISCOVERY WORLDWIDE CAPITAL AGGRESSIVE GROWTH AND
STOCK FUND II FUND II HARD ASSETS APPRECIATION GROWTH INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO(1)
------------- --------- --------------- ------------ ------------ ------------

$ 11,187 $ -- $ 9,610 $ 9,060 $ -- $ 3,439
25,477 2,621 6,153 20,639 17,873 7,399
---------- ------- --------- -------- ---------- --------
(14,290) (2,621) 3,457 (11,579) (17,873) (3,960)
---------- ------- --------- -------- ---------- --------
-- 44,830 -- 99,521 -- 5,794
2,395,242 (15,057) 164,247 634,969 1,323,874 197,475
---------- ------- --------- -------- ---------- --------
2,395,242 29,773 164,247 734,490 1,323,874 203,269
---------- ------- --------- -------- ---------- --------
$2,380,952 $27,152 $ 167,704 $722,911 $1,306,001 $199,309
========== ======= ========= ======== ========== ========
$ 61,955 $ 3,760 $ 41,873 $ 82,136 $ 13,351 $ 10,963
16,284 2,398 3,681 12,581 7,499 3,138
---------- ------- --------- -------- ---------- --------
45,671 1,362 38,192 69,555 5,852 7,825
---------- ------- --------- -------- ---------- --------
(206,240) 5,905 (41,446) 24,932 10,354 1,441
59,071 8,186 (148,313) 224,336 118,634 (4,187)
---------- ------- --------- -------- ---------- --------
(147,169) 14,091 (189,759) 249,268 128,988 (2,746)
---------- ------- --------- -------- ---------- --------
$ (101,498) $15,453 $(151,567) $318,823 $ 134,840 $ 5,079
========== ======= ========= ======== ========== ========
$ 8,037 $ -- $ 5,120 $ -- $ -- $ 267
8,011 1,084 1,655 2,354 1,370 272
---------- ------- --------- -------- ---------- --------
26 (1,084) 3,465 (2,354) (1,370) (5)
---------- ------- --------- -------- ---------- --------
(3,230) 5,524 2,494 2,729 4,036 1,288
(230,017) 12,920 (10,841) 21,451 1,306 3,027
---------- ------- --------- -------- ---------- --------
(233,247) 18,444 (8,347) 24,180 5,342 4,315
---------- ------- --------- -------- ---------- --------
$ (233,221) $17,360 $ (4,882) $ 21,826 $ 3,972 $ 4,310
========== ======= ========= ======== ========== ========

F-I- 7
51

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

OPPENHEIMER VARIABLE
ACCOUNTS FUND
----------------------------
STRATEGIC
HIGH INCOME BOND
PORTFOLIO(1) PORTFOLIO(1)
1999 ------------ ------------

INVESTMENT INCOME:
Dividend distributions received........................... $ 30,951 $ 37,569
Mortality and expense risk charge......................... 4,163 3,598
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 26,788 33,971
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... 6,886 (19,428)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. 6,886 (19,428)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 33,674 $ 14,543
======== ========
1998
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 6,494 $ 14,163
Mortality and expense risk charge......................... 1,942 1,297
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 4,552 12,866
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. (1,436) (5,635)
Net change in unrealized appreciation (depreciation)...... (10,716) (740)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. (12,152) (6,375)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ (7,600) $ 6,491
======== ========
1997
INVESTMENT INCOME:
Dividend and capital gains distributions received......... $ 2,165 $ 765
Mortality and expense risk charge......................... 248 45
-------- --------
NET INVESTMENT INCOME (LOSS)................................ 1,917 720
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from redemptions of fund
shares................................................. 270 4
Net change in unrealized appreciation (depreciation)...... 375 (196)
-------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. 645 (192)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 2,562 $ 528
======== ========

- ---------------
(1) Commenced business May, 1997

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

F-I- 8
52

[This page intentionally left blank.]

F-I- 9
53

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

CALVERT VARIABLE SERIES, INC.
--------------------------------------
SOCIAL
SOCIAL SOCIAL SMALL CAP
MONEY MARKET BALANCED GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------

1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 35,910 $ 5,519 $ (787)
Net realized gain distributions.......................... -- 24,085 --
Net change in unrealized appreciation (depreciation)..... 12,253 1,900 23,977
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 48,163 31,504 23,190
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 860,441 251,997 29,588
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 908,604 283,501 52,778
---------- -------- --------
NET ASSETS AT JANUARY 1, 1999.............................. $ 696,215 $ 47,148 $ 87,407
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1999............................ $1,604,819 $330,649 $140,185
========== ======== ========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 16,942 $ 3,101 $ 517
Net realized gain (loss) from redemption of fund
shares................................................ 99 611 (2,513)
Net change in unrealized appreciation (depreciation)..... 3,000 1,900 (1,616)
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 20,041 5,612 (3,612)
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 309,331 18,777 44,873
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 329,372 24,389 41,261
---------- -------- --------
NET ASSETS AT JANUARY 1, 1998.............................. $ 366,843 $ 22,759 $ 46,146
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1998............................ $ 696,215 $ 47,148 $ 87,407
========== ======== ========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)............................. $ 3,831 $ 1,493 $ 3,752
Net realized gain (loss) from redemption of fund
shares................................................ -- 204 (1,773)
Net change in unrealized appreciation (depreciation)..... 440 (515) (2,228)
---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... 4,271 1,182 (249)
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS...... 216,346 18,745 25,899
---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 220,617 19,927 25,650
---------- -------- --------
NET ASSETS AT JANUARY 1, 1997.............................. $ 146,226 $ 2,832 $ 20,496
---------- -------- --------
NET ASSETS AT DECEMBER 31, 1997............................ $ 366,843 $ 22,759 $ 46,146
========== ======== ========

- ---------------
(1) Commenced business May, 1997

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

F-I- 10
54

DREYFUS STOCK
CALVERT VARIABLE SERIES, INC. THE ALGER AMERICAN FUND INDEX FUND
------------------------------ ---------------------------------------- -------------
SOCIAL
SOCIAL INTERNATIONAL MID CAP SMALL
MID CAP GROWTH EQUITY GROWTH GROWTH CAPITALIZATION STOCK INDEX
PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ---------- ---------- -------------- -------------

$ (1,517) $ (3,020) $ (23,865) $ (9,224) $ (21,737) $ 35,571
20,944 52,658 292,559 152,575 303,027 98,876
2,980 113,538 882,734 257,406 903,837 1,835,918
-------- -------- ---------- ---------- ---------- -------------
22,407 163,176 1,151,428 400,757 1,185,127 1,970,365
125,068 383,269 1,752,646 519,905 823,820 4,711,735
-------- -------- ---------- ---------- ---------- -------------
147,475 545,445 2,904,074 920,662 2,008,947 6,682,100
-------- -------- ---------- ---------- ---------- -------------
$123,866 $205,166 $2,401,762 $ 851,023 $2,045,681 $ 6,667,859
-------- -------- ---------- ---------- ---------- -------------
$271,341 $750,611 $5,305,836 $1,771,685 $4,054,628 $ 13,349,959
======== ======== ========== ========== ========== =============
$ 12,955 $ 14,125 $ 218,050 $ 34,928 $ 160,628 $ 92,599
2,455 1,263 98,690 13,059 4,107 184,713
(1,025) (5,285) 297,960 98,503 62,991 729,209
-------- -------- ---------- ---------- ---------- -------------
14,385 10,103 614,700 146,490 227,726 1,006,521
98,279 175,356 898,671 387,686 1,009,524 3,632,941
-------- -------- ---------- ---------- ---------- -------------
112,664 185,459 1,513,371 534,176 1,237,250 4,639,462
-------- -------- ---------- ---------- ---------- -------------
$ 11,202 $ 19,707 $ 888,391 $ 316,847 $ 808,431 $ 2,028,397
-------- -------- ---------- ---------- ---------- -------------
$123,866 $205,166 $2,401,762 $ 851,023 $2,045,681 $ 6,667,859
======== ======== ========== ========== ========== =============
$ 1,132 $ 1,918 $ (74) $ 995 $ 21,386 $ 32,354
100 4 39,995 11,425 9,397 112,714
(603) (2,540) 95,625 15,140 70,132 146,383
-------- -------- ---------- ---------- ---------- -------------
629 (618) 135,546 27,560 100,915 291,451
10,573 20,325 431,691 198,748 303,922 1,185,520
-------- -------- ---------- ---------- ---------- -------------
11,202 19,707 567,237 226,308 404,837 1,476,971
-------- -------- ---------- ---------- ---------- -------------
$ -- $ -- $ 321,154 $ 90,539 $ 403,594 $ 551,426
-------- -------- ---------- ---------- ---------- -------------
$ 11,202 $ 19,707 $ 888,391 $ 316,847 $ 808,431 $ 2,028,397
======== ======== ========== ========== ========== =============

F-I- 11
55

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

NEUBERGER & BERMAN STRONG VARIABLE
ADVISERS MANAGEMENT TRUST INSURANCE FUNDS, INC.
-------------------------- ------------------------
LIMITED
MATURITY ASSET
BOND GROWTH ADVANTAGE ALLOCATION
PORTFOLIO PORTFOLIO FUND II(2) FUND II(2)
----------- ----------- ---------- ----------

1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 112,894 $ (14,860) $ -- $ --
Net realized gain distributions.................... -- 88,404 -- --
Net change in unrealized appreciation
(depreciation)................................... (30,899) 857,225 -- --
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 81,995 930,769 -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 1,025,930 243,298 -- --
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 1,107,925 1,174,067 -- --
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1999........................ $2,032,827 $1,548,079 $ -- $ --
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1999...................... $3,140,752 $2,722,146 $ -- $ --
========== ========== ======== =========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 46,123 $ 178,984 $ -- $ --
Net realized gain (loss) from redemption of fund
shares........................................... 1,107 (18,723) -- --
Net change in unrealized appreciation
(depreciation)................................... (2,543) 22,943 -- --
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 44,687 183,204 -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 1,124,307 735,204 -- --
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 1,168,994 918,408 -- --
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1998........................ $ 863,833 $ 629,671 $ -- $ --
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1998...................... $2,032,827 $1,548,079 $ -- $ --
========== ========== ======== =========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 16,358 $ 20,478 $ 310 $ 5,861
Net realized gain (loss) from redemption of fund
shares........................................... 1,905 16,065 (38) 11,629
Net change in unrealized appreciation
(depreciation)................................... 15,273 59,454 52 2,621
---------- ---------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS......................................... 33,536 95,997 324 20,111
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS....................................... 624,805 352,564 (10,234) (107,191)
---------- ---------- -------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 658,341 448,561 (9,910) (87,080)
---------- ---------- -------- ---------
NET ASSETS AT JANUARY 1, 1997........................ $ 205,492 $ 181,110 $ 9,910 $ 87,080
---------- ---------- -------- ---------
NET ASSETS AT DECEMBER 31, 1997...................... $ 863,833 $ 629,671 $ 0 $ 0
========== ========== ======== =========

