File Nos.   333-95729
                                                                       811-05618
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM N-4

REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OF 1933                   (X)
            Pre-Effective  Amendment No.                                   ( )
            Post-Effective  Amendment No. 9                                (X)

REGISTRATION  STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940           (X)
            Amendment  No.   132                                           (X)

                       (Check appropriate box or boxes.)

     ALLIANZ  LIFE  VARIABLE  ACCOUNT  B
     -----------------------------------
        (Exact  Name  of  Registrant)

     ALLIANZ  LIFE  INSURANCE  COMPANY  OF  NORTH  AMERICA
     -----------------------------------------------------
        (Name  of  Depositor)


     5701 Golden Hills Drive,  Minneapolis,  MN                         55416
     -------------------------------------------                         -----
     (Address  of  Depositor's  Principal  Executive  Offices)      (Zip Code)


Depositor's  Telephone  Number,  including  Area  Code    (763)  765-2913

     Name  and  Address  of  Agent  for  Service
     -------------------------------------------
          Stewart D. Gregg
          Allianz  Life  Insurance  Company  of  North  America
          5701 Golden Hills Drive
          Minneapolis,  MN    55416
          (763) 765-2913

It is proposed that this filing will become effective:

     _____  immediately  upon filing pursuant to paragraph (b) of Rule 485
     _____  on (date) pursuant  to  paragraph (b) of Rule 485
     __X__  60 days after filing pursuant to paragraph (a)(1) of Rule 485
     _____  on (date) pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following:

     _____  this post-effective amendment designates a new effective date
            for a previously filed post-effective amendment.

Title of Securities Registered:

     Individual Deferred Variable Annuity Contracts




<PAGE>
                                     PART A



               THE USALLIANZ REWARDS(R) VARIABLE ANNUITY CONTRACT

                                    issued by

                         ALLIANZ LIFE VARIABLE ACCOUNT B

                                       and

                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA



This  prospectus  describes a bonus  variable  deferred  annuity  contract  (the
"Contract")  issued by Allianz Life Insurance  Company of North America (Allianz
Life, we, or us).

FOR YOUR  CONVENIENCE  WE HAVE  PROVIDED A GLOSSARY  (SEE THE TABLE OF CONTENTS)
THAT DEFINES KEY, CAPITALIZED TERMS THAT ARE USED IN THIS PROSPECTUS.

You can allocate  your Purchase  Payments to the  Investment  Choices  available
under your Contract.  The  Investment  Choices  include the variable  Investment
Options  listed  below  and any  available  Fixed  Account  Investment  Choices.
However,  the Contract  currently  does not offer any Fixed  Account  Investment
Choices.  One or more of the  Investment  Choices may not be  available  in your
state.  You can select up to 10 Investment  Options.  We may add,  substitute or
remove Investment Choices in the future.



AIM
USAZ AIM Basic Value Fund
USAZ AIM Blue Chip Fund
USAZ AIM Dent Demographic Trends Fund
USAZ AIM International Equity Fund

ALLIANCE CAPITAL
USAZ Alliance Capital Growth and Income Fund
USAZ Alliance Capital Large Cap Growth Fund
USAZ Alliance Capital Technology Fund

DAVIS
Davis VA Financial Portfolio
Davis VA Value Portfolio

DREYFUS
Dreyfus Small Cap Stock Index Fund
Dreyfus Stock Index Fund

FRANKLIN TEMPLETON
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities  Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery  Securities Fund
Mutual Shares Securities Fund
Templeton  Developing Markets Securities Fund
Templeton Foreign Securities Fund
Templeton Growth Securities Fund
USAZ Templeton Developed Markets Fund

JENNISON
Jennison 20/20 Focus Portfolio
SP Jennison International Growth Portfolio
SP Strategic Partners Focused Growth Portfolio

OPPENHEIMER
Oppenheimer Global Securities Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
USAZ Oppenheimer Emerging Growth Fund

PIMCO
PIMCO VIT High Yield Portfolio
PIMCO VIT StocksPLUS Growth and Income Portfolio
PIMCO VIT Total  Return  Portfolio
USAZ PIMCO Growth and Income Fund
USAZ PIMCO Renaissance Fund
USAZ PIMCO Value Fund

SELIGMAN
Seligman Small-Cap Value Portfolio

USAZ
USAZ Money Market Fund

VAN KAMPEN
USAZ Van Kampen Aggressive Growth Fund
USAZ Van Kampen Comstock Fund
USAZ Van Kampen Emerging Growth Fund
USAZ Van Kampen Growth and Income Fund
USAZ Van Kampen Growth Fund



THE  SECURITIES AND EXCHANGE  COMMISSION  HAS NOT APPROVED OR DISAPPROVED  THESE
SECURITIES  OR  DETERMINED  IF THIS  PROSPECTUS  IS  TRUTHFUL OR  COMPLETE.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Expenses for a bonus Contract may be higher than expenses for a Contract without
a  bonus.  The  amount  of the  bonus  credit  may be more  than  offset  by any
additional fees and/or charges associated with the bonus.


Please read this prospectus  before investing and keep it for future  reference.
It contains important information about the Variable Annuity Contract.

To learn more about the  annuity  offered by this  prospectus,  you can obtain a
copy of the Statement of Additional Information (SAI) dated May 1, 2003. The SAI
has been filed with the Securities and Exchange  Commission (SEC) and is legally
a part of this  prospectus.  The Table of  Contents  of the SAI is on page __ of
this prospectus. The SEC maintains a Web site (http://www.sec.gov) that contains
the  SAI,  material  incorporated  by  reference  and  other  information  about
companies  that file  electronically  with the SEC.  For a free copy of the SAI,
call us at 1-800-542-5427 or write us at: 5701 Golden Hills Drive,  Minneapolis,
Minnesota 55416-1297.


The Variable  Annuity  Contracts  involve certain risks, and you may lose money.
The Contracts:

o   are not bank deposits

o   are not federally insured

o   are not endorsed by any bank or government agency

o   are not guaranteed and may be subject to loss of principal

This prospectus is not an offering of the securities in any state,  country,  or
jurisdiction  in which we are not authorized to sell the  Contracts.  You should
rely  only  on the  information  contained  in this  prospectus  or that we have
referred you to. We have not authorized  anyone to provide you with  information
that is different.


Dated: May 1, 2003




<PAGE>



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



Summary                                                         5

Fee Table                                                       8

1.THE VARIABLE ANNUITY CONTRACT                                18
     Ownership                                                 18
         Contract Owner                                        18
         Joint Owner                                           18
         Annuitant                                             18
         Beneficiary                                           19
         Assignment                                            19


2. ANNUITY PAYMENTS (THE PAYOUT PHASE)                         19
     Income Date                                               19
     Annuity Payments                                          19
     Annuity Options                                           19
     Guaranteed Minimum Income Benefits (GMIB)
     Annuity Income Protection
         Traditional Guaranteed Minimum Income Benefit
         (Traditional GMIB) - Original and New Contracts Only
         Enhanced Guaranteed Minimum Income Benefit
         (Enhanced GMIB)
         GMIB Examples


3. PURCHASE                                                    22
     Purchase Payments                                         22
     Bonus                                                     23
     Automatic Investment Plan                                 23
     Allocation of Purchase Payments                           24
     Tax-Free Section 1035 Exchanges                           24
     Faxed Applications                                        24
     Free Look                                                 24
     Accumulation Units                                        25

4. INVESTMENT OPTIONS                                          25
     Substitution and Limitation on
     Further Investments                                       31
     Transfers                                                 31
         Telephone Transfers                                   31
     Dollar Cost Averaging Program                             32
     Flexible Rebalancing                                      32
     Financial Advisers -
         Asset Allocation Programs                             32
     Voting Privileges                                         33
     Substitution                                              33


5. FIXED ACCOUNT


6.   EXPENSES 33 Separate Account Expenses 33
         Mortality and Expense Risk Charge                     33
         Administrative Charge                                 34
     Contract Maintenance Charge                               34
     Contingent Deferred Sales Charge                          34
         Partial Withdrawal Privilege                          35
         Waiver of Contingent Deferred
            Sales Charge Benefits                              35
         Reduction or Elimination of the
           Contingent Deferred Sales Charge                    35
     Commutation Fee                                           35
     Transfer Fee                                              35
     Premium Taxes                                             36
     Income Taxes                                              36
     Investment Option Expenses                                36


7. TAXES                                                       36
    Annuity Contracts in General                               36
    Qualified and Non-Qualified Contracts                      36
    Multiple Contracts                                         37
    Partial 1035 Exchanges                                     37
    Withdrawals-- Non-Qualified Contracts                      37
    Withdrawals-- Qualified Contracts                          37
    Withdrawals-- Tax-Sheltered Annuities                      38
    Death Benefits                                             38
    Diversification                                            39

8.  ACCESS TO YOUR MONEY                                       39
    Guaranteed Partial Withdrawal Benefit (GPWB)-
       Original and New Contracts Only
    Systematic Withdrawal Program                              40
    Minimum Distribution Program                               40
    Suspension of Payments or Transfers                        40


9.  PERFORMANCE AND ILLUSTRATIONS                              40


10. DEATH BENEFIT                                              42
    Traditional Guaranteed Minimum Death Benefit
       (Traditional GMDB)-New Contracts Only                   40
    Enhanced Guaranteed Minimum Death Benefit
       (Enhanced GMDB)-Original Contracts Only                 40
    Enhanced Guaranteed Minimum Death Benefit
       (Enhanced GMDB) - Revised and New Contracts Only        40
    Death Benefit Examples                                     41
    Death Benefit Options                                      41
    Death of Annuitant                                         41


11. OTHER INFORMATION                                          44
    Allianz Life                                               44
    The Separate Account                                       44
    Distribution                                               44
    Additional Credits for Certain Groups                      45
    Administration                                             45
    Financial Statements                                       45


12. GLOSSARY                                                   45

13. TABLE OF CONTENTS OF THE STATEMENT OF
     ADDITIONAL INFORMATION                                    45

14. PRIVACY NOTICE 46

APPENDIX A - CONDENSED FINANCIAL INFORMATION                   49



<PAGE>


SUMMARY


The sections in this summary  correspond  to sections in this  prospectus  which
discuss the topics in more detail.

THE VARIABLE  ANNUITY  CONTRACT:  The annuity  Contract  offered by Allianz Life
provides  a means  for  investing  on a  tax-deferred  basis  in the  Investment
Choices.  The Contract is intended  for  retirement  savings or other  long-term
investment purposes.  You can purchase the Contract as a Non-Qualified  Contract
or as a Qualified Contract.

This  prospectus  offers  "Original  Contracts,"  "Revised  Contracts"  and "New
Contracts." The product features and expenses of these three Contracts differ in
certain  respects,  as set out in this prospectus.  Only one type of Contract is
currently offered in each state.

The Contract  provides  several  different  Annuity Payment options that you can
choose from and a Traditional  Guaranteed  Minimum  Death  Benefit  (Traditional
GMDB). The Traditional GMDB guarantees a minimum death benefit of total Purchase
Payments adjusted for partial withdrawals.

If you and any Joint Owner are 79 or younger at  Contract  issue you may instead
select the Enhanced  Guaranteed  Minimum  Death Benefit  (Enhanced  GMDB) for an
additional charge.

For Original Contracts,  the Enhanced GMDB guarantees a minimum death benefit of
the greater of:

     (a)  total Purchase Payments adjusted for partial withdrawals, or

     (b)  the Maximum Anniversary Value (MAV) on each Contract anniversary prior
          to  any  owner's  81st  birthday,   adjusted  for  subsequent  partial
          withdrawals and subsequent Purchase Payments.

For Revised and New  Contracts,  the Enhanced  GMDB  guarantees a minimum  death
benefit of the greater of:

     (a)  the  MAV on  each  Contract  anniversary  prior  to any  owner's  81st
          birthday, or

     (b)  the Annual  Increase  Amount  (5% for  Revised  Contracts,  3% for New
          Contracts) prior to any owner's 81st birthday.

Both the MAV and the Annual Increase Amount are adjusted for subsequent  partial
withdrawals and subsequent Purchase Payments.

The death benefits are described in more detail in section 10. Death Benefits.

New  Contracts  include  the  Traditional   Guaranteed  Minimum  Income  Benefit
(Traditional  GMIB) for an additional  charge. If you have an Original Contract,
we will  allow you to add the  Traditional  GMIB for an  additional  fee once it
becomes available in your state. If you have an Original Contract,  you can only
make the  election for this  benefit  within 60 days of notice.  Revised and New
Contracts also provide the Enhanced  Guaranteed Minimum Income Benefit (Enhanced
GMIB)  which you can elect for an  additional  charge if you and any Joint Owner
are 79 or younger at Contract issue. If you have an Original  Contract,  we will
allow you to add the Enhanced GMIB for an additional charge if all owners are 79
or younger  when it becomes  available  in your  state.  The GMIBs  guarantee  a
minimum level of income through Annuity  Payments after the tenth Contract year.
The  Traditional  GMIB  Annuity  Payments are based on total  Purchase  Payments
adjusted for partial withdrawals.

The Enhanced GMIB Annuity Payments are based on the greater of:

     (a)  the  MAV on  each  Contract  anniversary  prior  to any  owner's  81st
          birthday, or

     (b)  the Annual  Increase  Amount (5% for Revised  Contracts and 3% for New
          and Original Contracts) prior to any owner's 81st birthday.

Both the MAV and the Annual Increase Amount are adjusted for subsequent  partial
withdrawals and subsequent Purchase Payments.

The GMIBs and the  Annuity  Options are  described  in more detail in section 2.
Annuity Payments (The Payout Phase).

For Original and New Contracts,  if you elect a GMIB we will  automatically give
you a Guaranteed Partial Withdrawal Benefit (GPWB) for no additional charge. The
GPWB  provides  income  through  partial  withdrawals  based on your GPWB value.
Payments  you  receive  under  the GPWB  will be taxed as a  withdrawal.  If you
exercise  the  GPWB,  your  GMIB and GMDB  values  will no  longer  increase  or
decrease, other than as a result of withdrawals,  however, the fee paid for your
GMIB or GMDB will continue  until the GPWB payments  have been  completely  paid
out. For more details on the GPWB please see section 8. Access to Your Money.