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

(1) Commenced business May, 1997

(2) Subaccount closed November, 1997

F-I- 12
56

STRONG VARIABLE VAN ECK WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST OPPENHEIMER VARIABLE ACCOUNTS FUND
------------------------- ----------------- ------------------------------------------
INTERNATIONAL DISCOVERY WORLDWIDE CAPITAL AGGRESSIVE GROWTH &
STOCK FUND II FUND II HARD ASSETS APPRECIATION GROWTH INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(1) PORTFOLIO(1)
------------- --------- ----------------- ------------ ------------ ------------

$ (14,290) $ (2,621) $ 3,457 $ (11,579) $ (17,873) $ (3,960)
-- 44,830 -- 99,521 -- 5,794
2,395,242 (15,057) 164,247 634,969 1,323,874 197,475
---------- -------- ---------- ---------- ---------- ----------
2,380,952 27,152 167,704 722,911 1,306,001 199,309
305,865 54,601 284,172 1,345,599 582,546 514,599
---------- -------- ---------- ---------- ---------- ----------
2,686,817 81,753 451,876 2,068,510 1,888,547 713,908
---------- -------- ---------- ---------- ---------- ----------
$2,412,905 $336,358 $ 582,277 $2,253,827 $1,347,548 $ 637,896
---------- -------- ---------- ---------- ---------- ----------
$5,099,722 $418,111 $1,034,153 $4,322,337 $3,236,095 $1,351,804
========== ======== ========== ========== ========== ==========
$ 45,671 $ 1,362 $ 38,192 $ 69,555 $ 5,852 $ 7,825
(206,240) 5,905 (41,446) 24,932 10,354 1,441
59,071 8,186 (148,313) 224,336 118,634 (4,187)
---------- -------- ---------- ---------- ---------- ----------
(101,498) 15,453 (151,567) 318,823 134,840 5,079
1,227,685 112,491 479,900 1,330,394 856,576 557,879
---------- -------- ---------- ---------- ---------- ----------
1,126,187 127,944 328,333 1,649,217 991,416 562,958
---------- -------- ---------- ---------- ---------- ----------
$1,286,718 $208,414 $ 253,944 $ 604,610 $ 356,132 $ 74,938
---------- -------- ---------- ---------- ---------- ----------
$2,412,905 $336,358 $ 582,277 $2,253,827 $1,347,548 $ 637,896
========== ======== ========== ========== ========== ==========
$ 26 $ (1,084) $ 3,465 $ (2,354) $ (1,370) $ (5)
(3,230) 5,524 2,494 2,729 4,036 1,288
(230,017) 12,920 (10,841) 21,451 1,306 3,027
---------- -------- ---------- ---------- ---------- ----------
(233,221) 17,360 (4,882) 21,826 3,972 4,310
1,076,576 114,093 170,829 582,784 352,160 70,628
---------- -------- ---------- ---------- ---------- ----------
843,355 131,453 165,947 604,610 356,132 74,938
---------- -------- ---------- ---------- ---------- ----------
$ 443,363 $ 76,961 $ 87,997 $ -- $ -- $ --
---------- -------- ---------- ---------- ---------- ----------
$1,286,718 $208,414 $ 253,944 $ 604,610 $ 356,132 $ 74,938
========== ======== ========== ========== ========== ==========

F-I- 13
57

ACACIA NATIONAL VARIABLE LIFE INSURANCE
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

OPPENHEIMER VARIABLE
ACCOUNTS FUND
------------------------------
HIGH INCOME STRATEGIC BOND
PORTFOLIO(1) PORTFOLIO(1)
1999 ------------ --------------

INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 26,788 $ 33,971
Net realized gain distributions........................... -- --
Net change in unrealized appreciation(depreciation)....... 6,886 (19,428)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 33,674 14,543
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 304,273 214,887
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 337,947 229,430
-------- --------
NET ASSETS AT JANUARY 1, 1999............................... 371,401 275,293
-------- --------
NET ASSETS AT DECEMBER 31, 1999............................. $709,348 $504,723
======== ========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 4,552 $ 12,866
Net realized gain(loss) from redemption of fund shares.... (1,436) (5,635)
Net change in unrealized appreciation(depreciation)....... (10,716) (740)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ (7,600) 6,491
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 309,237 249,444
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 301,637 255,935
-------- --------
NET ASSETS AT JANUARY 1, 1998............................... 69,764 19,358
-------- --------
NET ASSETS AT DECEMBER 31, 1998............................. $371,401 $275,293
======== ========
1997
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income(loss)............................... $ 1,917 $ 720
Net realized gain(loss) from redemption of fund shares.... 270 4
Net change in unrealized appreciation(depreciation)....... 375 (196)
-------- --------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 2,562 528
NET INCREASE(DECREASE) FROM POLICYOWNER TRANSACTIONS........ 67,202 18,830
-------- --------
TOTAL INCREASE(DECREASE) IN NET ASSETS...................... 69,764 19,358
-------- --------
NET ASSETS AT JANUARY 1, 1997............................... -- --
-------- --------
NET ASSETS AT DECEMBER 31, 1997............................. $ 69,764 $ 19,358
======== ========

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

(1) Commenced business May, 1997

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

F-I- 14
58

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The Acacia National Variable Life Insurance Separate Account I (the Account)
began operations on December 1, 1995 as a separate investment account within
Acacia National Life Insurance Company (the Company), a wholly owned subsidiary
of Acacia Life Insurance Company. The assets of the Account are held by the
Company and are segregated from all of the Company's other assets.

The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. At December 31, 1999 there are nineteen subaccounts
within the Account. Five of the subaccounts invest only in a corresponding
Portfolio of the Calvert Variable Series, Inc. which is a diversified open-end
management investment company managed by the Calvert Asset Management Company,
Inc. (see note 3). Three of the subaccounts invest only in a corresponding
Portfolio of The Alger American Fund which is a diversified open-end management
investment company managed by Fred Alger Management, Inc. (Alger Management).
One subaccount invests only in a corresponding Portfolio of Dreyfus Stock Index
Fund which is a non-diversified open-end management investment company managed
by Dreyfus Service Corporation. Two of the subaccounts invest only in a
corresponding Portfolio of the Neuberger & Berman Advisers Management Trust
which is a diversified open-end management investment company managed by
Neuberger & Berman Management Incorporated. Two of the subaccounts invest only
in a corresponding Portfolio of the Strong Variable Insurance Fund, Inc. which
is a diversified open-end management investment company managed by Strong
Capital Management, Inc. One of the subaccounts invest only in a corresponding
Portfolio of the Van Eck Worldwide Insurance Trust which is a non-diversified
open-end management investment company managed by Van Eck Associates
Corporation. Five of the subaccounts invest only in a corresponding Portfolio of
the Oppenheimer Variable Accounts Fund which is a diversified open-end
management investment company managed by Oppenheimer Funds, Inc. Each Portfolio
pays the manager a monthly fee for managing its investments and business
affairs.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CONSISTENCY

Due to changes in the processing environment during 1999, certain information is
presented differently between years. In 1999, net realized gains/losses on
redemption of fund shares is included in net change in unrealized
appreciation/depreciation. Capital gain distributions received are reflected in
net realized gain distributions.

In 1998 and 1997, net realized gains and losses on redemption of fund shares are
separately presented. Capital gain distributions received from funds are
included in dividend distributions received.

VALUATION OF INVESTMENTS

The assets of the account are carried at the net asset value of the underlying
Portfolios. The value of the policyowners' units corresponds to the Account's
investment in the underlying subaccounts. The availability of investment
portfolio and subaccount options may vary between products. Share transactions
and security transactions are accounted for on a trade date basis. However,
dividends of $30,157 for the Stock Index Portfolio and $21,938 for the
International Stock Fund II Portfolio were received in 1997 and recorded in
1998. All affected policyholder accounts were adjusted.

F-I- 15
59
ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
FEDERAL AND STATE TAXES

The operations of the Account are included in the federal income tax return of
the Company, which is taxed as a life insurance company under the Internal
Revenue Code. The Company has the right to charge the Account any federal income
taxes, or provision for federal income taxes, attributable to the operations of
the Account or to the policies funded in the Account. Currently, the Company
does not make a charge for income or other taxes. Charges for state and local
taxes, if any, attributable to the Account may also be made.

2. POLICYOWNER CHARGES

The Company charges the Account for mortality and expense risks assumed. A daily
charge is made on the average daily value of the net assets representing equity
of policyowners held in each subaccount per each product's current policy
provisions. Additional charges are made at intervals and in amounts per each
product's current policy provisions. These charges are prorated against the
balance in each investment option of the policyowner, including the Fixed
Account option which is not reflected in this separate account.

3. RELATED PARTIES

Calvert Asset Management Company, Inc., an affiliate of the Company, serves as
an investment advisor to the Calvert Variable Series, Inc. Social Money Market,
Social Balanced, Social Small Cap Growth, Social Mid Cap Growth and Social
International Equity Portfolios. The Advisors Group, Inc., an affiliate of the
Company, acts as a principal underwriter of the policies pursuant to an
underwriting agreement with the Company.

F-I- 16
60

[This page intentionally left blank.]

F-I- 17
61
ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. UNITS OWNED

Units owned in the Account are as follows:

CALVERT VARIABLE SERIES, INC.
-------------------------------------------------------------------------
SOCIAL SOCIAL
SOCIAL SOCIAL SMALL CAP SOCIAL INTERNATIONAL
MONEY MARKET BALANCED GROWTH MID CAP GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- --------- -------------- -------------

Units owned at January 1, 1999..... 598,035 2,990 7,476 7,670 15,712
Units acquired..................... 5,307,754 17,585 7,132 26,315 33,694
Units disposed..................... 4,539,913 2,073 4,511 18,191 6,276
--------- ------ ------ ------ ------
Units owned at December 31, 1999... 1,365,876 18,502 10,097 15,794 43,130
========= ====== ====== ====== ======

Units owned at January 1, 1998..... 330,489 1,678 3,703 900 1,788
Units acquired..................... 2,498,903 2,971 5,008 7,984 17,004
Units disposed..................... 2,231,357 1,659 1,235 1,214 3,080
--------- ------ ------ ------ ------
Units owned at December 31, 1998... 598,035 2,990 7,476 7,670 15,712
========= ====== ====== ====== ======

Units owned at January 1, 1997..... 138,906 251 1,482 -- --
Units acquired..................... 1,439,931 1,655 4,603 994 1,939
Units disposed..................... 1,248,348 228 2,382 94 151
--------- ------ ------ ------ ------
Units owned at December 31, 1997... 330,489 1,678 3,703 900 1,788
========= ====== ====== ====== ======

F-I- 18
62

DREYFUS NEUBERGER & BERMAN
STOCK ADVISERS STRONG VARIABLE
THE ALGER AMERICAN FUND INDEX FUND MANAGEMENT TRUST INSURANCE FUNDS, INC.
- -------------------------------------- ----------- --------------------- ----------------------------
LIMITED
MIDCAP SMALL MATURITY
GROWTH GROWTH CAPITALIZATION STOCK INDEX BOND GROWTH ADVANTAGE ASSET ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND II FUND II
- --------- --------- -------------- ----------- --------- --------- --------- ----------------

113,872 50,595 153,159 320,865 173,713 97,419 -- --
146,269 79,523 151,870 357,435 200,479 48,449 -- --
71,718 49,811 92,843 144,982 111,058 33,014 -- --
------- ------ ------- ------- ------- ------- ----- ------
188,423 80,307 212,186 533,318 263,134 112,854 -- --
======= ====== ======= ======= ======= ======= ===== ======

62,387 24,543 69,933 125,133 77,059 45,761 -- --
78,302 32,437 103,745 230,164 136,118 65,880 -- --
26,817 6,385 20,519 34,432 39,464 14,222 -- --
------- ------ ------- ------- ------- ------- ----- ------
113,872 50,595 153,159 320,865 173,713 97,419 -- --
======= ====== ======= ======= ======= ======= ===== ======

28,351 8,066 38,887 45,236 19,571 16,990 984 7,816
64,768 26,097 83,058 141,619 84,591 46,395 677 11,884
30,732 9,620 52,012 61,722 27,103 17,624 1,661 19,700
------- ------ ------- ------- ------- ------- ----- ------
62,387 24,543 69,933 125,133 77,059 45,761 -- --
======= ====== ======= ======= ======= ======= ===== ======

F-I- 19
63

ACACIA NATIONAL VARIABLE LIFE INSURANCE

SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. UNITS OWNED -- (CONTINUED)

Units owned in the Account are as follows:

VAN ECK
STRONG VARIABLE WORLDWIDE
INSURANCE FUNDS, INC. INSURANCE TRUST
-------------------------- ---------------
INTERNATIONAL DISCOVERY WORLDWIDE
STOCK FUND II FUND II HARD ASSETS
PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------- ---------------

Units owned at January 1, 1999........................... 262,868 28,197 73,721
Units acquired........................................... 258,376 91,292 105,757
Units disposed........................................... 223,453 86,116 71,150
------- ------ -------
Units owned at December 31, 1999......................... 297,791 33,373 108,328
======= ====== =======

Units owned at January 1, 1998........................... 137,912 18,742 22,198
Units acquired........................................... 201,600 14,670 59,926
Units disposed........................................... 76,644 5,215 8,403
------- ------ -------
Units owned at December 31, 1998......................... 262,868 28,197 73,721
======= ====== =======

Units owned at January 1, 1997........................... 39,763 7,708 7,560
Units acquired........................................... 132,459 17,417 22,271
Units disposed........................................... 34,310 6,383 7,633
------- ------ -------
Units owned at December 31, 1997......................... 137,912 18,742 22,198
======= ====== =======

F-I- 20
64

OPPENHEIMER VARIABLE ACCOUNTS FUND
----------------------------------------------------------------
CAPITAL AGGRESSIVE GROWTH AND STRATEGIC
APPRECIATION GROWTH INCOME HIGH INCOME BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ---------- ---------- ----------- ---------

150,216 95,687 47,458 33,313.. 24,847
135,346 159,858 93,705 60,039.. 54,441
82,628 131,625 58,251 32,216.. 34,723
------- ------- ------ ------ ------
202,934 123,920 82,912 61,136.. 44,565
======= ======= ====== ====== ======
49,967 28,422 5,836 6,274... 1,797
119,856 77,765 48,498 33,123.. 77,960
19,607 10,500 6,876 6,084... 54,910
------- ------- ------ ------ ------
150,216 95,687 47,458 33,313.. 24,847
======= ======= ====== ====== ======

-- -- -- -- --
59,904 36,728 7,354 7,955... 2,265
9,937 8,306 1,518 1,681... 468
------- ------- ------ ------ ------
49,967 28,422 5,836 6,274... 1,797
======= ======= ====== ====== ======

F-I- 21
65

INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company
Bethesda, Maryland

We have audited the accompanying statement of admitted assets, liabilities, and
surplus -- statutory basis of Acacia National Life Insurance Company (a wholly
owned subsidiary of Acacia Life Insurance Company) as of December 31, 1999, and
the related statements of operations -- statutory basis, changes in
surplus -- statutory basis, and cash flows -- statutory basis for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
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 audit provides a reasonable basis for our opinion.

As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Bureau of Insurance, State Corporation Commission of the
Commonwealth of Virginia, which practices differ from generally accepted
accounting principles. The effects on the financial statements of the variances
between the statutory basis of accounting and generally accepted accounting
principles, although not reasonably determinable, are presumed to be material.

In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the 1999 financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of Acacia National Life Insurance Company as of December 31,
1999, or the results of its operations or its cash flows for the year then
ended.

In our opinion, the 1999 financial statements referred to above present fairly,
in all material respects, the admitted assets, liabilities, and surplus of
Acacia National Life Insurance Company as of December 31, 1999, and the results
of its operations and its cash flows for the year then ended, on the basis of
accounting described in Note 1.

/s/ DELOITTE & TOUCHE LLP

Lincoln, Nebraska
April 7, 2000

F-II- 1
66

[PRICEWATERHOUSECOOPERS LOGO]

INDEPENDENT AUDITORS' REPORT

Board of Directors
Acacia National Life Insurance Company

We have audited the accompanying statement of admitted assets, liabilities, and
surplus -- statutory basis of Acacia National Life Insurance Company (the
Company) as of December 31, 1998, and the related statutory statements of
operations and changes in surplus, and cash flow, for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit 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 audit provide a reasonable basis for our
opinion.

As described more fully in Note 1 to the financial statements, these financial
statements were prepared in conformity with accounting practices prescribed or
permitted by the Bureau of Insurance, State Corporation Commission of the
Commonwealth of Virginia, which practices differ from accounting principles
generally accepted in the United states. The effects on the financial statements
of the variances between the statutory basis of accounting and accounting
principles generally accepted in the United States are material.

In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with accounting principles generally accepted in the United States,
the financial position of the Company as of December 31, 1998 or the results of
its operations or its cash flow for the years then ended.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities, and surplus of the
Company as of December 31, 1998, and the results of its operations and its cash
flow for the year then ended, on the basis of accounting described in Note 1.

/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP

Washington, D.C.
March 31, 1999

F-II- 2
67

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS -- STATUTORY BASIS
(COLUMNAR AMOUNTS IN THOUSANDS)

DECEMBER 31,
--------------------
1999 1998
-------- --------

ADMITTED ASSETS
Investments
Bonds..................................................... $522,328 $556,127
Mortgage loans............................................ 894 --
Preferred stocks.......................................... 70 546
Common stocks............................................. 385 1,778
Short-term investments.................................... 5,685 13,614
Other investments......................................... 495 682
Loans on insurance policies............................... 7,955 7,579
-------- --------
Total investments...................................... 537,812 580,326
Cash........................................................ 5,195 64
Accrued investment income................................... 9,157 9,775
Reinsurance recoverable -- affiliate........................ 1,162 --
Income taxes receivable -- affiliate........................ 1,203 400
Other assets................................................ 370 2,169
Separate accounts........................................... 140,638 73,334
-------- --------
$695,537 $666,068
======== ========
LIABILITIES AND SURPLUS
LIABILITIES
Life and annuity reserves................................. $464,615 $483,126
Funds left on deposit..................................... 65,002 62,065
Reserve for unpaid claims................................. 1,461 2,113
Interest maintenance reserve.............................. 1,684 3,202
Accrued separate account transfers........................ (7,702) (6,297)
Accounts payable -- affiliates............................ 999 7,586
Other liabilities......................................... 2,927 3,736
Asset valuation reserve................................... 1,805 5,513
Separate accounts......................................... 140,638 73,334
-------- --------
671,429 634,378
-------- --------
SURPLUS
Preferred stock, 8% non-voting, non-cumulative, $1,000 par
value, 10,000 shares authorized; 6,000 shares issued
and outstanding........................................ 6,000 6,000
Common stock, $170 par value; 15,000 shares authorized,
issued and outstanding................................. 2,550 2,550
Additional paid-in capital................................ 13,450 13,450
Retained earnings......................................... 2,108 9,690
-------- --------
24,108 31,690
-------- --------
$695,537 $666,068
======== ========

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

F-II- 3
68

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS -- STATUTORY BASIS
(IN THOUSANDS)