Certain  GMIB and GMDB  benefits may be limited  after age 81. As a result,  any
Contract  Owner  who is age 75 or older  when  adding  these  features  to their
Contract  should  determine  if  purchasing  a  benefit  for  which  there is an
additional cost is appropriate for their situation.

THE GUARANTEED  BENEFITS  LISTED ABOVE MAY NOT BE AVAILABLE IN ALL STATES.  ONCE
YOU ELECT ONE OF THESE  GUARANTEED  BENEFIT  OPTIONS YOU CANNOT CHANGE IT. CHECK
WITH YOUR REGISTERED REPRESENTATIVE REGARDING THE AVAILABILITY OF THESE FEATURES
IN YOUR STATE.

The Contract may be used as a funding vehicle for  asset-based fee  arrangements
offered by brokerage firms or their associated  investment advisory firms. There
may be fees and charges assessed by these firms for their asset-based  programs.
These fees and charges would be in addition to the charges and other  deductions
we describe elsewhere in this prospectus. Your registered representative will be
able to describe  the fees  assessed  in  connection  with any such  asset-based
programs.

We  currently  do not permit  Contract  owners to borrow money from us using the
Contract as security for the loan.

Some Contract features may not be available in all states.


ANNUITY  PAYMENTS:  The  Income  Date is the date you  begin  receiving  Annuity
Payments. You generally can elect to receive your Annuity Payments as a variable
payout,  a fixed  payout,  or a  combination  of both under a variety of Annuity
Options.  If you  choose  to  receive  any part of your  Annuity  Payments  as a
variable payout,  the dollar amount of your payments will go up or down based on
the performance of the Investment Options.  See section 2. Annuity Payments (The
Payout Phase).

PURCHASE:  You can buy a New  Contract  with  $25,000  or more if you  choose to
include a GMIB in you  Contract.  Otherwise  you can  purchase  a  Contract  for
$15,000 or more.  You can add $250 or more (or $100 if you select our  automatic
investment  plan) any time you like  during  the  Accumulation  Phase  until you
exercise  your GPWB  benefit (if  applicable).  In some states,  the  additional
Purchase  Payments may be restricted to the first Contract year. See Section 3 -
"Purchase - Allocation of Purchase Payments."

BONUS: For all Purchase  Payments you make prior to your 81st birthday,  Allianz
Life will credit your Contract with a bonus at the time of  contribution  to the
Contract.  The amount of the bonus will be based on the total amount of Purchase
Payments you have made at the time of the contribution, less any withdrawals you
have made (and assessed  contingent  deferred sales charges).  Bonus amounts are
available for withdrawal,  annuitization or payment of a death benefit only when
the bonus becomes vested (which varies  depending upon how long Allianz Life has
had your Purchase Payment).

Contract charges are deducted from the total value of your Contract.  Therefore,
when we credit your Contract with a bonus,  your Contract incurs expenses on the
total  Rewards  Value,  which  includes the vested and unvested  portions of the
bonus. When you cancel your Contract during the Free Look period, or if you make
a withdrawal,  annuitize or when a death benefit is payable in the first 3 years
from any  Purchase  Payment  date,  you will  forfeit all or some of your bonus.
Since  charges  will have been  assessed  against  the higher  amount  (Purchase
Payment plus bonus),  it is possible  that upon  withdrawal,  particularly  in a
declining  market,  you will  receive less money back than you would have if you
had not received the bonus or not purchased a bonus Contract.  You may alleviate
this risk by  allocating  the bonus  amounts to the USAZ Money Market  Fund.  We
expect to profit from certain  charges  assessed under the Contract  (i.e.,  the
contingent  deferred  sales  charge and the  mortality  and expense risk charge)
associated with the bonus.

INVESTMENT  CHOICES:  You can put your money in the Investment Choices available
under your  Contract.  The Contract does not  currently  offer any Fixed Account
Investment  Choices.  The investment returns on the variable  Investment Options
are  not  guaranteed.  You  can  lose  money.  You can  make  transfers  between
Investment Choices as permitted. See section 4. Investment Options - Transfers.


EXPENSES: The Contract has insurance features and investment features, and there
are costs related to each.

Each year,  Allianz  Life deducts a $40  contract  maintenance  charge from your
Contract.  During the  Accumulation  Phase,  Allianz Life currently  waives this
charge if the Rewards Value of your Contract is at least $75,000.

Allianz Life deducts a mortality and expense risk charge which varies  depending
upon the  benefits  you  choose as shown  below.  Allianz  Life also  deducts an
administrative  charge which is equal, on an annual basis, to 0.15% of the value
of the Contract  invested in an Investment  Option.  The tables that follow show
the combinations available to you and their total Separate Account expenses. The
charges  are  calculated  as a  percentage  of the  average  daily  value of the
Contract Value invested in the Investment Options.



<PAGE>





SEPARATE ACCOUNT EXPENSES: *
<TABLE>
<CAPTION>

FOR NEW CONTRACTS:
                                     CHARGES FOR A         CHARGES FOR A            CHARGES FOR A
                                     CONTRACT WITH       CONTRACT WITH THE        CONTRACT WITH THE
                                        NO GMIB         TRADITIONAL GMIB**         ENHANCED GMIB**

<S>                                       <C>                   <C>                     <C>
Traditional GMDB                          1.70%                 1.90%                   2.40%
Enhanced GMDB                             2.00%                 2.15%                   2.60%

FOR ORIGINAL CONTRACTS:


                                     CHARGES FOR A         CHARGES FOR A           CHARGES FOR A
                                     CONTRACT WITH       CONTRACT WITH THE       CONTRACT WITH THE
                                        NO GMIB         TRADITIONAL GMIB**        ENHANCED GMIB**
Traditional GMDB                         1.65%                 1.85%                    2.35%
Enhanced GMDB                            1.85%                 2.05%                    2.55%

FOR REVISED CONTRACTS:

                                 CHARGES FOR A CONTRACT                        CHARGES FOR A CONTRACT
                                      WITH NO GMIB                             WITH THE ENHANCED GMIB
Traditional GMDB                           1.65%                                        1.95%
Enhanced GMDB                              1.95%                                        2.15%

<FN>
* Some or all of the guaranteed benefits may not be available in all states.

**   If you choose a GMIB in a New or Original  Contract,  a Guaranteed  Partial
     Withdrawal  Benefit (GPWB) is  automatically  included  without  additional
     charge. GMIB options will be made available to owners of Original Contracts
     upon state approval.
</FN>
</TABLE>

If you take money out of the  Contract,  Allianz  Life may  assess a  contingent
deferred sales charge against each Purchase  Payment  withdrawn.  The contingent
deferred  sales charge starts at 8.5% in the first year and declines to 0% after
we have had your Purchase Payment for 10 complete years.

Each Investment Option deducts management fees and expenses from the amounts you
have invested in the Investment  Options.  Some  Investment  Options also deduct
12b-1 fees from  Investment  Option  assets.  For 2002 these  expenses  and fees
ranged on an annual basis, from ___% to ____% of an Investment  Option's average
daily net assets before expense reimbursements or fee waivers.

You can currently  make 12 free transfers  each year.  After that,  Allianz Life
deducts a $25 transfer fee for each additional transfer.

Allianz  Life is  responsible  for paying any  premium and other  similar  taxes
assessed  by states  and other  governmental  entities  (e.g.,  municipalities).
Premium  taxes  typically  range  from  0% to 3.5% of the  Purchase  Payment  or
Contract  Value,  depending on the state or governmental  entity.  Allianz Life,
when  applicable,  currently  withholds  premium tax charges when you die,  when
Annuity Payments begin, or when you make a complete withdrawal,  whichever comes
first. Allianz Life reserves the right to change this practice in the future.

We will pay sales  commissions to broker/dealers  who sell the Contracts.  For a
discussion  of  these   arrangements,   see  section  11.  Other  Information  -
Distribution.

For more details on the expenses  associated with this Contract,  see section 6.
Expenses.

TAXES:  Your  earnings are  generally  not taxed until you take them out. If you
take money out during the  Accumulation  Phase,  earnings come out first and are
taxed as income.  If you are younger than  591/2when you take money out, you may
be charged a 10% federal tax penalty.  Other tax rules and limitations may apply
to Qualified Contracts. See section 7. Taxes.

ACCESS  TO YOUR  MONEY:  You can take  money  out of your  Contract  during  the
Accumulation Phase.  Withdrawals during the Accumulation Phase may be subject to
a contingent  deferred  sales charge.  You may also have to pay income tax and a
tax penalty on any money you take out. Under certain  circumstances,  you may be
able to take money out during the Payout Phase if you select Annuity Option 2, 4
or 6 on a variable  payout  basis.  Money you take out  during the Payout  Phase
under  Annuity  Option 2, 4 or 6 is  subject  to a  commutation  fee.  Limits on
withdrawals may apply to certain Qualified  Contracts.  See section 8. Access to
Your Money.

DEATH BENEFIT: If you die before moving to the Payout Phase, the person you have
chosen as a Beneficiary  will receive a death  benefit.  The amount of the death
benefit  depends on the death  benefit  that  applies.  See  section  10.  Death
Benefit.

FREE-LOOK:  You can cancel the  contract  within 10 days after  receiving it (or
whatever  period is  required  in your  state).  Allianz  Life will  refund your
Contract Value on the day it receives your request to cancel the Contract.  This
may be more or less than your original  payment.  In certain  states,  or if you
have purchased the Contract as an individual  retirement  annuity,  Allianz Life
will refund the Purchase Payment. See section 3. Purchase - Free Look.

PRIVACY  POLICY:  WE  PLACE  A HIGH  PRIORITY  ON  MAINTAINING  YOUR  TRUST  AND
CONFIDENCE.  A NOTICE OF THE PRIVACY  POLICY  FOLLOWED  BY ALLIANZ  LIFE AND ITS
AFFILIATED   COMPANIES   IS  PROVIDED  IN  THIS   PROSPECTUS   TO  ENHANCE  YOUR
UNDERSTANDING OF HOW WE PROTECT YOUR PRIVACY WHEN WE COLLECT AND USE INFORMATION
ABOUT YOU, AND THE STEPS WE TAKE TO  SAFEGUARD  THAT  INFORMATION.  SEE "PRIVACY
NOTICE."

INQUIRIES:  If  you  have  any  questions  about  your  Contract  or  need  more
information, please contact us at:


         USAllianz Service Center
         300 Berwyn Park
         P.O. Box 3031 Berwyn, PA 19312-0031 (800) 624-0197




<PAGE>



FEE TABLE
--------------------------------------------------------------------------------


The purpose of this Fee Table is to help you  understand the costs of investing,
directly or indirectly,  in the Contract.  It reflects  expenses of the Separate
Account as well as the Investment Options. Taxes, including premium tax charges,
also may apply, although they do not appear in the table.



CONTRACT OWNER TRANSACTION FEES

                       Contingent Deferred Sales Charge*
                     (as a percentage of purchase payments)

                           NUMBER OF COMPLETE YEARS
                      SINCE RECEIPT OF PURCHASE PAYMENT         CHARGE
                                     0-1                         8.5%
                                     1-2                         8.5%
                                     2-3                         8.5%
                                     3-4                         8.5%
                                     4-5                         8.0%
                                     5-6                         7.0%
                                     6-7                         6.0%
                                     7-8                         5.0%
                                     8-9                         4.0%
                                     9-10                        3.0%
                                  10 or more                     0.0%

Commutation Fee (as a percentage of amount  liquidated under Annuity Option 2, 4
or 6) **

                                 YEARS SINCE
                                  INCOME DATE                   CHARGE
                                     0-1                          7%
                                     1-2                          6%
                                     2-3                          5%
                                     3-4                          4%
                                     4-5                          3%
                                     5-6                          2%
<TABLE>
<CAPTION>
                                    over 6                        1%


<S>                                                    <C>
Transfer Fee ..........................................First 12 transfers in a Contract year are currently free. Thereafter, the
                                                       fee is $25.Transfers from the Fixed Account Investment Choices may be
                                                       subject to a Market Value Adjustment (MVA) which may increase or decrease
                                                       the amount transferred. Dollar Cost Averaging transfers and Flexible
                                                       Rebalancing transfers are not currently counted.


CONTRACT MAINTENANCE CHARGE**........                      $40 per Contract per year.
</TABLE>


SEPARATE ACCOUNT ANNUAL EXPENSES****
(as a percentage of average daily account value)


<TABLE>
<CAPTION>

FOR NEW CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT       CHARGES FOR A CONTRACT
                                                    WITH NO GMIB       WITH THE TRADITIONAL GMIB*****WITH THE ENHANCED GMIB*****
                                               M&E   Admin.   Total         M&E   Admin.    Total         M&E   Admin.  Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE       CHARGE  CHARGE CHARGE
<S>                                           <C>      <C>    <C>          <C>      <C>     <C>           <C>     <C>   <C>
Traditional GMDB                              1.55%    .15%   1.70%        1.75%    .15%    1.90%         2.25%   .15%  2.40%
Enhanced GMDB                                 1.85%    .15%   2.00%        2.00%    .15%    2.15%         2.45%   .15%  2.60%

FOR ORIGINAL CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT       CHARGES FOR A CONTRACT
                                                    WITH NO GMIB       WITH THE TRADITIONAL GMIB***** WITH THE ENHANCED GMIB*****
                                               M&E   Admin.   Total         M&E   Admin.    Total         M&E   Admin.  Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE       CHARGE  CHARGE CHARGE
Traditional GMDB                              1.50%    .15%   1.65%        1.70%    .15%    1.85%         2.20%   .15%  2.35%
Enhanced GMDB                                 1.70%    .15%   1.85%        1.90%    .15%    2.05%         2.40%   .15%  2.55%

FOR REVISED CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT
                       WITH NO GMIB WITH THE ENHANCED GMIB
                        M&E Admin. Total M&E Admin. Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE
Traditional GMDB                              1.50%    .15%   1.65%        1.80%    .15%    1.95%
Enhanced GMDB                                 1.80%    .15%   1.95%        2.00%    .15%    2.15%

<FN>
*        You may make  partial  withdrawals  of up to a total of 10% of Purchase
         Payments  (less  any  previous  withdrawals  you  make  in the  current
         Contract  year which are not  subject to a  contingent  deferred  sales
         charge), and no contingent deferred sales charge will be assessed. This
         Partial Withdrawal  Privilege is non-cumulative,  which means if you do
         not use your 10% free privilege in a given year, it does not carry over
         to the next year. See "Access to Your Money" for additional options. If
         you invest in a Fixed  Account  Investment  Choice,  a MVA may apply to
         certain  transactions.  This MVA may  increase or decrease the value of
         the amount transferred or withdrawn.