YEARS ENDED
DECEMBER 31,
--------------------
1999 1998
-------- --------

INCOME
Premium income............................................ $ 79,057 $ 67,919
Less net reinsurance:
Yearly renewable term.................................. (5,318) (4,601)
-------- --------
Net premium income................................... 73,739 63,318
Funds left on deposit..................................... 8,257 8,292
Net investment income..................................... 41,553 46,305
Miscellaneous insurance income............................ 1,481 25
-------- --------
125,030 117,940
-------- --------
EXPENSES
Benefits to policyowners.................................. 86,472 83,190
Decrease in reserves...................................... (15,569) (18,937)
Commissions............................................... 7,256 7,353
General insurance expenses................................ 13,562 16,377
Taxes, licenses and fees.................................. 2,154 1,167
Amortization of goodwill.................................. 382 684
Net premium transferred to separate accounts.............. 34,764 30,725
-------- --------
129,021 120,559
-------- --------
Loss before federal income taxes and realized capital
losses................................................. (3,991) (2,619)
Income taxes (benefit).................................... (439) (1,822)
-------- --------
Loss before realized capital losses....................... (3,552) (797)
Realized capital losses (net of tax of ($972) and $760 and
transfers to interest maintenance reserve of ($1,111)
and $965 for 1999 and 1998, respectively).............. (6,244) (209)
-------- --------
Net loss.................................................. $ (9,796) $ (1,006)
======== ========

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

F-II- 4
69

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF CHANGES IN SURPLUS -- STATUTORY BASIS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARES)

PREFERRED STOCK COMMON STOCK ADDITIONAL
---------------- ---------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ------ ------ ---------- -------- -------

BALANCE, January 1, 1998............... 6,000 $6,000 15,000 $2,550 $13,450 $10,506 $32,506
Change in non-admitted assets........ -- -- -- -- -- 684 684
Change in net unrealized capital
gains.............................. -- -- -- -- -- (49) (49)
Change in valuation basis of
reserves........................... -- -- -- -- -- (120) (120)
Transfer to asset valuation
reserve............................ -- -- -- -- -- (325) (325)
Net loss............................. -- -- -- -- -- (1,006) (1,006)
----- ------ ------ ------ ------- ------- -------
BALANCE, December 31, 1998............. 6,000 6,000 15,000 2,550 13,450 9,690 31,690
Change in non-admitted assets........ -- -- -- -- -- (3) (3)
Change in net unrealized capital
gains.............................. -- -- -- -- -- (1,491) (1,491)
Transfer from asset valuation
reserve............................ -- -- -- -- -- 3,708 3,708
Net loss............................. -- -- -- -- -- (9,796) (9,796)
----- ------ ------ ------ ------- ------- -------
BALANCE, December 31, 1999............. 6,000 $6,000 15,000 $2,550 $13,450 $ 2,108 $24,108
===== ====== ====== ====== ======= ======= =======

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

F-II- 5
70

ACACIA NATIONAL LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS -- STATUTORY BASIS
(IN THOUSANDS)

YEARS ENDED DECEMBER 31,
------------------------
1999 1998
---------- ----------

OPERATING ACTIVITIES:
Net premium income received............................... $ 74,462 $ 63,318
Miscellaneous insurance income............................ 8,904 8,176
Net investment income received............................ 43,690 44,953
Net premium transferred to separate accounts.............. (37,511) (34,192)
Benefits paid to policyowners............................. (89,096) (84,359)
Commissions, expenses and taxes, other than federal income
tax.................................................... (21,394) (23,804)
Federal income tax received............................... 608 2,596
Other operating income and disbursements.................. (7,174) 8,488
--------- ---------
Net cash used in operating activities..................... (27,511) (14,824)
--------- ---------
INVESTING ACTIVITIES:
Proceeds from investments sold, matured or repaid......... 337,366 182,412
Purchase of investments................................... (312,277) (161,169)
Net decrease (increase) in loans on insurance policies.... (376) 522
--------- ---------
Net cash provided by investing activities................. 24,713 21,765
--------- ---------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM
INVESTMENTS............................................... (2,798) 6,941
CASH AND SHORT-TERM INVESTMENTS -- BEGINNING OF PERIOD...... 13,678 6,737
--------- ---------
CASH AND SHORT-TERM INVESTMENTS -- END OF PERIOD............ $ 10,880 $ 13,678
========= =========

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

F-II- 6
71

ACACIA NATIONAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF OPERATIONS
Acacia National Life Insurance Company (the Company) is a wholly owned
subsidiary of Acacia Life Insurance Company (Acacia Life). Acacia Life is a
wholly owned subsidiary of Ameritas Holding Company (AHC) which is a wholly
owned subsidiary of Ameritas Acacia Mutual Holding Company (AAMHC).

The Board of Directors of Ameritas Mutual Insurance Holding Company (AMIHC) and
Acacia Mutual Holding Corporation (AMHC) approved and adopted a plan of merger
under which the two would merge to form AAMHC. In addition their two wholly
owned subsidiaries, AHC and Acacia Financial Group, Ltd. (AFG), would merge to
form Ameritas Holding Company. Public informational hearings on the proposed
merger were held on November 20, 1998 with the Nebraska Insurance Director and
on December 17, 1998 with the D.C. Insurance Commissioner. Following the
commissioner's approval a special meeting with the eligible members of AMHC was
held on December 22, 1998 and with the members of AMIHC on December 29, 1998.
With the members approval the merger became effective January 1, 1999. The
business combination was accounted for as a pooling of interests.

AMHC was formed in 1997 in conjunction with a plan of reorganization
(Reorganization) of the former Acacia Life, Acacia Mutual Life Insurance Company
(Acacia). Pursuant to the Reorganization which was approved by the Department of
Insurance and Securities Regulation of the District of Columbia and the eligible
members of Acacia and became effective June 30, 1997, Acacia was converted to a
mutual insurance holding company structure whereby AMHC and AFG were formed and
Acacia was converted to a stock life insurance company wholly owned by AFG. As
of the effective date of the reorganization, the membership interests and the
contractual rights of the policyowners of Acacia were separated -- the
membership interests automatically became, by operation of law, membership
interests in AMHC and the contractual rights remained in Acacia. Each person who
becomes the owner of a designated policy issued by Acacia after the effective
date of the Reorganization became a member of AMHC, now AAMHC.

The Company, domiciled in Virginia, underwrites and markets deferred and
immediate annuities and life insurance products within the United States and is
licensed to operate in 46 states and the District of Columbia. On December 1,
1995 and September 9, 1996, respectively, operations began for the Acacia
National Variable Life Insurance Separate Account I and Acacia National Variable
Annuity Separate Account II which are separate investment accounts within the
Company.

Non-insurance products and services are offered by an affiliate of the Company,
Acacia Financial Corporation (AFC), a wholly owned subsidiary of Acacia Life,
which is a holding company of several financial service companies. Principal
subsidiaries include: Calvert Group Ltd. (Calvert), a provider of investment
advisory, management and administrative services to The Calvert Group of mutual
funds; Acacia Federal Savings Bank (AFSB), a federally chartered savings bank;
and The Advisors Group, Inc., a broker/dealer.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared, except as to form, on
the basis of accounting practices prescribed or permitted by the Bureau of
Insurance, State Corporate Commission of the Commonwealth of Virginia (statutory
basis or SAP), which are designed primarily to demonstrate ability to meet
claims of policyowners. These practices differ in certain respects, which in
some cases may be material, from generally accepted accounting principles (GAAP)
applied in the presentation of financial condition and results of operations on
the "going concern" basis commonly followed by other types of enterprises.

In March of 1998, the National Association of Insurance Commissioners adopted
the Codification of Statutory Accounting Principles (Codification). The
Codification, which is intended to standardize

F-II- 7
72
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)

BASIS OF PRESENTATION -- (CONTINUED)

regulatory accounting and reporting for the insurance industry, is proposed to
be effective January 1, 2001. However, statutory accounting principles will
continue to be established by individual state laws and permitted practices and
it is uncertain when, or if, the state of Virginia will require adoption of
Codification for the preparation of statutory financial statements. The Company
has not finalized the quantification of the effects of Codification on its
statutory financial statements.

The accompanying statutory financial statements vary in some respects from
generally accepted accounting principles. The most significant differences
include: (a) bonds are generally carried at amortized cost rather than being
valued at either amortized cost or fair value based on their classification
according to the Company's ability and intent to hold or trade the securities;
(b) costs related to acquiring new business are charged to operations as
incurred and not deferred, whereas premiums are taken into income on a pro rata
basis over the respective term of the policies; (c) policy reserves are carried
at amounts which approximate surrender values rather than accumulation values
and statutory investment reserves are established; (d) a provision has not been
made for federal income taxes resulting from all of the cumulative differences
in assets and liabilities determined on a tax return and financial statement
basis; and (e) changes in certain assets designated as "non-admitted" assets
have been charged to surplus.

In 1998, the Company's financial information was included in the determination
of consolidated GAAP amounts for Acacia Mutual Holding Corporation. The Acacia
National Life Insurance Company GAAP amounts were derived from this consolidated
financial information. The Company does not prepare separate financial
statements on a GAAP basis.

The impact of the estimated differences between SAP and GAAP in 1998 were as
follows:

CAPITAL
NET LOSS AND SURPLUS
-------- -----------

AS REPORTED UNDER SAP....................................... $(1,006) $ 31,690
Adjustments:
Deferred policy acquisition costs......................... 2,874 58,017
AVR and IMR............................................... 615 8,715
Deferred Federal income tax............................... (732) (20,077)
Net policyholder liabilities.............................. (1,601) (11,291)
Investments............................................... (59) 20,013
Other..................................................... (500) (946)
------- --------
AMOUNTS UNDER GAAP.......................................... $ (409) $ 86,121
======= ========

For 1999, it is not practicable to determine the above information.

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

F-II- 8
73
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

USE OF ESTIMATES -- (CONTINUED)
The principal accounting and reporting practices followed are:

INVESTMENTS
Investments are reported according to valuation procedures prescribed by the
National Association of Insurance Commissioners (NAIC), and generally: bonds and
mortgage loans are valued at amortized cost; preferred stock at cost; common
stock at fair value; other investments on the equity method; and separate
account assets are carried at fair value.