**       Commutation Fee may not be applicable in all states.

***      During the Accumulation Phase the charge is waived if the Rewards Value
         of your Contract is at least $75,000. If you own more than one Contract
         offered under this Prospectus (registered with the same social security
         number),  we  will  determine  the  total  Rewards  Value  of all  your
         Contracts. If the total Rewards Value of all your Contracts is at least
         $75,000, the charge is waived on all your Contracts (except in Texas).

****     Some or all of the guaranteed benefits may not be available in all
         states.

*****    If you  choose  a GMIB  in a New or  Original  Contract,  a  Guaranteed
         Partial  Withdrawal  Benefit (GPWB) is  automatically  included without
         additional  charge.  GMIB options  will be made  available to owners of
         Original Contracts upon state approval.
</FN>
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

INVESTMENT OPTION ANNUAL EXPENSES NET OF WAIVERS/REIMBURSEMENTS
--------------------------------------------------------------------------------

(as a percentage of an Investment Option's average daily net assets for the most
recent  fiscal  year.)  See  the  Investment   Option   prospectuses   for  more
information.*



                                                  MANAGEMENT           12B-1               OTHER        TOTAL INVESTMENT
INVESTMENT OPTION                                    FEES              FEES**            EXPENSES        OPTION EXPENSES
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>             <C>                 <C>                <C>
USAZ AIM Basic Value Fund1                             .75%            .25%                .10%               1.10%
USAZ AIM Blue Chip Fund1                               .80%            .25%                .10%               1.15%
USAZ AIM Dent Demographic Trends Fund1                 .85%            .25%                .10%               1.20%
USAZ AIM International Equity Fund1                    .90%            .25%                .10%               1.25%
USAZ Alliance Capital Growth and Income Fund1          .85%            .25%                 --                1.10%
USAZ Alliance Capital Large Cap Growth Fund1           .85%            .25%                 --                1.10%
USAZ Alliance Capital Technology Fund1                1.00%            .25%                 --                1.25%
Davis VA Financial Portfolio2                          .75%             --                 .25%               1.00%
Dreyfus Small Cap Stock Index Fund - Service Shares1   .35%            .25%                 --                 .60%
Dreyfus Stock Index Fund - Service Shares              .25%            .25%                .07%                .57%
Franklin Global Communications Securities Fund
 - Class 23/4                                          .52%            .25%                .03%                .80%
Franklin Growth and Income Securities Fund - Class 23/4.48%            .25%                .03%                .76%
Franklin High Income Fund - Class 23/4                 .57%            .25%                .05%                .87%
Franklin Income Securities Fund - Class 23/4           .49%            .25%                .04%                .78%
Franklin Large Cap Growth Securities Fund - Class 23/4 .75%            .25%                .03%               1.03%
Franklin Real Estate Fund - Class 23/4                 .56%            .25%                .03%                .84%
Franklin Rising Dividends Securities Fund
 - Class 23/4/5                                        .74%            .25%                .02%               1.01%
Franklin Small Cap Fund - Class 23/5                   .45%            .25%                .31%               1.01%
Franklin Small Cap Value Securities Fund - Class 23/5  .57%            .25%                .20%               1.02%
Franklin U.S. Government Fund - Class 23/4             .51%            .25%                .02%                .78%
Franklin Zero Coupon Fund 2005 - Class 14              .63%             --                 .05%                .68%
Franklin Zero Coupon Fund 2010 - Class 14              .63%             --                 .05%                .68%
Mutual Discovery Securities Fund - Class 23            .80%            .25%                .22%               1.27%
Mutual Shares Securities Fund - Class 23               .60%            .25%                .19%               1.04%
Templeton Developing Markets Securities Fund
 - Class 23                                           1.25%            .25%                .32%               1.82%
Templeton Foreign Securities Fund - Class 23/5         .68%            .25%                .22%               1.15%
Templeton Growth Securities Fund - Class 23/4          .80%            .25%                .05%               1.10%
USAZ Templeton Developed Markets Fund1                 .88%            .25%                .12%               1.25%
Jennison 20/20 Focus Portfolio - Class 21              .75%            .25%                .33%               1.33%
SP Jennison International Growth Portfolio - Class 26  .85%            .25%                .54%               1.64%
SP Strategic Partners Focused Growth Portfolio
 - Class 26                                            .90%            .25%                .26%               1.41%
Oppenheimer Global Securities Fund/VA                  .64%             --                 .06%                .70%
Oppenheimer High Income Fund/VA                        .74%             --                 .05%                .79%
Oppenheimer Main Street Growth & Income Fund/VA        .68%             --                 .05%                .73%
USAZ Oppenheimer Emerging Growth Fund1                 .85%            .25%                .15%               1.25%
PIMCO VIT High Yield Portfolio - Admin. Class7         .25%             --                 .50%                .75%
PIMCO VIT StocksPLUS Growth and  Income Portfolio
 - Admin. Class 7                                      .40%             --                 .27%                .67%
PIMCO VIT Total Return Portfolio- Admin. Class 7       .25%             --                 .40%                .65%
USAZ PIMCO Growth and Income Fund1                     .75%            .25%                .10%               1.10%
USAZ PIMCO Renaissance Fund1                           .75%            .25%                .10%               1.10%
USAZ PIMCO Value Fund1                                 .75%            .25%                .10%               1.10%
Seligman Small-Cap Value Portfolio - Class 18         1.00%             --                 .19%               1.19%
USAZ Money Market Fund1                                .35%            .25%                .30%                .90%
USAZ  Van Kampen Aggressive Growth Fund1               .80%            .25%                .20%               1.25%
USAZ Van Kampen Comstock Fund1                         .68%            .25%                .27%               1.20%
USAZ Van Kampen Emerging Growth Fund1                  .75%            .25%                .10%               1.10%
USAZ Van Kampen Growth and Income Fund1                .68%            .25%                .17%               1.10%
USAZ Van Kampen Growth Fund1                           .75%            .25%                .20%               1.20%

<FN>
*The fee and expense  information  regarding the Investment Options was provided
  by the investment  advisers,  and Allianz Life has not independently  verified
  such information.  Some of the Investment  Options may pay service fees, which
  vary by  Investment  Option.  Except  for the USAZ  Funds  and the  PIMCO  VIT
  Investment  Options,  neither the  Investment  Options nor their  Advisers are
  affiliated with Allianz Life.

**The 12b-1 fees cover certain  distribution  and shareholder  support  services
  provided  by the  companies  selling  Contracts.  Our  principal  underwriter,
  USAllianz Investor Services, LLC will receive 12b-1 fees.

1.   The USAZ AIM  Basic  Value  Fund,  USAZ AIM Blue Chip  Fund,  USAZ AIM Dent
     Demographic Trends Fund, USAZ AIM International  Equity Fund, Dreyfus Small
     Cap  Stock  Index  Fund,  Jennison  20/20  Focus  Portfolio  and  the  USAZ
     Oppenheimer  Emerging  Growth Fund commenced  operations as of May 1, 2002.
     The  expenses  shown  above  for these  Investment  Options  are  therefore
     estimated for the Investment  Option's  current  fiscal year.  Certain USAZ
     Fund  expenses  will be assumed by the Adviser and an annual  expense limit
     has been  designated  by the Adviser for each  Investment  Option  which is
     reflected in the total expense  amount  listed in the table above.  Without
     reimbursement,  total  Investment  Option  expenses  would be  estimated as
     follows: USAZ Alliance Capital Growth and Income Fund, 3.28%, USAZ Alliance
     Capital  Large Cap Growth Fund,  3.36%,  USAZ Alliance  Capital  Technology
     Fund,  3.19%,  USAZ Templeton  Developed  Markets Fund,  3.56%,  USAZ PIMCO
     Growth and Income Fund,  3.70%,  USAZ PIMCO  Renaissance  Fund, 2.96%, USAZ
     PIMCO Value Fund,  3.43%,  USAZ Money Market Fund,  1.21%,  USAZ Van Kampen
     Aggressive  Growth Fund,  7.59%, USAZ Van Kampen Comstock Fund, 3.01%, USAZ
     Van Kampen Emerging Growth Fund,  3.81%,  USAZ Van Kampen Growth and Income
     Fund, 2.71%, and the USAZ Van Kampen Growth Fund, 4.46%.

2.   Without  reimbursement,  other expenses and total operating  expenses would
     have  been  0.29%  and  1.04%,  respectively  for the  Davis  VA  Financial
     Portfolio.

3.   For  the  Investment  Options  of  Franklin  Templeton  Variable  Insurance
     Products Trust,  Class 2 shares have a distribution  plan which is referred
     to as a rule  12b-1  plan.  See "Fund  Account  Policies"  in the  Franklin
     Templeton Variable Insurance Products Trust prospectus for more information
     about the rule 12b-1 plan.

4.   The Investment  Option  administration  fee is paid indirectly  through the
     management fee.

5.   For the Franklin Rising  Dividends,  Franklin Small Cap, Franklin Small Cap
     Value Securities and Templeton Foreign  Securities Funds, the managers have
     agreed in advance to make estimated  reductions of 0.01%,  0.08%, 0.03% and
     0.01%,  respectively,  in their fees to reflect reduced services  resulting
     from the Investment Options' investment in a Franklin Templeton money fund.
     The managers are required by the Investment  Options' Board of Trustees and
     an order of the Securities and Exchange  Commission to reduce their fees if
     the Investment  Options invest in a Franklin  Templeton money fund. Without
     these reductions,  the total annual Investment  Options' operating expenses
     are estimated to be 1.02%, 1.09%, 1.05% and 1.16%, respectively.

6.   Without  reimbursement,  total operating expenses would have been 2.26% and
     3.01%,  respectively  for  the  SP  Jennison  International  Growth  and SP
     Strategic  Partners Focused Growth  Portfolios.  These  reimbursements  are
     voluntary and may be terminated at any time.

7.   "Other Expenses" without  reimbursement reflect a 0.35% administrative fee,
     a 0.15% service fee and 0.01%  representing pro rata Trustees' Fees for the
     PIMCO VIT High Yield Portfolio; a 0.10% administrative fee, a 0.15% service
     fee and 0.02%  interest  expense  for the PIMCO VIT  StocksPLUS  Growth and
     Income Portfolio;  and a 0.25%  administrative fee, a 0.15% service fee and
     0.01%  representing  pro rata Trustees' fees for the PIMCO VIT Total Return
     Portfolio. PIMCO has contractually agreed to reduce total annual Investment
     Option  operating  expenses  to the extent  they would  exceed,  due to the
     payment of  organizational  expenses and Trustees' fees,  0.75%,  0.65% and
     0.65%,  respectively,  of  average  daily net assets for the PIMCO VIT High
     Yield,  StocksPLUS Growth and Income and Total Return  Portfolios.  Without
     such  reductions,  Total Annual Expenses for the fiscal year ended December
     31, 2001 would have been 0.76%,  0.67% and 0.66%,  respectively.  Under the
     Expense   Limitation   Agreement,   PIMCO  may  recoup  these  waivers  and
     reimbursements in future periods, not exceeding three years, provided total
     expenses,  including  such  recoupment,  do not exceed  the annual  expense
     limit.  Ratio of net  expenses  to average  net assets  excluding  interest
     expense is 0.65% for the StocksPLUS Growth and Income Portfolio.

8.   Effective  March 1, 2001, J & W. Seligman & Co.  Incorporated  ("Seligman")
     voluntarily  agreed to  reimburse  expenses  of  Seligman  Small-Cap  Value
     Portfolio,  other than management and 12b-1 fees, that exceed 0.20%.  Prior
     to that date, Seligman  reimbursed all expenses,  other than management and
     12b-1 fees.  Without  reimbursement,  other  expenses and total  Investment
     Option expenses would have been 0.22% and 1.22%, respectively.  There is no
     assurance that Seligman will continue this policy in the future.
</FN>
</TABLE>



EXAMPLES
--------------------------------------------------------------------------------



The expenses for your  Contract may be different  than those shown in the charts
below  depending upon which  benefits,  or combination of benefits,  if any, you
select.

o    The examples  below should not be  considered a  representation  of past or
     future  expenses.  Actual expenses may be greater or less than those shown.
     These  examples   assume  that  the  applicable  fee  waivers  and  expense
     reimbursements provided by some of the Investment Options will continue for
     the periods shown.

o    The $40  contract  maintenance  charge is  included  in the  examples  as a
     prorated  charge of $1.  Since the average  Contract  size is greater  than
     $1,000, the contract maintenance charge is reduced accordingly.

o    Premium taxes are not reflected in the tables. Premium taxes may apply.

o    For additional information, see "Expenses."

These charts show the highest and lowest  expenses for New  Contracts.  High and
low expenses,  respectively,  for Original and Revised Contracts if shown, would
be lower.

You would pay the  following  expenses  on a $1,000  investment,  assuming  a 5%
annual  return on your money if you  withdraw  your  Contract at the end of each
time period for Contracts with:

     (a)  selection of the Enhanced  GMIB and the Enhanced  GMDB (which  carries
          the highest total Separate Account expenses of 2.60%).