Realized capital gains and losses, including valuation allowances on specific
investments, are recorded in the Statement of Operations and unrealized gains
and losses are credited or charged to retained earnings.

SEPARATE ACCOUNTS
The Company operates separate accounts on which the earnings or losses accrue
exclusively to contract holders. The assets (mutual fund investments) and
liabilities of each account are clearly identifiable and distinguishable from
other assets and liabilities of the Company. Amounts are reported at fair value.

NON-ADMITTED ASSETS
Certain assets (primarily goodwill) are designated as "non-admitted" under
statutory accounting requirements. These assets are excluded from the statements
of admitted assets, liabilities and surplus by adjustments to retained earnings.
Total "non-admitted assets" were $2,981 and $2,978 in 1999 and 1998,
respectively.

RESERVES
Life policy reserves are computed by using the Commissioners Reserve Valuation
Method (CRVM) and the Commissioners Standard Ordinary Mortality table. Annuity
reserves are calculated using the Commissioners Annuity Reserve Valuation Method
(CARVM) and the maximum valuation interest rate; for annuities with life
contingencies, the prescribed valuation mortality table is used. Reserves for
unpaid claims include claims reported and unpaid and claims not yet reported,
the latter estimated on the basis of historical experience. As such amounts are
necessarily estimates, the ultimate liability will differ from the amount
recorded and will be reflected in operations when additional information becomes
known.

Accrued separate account transfers primarily consists of the amount of
policyholder account values over modified reserves used in the separate account,
such as the use of CARVM and CRVM.

The interest maintenance reserve (IMR) is calculated based on the prescribed
methods developed by the NAIC. Realized gains and losses, net of tax, resulting
from interest rate changes on fixed income investments are deferred and credited
to this reserve. These gains and losses are then amortized into investment
income over what would have been the remaining years to maturity of the
underlying investment. Amortization included in net investment income was $407
and $350 for 1999 and 1998, respectively.

The asset valuation reserve (AVR) is a required appropriation of surplus to
provide for possible losses that may occur on certain investments held by the
Company. The reserve is computed based on holdings of bonds, stocks, and
short-term investments and realized and unrealized gains and losses, other than
those resulting from interest rate changes. Changes in the reserve are charged
or credited to retained earnings.

INCOME TAXES
The Company, beginning in 1999, will file a consolidated tax return with Acacia
Life Insurance Company. Prior to 1999, Acacia National filed a consolidated
return with Acacia Mutual Holding Corporation and its

F-II- 9
74
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

USE OF ESTIMATES -- (CONTINUED)
INCOME TAXES -- (CONTINUED)
subsidiaries. An agreement among the members of the consolidated group,
generally, provides for distribution of consolidated tax results as if filed on
a separate return basis.

The Company's federal income tax returns have been examined by and settled with
the Internal Revenue Service through 1995.

Under statutory accounting practices, no provision is made for deferred federal
income taxes related to temporary differences between statutory and taxable
income. Such temporary differences arise primarily from capitalization and
amortization of deferred policy acquisition costs, certain reserve calculations
and recognition of realized gains or losses on sales of bonds.

Federal income tax regulations allowed certain special deductions for 1983 and
prior years which are accumulated in a memorandum tax account designated as
"policyholders' surplus". Generally, this policyholders' surplus account (PSA)
will become subject to tax at the then current rates only if the accumulated PSA
exceeds certain maximum limitations or if certain cash distributions are deemed
to be paid out of the account. At December 31, 1999 and 1998, the Company has
$6.6 million in their policyholders' surplus accounts which is not reflected in
the financial statements.

RECOGNITION OF PREMIUM INCOME AND RELATED EXPENSES
Premiums are reported as income when collected over the premium paying periods
of the policies. Annuity and fund deposits are included as income when received.
Policy acquisition costs, such as commissions and other marketing and issuance
expenses incurred in connection with acquiring new business, are charged to
operations as incurred. Premium income consists of:

YEARS ENDED
DECEMBER 31
------------------
1999 1998
------- -------

Life........................................................ $27,747 $23,552
Annuity..................................................... 51,310 44,367
------- -------
$79,057 $67,919
======= =======

RECLASSIFICATIONS
Certain items on the prior year financial statements have been reclassified to
conform to current year presentation.

2. FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate a
value:

BONDS -- For publicly traded securities, fair value is determined
using an independent pricing source. For securities without a readily
ascertainable fair value, fair value has been determined using an interest
rate spread matrix based upon quality, weighted average maturity and
Treasury yields.

MORTGAGE LOANS -- Mortgage loans in good standing are valued on the
basis of discounted cash flow. The interest rate that is assumed is based
upon the weighted average term of the mortgage and appropriate spread over
Treasuries. There were no mortgage loans in default at December 31, 1999.

PREFERRED STOCKS -- For publicly traded securities, fair value is
determined using an independent pricing source.

F-II- 10
75
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

2. FINANCIAL INSTRUMENTS -- (CONTINUED)
COMMON STOCKS -- For publicly traded securities, fair value is
determined using an independent pricing source.

SHORT-TERM INVESTMENTS -- The carrying amount approximates fair value
because of the short maturity of these instruments.

OTHER INVESTMENTS -- Fair value for venture capital partnerships is
estimated based on values as last reported by the partnership and
discounted for their lack of marketability.

LOANS ON INSURANCE POLICIES -- Fair values for loans on insurance
policies are estimated using a discounted cash flow analysis at interest
rates currently offered for similar loans. Loans on insurance policies with
similar characteristics are aggregated for purposes of the calculations.

CASH -- The carrying amount equals fair value.

ACCRUED INVESTMENT INCOME -- Fair value of accrued investment income
equals book value.

INVESTMENT-TYPE CONTRACTS -- Reserves held on investment-type
insurance contracts, i.e. contracts which do not contain significant
morbidity risks, are carried at amounts which approximate fair value.

FUNDS LEFT ON DEPOSIT -- Funds on deposit which do not have fixed
maturities are carried at the amount payable on demand at the reporting
date.

The estimated fair values of the Company's financial instruments are as follows:

DECEMBER 31,
--------------------------------------------
1999 1998
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------

Financial assets:
Bonds............................................. $522,328 $517,993 $556,127 $591,776
Preferred stocks.................................. 70 106 546 798
Common stocks..................................... 385 385 1,778 1,778
Mortgage loans.................................... 894 861 -- --
Short-term investments............................ 5,685 5,685 13,614 13,614
Other investments................................. 495 495 682 682
Loans on insurance policies....................... 7,955 6,816 7,579 6,996
Cash.............................................. 5,195 5,195 64 64
Accrued investment income......................... 9,157 9,157 9,775 9,775
Financial Liabilities:
Investment-type contracts......................... $357,515 $357,515 $380,641 $380,641
Funds left on deposit............................. 65,002 65,002 62,065 62,065

These values do not necessarily represent the value for which the financial
instrument could be sold.

F-II- 11
76
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

3. INVESTMENTS

The table below provides additional information relating to bonds and stocks
held by the Company as of December 31, 1999:

DECEMBER 31, 1999
----------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
--------- ------- ------- --------

U.S. Corporate................................. $292,892 $ 6,818 $ 8,603 $291,107
Mortgage-backed................................ 102,157 803 2,465 100,495
U.S. Treasury securities and obligations of
U.S. government agencies..................... 68,397 3,284 314 71,367
Foreign........................................ 15,237 15 603 14,649
Asset backed................................... 43,645 9 3,279 40,375
-------- ------- ------- --------
Total bonds.................................. $522,328 $10,929 $15,264 $517,993
-------- ------- ------- --------
Preferred stocks............................... $ 70 $ 36 $ -- $ 106
-------- ------- ------- --------
Common stocks.................................. $ 1,137 $ -- $ 752 $ 385
-------- ------- ------- --------

The comparative data as of December 31, 1998 is summarized as follows:

DECEMBER 31, 1998
----------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- FAIR
COST GAINS LOSSES VALUE
--------- ------- ------ --------

U.S. Corporate................................. $294,538 $24,557 $2,729 $316,366
Mortgage-backed................................ 166,042 4,928 708 170,262
U.S. Treasury securities and obligations of
U.S. government agencies..................... 72,543 9,705 -- 82,248
Foreign........................................ 23,004 624 728 22,900
-------- ------- ------ --------
Total bonds.................................. $556,127 $39,814 $4,165 $591,776
-------- ------- ------ --------
Preferred stocks............................... $ 546 $ 252 $ -- $ 798
-------- ------- ------ --------
Common stocks.................................. $ 1,870 $ 118 $ 210 $ 1,778
-------- ------- ------ --------

The amortized cost and fair value of bonds at December 31, 1999 are shown below.
Expected maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.

AMORTIZED FAIR
COST VALUE
--------- --------

Due in one year or less..................................... $ 18,671 $ 18,764
Due after one year through five years....................... 148,661 149,293
Due after five years through ten years...................... 106,308 105,839
Due after ten years......................................... 102,886 103,227
Mortgage-backed securities.................................. 102,157 100,495
Asset backed................................................ 43,645 40,375
-------- --------
Total..................................................... $522,328 $517,993
======== ========

At December 31, 1999, the Company had bonds with a book value of $6,870 and a
fair value of $7,818 on deposit with various State Insurance Departments.

F-II- 12
77
ACACIA NATIONAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 -- (CONTINUED)
(IN THOUSANDS)

3. INVESTMENTS -- (CONTINUED)
Sales of bond investments in 1999 and 1998 resulted in proceeds of $294,291 and
$112,603, respectively. Gains of $1,489 and $505 and losses of $3,316 and $50
were realized on those sales in 1999 and 1998, respectively.

The Company's bond investment portfolio is predominantly comprised of investment
grade securities. At December 31, 1999 and 1998, approximately $16,276 and
$8,865, respectively, in bonds (3.1% and 1.6%, respectively, of the total bond
portfolio) are considered "below investment grade". Securities are classified as
"below investment grade" by utilizing rating criteria established by the NAIC.
During 1999, the Company took other than temporary write downs on bonds of
$6,759.