     (b)  selection  of the  Traditional  GMDB and no GMIB  (which  carries  the
          lowest total Separate Account expenses of 1.70%).
<TABLE>
<CAPTION>

THE TABLE BELOW WILL BE UPDATED UPON AMENDMENT

INVESTMENT OPTION                                1 YEAR            3 YEARS          5 YEARS          10 YEARS
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                 <C>              <C>               <C>              <C>
USAZ AIM Basic Value Fund                        (a)$114          (a)$173           (a)$230          (a)$348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Blue Chip Fund                          (a) 114          (a) 175           (a) 233          (a) 353

                                                 (b) 119          (b) 190           (b) 257          (b) 399
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Dent Demographic Trends Fund            (a) 115          (a) 176           (a) 235          (a) 358

                                                 (b) 120          (b) 191           (b) 260          (b) 404
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM International Equity Fund               (a) 115          (a) 178           (a) 238          (a) 362

                                                 (b) 120          (b) 192           (b) 262          (b) 408
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Growth and Income Fund     (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------
USAZ Alliance Capital Large Cap Growth Fund      (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Technology Fund            (a) 115          (a) 178           (a) 238          (a) 362

                                                 (b) 120          (b) 192           (b) 262          (b) 408
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Financial Portfolio                     (a) 113          (a) 170           (a) 226          (a) 338

                                                 (b) 118          (b) 185           (b) 250          (b) 286
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Value Portfolio                         (a) 112          (a) 166           (a) 219          (a) 326

                                                 (b) 116          (b) 181           (b) 244          (b) 374
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Small Cap Stock Index Fund               (a) 109          (a) 158           (a) 205          (a) 298

                                                 (b) 114          (b) 173           (b) 230          (b) 348
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Stock Index Fund                         (a) 109          (a) 157           (a) 204          (a) 295

                                                 (b) 114          (b) 172           (b) 229          (b) 345
------------------------------------------------------------------------------------------------------------------------------------

Franklin Global Communications Securities Fund   (a) 111          (a) 164           (a) 216          (a) 319

                                                 (b) 116          (b) 179           (b) 240          (b) 367
------------------------------------------------------------------------------------------------------------------------------------

Franklin Growth and Income Securities Fund       (a) 110          (a) 163           (a) 214          (a) 315

                                                 (b) 115          (b) 178           (b) 238          (b) 363
------------------------------------------------------------------------------------------------------------------------------------

Franklin High Income Fund                        (a) 112          (a) 166           (a)219           (a) 326

                                                 (b) 116          (b) 181           (b) 244          (b) 374
------------------------------------------------------------------------------------------------------------------------------------

Franklin Income Securities Fund                  (a) 111          (a) 164           (a) 215          (a) 317

                                                 (b) 116          (b) 179           (b) 239          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

Franklin Large Cap Growth Securities Fund        (a) 113          (a) 171           (a) 227          (a) 341

                                                 (b) 118          (b) 186           (b) 251          (b) 388
------------------------------------------------------------------------------------------------------------------------------------

Franklin Real Estate Fund                        (a) 111          (a) 166           (a)218           (a) 323

                                                 (b) 116          (b) 180           (b) 242          (b) 371
------------------------------------------------------------------------------------------------------------------------------------

Franklin Rising Dividends Securities Fund        (a)113           (a) 171           (a) 226          (a) 339

                                                 (b) 118          (b) 185           (b) 250          (b) 387
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Fund                          (a) 113          (a) 171           (a) 226          (a) 339

                                                 (b) 118          (b) 185           (b) 250          (b) 387
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Value Securities Fund         (a) 113          (a) 171           (a) 226          (a) 340

                                                 (b) 118          (b) 186           (b) 251          (b) 388
------------------------------------------------------------------------------------------------------------------------------------

Franklin U.S. Government Fund                    (a) 111          (a) 164           (a) 215          (a) 317

                                                 (b) 116          (b) 179           (b) 239          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2005                   (a) 110          (a) 161           (a)210           (a) 307

                                                 (b) 115          (b) 176           (b) 234          (b) 256
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2010                   (a) 110          (a) 161           (a)210           (a) 307

                                                 (b) 115          (b) 176           (b) 234          (b) 356
------------------------------------------------------------------------------------------------------------------------------------

Mutual Discovery Securities Fund                 (a)116           (a) 178           (a) 239          (a) 364

                                                 (b) 120          (b) 193           (b) 263          (b) 410
------------------------------------------------------------------------------------------------------------------------------------

Mutual Shares Securities Fund                    (a) 113          (a) 172           (a) 227          (a) 342

                                                 (b) 118          (b) 186           (b) 252          (b) 389
------------------------------------------------------------------------------------------------------------------------------------

Templeton Developing Markets Securities Fund     (a) 121          (a) 195           (a) 265          (a) 415

                                                 (b) 126          (b) 209           (b) 289          (b) 458
------------------------------------------------------------------------------------------------------------------------------------

Templeton Foreign Securities Fund                (a) 114          (a) 175           (a) 233          (a) 353

                                                 (b) 119          (b) 190           (b) 257          (b) 399
------------------------------------------------------------------------------------------------------------------------------------

Templeton Growth Securities Fund                 (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ Templeton Developed Markets Fund            (a) 115          (a) 178           (a) 238          (a) 362

                                                 (b) 120          (b) 192           (b) 262          (b) 408
------------------------------------------------------------------------------------------------------------------------------------

Jennison 20/20 Focus Portfolio                   (a)116           (a) 180           (a) 242          (a) 370

                                                 (b) 121          (b) 195           (b) 266          (b) 416
------------------------------------------------------------------------------------------------------------------------------------

SP Jennison International Growth Portfolio       (a)119           (a) 189           (a) 257          (a) 399

                                                 (b) 124          (b) 204           (b) 280          (b) 443
------------------------------------------------------------------------------------------------------------------------------------

SP Strategic Partners Focused Growth Portfolio   (a) 117          (a) 183           (a) 246          (a) 377

                                                 (b) 122          (b) 197           (b) 270          (b) 423
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Global Securities Fund/VA            (a) 110          a)  161           (a) 211          (a) 309

                                                 (b) 115          (b) 176           (b) 235          (b) 358
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer High Income Fund/VA                  (a) 111          (a) 164           (a) 215          (a) 318

                                                 (b) 116          (b) 179           (b) 240          (b) 366
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Main Street Growth & Income Fund/VA  (a) 110          (a) 162           (a) 212          (a) 312

                                                 (b) 115          (b) 177           (b) 237          (b) 360
------------------------------------------------------------------------------------------------------------------------------------

USAZ Oppenheimer Emerging Growth Fund            (a) 115          (a) 178           (a) 238          (a) 362

                                                 (b) 120          (b) 192           (b) 262          (b) 408
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT High Yield Portfolio                   (a) 110          (a) 163           (a) 213          (a) 314

                                                 (b) 115          (b) 178           (b) 238          (b) 362
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth & Income Portfolio   (a) 110          (a) 160           (a) 209          (a) 306

                                                 (b) 115          (b) 175           (b) 234          (b) 355

PIMCO VIT Total Return Portfolio                 (a) 109          (a) 160           (a) 208          (a) 304

                                                 (b) 114          (b) 175           (b) 233          (b) 353
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Growth and Income Fund                (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Renaissance Fund                      (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Value Fund                            (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

Seligman Small-Cap Value Portfolio               (a) 115          (a) 176           (a) 235          (a) 357

                                                 (b) 120          (b) 191           (b) 259          (b) 403
------------------------------------------------------------------------------------------------------------------------------------

USAZ Money Market Fund                           (a) 112          (a) 167           (a) 221          (a) 329

                                                 (b) 117          (b) 182           (b) 245          (b) 376
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Aggressive Growth Fund           (a) 115          (a) 178           (a) 238          (a) 362

                                                 (b) 120          (b) 192           (b) 262          (b) 408
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Comstock Fund                    (a) 115          (a) 176           (a) 235          (a) 358
                                                 (b) 120          (b) 191           (b) 260          (b) 404
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Emerging Growth Fund             (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth and Income Fund           (a) 114          (a) 173           (a) 230          (a) 348

                                                 (b) 119          (b) 188           (b) 255          (b) 395
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth Fund                      (a) 115          (a) 176           (a) 235          (a) 358

                                                 (b) 120          (b) 191           (b) 260          (b) 404
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


You would pay the  following  expenses  on a $1,000  investment,  assuming  a 5%
annual  return on your money if your  Contract is not  withdrawn or if you apply
your Contract to an Annuity Option for Contracts with:

     (a)  selection of the Enhanced  GMIB and the Enhanced  GMDB (which  carries
          the highest total Separate Account expenses of 2.60%).

     (b)  selection  of the  Traditional  GMDB and no GMIB  (which  carries  the
          lowest total Separate Account expenses of 1.70%).
<TABLE>
<CAPTION>

THE TABLE BELOW WILL BE UPDATED UPON AMENDMENT

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

INVESTMENT OPTION                                1 YEAR            3 YEARS          5 YEARS         10 YEARS
<S>                                                 <C>               <C>              <C>              <C>
USAZ AIM Basic Value Fund                        (a)$29           (a) $88           (a)$150          (a)$318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Blue Chip Fund                          (a) 29           (a)  90           (a) 153          (a) 323

                                                 (b) 34           (b) 105           (b) 177          (b) 369
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Dent Demographic Trends Fund            (a) 30           (a)  91           (a) 155          (a) 328

                                                 (b) 35           (b) 106           (b) 180          (b) 374
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM International Equity Fund               (a) 30           (a)  93           (a) 158          (a) 332

                                                 (b) 35           (b) 107           (b) 182          (b) 378
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Growth and Income Fund     (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Large Cap Growth Fund      (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Technology Fund            (a) 30           (a)  93           (a) 158          (a) 332

                                                 (b) 35           (b) 107           (b) 182          (b) 378
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Financial Portfolio                     (a) 28           (a)  85           (a) 146          (a) 308

                                                 (b) 33           (b) 100           (b) 170          (b) 356
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Value Portfolio                         (a) 27           (a)  81           (a) 139          (a) 296

                                                 (b) 31           (b)  96           (b) 164          (b) 344
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Small Cap Stock Index Fund               (a) 24           (a)  73           (a) 125          (a) 268

                                                 (b) 29           (b)  88           (b) 150          (b) 318
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Stock Index Fund                         (a) 24           (a)  72           (a) 124          (a) 265

                                                 (b) 29           (b)  87           (b) 149          (b) 315
------------------------------------------------------------------------------------------------------------------------------------

Franklin Global Communications Securities Fund   (a) 26           (a)  79           (a) 136          (a) 289

                                                 (b) 31           (b)  94           (b) 160          (b) 337
------------------------------------------------------------------------------------------------------------------------------------


Franklin Growth and Income Securities Fund       (a) 25           (a)  78           (a) 134          (a) 285

                                                 (b) 30           (b)  93           (b) 158          (b) 333
------------------------------------------------------------------------------------------------------------------------------------

Franklin High Income Fund                        (a) 27           (a)  81           (a) 139          (a) 296

                                                 (b) 31           (b)  96           (b) 164          (b) 344
------------------------------------------------------------------------------------------------------------------------------------

Franklin Income Securities Fund                  (a) 26           (a)  79           (a) 135          (a) 287

                                                 (b) 31           (b)  94           (b) 159          (b) 335
------------------------------------------------------------------------------------------------------------------------------------

Franklin Large Cap Growth Securities Fund        (a) 28           (a)  86           (a) 147          (a) 311

                                                 (b) 33           (b) 101           (b) 171          (b) 358
------------------------------------------------------------------------------------------------------------------------------------

Franklin Real Estate Fund                        (a) 26           (a)  81           (a) 138          (a) 293

                                                 (b) 31           (b)  95           (b) 162          (b) 341
------------------------------------------------------------------------------------------------------------------------------------

Franklin Rising Dividends Securities Fund        (a) 28           (a)  86           (a) 146          (a) 309

                                                 (b) 33           (b) 100           (b) 171          (b) 357
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Fund                          (a) 28           (a)  86           (a) 146          (a) 309

                                                 (b) 33           (b) 100           (b) 170          (b) 357
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Value Securities Fund         (a) 28           (a)  86           (a) 146          (a) 310

                                                 (b) 33           (b) 101           (b) 171          (b) 358
------------------------------------------------------------------------------------------------------------------------------------

Franklin U.S. Government Fund                    (a) 26           (a)  79           (a) 135          (a) 287

                                                 (b) 31           (b)  94           (b) 159          (b) 335
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2005                   (a) 25           (a)  76           (a) 130          (a) 277

                                                 (b) 30           (b)  91           (b) 154          (b) 326
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2010                   (a) 25           (a)  76           (a) 130          (a) 277

                                                 (b) 30           (b)  91           (b) 154          (b) 326
------------------------------------------------------------------------------------------------------------------------------------

Mutual Discovery Securities Fund                 (a) 31           (a)  93           (a) 159          (a) 334

                                                 (b) 35           (b) 108           (b) 183          (b) 380
------------------------------------------------------------------------------------------------------------------------------------

Mutual Shares Securities Fund                    (a) 28           (a)  87           (a) 147          (a) 312

                                                 (b) 33           (b) 101           (b) 172          (b) 359
------------------------------------------------------------------------------------------------------------------------------------

Templeton Developing Markets Securities Fund     (a) 36           (a) 110           (a) 185          (a) 385

                                                 (b) 41           (b) 124           (b) 209          (b) 428
------------------------------------------------------------------------------------------------------------------------------------

Templeton Foreign Securities Fund                (a) 29           (a)  90           (a) 153          (a) 323

                                                 (b) 34           (b) 105           (b) 177          (b) 369
------------------------------------------------------------------------------------------------------------------------------------

Templeton Growth Securities Fund                 (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 35           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ Templeton Developed Markets Fund            (a) 30           (a)  93           (a) 158          (a) 332

                                                 (b) 35           (b) 107           (b) 182          (b) 378
------------------------------------------------------------------------------------------------------------------------------------

Jennison 20/20 Focus Portfolio                   (a) 31           (a)  95           (a) 162          (a) 340

                                                 (b) 36           (b) 110           (b) 186          (b) 386
------------------------------------------------------------------------------------------------------------------------------------

SP Jennison International Growth Portfolio       (a) 34           (a) 104           (a) 177          (a) 369

                                                 (b) 39           (b) 119           (b) 200          (b) 413
------------------------------------------------------------------------------------------------------------------------------------

SP Strategic Partners Focused Growth Portfolio   (a) 32           (a)  98           (a) 166          (a) 347

                                                 (b) 37           (b) 112           (b) 190          (b) 393
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Global Securities Fund/VA            (a) 25           (a)  76           (a) 131          (a) 279

                                                 (b) 30           (b)  91           (b) 155          (b) 328
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer High Income Fund/VA                  (a) 26           (a)  79           (a) 135          (a) 288

                                                 (b) 31           (b)  94           (b) 160          (b) 336
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Main Street Growth & Income Fund/VA  (a) 25           (a)  77           (a) 132          (a) 282

                                                 (b) 30           (b)  92           (b) 157          (b) 330
------------------------------------------------------------------------------------------------------------------------------------

USAZ Oppenheimer Emerging Growth Fund            (a) 30           (a)  93           (a) 158          (a) 332

                                                 (b) 35           (b) 107           (b) 182          (b) 378
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT High Yield Portfolio                   (a) 25           (a)  78           (a) 133          (a) 284

                                                 (b) 30           (b)  93           (b) 158          (b) 332
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth & Income Portfolio   (a) 25           (a)  75           (a) 129          (a) 276

                                                 (b) 30           (b)  90           (b) 154          (b) 325
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT Total Return  Portfolio                (a) 24           (a)  75           (a) 128          (a) 274

                                                 (b) 29           (b)  90           (b) 153          (b) 323
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Growth and Income Fund                (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Renaissance Fund                      (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Value Fund                            (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

Seligman Small-Cap Value Portfolio               (a) 30           (a)  91           (a) 155          (a) 327

                                                 (b) 35           (b) 106           (b) 179          (b) 373
------------------------------------------------------------------------------------------------------------------------------------

USAZ Money Market Fund                           (a) 27           (a)  82           (a) 141          (a) 299

                                                 (b) 32           (b)  97           (b) 165          (b) 346
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Aggressive Growth Fund           (a) 30           (a)  93           (a) 158          (a) 332

                                                 (b) 35           (b) 107           (b) 182          (b) 378
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Comstock Fund                    (a) 30           (a)  91           (a) 155          (a) 328

                                                 (b) 35           (b) 106           (b) 180          (b) 374
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Emerging Growth Fund             (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth and Income Fund           (a) 29           (a)  88           (a) 150          (a) 318

                                                 (b) 34           (b) 103           (b) 175          (b) 365
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth Fund                      (a) 30           (a)  91           (a) 155          (a) 328

                                                 (b) 35           (b) 106           (b) 180          (b) 374
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See Appendix A for Accumulation Unit Values - Condensed Financial Information.

<PAGE>



1.THE VARIABLE ANNUITY CONTRACT
--------------------------------------------------------------------------------




This prospectus  describes a flexible purchase payment variable deferred annuity
Contract  offered by Allianz Life.  All  references in this  prospectus to "we,"
"us" and "our" refer to Allianz Life.

o   Flexible  Purchase  Payment  means  that  you may  choose  to make  Purchase
    Payments at any time during the Accumulation  Phase (until you exercise your
    GPWB benefits,  if applicable),  in whatever  amount you choose,  subject to
    certain minimum and maximum requirements and some state requirements.

o   A deferred  annuity  contract means that Annuity Payments do not begin for a
    specified  period of time in the future  (usually  when you retire) or until
    you reach a certain age.

o   A  variable  annuity is one in which  Contract  Values  and/or the  variable
    Annuity  Payments  vary  depending  on the  performance  of  the  underlying
    Investment Options.

An annuity is a contract  between you, the owner,  and an insurance  company (in
this case Allianz  Life),  where the insurance  company  promises to pay you (or
someone else you choose) an income, in the form of Annuity Payments. The Annuity
Payments  must begin on a designated  date that is at least three years after we
issue the Contract.  Until you decide to begin receiving Annuity Payments,  your
Contract  is in  the  Accumulation  Phase.  Once  you  begin  receiving  Annuity
Payments, your Contract switches to the Payout Phase.

The Contract  benefits  from Tax Deferral.  Tax Deferral  means that you are not
taxed on any earnings or  appreciation  on the assets in your Contract until you
take money out of your Contract.

Your  Investment  Choices  include  the  variable  Investment  Options  and  any
available  Fixed Account  option.  You may not invest in more than 10 Investment
Options at any one time. Depending upon market conditions,  you can make or lose
money  in the  Contract  based on the  investment  performance  of the  variable
Investment  Options.  The  variable  Investment  Options are designed to offer a
better return than any available Fixed Account Investment Choice.  However, this
is not guaranteed.

The  amount of money you are able to  accumulate  in your  Contract  during  the
Accumulation Phase depends in large part upon the investment  performance of the
Investment Option(s) you select. The amount of the variable Annuity Payments you
receive  during the Payout Phase also depends in large part upon the  investment
performance of any Investment Options you select for the Payout Phase.

Allianz Life will not make any changes to your Contract  without your permission
except as may be required by law.

OWNERSHIP

CONTRACT  OWNER.  You,  as the  Contract  Owner,  have all the rights  under the
Contract.  The  Contract  Owner is as  designated  at the time the  Contract  is
issued,  unless  changed.  You may change  Contract  Owners for a  Non-Qualified
Contract,  subject to our approval,  at any time. Upon our approval,  the change
will  become  effective  as of the date the  request  is  signed.  This may be a
taxable event. You should consult with your tax adviser before doing this.

JOINT OWNER. The Non-Qualified  Contract can be owned by Joint Owners. Any Joint
Owner must be the spouse of the other Contract Owner (this  requirement  may not
apply in certain  states).  Upon the death of either Joint Owner,  the surviving
Joint  Owner  will  be  the  designated   Beneficiary.   Any  other  Beneficiary
designation  at the time the  Contract  was  issued  or as may have  been  later
changed will be treated as a contingent Beneficiary unless otherwise indicated.

ANNUITANT.  The  Annuitant  is the natural  person on whose life we base Annuity
Payments.  You name the  Annuitant  (subject to our  underwriting  rules then in
effect).  You may change the Annuitant at any time before the Income Date unless
the Contract is owned by a  non-individual  (for  example,  a qualified  plan or
trust).  For a Qualified  Contract there may be a requirement that the Owner and
the Annuitant are the same person.

BENEFICIARY.  The Beneficiary is the person(s) or entity you name to receive any
death  benefit.  The  Beneficiary  is named at the time the  Contract  is issued
unless  changed at a later  date.  Unless an  irrevocable  Beneficiary  has been
named, you can change the Beneficiary or contingent Beneficiary.

ASSIGNMENT.  You can  transfer  ownership  of (assign)  the Contract at any time
during your lifetime.  Allianz Life will not be bound by the assignment until it
records the assignment. Allianz Life will not be liable for any payment or other
action we take in accordance  with the Contract  before we receive notice of the
assignment.  Any assignment  made after the death benefit has become payable can
only be done with our consent. An assignment may be a taxable event.

If the  Contract is issued  pursuant to a Qualified  plan,  you may be unable to
assign the Contract.


2.ANNUITY PAYMENTS
(THE PAYOUT PHASE)
--------------------------------------------------------------------------------



INCOME DATE

You can receive  regular  monthly income  payments under your Contract.  You can
choose the month and year in which those payments  begin.  We call that date the
Income Date. Your Income Date must be the first day of a calendar month and must
be at least 3 years after we issue the Contract.  To receive the annuity  income
protection of the Guaranteed  Minimum Income  Benefit,  your Income Date must be
within 30 days following a Contract anniversary beginning with the 10th Contract
anniversary (certain other conditions must be met).

We ask you to choose your Income Date when you  purchase the  Contract.  You can
change it after  issue  subject to our  approval.  Your  Income Date must not be
later than the Annuitant's  90th birthday or 10 years from the date the Contract
was issued (if later),  unless  approved by us, or the  maximum  date  permitted
under state law. This  limitation may not apply when the Contract is issued to a
charitable remainder trust.

ANNUITY PAYMENTS

The Contract  provides  for a Guaranteed  Minimum  Income  Benefit  (GMIB) under
certain  circumstances.  The amount of the guaranteed minimum payment depends on
the GMIB you select and whether you have an Original,  Revised or New  Contract.
THE  GMIB  MAY NOT BE  AVAILABLE  IN YOUR  STATE.  CHECK  WITH  YOUR  REGISTERED
REPRESENTATIVE REGARDING AVAILABILITY.

Generally,  you may elect to receive your Annuity Payments under Annuity Options
1-5 as:

o a variable payout,

o a fixed payout, or

o a combination of both.

If you purchased  your Contract  before June 16, 2000,  you may elect to receive
variable payouts under Annuity Option 6. If you have a Revised  Contract,  or an
Original Contract that you purchased on or after June 16, 2000, Annuity Option 6
is only available for fixed payouts.

For New Contracts, Annuity Option 6 is generally only available as a ten-year or
more period certain for fixed payouts of the GMIB value. Annuity Option 6 may be
available for fixed and/or variable payouts in some states for New Contracts.

Under a fixed payout, all of the Annuity Payments will be the same dollar amount
(equal installments).  If you choose a variable payout, you can select up to ten
of the  available  Investment  Options.  If you do not tell us  otherwise,  your
Annuity Payments will be based on the investment  allocations that were in place
on the Income Date. There is no minimum  required  Annuity  Payment.  Guaranteed
fixed Annuity  Payments are generally based on an interest rate of 2.5% per year
and the mortality table specified in your Contract.

If you  choose  to have  any  portion  of your  Annuity  Payments  based  on the
investment  performance of the Investment  Option(s),  the dollar amount of your
payments will depend upon three factors:

1) the Contract Value, adjusted for any applicable MVA (less any premium tax) on
the Income Date,

2) the assumed investment rate used in the annuity table for the Contract, and

3) the performance of the Investment Option(s) you selected.

The assumed investment rate (AIR) is 5%. However, we may agree with you to use a
different  value.  The AIR will never exceed 7%. The 7% AIR is not  available in
all states.  If the actual  performance  exceeds the AIR, your Annuity  Payments
will increase.  Similarly, if the actual rate is less than the AIR, your Annuity
Payments will decrease.

You (or someone you  designate)  will  receive  the Annuity  Payments.  You will
receive tax reporting on those payments.

PARTIAL ANNUITIZATION

You are  currently  allowed to  annuitize  a portion of your  Contract,  without
annuitizing   the  entire  value   according  to  the  Allianz  Life  applicable
annuitization rules. This is referred to as a partial  annuitization.  A partial
annuitization  will decrease the amounts  available for  withdrawal,  payment of
death benefits and any additional Annuity Payments.

A partial annuitization may be treated as a partial withdrawal for tax purposes.
You should consult a tax adviser before requesting a partial  annuitization.  We
may deduct premium taxes from partially  annuitized amounts. We do not currently
restrict the number of partial annuitizations for a Contract, but we reserve the
right to do so.

ANNUITY OPTIONS

You can choose among income plans. We call those Annuity Options. You can choose
one of the Annuity  Options  described  in the  following  or any other  Annuity
Option you want and that  Allianz  Life agrees to provide.  You may, at any time
prior to the Income Date,  30 days in advance,  select and/or change the Annuity
Option.  After Annuity Payments begin, you cannot change the Annuity Option.  If
you do not choose an Annuity  Option  prior to the Income  Date,  we will assume
that you  selected a  variable  payout  under  Option 2 with 10 years of monthly
payments guaranteed. Upon the death of the Contract Owner, if different than the
Annuitant, the Beneficiary will receive the Annuity Payments.

OPTION 1. LIFE ANNUITY. Under this option, we will make monthly Annuity Payments
so long as the  Annuitant is alive.  After the  Annuitant  dies,  we stop making
Annuity Payments.

OPTION 2. LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 10, 15 OR 20 YEARS GUARANTEED.
Under  this  option,  we  will  make  monthly  Annuity  Payments  so long as the
Annuitant  is  alive.  However,  if the  Annuitant  dies  before  the end of the
selected  guaranteed period, we will continue to make Annuity Payments to you or
any person you choose for the rest of the guaranteed  period. If you do not want
to receive  Annuity  Payments  after the  Annuitant's  death,  you can ask for a
single lump sum equal to the present  value of the  guaranteed  monthly  Annuity
Payments  remaining,  as of the date Allianz Life receives proof of the death of
the  Annuitant  and a  payment  election  form,  commuted  as set  forth  in the
Contract.

During the lifetime of the Annuitant,  and while the number of Annuity  Payments
made is less than the guaranteed number of payments elected,  and if you elected
to receive payments on a variable basis,  you may request a withdrawal  (partial
liquidation).  You will be allowed to make a partial  liquidation  at least once
per Contract year after the Income Date. The  liquidation  value is equal to the
present value of the remaining  guaranteed  Annuity Payments,  to the end of the
period  certain,  commuted at the AIR.  The total of all  partial  liquidations,
measured as a percentage  of the  liquidation  value,  cannot  exceed 75% of the
liquidation  value, less any previously  liquidated  amounts.  A commutation fee
will be subtracted from the amount  liquidated before the proceeds are paid out.
Partial  liquidations  will  be  processed  on the  next  Annuity  Payment  date
following your written request.  The minimum allowable partial  liquidation will
be the  lesser  of  $500  or the  remaining  portion  of the  liquidation  value
available.

OPTION 3.  JOINT AND LAST  SURVIVOR  ANNUITY.  Under this  option,  we will make
monthly  Annuity  Payments  during the joint  lifetime of the  Annuitant and the
joint Annuitant. When the Annuitant dies, if the joint Annuitant is still alive,
we will  continue  to make  Annuity  Payments  so  long as the  joint  Annuitant
continues to live. The amount of the Annuity Payments we will make to you can be
equal to 100%,  75% or 50% (as  selected) of the amount that was being paid when
both Annuitants were alive.  The monthly Annuity Payments will end when the last
surviving Annuitant dies.

OPTION 4. JOINT AND LAST SURVIVOR  ANNUITY WITH MONTHLY  PAYMENTS OVER 10, 15 OR
20 YEARS  GUARANTEED.  Under this option,  we will make monthly Annuity Payments
during the joint  lifetime of the  Annuitant and the joint  Annuitant.  When the
Annuitant  dies, if the joint Annuitant is still alive, we will continue to make
Annuity Payments,  so long as the surviving Annuitant continues to live, at 100%
of the amount that was being paid when both were alive.  If, when the last death
occurs,  we have made Annuity  Payments  for less than the  selected  guaranteed
period,  we will  continue  to make  Annuity  Payments  to you or any person you
choose  for the rest of the  guaranteed  period.  If you do not want to  receive
Annuity Payments after the Annuitant's  death, you can ask for a single lump sum
equal to the present value of the guaranteed monthly Annuity Payments remaining,
as of the date Allianz Life  receives  proof of the death of the Annuitant and a
payment election form, commuted as set forth in the Contract.