4. RELATED PARTY TRANSACTIONS

The Company has no employees, affiliates (primarily Acacia Life and Ameritas
entities) provide technical, financial, legal, marketing and investment advisory
support to the Company under various administrative service agreements. The cost
of these services to the Company for years ended December 31, 1999 and 1998 was
$15,929 and $17,695, respectively.

The Company entered into reinsurance agreements (yearly renewable term) with
affiliates. Under these agreements, these affiliates assume life insurance risk
in excess of the Company's retention limit. These reinsurance contracts do not
relieve the Company of its obligations to its policyowners, (see footnote 5).

The assets of the defined contribution plan under Internal Revenue Code Section
401(k) for the employees of Acacia Life include an investment in a deposit
administration contract with the Company of $18,305 and $18,665 at December 31,
1999 and 1998, respectively.

5. REINSURANCE

The Company reinsures all life insurance risks over its retention limit of ten
thousand per policy under yearly renewable term insurance agreements with Acacia
Life and several other non-affiliated companies. The Company remains obligated
for amounts ceded in the event that reinsurers do not meet their obligations.
Since the reinsurance treaties are of such a nature as to pass economic risk to
the reinsurer, appropriate reductions are made from income, claims, expense and
liability items in accounting for the reinsurance ceded.

Premiums and benefits have been reduced by amounts reinsured as follows:

1999 1998
------ ------

Premiums ceded:
Acacia Life............................................... $4,634 $3,971
Others.................................................... 684 630
------ ------
Total premium ceded......................................... $5,318 $4,601
====== ======
Death benefits reimbursed:
Acacia Life............................................... $3,186 $3,610
Others.................................................... 1,082 233
------ ------
Total benefits reimbursed................................... $4,268 $3,843
====== ======
Life and annuity reserves ceded:
Acacia Life............................................... $2,501 $2,108
Others.................................................... 497 392
------ ------
Total life and annuity reserves ceded....................... $2,998 $2,500
====== ======

F-II- 13
78

APPENDIX A

ILLUSTRATIONS OF DEATH BENEFITS AND VALUES
The following tables illustrate how the values and Death Benefits of a
Policy may change with the investment experience of the Fund. The tables show
how the values and Death Benefits of a Policy issued to an Insured of a given
age and specified underwriting risk classification who pays the given premium at
issue would vary over time if the investment return on the assets held in each
portfolio of the Funds were a uniform, gross, after-tax annual rate of 0%, 6%,
or 12%. The tables on pages A-3 through A-6 illustrate a Policy issued to a
male, age 45, under a preferred rate non-tobacco underwriting risk
classification. A standard tobacco use and non-tobacco use, and preferred
non-tobacco classification and different rates for certain specified amounts.
The values and Death Benefits would be different from those shown if the gross
annual investment rates of return averaged 0%, 6%, and 12% over a period of
years, but fluctuated above and below those averages for individual Policy
Years, or if the Insured were assigned to a different underwriting risk
classification.

The second column of the tables shows the accumulated value of the premiums
paid at 5%. The following columns show the Death Benefits and the values for
uniform hypothetical rates of return shown in these tables. The tables on pages
A-3 and A-5 are based on the current Cost of Insurance Rates, current expense
deductions and the maximum percent of premium loads. These reflect the basis on
which ANLIC currently sells its Policies. The maximum allowable Cost of
Insurance Rates under the Policy are based upon the 1980 Commissioner's Standard
Ordinary Smoker and Non-Smoker, Male and Female Mortality Tables, without smoker
distinction. ANLIC anticipates reflecting future improvements in actual
mortality experience through adjustments in the current Cost of Insurance Rates
actually applied. ANLIC also anticipates reflecting any future improvements in
expenses incurred by applying lower percent of premium charges and other expense
deductions. The Death Benefits and values shown in the tables on pages A-4 and
A-6 are based on the assumption that the maximum allowable Cost of Insurance
Rates as described above and maximum allowable expense deductions are made
throughout the life of the Policy. After the tenth Policy Year, the maximum
values may be less than illustrated in those states which require the per $1000
components of the Administrative Expense Charge to continue for the life of the
Policy.

The amounts shown for the Death Benefits, Net Cash Surrender values and
accumulation values reflect the fact that the net investment return of the
Subaccounts is lower than the gross, after-tax return of the assets held in the
Funds as a result of expenses paid by the Fund and charges levied against the
Subaccounts. The values shown take into account an average of the expenses paid
by each portfolio available for investment at an equivalent annual rate of .90%
(which is in excess of the current equivalent annual rate of .86% of the
aggregate average daily net assets of the Funds) and the daily charge by ANLIC
to each Subaccount for assuming mortality and expense risks and administrative
expenses (which is equivalent to a charge at an annual rate of 0.90% for Policy
Years 1-15 and 0.45% thereafter on pages A-3 and A-5 and at an annual rate of
1.10% for Policy Years 1-15 and .65% thereafter on pages A-4 and A-6 of the
average net assets of the Subaccounts). The investment adviser or other
affiliates of various Funds have agreed to reimburse the portfolios to the
extent that the aggregate operating expenses (certain portfolios may exclude
certain items) were in excess of an annual rate of average daily net assets.
These agreements are expected to continue in future years but may be terminated
at any time. As long as the expense limitations continue for a portfolio, if a
reimbursement occurs, it has the effect of lowering the portfolio's expense
ratio and increasing its total return. The illustrated gross annual investment
rates of return of 0%, 6%, and 12% were computed after deducting fund expenses
and correspond to approximate net annual rates of -1.80%, 4.20%, and 10.20%
respectively, for Policy Years 1-15 and -1.35%, 4.65%, and 10.65% for the Policy
Years thereafter respectively, on pages A-3 and A-5 and -2.00%, 4.00%, and
10.00% respectively, for years 1-15, and -1.65%, 4.35%, and 10.35% thereafter on
pages A-4 and A-6.

The hypothetical values shown in the tables do not reflect any charges for
federal income tax burden attributable to Separate Account I, since ANLIC is not
currently making such charges. However, such charges may be made in the future
and, in that event, the gross annual investment rate of return would have to
exceed 0 percent, 6 percent, or 12 percent by an amount sufficient to cover the
tax charges in order to produce the Death Benefits and Accumulation Values
illustrated. (See the section on Federal Tax Matters.)

EXECUTIVE SELECT
A- 1
79

The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all Net Premiums are allocated to Separate Account I, and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner has not requested an increase or decrease in the initial Specified Amount,
that no partial withdrawals have been made, and that no more than fifteen
transfers have been made in any Policy Year so that no transfer charges have
been incurred. Illustrated values would be different if the proposed Insured
were female, a tobacco user, in substandard risk classification, or were another
age, or if a higher or lower premium was illustrated.

Upon request, ANLIC will provide comparable illustrations based upon the
proposed Insured's age, gender and risk class, the Specified Amount, the Death
Benefit option, and planned periodic premium schedule requested, and any
available riders requested. These illustrations may be provided to you in
printed form by your registered representative. ANLIC may also make these
illustrations available to you by electronic means, such as through our website.
In addition, upon client request, illustrations may be furnished reflecting
allocation of premiums to specified Subaccounts. Such illustrations will reflect
the expenses of the portfolio in which the Subaccount invests.

EXECUTIVE SELECT
A- 2
80

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age: 45 Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A
USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES

0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT 12% HYPOTHETICAL GROSS
RETURN RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
END ACCUMULATED --------------------- --------------------- -------------------------
OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ---------- -------- ---------- -------- ----------- -----------

1 5,775 3,903 250,000 4,175 250,000 4,447 250,000
2 11,839 7,535 250,000 8,316 250,000 9,132 250,000
3 18,206 11,044 250,000 12,580 250,000 14,250 250,000
4 24,891 14,512 250,000 17,053 250,000 19,927 250,000
5 31,911 17,852 250,000 21,651 250,000 26,126 250,000
6 39,281 21,063 250,000 26,380 250,000 32,904 250,000
7 47,020 24,136 250,000 31,234 250,000 40,313 250,000
8 55,146 27,065 250,000 36,215 250,000 48,419 250,000
9 63,678 29,838 250,000 41,318 250,000 57,290 250,000
10 72,637 32,446 250,000 46,540 250,000 67,006 250,000
11 82,044 35,521 250,000 52,534 250,000 78,325 250,000
12 91,921 38,527 250,000 58,792 250,000 90,858 250,000
13 102,292 41,476 250,000 65,337 250,000 104,751 250,000
14 113,182 44,379 250,000 72,195 250,000 120,164 250,000
15 124,616 47,244 250,000 79,388 250,000 137,273 250,000
16 136,622 50,307 250,000 87,315 250,000 156,908 250,000
17 149,228 53,354 250,000 95,676 250,000 178,799 250,000
18 162,465 56,396 250,000 104,501 250,000 203,205 256,039
19 176,363 59,444 250,000 113,825 250,000 230,262 285,525
20 190,956 62,519 250,000 123,686 250,000 260,201 317,445
25 275,624 76,796 250,000 181,191 250,000 464,371 538,670
30 383,684 86,830 250,000 255,192 273,055 800,993 857,062
35 521,600 91,072 250,000 348,864 366,307 1,358,158 1,426,066

- ---------------
1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND NET CASH
SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY ANLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

EXECUTIVE SELECT
A- 3
81

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY

EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

Male Issue Age: 45 Preferred Underwriting Class

PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A

USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES

0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT ANNUAL INVESTMENT RETURN
RETURN (-2.00% NET) RETURN (4.00% NET) (10.00% NET)
ACCUMULATED --------------------- --------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ---------- -------- ---------- -------- ----------- -----------

1 5,775 3,894 250,000 4,166 250,000 4,438 250,000
2 11,839 7,007 250,000 7,768 250,000 8,565 250,000
3 18,206 9,976 250,000 11,440 250,000 13,035 250,000
4 24,891 12,885 250,000 15,265 250,000 17,968 250,000
5 31,911 15,644 250,000 19,155 250,000 23,312 250,000
6 39,281 18,251 250,000 23,111 250,000 29,112 250,000
7 47,020 20,690 250,000 27,118 250,000 35,400 250,000
8 55,146 22,950 250,000 31,169 250,000 42,223 250,000
9 63,678 25,017 250,000 35,252 250,000 49,629 250,000
10 72,637 26,874 250,000 39,353 250,000 57,673 250,000
11 82,044 29,051 250,000 44,021 250,000 67,000 250,000
12 91,921 30,993 250,000 48,725 250,000 77,185 250,000
13 102,292 32,699 250,000 53,465 250,000 88,338 250,000
14 113,182 34,158 250,000 58,242 250,000 100,582 250,000
15 124,616 35,359 250,000 63,052 250,000 114,061 250,000
16 136,622 36,454 250,000 68,186 250,000 129,468 250,000
17 149,228 37,244 250,000 73,372 250,000 146,591 250,000
18 162,465 37,691 250,000 78,592 250,000 165,678 250,000
19 176,363 37,748 250,000 83,832 250,000 187,025 250,000
20 190,956 37,371 250,000 89,076 250,000 210,976 257,391
25 275,624 27,344 250,000 115,270 250,000 371,638 431,100
30 383,684 * * 140,736 250,000 629,974 674,072
35 521,600 * * 163,641 250,000 1,051,039 1,103,591

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

* In the absence of an additional premium, the policy would lapse.