During the lifetime of the Annuitant or joint Annuitant, and while the number of
Annuity  Payments made is less than the guaranteed  number of payments  elected,
and if you elected to receive  payments on a variable  basis,  you may request a
withdrawal  (partial  liquidation).  You  will  be  allowed  to  make a  partial
liquidation  at least  once  per  Contract  year  after  the  Income  Date.  The
liquidation  value is equal to the  present  value of the  remaining  guaranteed
Annuity  Payments,  to the end of the period  certain,  commuted at the AIR. The
total of all partial  liquidations,  measured as a percentage of the liquidation
value,  cannot  exceed  75%  of  the  liquidation  value,  less  any  previously
liquidated  amounts.  A  commutation  fee will be  subtracted  from  the  amount
liquidated  before  the  proceeds  are paid out.  Partial  liquidations  will be
processed on the next Annuity Payment date following your written  request.  The
minimum  allowable  partial  liquidation  will  be the  lesser  of  $500  or the
remaining portion of the liquidation value available.

OPTION 5. REFUND LIFE ANNUITY.  Under this option,  we will make monthly Annuity
Payments  during  the  Annuitant's  lifetime.  If at the  time of  death  of the
Annuitant the value of the Annuity  Payments made is less than the value applied
to the Annuity Option, then you will receive a refund.

For a fixed Annuity  Option,  the amount of the refund will be any excess of the
amount  applied to this  Annuity  Option over the total of all Annuity  Payments
made under this option.  For a variable Annuity Option, the amount of the refund
will be the then  value of the number of  Annuity  Units  equal to (1) the value
applied to this Annuity  Option divided by the value of the Annuity Unit used to
determine  the first  Annuity  Payment,  minus (2) the  product of the number of
Annuity Units of each Annuity Payment and the number of payments made.


OPTION 6.  SPECIFIED  PERIOD  CERTAIN  ANNUITY.  If you purchased  your Contract
before June 16, 2000 you may elect to receive  variable  payouts  under  Annuity
Option 6. If you have a  Revised  Contract,  or an  Original  Contract  that you
purchased  on or after June 16, 2000,  Annuity  Option 6 is only  available  for
fixed payouts.  For New Contracts,  Annuity Option 6 is generally only available
as a ten-year  or more  period  certain  for fixed  payouts  of the GMIB  value.
Annuity  Option 6 may be  available  for fixed and/or  variable  payouts in some
states for New Contracts.

Under this option,  we will make monthly Annuity Payments for a specified period
of time.  You elect the  specified  period which must be a whole number of years
from 10 to 30. If at the time of the death of the last  Annuitant  and any joint
Annuitant,  Annuity  Payments have been made for less than the specified  period
certain,  then we will continue to make Annuity  Payments to you for the rest of
the period  certain.  If you have  selected  to receive  payments  on a variable
basis, you may make a partial liquidation at least once each Contract year of up
to 100% of the Total Liquidation  Value in the Contract.  A commutation fee will
be accessed against the amount  liquidated before the proceeds are paid out. The
liquidation  will be  processed  on the next  Annuity  Payment  date  after your
written request is received as set forth in the Contract.


GUARANTEED MINIMUM INCOME BENEFITS (GMIB) -- ANNUITY INCOME PROTECTION


New  Contracts  include  the  Traditional  GMIB as an  optional  benefit  for an
additional  mortality and expense risk charge. If you have an Original Contract,
we will allow you to add the  Traditional  GMIB for an additional  mortality and
expense risk charge if all owners are 79 or younger and it becomes  available in
your state.  Revised and New  Contracts  also provide an Enhanced GMIB which you
can elect for an additional  mortality  and expense  charge if you and any Joint
Owner are 79 or younger at Contract issue. If you have an Original Contract,  we
will allow you to add the Enhanced GMIB for an additional  mortality and expense
risk charge if all owners are 79 or younger  when it becomes  available  in your
state. If you have an Original Contract, you can only make the election for this
benefit  within 60 days of notice.  Notice  will be  provided  when we make this
benefit  available to Contract  Owners with an Original  Contract.  You can make
this  election by returning  and signing an election  form.Your  charges will be
increased as set forth in the fee table and section 6. Expenses.  Because of the
increased  charges,  the  number of  Accumulation  Units in your  Contract  will
increase on the effective  date of the change so that the Contract Value on that
date will remain the same. Once selected, you cannot change it.

Once you select a GMIB,  you cannot  change  it.  The  Enhanced  GMIB may not be
appropriate  for owners who are age 75 to 79 when adding  this  feature to their
Contract.  because  the GMIB value is  limited  after age 81. You must hold your
Contract for ten complete  Contract years before you can exercise a GMIB. A GMIB
that carries an additional  charge may not be appropriate  for you if you intend
to hold your Contract for less than ten years.

These GMIBs apply to the Annuitant on a Contract owned by a non-individual.  The
GMIBs  do  not  create  Contract  Value  or  guarantee  the  performance  of any
Investment  Option.  THESE GMIBS MAY NOT BE AVAILABLE IN YOUR STATE.  CHECK WITH
YOUR REGISTERED  REPRESENTATIVE  REGARDING  AVAILABILITY  AND BE SURE TO DISCUSS
WHETHER A GMIB IS APPROPRIATE FOR YOUR SITUATION.

The annuity income protection  provided by the GMIBs are described below and are
used in  determining  the amount of each Annuity  Payment you receive during the
Payout Phase.  You can use a GMIB with fixed  Annuity  Options 1 through 6 only.
The GMIB provides  guaranteed  minimum Annuity Payments during the Payout Phase.
The GMIB protection will apply only under the following circumstances:

    1. Your Income Date must be within 30 days following a Contract  anniversary
       beginning with the tenth Contract anniversary;

    2. Annuity  Payments can only be made as a fixed  payout,  regardless of the
       Annuity Option you select; and

    3. If you choose  Annuity  Option 6, which is a period  certain,  the period
       certain must be for at least ten years. For New Contracts, the guaranteed
       fixed Annuity Payments under this option are based on an interest rate of
       1% per year.

The GMIBs guarantee that your Annuity Payments will be equal to the "guaranteed"
fixed  payout  rates  applied to the GMIB  value  described  below.  We will use
"current"  fixed payout rates  applied to the  Contract  Value  adjusted for any
applicable  MVA (less any  applicable  premium  tax) to  calculate  your Annuity
Payments if that produces a greater payment. If you select a GMIB and we use the
Contract  Value and the current  fixed payout  rates to  calculate  your Annuity
Payments,  you will have incurred higher Contract expenses without receiving any
explicit benefit from the GMIB option.

You can always annuitize your Contract Value three years or more after the issue
date* under a fixed and/or  variable  Annuity  Option.  However,  if you do, you
cannot use the GMIB value.

If Joint  Owners  are  named,  we will use the age of the older  Joint  Owner to
determine the GMIB value.

* Some states may require a shorter period of time.

THE TRADITIONAL  GUARANTEED MINIMUM INCOME BENEFIT (TRADITIONAL GMIB) - ORIGINAL
AND NEW CONTRACTS ONLY

The GMIB  value  before  the  date of your  death  or  exercise  of the GPWB (if
applicable)  is equal  to:

     |X|  your total Purchase Payments

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you made.

THE ENHANCED GUARANTEED MINIMUM INCOME BENEFIT (ENHANCED GMIB)

The GMIB  value  before  the  date of your  death  or  exercise  of the GPWB (if
applicable) is equal to the greater of A or B described below.

A. ANNUAL INCREASE AMOUNT

If you elected the Enhanced GMIB at Contract  issue,  the Annual Increase Amount
is initially equal to your Purchase Payment.

If you elected the  Enhanced  GMIB after  Contract  issue,  the Annual  Increase
Amount is initially  equal to the Contract  Value on the  effective  date of the
GMIB.

On each  business  day other than a Contract  anniversary,  the Annual  Increase
Amount is equal to:

     |X|  its value on the immediately preceding Business Day,

     |X|  plus any additional Purchase Payments received that day, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you make that day.

On every Contract  anniversary prior to your 81st birthday,  the Annual Increase
Amount is equal to:

     |X|  for Revised Contracts, its value on the immediately preceding business
          day increased by 5%;

     |X|  for Original and New Contracts, its value on the immediately preceding
          business day increased by 3%;

     |X|  plus any additional Purchase Payments received that day, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you make that day.

Beginning  with the  Contract  anniversary  that  occurs  on or after  your 81st
birthday,  we calculate the Annual Increase Amount in the same way that we do on
any business day other than a Contract anniversary.

For Revised  Contracts,  we limit the Annual Increase Amount to a maximum of two
times your total  Purchase  Payments  minus the percentage of any Contract Value
withdrawn (prior to any MVA, but including any contingent deferred sales charge)
for each withdrawal you made.

For Original and New Contracts, we limit the Annual Increase Amount to a maximum
of 1.5 times your total  Purchase  Payments minus the percentage of any Contract
value withdrawn  (prior to any MVA, but including any contingent  deferred sales
charge) for each withdrawal you made.


B. MAXIMUM ANNIVERSARY VALUE (MAV)

If you elected the Enhanced GMIB at Contract  issue,  the MAV is initially equal
to your Purchase Payment.

If you elected the  Enhanced  GMIB after  Contract  issue,  the MAV is initially
equal to the Contract Value on the effective date of the GMIB.

On each Business Day other than a Contract anniversary, the MAV is equal to:

     |X|  its value on the immediately preceding business day,

     |X|  plus any additional Purchase Payments received that day, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you make that day.

On every Contract anniversary prior to your 81st birthday,  the MAV is equal to:

     |X|  the highest Contract Value that occurred on any Contract anniversary,

     |X|  plus  subsequent  additional  Purchase  Payments  you made  since that
          Contract anniversary, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you made since that Contract anniversary.

Beginning  with the  Contract  anniversary  that  occurs  on or after  your 81st
birthday,  we  calculate  the MAV in the same way that we do on any business day
other than a Contract anniversary.

FOR ORIGINAL AND NEW CONTRACTS,  IF YOU EXERCISE THE GPWB, THE  TRADITIONAL  AND
ENHANCED GMIB VALUES WILL FREEZE ON THE DATE YOU BEGIN  RECEIVING GPWB PAYMENTS.
HOWEVER, WE WILL CONTINUE TO ADJUST THE GMIB VALUE BY:

     |X|  reducing it for each GPWB payment you receive; and

     |X|  if you make any additional partial  withdrawals,  we will reduce it by
          the percentage of the Contract  Value you withdraw  (prior to any MVA,
          but  including  any   contingent   deferred  sales  charge)  for  each
          withdrawal you make.

At the time the last GPWB  benefit has been paid,  you have the option of either
annuitizing  or  receiving a lump sum payment of the  remaining  Contract  Value
adjusted for any applicable MVA (less any contingent  deferred sales charges and
applicable premium taxes).

GMIB EXAMPLES

     o    You  purchase  a New  Contract  with an  initial  Purchase  Payment of
          $100,000.  You allocate your entire Purchase Payment to the Investment
          Options and you make no additional Purchase Payments.

     o    The MAV on the ninth Contract anniversary is $180,000.

     o    You take a partial withdrawal of $20,000 (this includes any contingent
          deferred  sales  charge) in the tenth  Contract year when the Contract
          Value (prior to the partial withdrawal) is $160,000. You take no other
          partial withdrawals.

     o    The Contract Value on the tenth Contract anniversary is $140,000.

     o    You have not yet reached your 81st  birthday as of the tenth  Contract
          anniversary.
<TABLE>
<CAPTION>

TRADITIONAL GMIB EXAMPLE:

<S>                                                                                     <C>
         Total Purchase Payments:                                                       $100,000
         Minus the percentage of Contract Value
           withdrawn:   ($20,000 / $160,000) = 0.125 x $100,000 =                      -  12,500
         Traditional GMIB value as of the tenth Contract anniversary:                   $ 87,500


ENHANCED GMIB EXAMPLE:

On the tenth Contract anniversary, the GMIB value is equal to the greater of:

         1) The Annual Increase Amount:
               Initial Purchase Payment                                                 $100,000.00
               Increased by 3% on the first Contract anniversary                        X      1.03
                                                                                        $103,000.00
               Increased by 3% on the second Contract anniversary                       X      1.03
                                                                                        $106,090.00
               Increased by 3% on the third Contract anniversary                        X      1.03
                                                                                        $109,272.70
               On the ninth Contract anniversary the
                 Annual Increase Amount is                                              $130,477.32
               Minus the percentage of Contract Value
                 withdrawn:   ($20,000 / $160,000) = 0.125 x $130,477.32 =              - 16,309.66
                                                                                        $114,167.65
               Increased by 3% on the tenth Contract anniversary                        X      1.03
                                                                                        $117,592.68
               Verifying that the Annual  Increase  Amount is within the maximum
                 limit:
                   1.5 times Purchase Payments:    1.5 x $100,000 =                     $150,000
                   Minus the percentage of Contract Value
                     withdrawn:   ($20,000 / $160,000) = 0.125 x $150,000 =           -   18,750
                                                                                        $131,250
         2) The MAV:
               The MAV on the ninth Contract anniversary                                $180,000
               Minus the percentage of Contract Value
                 withdrawn:   ($20,000 / $160,000) = 0.125 x $180,000 =                -  22,500
                                                                                        $157,500

Therefore, the Enhanced GMIB value on the tenth Contract anniversary is equal to
$157,500.
</TABLE>

If the GMIB value is greater than your  Contract  Value on the Income Date,  you
may  receive a higher  Annuity  Payment by using the GMIB  value.  However,  the
guaranteed  fixed  payout  rates  available  with the GMIB  value  might be more
conservative  than the current fixed payout rates that are otherwise  available.
Therefore,  the Annuity  Payment you would receive by using the GMIB value might
be less than the payment  you would get using the  Contract  Value,  even if the
GMIB value is greater  than the Contract  Value.  We will use  whichever  amount
produces the greater Annuity Payment to calculate your payments.