1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 4
82

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY

EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

Male Issue Age: 45 Preferred Underwriting Class

PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B

USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES

0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
ACCUMULATED ------------------------- ------------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ----------- ----------- ----------- ----------- ----------- -----------

1 14,490 12,044 261,630 12,798 262,384 13,552 263,138
2 29,705 23,286 273,079 25,524 275,317 27,854 277,647
3 45,680 34,251 284,251 38,719 288,719 43,559 293,559
4 62,454 45,145 295,145 52,606 302,606 61,013 311,013
5 80,066 55,757 305,757 66,987 316,987 80,156 330,156
6 98,560 66,087 316,087 81,878 331,878 101,155 351,155
7 117,978 76,124 326,124 97,285 347,285 124,182 374,182
8 138,367 85,863 335,863 113,217 363,217 149,434 399,434
9 159,775 95,292 345,292 129,679 379,679 177,116 427,116
10 182,254 104,397 354,397 146,674 396,674 207,461 457,461
11 205,856 113,827 363,827 164,888 414,888 241,421 491,421
12 230,639 123,046 373,046 183,823 433,823 278,801 528,801
13 256,661 132,069 382,069 203,524 453,524 319,963 569,963
14 283,984 140,913 390,913 224,035 474,035 365,306 615,306
15 312,673 149,588 399,588 245,398 495,398 415,265 665,265
16 342,797 158,830 408,830 268,813 518,813 472,240 722,240
17 374,427 167,951 417,951 293,320 543,320 535,287 785,287
18 407,638 176,965 426,965 318,985 568,985 605,068 855,068
19 442,510 185,891 435,891 345,877 595,877 682,317 932,317
20 479,126 194,758 444,758 374,083 624,083 767,859 1,017,859
25 691,566 236,182 486,182 534,855 784,855 1,352,027 1,602,027
30 962,699 269,165 519,165 730,101 980,101 2,313,609 2,563,609
35 1,308,741 291,151 541,151 965,102 1,215,102 3,897,507 4,147,507

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

1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 5
83

ILLUSTRATION OF POLICY VALUES
ACACIA NATIONAL LIFE INSURANCE COMPANY
EXECUTIVE SELECT FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age: 45 Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B
USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES

0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT 12% HYPOTHETICAL GROSS
RETURN RETURN ANNUAL INVESTMENT RETURN
(-2.00% NET) (4.00% NET) (10.00% NET)
ACCUMULATED --------------------- --------------------- -------------------------
END OF PREMIUMS AT NET CASH NET CASH NET CASH
POLICY 5% INTEREST SURRENDER DEATH SURRENDER DEATH SURRENDER DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- --------- ------- --------- ------- --------- -------

1 14,490 12,019 261,605 12,798 262,384 13,527 263,113
2 29,705 22,538 272,331 24,818 274,611 27,040 276,833
3 45,680 32,745 282,745 37,250 287,250 41,821 291,821
4 62,454 42,846 292,846 50,314 300,314 58,197 308,197
5 80,066 52,630 302,630 63,806 313,806 76,088 326,088
6 98,560 62,096 312,096 77,738 327,738 95,637 345,637
7 117,978 71,227 321,227 92,105 342,105 116,987 366,987
8 138,367 80,012 330,012 106,908 356,908 140,299 390,299
9 159,775 88,438 338,438 122,142 372,142 165,746 415,746
10 182,254 96,486 346,486 137,800 387,800 193,516 443,516
11 205,856 104,683 354,683 154,436 404,436 224,395 474,395
12 230,639 112,473 362,473 171,520 421,520 258,103 508,103
13 256,661 119,853 369,853 189,061 439,061 294,913 544,913
14 283,984 126,816 376,816 207,058 457,058 335,119 585,119
15 312,673 133,348 383,348 225,512 475,512 379,037 629,037
16 342,797 140,077 390,077 245,473 495,473 428,763 678,763
17 374,427 146,342 396,342 265,992 515,992 483,304 733,304
18 407,638 152,103 402,103 287,045 537,045 543,117 793,117
19 442,510 157,313 407,313 308,602 558,602 608,695 858,695
20 479,126 161,930 411,930 330,633 580,633 680,587 930,587
25 691,566 174,928 424,928 447,078 697,078 1,158,690 1,408,690
30 962,699 165,778 415,778 568,953 818,953 1,917,412 2,167,412
35 1,308,741 122,415 372,415 681,770 931,770 3,120,176 3,370,176

- ---------------
1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.

2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender value.

EXECUTIVE SELECT
A- 6
84

APPENDIX B

AUTOMATIC REBALANCING, MODEL ASSET ALLOCATION, DOLLAR COST AVERAGING AND
EARNINGS SWEEP PROGRAMS

To assist the Owner in making a premium allocation decision among
Subaccounts, ANLIC offers automatic transfer programs. These programs are
designed to meet individual needs of the Owner and are not guaranteed to improve
performance of the Policy.

The Owner may elect the Automatic Rebalancing Program which will adjust
values in the Subaccounts to align with a specific percentage of total value in
the Variable Account. By placing a written allocation election form on file with
ANLIC, the Owner may have amounts automatically transferred from the Subaccounts
on either a quarterly, semi-annual or annual basis. The Owner chooses the
percentages to be used under the Automatic Rebalancing Program.

Model Asset Allocation is offered through The Advisors Group, Inc. (TAG) in
conjunction with the services of Ibbotson Associates who were among the first to
develop the modern science of asset allocation. TAG representatives offer a
service created by Ibbotson Associates to match the Owner's risk tolerance and
investment objectives with a model Subaccount percentage allocation formula. To
use this service, the Owner first completes a questionnaire about risk tolerance
and Policy performance objectives. The TAG representative uses the completed
responses to match the Owner's needs to one of ten different model percentage
allocation formulas designed by Ibbotson. The Owner may then elect to follow the
recommended percentage allocation formula, or select a different formula.

Ibbotson Associates provides a valuable service to an Owner who seeks to
follow the science of asset allocation. Some research studies have shown that
the asset allocation decision is the single largest determinant of Portfolio
performance. Asset allocation combines the concepts of asset-liability
management, mean-variance optimization, simulation and economic forecasting. Its
objectives are to match asset classes and strategies to achieve better returns,
to reduce volatility and to attain specific goals such as avoidance of interest
rate or market risk.

As an alternative, ANLIC also offers the Owner the option to elect the
Dollar Cost Averaging Program. Dollar cost averaging is a long term investment
method that uses periodic premium allocations from the Money Market Subaccount
to other Subaccounts. Under the theory of dollar cost averaging, the Owner may
pursue a strategy of regular and systematic purchases to take advantage of
market value fluctuations. More Subaccount accumulation units will be purchased
when Subaccount unit values are low and fewer units will be purchased when unit
values are high. There is no guarantee that the Dollar Cost Averaging Program
will protect against market loss or improve performance of the Policy.

The Dollar Cost Averaging Program provides a valuable service to an Owner
who is able to sustain a long term transfer schedule and who seeks to avoid the
volatility often associated with equity investments.

The Earnings Sweep Program allows an Owner to systematically reallocate
interest earnings from the Fixed Account to one or more of the Subaccounts on a
monthly, quarterly, semi-annual, or annual basis to meet your investment
allocation percentages.

EXECUTIVE SELECT
B- 1
85

APPENDIX C

[THE ACACIA GROUP LOGO]

EMPLOYEE BENEFIT PLAN
INFORMATION STATEMENT

The purpose of this statement is to inform you as an independent Fiduciary
of the Employee Benefit Plan, of the Sales Representative's relationship to and
compensation from Acacia National Life Insurance Company (ANLIC), as well as to
describe certain fees and charges under the Executive Select Policy being
purchased from the Sales Representative.

The Sales Representative is appointed with ANLIC as its Sales
Representative and is a Securities Registered Representative. In this position,
the Sales Representative is employed to procure and submit to ANLIC applications
for contracts, including applications for Executive Select.

COMMISSIONS, FEES AND CHARGES

The following commissions, fees and charges apply to Executive Select
(Policy):

SALES COMMISSION: ANLIC pays commission to the broker-dealers, which in
turn pay commissions to the registered representative who sells this Policy. The
commission may equal an amount up to 30% of premium in the first Policy Year and
up to 12% of premium in renewal years. Broker-dealers may also receive a service
fee up to an annualized rate of .50% of the Accumulation Value beginning in the
sixth Policy Year. Compensation arrangements may vary among broker-dealers. In
addition, ANLIC may also pay override payments, expense allowances, bonuses,
wholesaler fees, and training allowances. Registered representatives who meet
certain production standards may receive additional compensation. From time to
time, additional sales incentives may be provided to broker-dealers.

COST OF INSURANCE: A monthly charge for the Policy and any riders. The Cost
of Insurance Rates are shown on the Policy Schedule.

MONTHLY PER POLICY CHARGE: ANLIC will make a per Policy charge of $15.00
per month (maximum $15.00) during the first Policy Year and $7.00 per month
(maximum $12.00) thereafter. This charge is guaranteed not to increase above the
maximum.

MONTHLY PER $1000 CHARGE FOR ADMINISTRATIVE EXPENSES: The first ten Policy
Years, there is a monthly charge per $1000 of initial Specified Amount. In
addition, there is a monthly charge per $1000 of each increase in Specified
Amount for ten years from the date of increase. The per $1000 rates for both the
initial Specified Amount and each increase vary by Issue Age, gender, and risk
class. (See the Policy Schedule for rates.)

DAILY ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE: ANLIC makes a daily charge
of the value of the average daily net assets of the Account under the policies
equal to an annual rate of 0.15% (maximum 0.15%). This charge is subtracted when
determining the daily accumulation unit value. This charge is guaranteed not to
increase above the maximum and is designed to reimburse ANLIC for administrative
expenses of issuing, servicing and maintaining the policies. ANLIC does not
expect to make a profit on this fee.

MORTALITY AND EXPENSE RISK CHARGE: ANLIC imposes a charge to compensate it
for bearing certain mortality and expense risks under the policies. ANLIC makes
a daily charge of the value of the average daily net assets of the Account under
the policies equal to an annual rate of 0.75% (maximum 0.95%) in Policy Years
1-15 and 0.30% (maximum 0.50%) thereafter. This charge is subtracted when
determining the daily accumulation unit value.

EXECUTIVE SELECT

C- 1

ANLIC guarantees that this charge will never increase above the maximum. If
this charge is insufficient to cover assumed risks, the loss will fall on ANLIC.
Conversely, if the charge proves more than sufficient, any excess will be added
to ANLIC's surplus. No mortality and expense risk charge is imposed on the Fixed
Account.

PARTIAL AND FULL WITHDRAWALS: Partial withdrawals may be made, subject to
certain restrictions. The Death Benefit will be reduced by the amount of the
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). You may Surrender the Policy at
any time for its Net Cash Surrender Value. There is no surrender charge.

PERCENT OF PREMIUM CHARGE: ANLIC will deduct a percent of premium charge
upon receipt of a premium payment. Currently, this charge is 3.0% of the premium
paid (maximum 5.0%).

FUND INVESTMENT ADVISORY FEES AND EXPENSES: At the direction of the Policy
Owner, Separate Account I purchases shares of Funds which are available for
investment under this Policy. The net assets of Separate Account I will reflect
the value of the Fund shares and therefore, investment advisory fees and other
expenses of the Funds. A complete description of these fees and expenses is
contained in the Funds' prospectuses.

EXECUTIVE SELECT

C- 2

INCORPORATION BY REFERENCE

The Registrant, Separate Account I, purchases or will purchase units from
the portfolios of these Funds at the direction of its Policy Owners. The
prospectuses of these Funds will be distributed with this prospectus and are
hereby incorporated by reference. The prospectuses incorporated by reference are
as follows:

The Alger American Fund
SEC File No. 33-21722

Calvert Variable Series, Inc.
SEC File No. 2-80154

Deutsche Asset Management VIT Funds

SEC File No. 333-00479

Variable Insurance Products Fund
SEC File No. 2-75010

Variable Insurance Products Fund II
SEC File No. 33-20773

Franklin Templeton Variable Insurance Products Trust
SEC File No. 33-23493

Neuberger Berman Advisers Management Trust
SEC File No. 2-88566

Oppenheimer Variable Account Funds
SEC File No. 2-931-77

Van Eck Worldwide Insurance Trust
SEC File No. 33-13019

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.

Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:

Acacia National Life Insurance Company represents that the fees and charges
deducted under the contract, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by the insurance company.

RULE 484 UNDERTAKING

ANLIC'S By-laws provide as follows:

In the event any action, suit or proceeding is brought against a present or
former Director, elected officer, appointed officer or other employee because of
any action taken by such person as a Director, officer or other employee of the
Company or which he omitted to take as a Director, officer or employee of the
Company, the Company shall reimburse or indemnify him for all loss reasonably
incurred by him in connection with such action to the fullest extent permitted
by sec.13.1-696 through sec.13.1-704 of the Code of Virginia, as is now or
hereafter amended, except in relation to matters as to which such person shall
have been finally adjudged to be liable by reason of having been guilty of gross
negligence or willful misconduct in the performance of duties as such Director,
officer or employee. In case any such suit, action or proceeding shall result in
a settlement prior to final judgment and if, in the judgment of the Board of
Directors, such person in taking the action or failing to take the action
complained of was not grossly negligent or guilty of wilful misconduct in the
performance of his duty, the Company shall reimburse or indemnify him for the
amount of such settlement and for all expenses reasonably incurred in connection
with such action and its settlement. This right of indemnification shall not be
exclusive of any other rights to which such person may be entitled.

REPRESENTATION PURSUANT TO RULE 6E-3(T)

This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following Papers and Documents:

The facing sheet.

The prospectus consisting of 83 pages.

The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) Russell J. Wiltgen
(b) Robert-John H. Sands
(c) Deloitte & Touche LLP
(d)PricewaterhouseCoopers LLP
The Following Exhibits:

1. The Following exhibits correspond to those required by paragraph IX A of the
instructions as to exhibits in Form N-8B-2.
(A)(1) Board Resolution Establishing Separate Account I(1)
(A)(2) Not applicable
(A)(3)(a) Underwriting Agreement between The Advisors Group, Inc. and Acacia
National Life Insurance Company(2)
(A)(3)(b) Form of Selling Agreement(3)
(A)(3)(c) Commission Schedule.
(A)(4) Not Applicable
(A)(5)(a) Policy.
(A)(5)(b) Policy Riders.
(A)(6) Certificate of Organization of Acacia National Life Insurance Company(4)
(A)(6) Bylaws of Acacia National Life Insurance Company(4)
(A)(7) Not applicable
(A)(8)(a) Participation Agreement Alger American Fund (1)
(A)(8)(b) Participation Agreement Calvert Variable Series, Inc.(1)
(A)(8)(c) Participation Agreement Deutsche Asset Management VIT Funds.(5)
(A)(8)(d) Form of Participation Agreement Variable Insurance Product Fund.
(A)(8)(e) Form of Participation Agreement Variable Insurance Product Fund II
(A)(8)(f) Participation Agreement Franklin Templeton Variable Insurance
Products Trust(5)
(A)(8)(g) Participation Agreement Neuberger Berman Advisers Management Trust(1)
(A)(8)(h) Participation Agreement Oppenheimer Variable Account Funds(4)

(A)(8)(i) Participation Agreement Van Eck Worldwide Insurance Trust(1)

(A)(9) Not Applicable
(A)(10) Application for Policy

2. (a)(b) Opinion and Consent of Robert-John H. Sands Senior Vice President and
General Counsel
3. No financial statements will be omitted from the final Prospectus pursuant to
Instruction 1(b) or
(c) or Part I.
4. Not applicable.
5. Not applicable.
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
7. (a) Consent of Deloitte & Touche LLP
7. (b) Consent of PricewaterhouseCoopers LLP
8. Not applicable.

1 Incorporated by reference to the Pre-Effective Amendment No. 3 to the
Registration Statement on Form S-6 for Acacia National Variable Life Insurance
Separate Account I (File No. 33-90208), filed on October 11, 1995.

2 Incorporated by reference to the initial Registration Statement for
Acacia National Variable Annuity Separate Account II on Form N-4
(File No 333 -03963), filed August 26, 1996.

3 Incorporated by reference to the initial Registration Statement on
Form S-6 for Acacia National Variable Life Insurance Separate Account I
(File No. 33-90208), filed on March 10, 1995.

4 Incorporated by reference to the Post-Effective Amendment No. 3 to
the Registration Statement on Form S-6 for Acacia National Variable Life
Insurance Separate Account I (File No. 33-90208), filed on May 1, 1997.

5 Incorporated by reference to the Post-Effective Amendment No. 1 to
the Registration Statement on Form S-6 for Acacia National Variable Life
Insurance Separate Account I (File No. 333-81057), filed on February 25, 2000.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Acacia National Variable Life Insurance Separate Account I, certifies that it
has duly caused this Pre-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized in the City of
Bethesda, County of Montgomery, State of Maryland on this 20th day of April,
2000.

ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE ACCOUNT I, Registrant

ACACIA NATIONAL LIFE INSURANCE COMPANY, Depositor

Attest: /s/ Robert-John H. Sands By: /s/ Charles T. Nason
------------------------- ---------------------
Secretary Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Acacia
National Life Insurance Company on the dates indicated.

SIGNATURE TITLE DATE

/s/ Charles T. Nason Chairman of the Board April 20, 2000
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Charles T. Nason and Chief Executive Officer

/s/ Robert W. Clyde President and Chief April 20, 2000
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Robert W. Clyde Operating Officer

/s/ Robert-John H. Sands Senior Vice President, April 20, 2000
- -------------------------
Robert-John H. Sands General Counsel & Corporate
Secretary

/s/ Haluk Ariturk Senior Vice President, April 20, 2000
- -------------------------
Haluk Ariturk Product Management and
Administration

/s/ JoAnn M. Martin Senior Vice President, April 20, 2000
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JoAnn M. Martin Chief Financial Officer

/s/ Reno J. Martini Director April 20, 2000
- -------------------------
Reno J. Martini

/S/ Brian J. Owens Senior Vice President, April 20, 2000
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Brian J. Owens Career Distribution

/S/ Janet L. Schmidt Senior Vice President, April 20, 2000
- --------------------------
Janet L. Schmidt Human Resources

/S/ Barry C. Ritter Senior Vice President April 20, 2000
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Barry C. Ritter and Chief Information Officer

/S/ Richard W. Vautravers Senior Vice President April 20, 2000
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Richard W. Vautravers and Corporate Actuary

EXHIBIT INDEX

EXHIBIT

1. (3)(c) Commission Schedule
1. (5)(a) Policy
1. (5)(b) Policy Riders
1. (8)(d) Form of Participation Agreement Variable Insurance Products Fund
1. (8)(e) Form of Participation Agreement Variable Insurance Products Fund II
1. (10) Application for Policy
2. (a)(b) Opinion and Consent of Robert-John H. Sands
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
7. (a) Consent of Deloitte & Touche LLP
7. (b) Consent of PricewaterhouseCoopers LLP