3.PURCHASE
--------------------------------------------------------------------------------



PURCHASE PAYMENTS

A Purchase Payment is the money you invest in the Contract. The Purchase Payment
requirements are:

     o    For New Contracts,  if you select a GMIB, the minimum  initial payment
          we will accept $25,000.  For all other Contracts,  the minimum initial
          payment we will accept is $15,000.

     o    The  maximum  amount we will accept  without our prior  approval is $1
          million in all Contracts with us.

     o    You can make  additional  Purchase  Payments  any  time  prior to your
          exercise  of the  GPWB (if  applicable)  of $250 or more (or as low as
          $100 if you have selected the Automatic  Investment  Plan). In certain
          states, additional Purchase Payments can only be made during the first
          Contract year. (In Connecticut, no purchase payments may be made on or
          after the Contract Owner's 81st birthday).

Allianz  Life  may,  at  its  sole   discretion,   waive  the  minimum   payment
requirements. We reserve the right to decline any Purchase Payments. At the time
you buy the Contract, you and the Annuitant cannot be older than 80 years old.

This product is not designed for professional market timing organizations, other
entities, or persons using programmed, large or frequent transfers.

The Contract may be used in  connection  with certain tax  qualified  retirement
plans.  The Contract  includes  attributes  such as tax deferral on  accumulated
earnings. Qualified retirement plans provide their own tax deferral benefit; the
purchase of this  Contract  does not provide  additional  tax deferral  benefits
beyond those provided in the qualified plan. Accordingly,  if you are purchasing
the Contract  through a qualified  plan,  you should  consider  purchasing  this
Contract for its Death Benefit,  annuity  benefits,  and other non-tax  deferral
related benefits.  Please consult a tax advisor for information specific to your
circumstances to determine whether the Contract is an appropriate investment for
you.

BONUS

Allianz  Life will credit each  Purchase  Payment you make prior to your and any
Joint Owner's 81st birthday with a bonus at the time it is made.  The bonus rate
will be based on the total amount of Purchase  Payments  made at the time of the
contribution,  less any  withdrawals  you have  made  (and  assessed  contingent
deferred sales charges). The bonus rates are:

4% of the Purchase  Payment with total Purchase  Payments (less  withdrawals and
related contingent deferred sales charges) of under $25,000;

5% of the Purchase  Payment with total Purchase  Payments (less  withdrawals and
related contingent deferred sales charges) of $25,000-$99,999;

6% of the Purchase  Payment with total Purchase  Payments (less  withdrawals and
related contingent deferred sales charges) of $100,000-$999,999;

7% of the Purchase  Payment with total Purchase  Payments (less  withdrawals and
related contingent deferred sales charges) of $1,000,000-$4,999,999;

8% of the Purchase  Payment with total Purchase  Payments (less  withdrawals and
related contingent deferred sales charges) of $5,000,000 or greater.

The bonus will be credited to your Contract subject to the following terms:

1)  Bonus amounts are available for  withdrawal,  annuitization  or payment of a
    death benefit only when such amounts become vested as follows:

    0% - up through 12 completed months from the date of Purchase Payment;

    35% - at least 12 and through 24 completed months from date of Purchase
    Payment;

    70% - at least 24 months and through 36 completed months from date of
     Purchase Payment;

    100% - at least 36 completed months from date of Purchase Payment.

2)  All bonus amounts and any gains or losses  attributable  to such amounts are
    treated as earnings  under the Contract and are treated as such for purposes
    of the contingent deferred sales charge.

3)  All gains and  losses  attributable  to the bonus are part of your  Contract
    Value and are always 100% vested.

4)  If Joint Owners are named, the age of the older Joint Owner will be used and
    if the Contract  Owner is a  non-individual,  then the age of the  Annuitant
    will be used to determine whether a bonus applies.

All bonus amounts are paid from the general account assets of Allianz Life.


Contract charges are deducted from the total value of your Contract.  Therefore,
your Contract  incurs  expenses on the total Rewards  Value,  which includes all
vested and unvested  portions of the bonus. When you cancel your Contract during
the Free Look  period,  or if you make a  withdrawal,  annuitize or when a death
benefit is payable in the first 3 years from any Purchase Payment date, you will
forfeit all or some of your bonus. Since charges will have been assessed against
the higher  amount  (Purchase  Payment  plus  bonus),  it is possible  that upon
withdrawal, particularly in a declining market, you will receive less money back
than you would have if you had not received  the bonus or not  purchased a bonus
Contract.  You may alleviate  this risk by  allocating  the bonus amounts to the
USAZ Money Market Fund. We expect to profit from certain charges  assessed under
the Contract (i.e.,  the contingent  deferred sales charge and the mortality and
expense risk charge) associated with the bonus.


AUTOMATIC INVESTMENT PLAN

The  Automatic  Investment  Plan  (AIP) is a program  which  allows  you to make
additional Purchase Payments to your Contract on a monthly or quarterly basis by
electronic transfer of monies from your savings,  checking or brokerage account.
You may participate in this program by completing the appropriate  form. We must
receive  your form by the first of the month in order for AIP to begin that same
month.  Investments  will  take  place  on the  20th of the  month,  or the next
business day. The minimum  investment  that can be made by AIP is $100.  You may
stop AIP at any time you want.  We need to be notified by the first of the month
in  order  to stop or  change  AIP that  month.  If AIP is used for a  Qualified
Contract,  you should  consult  your tax  adviser for advice  regarding  maximum
contributions.

ALLOCATION OF PURCHASE PAYMENTS


When you purchase a Contract,  we will allocate your Purchase  Payment and bonus
amounts to the Investment  Choices you have  selected.  We ask that you allocate
your money in either whole  percentages  or round  dollars.  In certain  states,
additional  Purchase  Payments can only be made during the first  Contract year.
Transfers  do not change  the  allocation  instructions  for  payments.  You can
instruct us how to allocate  additional  Purchase Payments and bonus amounts. If
you do not instruct us, we will  allocate  them in the same way as your previous
instructions  to us. If you  select the USAZ  Money  Market  Fund for your bonus
allocation,  that will be the default  allocation for the bonus unless otherwise
specified.  If you do not  select  the USAZ  Money  Market  Fund for your  bonus
allocation,  then the bonus will be allocated the same way as the  corresponding
Purchase Payment.  You may change the allocation of future payments without fee,
penalty or other charge upon written  notice or  telephone  instructions  to the
USAllianz Service Center. A change will be effective for payments received on or
after we receive your notice or instructions.

Allianz Life reserves the right to limit the number of  Investment  Choices that
you may  invest  in at one time.  Currently,  you may  invest  in 10  Investment
Options. We may change this in the future.  However, we will always allow you to
invest in at least five Investment Options.

Once we receive your  Purchase  Payment and the necessary  information,  we will
issue your Contract and allocate your first  Purchase  Payment within 2 business
days. If you do not give us all of the  information we need, we will contact you
or your registered representative to get it. If for some reason we are unable to
complete  this  process  within 5 business  days,  we will either send back your
money  or get  your  permission  to keep it  until  we get all of the  necessary
information.  If you make  additional  Purchase  Payments,  we will credit these
amounts to your  Contract  within one business day. Our business day closes when
the New York Stock Exchange closes, which is usually at 4:00 p.m. Eastern time.


TAX-FREE SECTION 1035 EXCHANGES


You generally can exchange one annuity contract, or a life insurance policy, for
another  annuity  contract in a "tax-free"  exchange  under  Section 1035 of the
Internal  Revenue  Code.  Before  making an  exchange,  you should  compare both
contracts carefully.  Remember that if you exchange another annuity contract for
the one described in this prospectus:  you might have to pay a withdrawal charge
on your old contract;  there will be a new withdrawal  charge period for the new
contract; other charges under the new Contract may be higher (or lower); and the
benefits may be  different.  If the  exchange  does not qualify for Section 1035
treatment,  you also may have to pay  federal  income tax on the  exchange.  You
should not exchange  another annuity  contract for this one unless you determine
that the exchange is in your best interest.


FAXED APPLICATIONS


Allianz Life will accept Contract applications  delivered in writing, as well as
via fax. A manually signed faxed  application  will be treated as an application
delivered  in  writing.  Please note that fax  communications  may not always be
available.   Any  fax   system,   whether   it  is  yours  or  your   registered
representative's,  can experience outages or slowdowns for a variety of reasons.
These outages or slowdowns may delay or prevent our  processing of your request.
Although  we have taken  precautions  to help our systems  handle  heavy use, we
cannot  promise  complete  reliability  under  all  circumstances.  If  you  are
experiencing  problems,  you should  submit your  application  in writing to our
service center.  We do not currently accept  applications  delivered via e-mail,
web site,  or other  electronic  communications.  This may be  available  in the
future.


FREE LOOK


If you change your mind about owning the  Contract,  you can cancel it within 10
days after receiving it (or the period required in your state).  When you cancel
the Contract within this time period,  Allianz Life will not assess a contingent
deferred sales charge.  You will receive back whatever your Contract is worth on
the day we receive your request. In certain states, or if you have purchased the
Contract as an IRA, we may be required to give you back your Purchase Payment if
you  decide to  cancel  your  Contract  within 10 days  after  receiving  it (or
whatever period is required in your state).  If that is the case, we reserve the
right to allocate  your initial  Purchase  Payment to the USAZ Money Market Fund
for 15 days after we receive it. (In some states,  the period may be longer.) At
the  end of that  period,  we  will  re-allocate  your  money  as you  selected.
Currently,  however,  we will  directly  allocate  your money to the  Investment
Choices as you have selected on your application.


ACCUMULATION UNITS

The value of the portion of your Contract  allocated to the  Investment  Options
will go up or down  based  upon the  investment  performance  of the  Investment
Option(s)  you  choose.  The  value of your  Contract  will  also  depend on the
expenses of the Contract.  In order to keep track of the value of your Contract,
we use a  measurement  called an  Accumulation  Unit (which is like a share of a
mutual  fund).  During the Payout  Phase of the  Contract  we call it an Annuity
Unit.

Every  business  day we  determine  the value of an  Accumulation  Unit for each
Investment  Option by multiplying the  Accumulation  Unit value for the previous
period by a factor for the current period. The factor is determined by:

o    dividing the value of an Investment Option at the end of the current period
     by the value of an Investment Option for the previous period; and


o    multiplying  it by one minus the daily amount of the insurance  charges and
     any charges for taxes.


The  value  of an  Accumulation  Unit  may go up or down  from  business  day to
business day.

When you make a Purchase  Payment,  we credit your  Contract  with  Accumulation
Units for any portion of your Purchase  Payment and bonus amount allocated to an
Investment Option. The number of Accumulation Units we credit your Contract with
is  determined  by dividing the amount of the Purchase  Payment and bonus amount
allocated to an Investment Option by the value of the corresponding Accumulation
Unit.

We calculate the value of each  Accumulation  Unit after regular  trading on the
New York Stock Exchange closes each day, and then credit your Contract.

EXAMPLE:

On Wednesday we receive an  additional  Purchase  Payment of $3,000 from you and
assume  the  bonus  rate is 4%.  You  have  told us you  want  this to go to the
Franklin  Growth and Income  Securities  Fund.  When the New York Stock Exchange
closes on that Wednesday,  we determine that the value of an  Accumulation  Unit
based on an  investment  in the Franklin  Growth and Income  Securities  Fund is
$13.25.  We then divide $3,120 ($3,000  Purchase Payment plus $120 bonus amount)
by $13.25 and credit your Contract on Wednesday  night with 235.47  Accumulation
Units.

If you select the USAZ Money Market Fund for your bonus allocation, that will be
the default allocation for the bonus unless otherwise  specified.  If you do not
select the USAZ Money Market Fund for your bonus allocation, then the bonus will
be allocated the same way as the corresponding Purchase Payment.


4.INVESTMENT OPTIONS
--------------------------------------------------------------------------------



The Contract offers the Investment  Options listed in the following table.  Each
Investment  Option  has  its own  investment  objective.  Additional  Investment
Options may be available  in the future.  In the future,  we also may  eliminate
Investment Options.


YOU SHOULD READ THE INVESTMENT  OPTION  PROSPECTUSES  CAREFULLY.  The Investment
Options invest in different  types of securities  and follow varying  investment
strategies.  There are potential  risks  associated  with each of these types of
securities  and  investment  strategies.  For example,  an  Investment  Option's
performance  may be affected by risks specific to certain types of  investments,
such as foreign securities,  derivative  investments,  non-investment grade debt
securities,  initial public  offerings (IPOs) or companies with relatively small
market  capitalizations.  IPOs  and  other  investment  techniques  may  have  a
magnified performance impact on an Investment Option with a small asset base. An
Investment Option may not experience similar performance as its assets grow. The
operation of the Investment  Options and the various risks  associated  with the
Investment  Options are  described in the  Investment  Option  prospectuses.  To
obtain  a  current  prospectus  for  any of the  Investment  Options  call  your
registered  representative  or  USAllianz  at  1-800-542-5427.   Copies  of  the
Investment Option prospectuses will be sent to you with your Contract.

Franklin  Templeton  Variable  Insurance  Products  Trust  issues two classes of
shares.  Only Class 2 shares are  available in  connection  with your  Contract.
Class 2 shares have Rule 12b-1 plan expenses.

The investment objectives and policies of certain Investment Options are similar
to the  investment  objectives  and policies of other  portfolios  that the same
investment advisers manage. Although the objectives and policies may be similar,
the investment results of the Investment Options may be higher or lower than the
results of such portfolios.  The investment advisers cannot guarantee,  and make
no  representation,  that the investment  results of similar  Investment Options
will be comparable  even though the Investment  Options have the same investment
advisers and objectives.

We offer other variable annuity contracts that may invest in the same Investment
Options.  These  Contracts may have  different  charges and may offer  different
benefits  more  suitable  to  your  needs.  For  more  information  about  these
Contracts, please contact us at the USAllianz Service Center.

The following is a list of the Investment  Options available under the Contract,
the  investment  advisers  and  sub-advisers  for each  Investment  Option,  the
investment  objectives for each Investment Option and the primary investments of
each Investment Option:



<PAGE>
<TABLE>
<CAPTION>
                                                     INVESTMENT OPTIONS
------------------------------------------------------------------------------------------------------------------------------------
                                                      ASSET CATEGORIES
                                             -----------------------------------
<S>                        <C>                <C> <C><C> <C> <C> <C>  <C><C><C><C>  <C>                   <C>

Investment Management      Investment         SB  S  CE  IT  HB  IE   L  L  S  M    Objective(s)          Primary Investments
Company                    Option             ho  p  aq  ne  io  nq   a  a  m  i
----------------------                        on  e  su  tr  gn  tu   r  r  a  d
                                              rd  c  hi  em  hd  ei   g  g  l
   Adviser/Sub-Adviser                        ts  i   v  r    s  rt   e  e  l  C
                                              -   a   a  mB  Y   ny            a
                                              T   l   l  eo  i   a    V  G  C  p
                                              e   t   e  dn  e   t    a  r  a
                                              r   y   n  id  l   i    l  o  p
                                              m       t  as  d   o    u  w
                                                         t       n    e  t
                                                         e       a       h
                                                                 l
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
AIM                     USAZ AIM Basic Value                         X            Long-term growth of   At least 65% of total assets
o  managed by           Fund                                                      capital               in equity securities of U.S.
   USAllianz Advisers,                                                                                  issuers that have market
   LLC/ A I M Advisors,                                                                                 capitalizations of greater
   Inc.                                                                                                 than $500 million and that
                                                                                                        the portfolio managers
                                                                                                        believe to be undervalued
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM Blue Chip                           X            Long-term growth of   At least 65% of total assets
                        Fund                                                      capital with a        in the common stocks of blue
                                                                                  secondary objective   chip companies
                                                                                  of current income
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM Dent                                   X         Long-term growth of   Investment in securities of
                        Demographic Trends                                        capital               companies that are likely to
                        Fund                                                                            benefit from changing
                                                                                                        demographic, economic and
                                                                                                        lifestyle trends. May invest
                                                                                                        up to 25% of total assets in
                                                                                                        foreign securities of which
                                                                                                        no more than 15% of its
                                                                                                        total assets may be invested
                                                                                                        in securities of companies
                                                                                                        domiciled in developing
                                                                                                        countries.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM                                  X               Long-term growth of   At least 70% of net assets
                        International Equity                                      capital               in marketable equity
                        Fund                                                                            securities of foreign
                                                                                                        companies that are listed on
                                                                                                        a recognized foreign
                                                                                                        securities exchange or
                                                                                                        traded in a foreign
                                                                                                        over-the-counter market
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
ALLIANCE CAPITAL        USAZ Alliance Capital                        X            Income and long-term  At least 65% in dividend
o  managed by USAllianz Growth and Income                                         growth of capital     paying stocks of large
   Advisers, LLC/       Fund                                                                            well-established "blue
   Alliance Capital                                                                                     chip" companies
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Alliance  Capital                          X         Long-term growth of   At least 80% of net assets
                        Large Cap Growth Fund                                     capital               in equity securities of U.S.
                                                                                                        companies judged by adviser
                                                                                                        likely to achieve superior
                                                                                                        earnings growth.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Alliance Capital     X                               Superior long-term    At least 80% of assets in
                        Technology Fund                                           growth of capital     securities of companies
                                                                                                        involved with innovative
                                                                                                        technologies
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
DAVIS                   Davis VA Financial        X                               Growth of capital     At least 65% in common stock
o  managed by Davis     Portfolio                                                                       of companies "principally
   Advisors                                                                                             engaged" in financial
                                                                                                        services
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Davis VA  Value                              X            Growth of capital     Common stock of U.S.
                        Portfolio                                                                       companies with market
                                                                                                        capitalizations of at
                                                                                                        least $5 billion, which
                                                                                                        adviser believes are of
                                                                                                        high quality and whose
                                                                                                        shares are selling at
                                                                                                        attractive prices, stocks
                                                                                                        are selected with the
                                                                                                        intention of holding them
                                                                                                        for the long term
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
DREYFUS                 Dreyfus Small Cap                                  X      Match performance     Invests in a representative
o  managed by The       Stock Index Fund                                          of the Standard &     sample of stocks included in
   Dreyfus Corporation                                                            Poor's Small Cap      the S&P Small Cap 600 Index,
                                                                                  600 Index             and in futures whose
                                                                                                        performance is related to
                                                                                                        the index, rather than
                                                                                                        attempt to replicate the
                                                                                                        index
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Dreyfus Stock Index                             X         Match total return    Invests in all 500 stocks in
                        Fund                                                      of the S&P 500        the S&P 500 in proportion to
                                                                                  Composite Stock       their weighting in the index
                                                                                  Price Index
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
FRANKLIN TEMPLETON      Franklin Global           X                               Capital               At least 80% of net assets
o  managed by           Communications                                            appreciation and      in investments of
   Franklin             Securities Fund                                           current income        communications companies
   Advisers, Inc.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Growth and                          X            Capital               At least 65% of total assets
                        Income Securities Fund                                    appreciation, with    in broadly diversified
                                                                                  current income as a   portfolio of equity
                                                                                  secondary goal        securities the adviser
                                                                                                        considers financially
                                                                                                        strong, but undervalued by
                                                                                                        the market
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin High Income                  X                   High level of         At least 65% of total assets
                        Fund                                                      current income;       in debt securities offering
                                                                                  secondary goal is     high yield and expected
                                                                                  capital appreciation  total return
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Income                       X                   Maximize income       Investment in debt and
                        Securities Fund                                           while maintaining     equity securities, including
                                                                                  prospects for         high yield, lower-rated
                                                                                  capital appreciation  bonds
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Large Cap                              X         Capital appreciation  At least 80% of net assets
                        Growth Securities Fund                                                          in investments of large
                                                                                                        capitalization companies.
                                                                                                        For this Fund, large
                                                                                                        capitalization companies are
                                                                                                        those with market
                                                                                                        capitalization values within
                                                                                                        the top 50% of market
                                                                                                        capitalization values in the
                                                                                                        Russell 1000 Index at the
                                                                                                        time of purchase
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Real Estate      X                               Capital               At least 80% of net assets
                        Fund                                                      appreciation;         in investment of companies
                                                                                  secondary emphasis    operating in the real estate
                                                                                  on current income     sector
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin Rising                                        X  Long-term capital     At least 80% of net assets
   Advisory             Dividends Securities                                      appreciation; while   in investments of companies
   Services, LLC        Fund                                                      not a goal, capital   that have paid rising
                                                                                  preservation is a     dividends
                                                                                  secondary
                                                                                  consideration
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Franklin Small Cap                                 X      Long-term capital     At least 80% of net assets
   Franklin             Fund                                                      growth                in investments of small
   Advisers, Inc.                                                                                       capitalization companies.
                                                                                                        For this Fund, small
                                                                                                        capitalization companies are
                                                                                                        those with market
                                                                                                        capitalization values not
                                                                                                        exceeding (i) $1.5 billion;
                                                                                                        or (ii) the highest market
                                                                                                        capitalization values in the
                                                                                                        Russell 2000 Index;
                                                                                                        whichever is greater at the
                                                                                                        time of purchase
----------------------  --------------------  --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin Small Cap                                 X      Long term total       At least 80% of net assets
   Advisory             Value Securities Fund                                     return                in investments of small
   Services, LLC                                                                                        capitalization companies.
                                                                                                        For this Fund, small
                                                                                                        capitalization companies are
                                                                                                        those with market
                                                                                                        capitalization values not
                                                                                                        exceeding $2.5 billion in
                                                                                                        assets. The Fund invests in
                                                                                                        equity securities of
                                                                                                        companies the adviser
                                                                                                        believes are undervalued
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin U.S.          X                                  Income                At least 80% of its net
       Advisers, Inc.   Government Fund                                                                 assets in U.S. government
                                                                                                        securities. The Fund
                                                                                                        currently invests primarily
                                                                                                        in fixed and variable rate
                                                                                                        mortgage-backed securities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Zero Coupon              X                       As high an            At least 80% of net assets
                        Fund 2005                                                 investment return     in zero coupon debt
                                                                                  as is consistent      securities. The Fund invests
                                                                                  with capital          primarily in U.S. Treasury
                                                                                  preservation          issued stripped securities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Zero Coupon              X                       As high an            At least 80% of net assets
                        Fund 2010                                                 investment return     in zero coupon debt
                                                                                  as is consistent      securities. The Fund invests
                                                                                  with capital          primarily in U.S. Treasury
                                                                                  preservation          issued stripped securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Mutual Discovery                          X               Capital appreciation  At least 65% of total assets
   Mutual               Securities Fund                                                                 in equity securities of
   Advisers, LLC                                                                                        companies of any nation the
                                                                                                        adviser believes are
                                                                                                        available at market prices
                                                                                                        less than their value, based
                                                                                                        on certain recognized or
                                                                                                        objective criteria
                                                                                                        (intrinsic value)
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Mutual Shares                                          X  Capital               At least 65% of total assets
                        Securities Fund                                           appreciation, with    in equity securities of
                                                                                  income as a           companies the adviser
                                                                                  secondary goal        believes are available at
                                                                                                        market prices less than
                                                                                                        their value, based on
                                                                                                        certain recognized or
                                                                                                        objective criteria
                                                                                                        (intrinsic value)
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Templeton Developing      X                               Long-term capital     At least 80% of net assets
   Templeton  Asset     Markets Securities                                        appreciation          in emerging market
   Management, Ltd.     Fund                                                                            investments, typically
                                                                                                        located in the Asia-Pacific
                                                                                                        region, Eastern Europe,
                                                                                                        Central and South America,
                                                                                                        and Africa
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Templeton  Templeton Foreign                        X               Long-term capital     At least 80% of net asets in
   Investment            Securities Fund                                          growth                investments of issuers
   Counsel, LLC                                                                                         outside the U.S., including
                                                                                                        emerging markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Templeton Growth                          X               Long-term capital     At least 65% of total assets
   Templeton            Securities Fund                                           growth                in the equity securities of
   Global  Advisors                                                                                     companies located anywhere
   Limited                                                                                              in the world, including
                                                                                                        those in the U.S. and
                                                                                                        emerging markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ Templeton                            X               Long-term capital     At least 80% of net assets
   USAllianz            Developed Markets Fund                                    appreciation          in equity securities of
   Advisers, LLC/                                                                                       companies located in any
   Templeton                                                                                            developed country outside
   Investment                                                                                           the U.S., with particular
   Counsel, LLC                                                                                         areas of interest in Western
                                                                                                        Europe, Australia, Canada
                                                                                                        New Zealand, Hong Kong,
                                                                                                        Japan, Bermuda and Singapore
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
JENNISON                Jennison 20/20 Focus                            X         Long-term growth of   Invests in up to 20 value
o  managed by           Portfolio                                                 capital               stocks and 20 growth stocks
   Prudential                                                                                           of mid-to-large size U.S.
   Investments Fund                                                                                     companies
   Management
   LLC/Jennison
   Associates, LLC
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        SP Jennison                               X               Long-term growth of   Equity-related securities of
                        International Growth                                      capital               foreign issuers
                        Portfolio
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        SP Strategic Partners                           X         Long-term growth of   At least 65% of total assets
                        Focused Growth                                            capital               in equity-related securities
                        Portfolio                                                                       of U.S. companies that the
                                                                                                        adviser believes to have
                                                                                                        strong capital appreciation
                                                                                                        potential
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
OPPENHEIMER             Oppenheimer Global                       X                Long-term capital     Securities - mainly common
o  managed by           Securities Fund/VA                                        appreciation          stocks, but also other
   Oppenheimer Funds,                                                                                   equity securities including
   Inc.                                                                                                 preferred stocks and
                                                                                                        securities convertible
                                                                                                        into common stock-of
                                                                                                        foreign issuers,
                                                                                                        "growth-type" companies,
                                                                                                        cyclical industries and
                                                                                                        special situations the
                                                                                                        adviser believes offer
                                                                                                        appreciation possibilities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Oppenheimer High                     X                   High level of         High-yield fixed-income
                        Income Fund/VA                                            current income        securities of domestic and
                                                                                                        foreign issuers
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Oppenheimer Main                            X            High total return     Common stocks of U.S.
                        Street Growth &                                           (which includes       companies; other equity
                        Income Fund/VA                                            growth in the value   securities -- such as
                                                                                  of its shares as      preferred stocks and
                                                                                  well as current       securities convertible into
                                                                                  income)               common stocks; debt
                                                                                                        securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ Oppenheimer                                   X      Capital appreciation  Invests in companies that
   USAllianz Advisers,  Emerging Growth Fund                                                            have the potential to become
   LLC/Oppenheimer                                                                                      leaders in new emerging
   Funds, Inc.                                                                                          markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
PIMCO                   PIMCO VIT High Yield                  X                   Maximum total         At least 80% of assets in
o  managed by Pacific   Portfolio                                                 return, consistent    high-yield securities ("junk
   Investment                                                                     with preservation     bonds") rated below
   Management Company                                                             of capital and        investment grade, but at
   LLC                                                                            prudent investment    least "B" by Moody's or S&P
                                                                                  management
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        PIMCO VIT StocksPLUS                            X         Total return          Substantially in S&P 500
                        Growth and Income                                         exceeding that of     derivatives, backed by a
                        Portfolio                                                 the S&P 500           portfolio of fixed income
                                                                                                        instruments
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        PIMCO VIT Total                   X                       Maximum total         At least 65% of assets in
                        Return Portfolio                                          return, consistent    fixed income instruments of
                                                                                  with preservation     varying maturities
                                                                                  of capital and
                                                                                  prudent investment
                                                                                  management
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ PIMCO Growth &                          X            Long-term growth of   At least 65% of its total
   USAllianz Advisers,  Income Fund                                               capital ; secondary   assets in common stocks of
   LLC/ Allianz                                                                   emphasis on income    companies with market
   Dresdner Asset                                                                                       capitalizations of more than
   Management of                                                                                        $1 billion at the time of
   America L.P.                                                                                         investment
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ PIMCO                                             X  Long-term growth of   At least 65% of total assets
                        Renaissance Fund                                          capital and income    in common stocks of
                                                                                                        companies with below-average
                                                                                                        valuations whose business
                                                                                                        fundamentals are expected to
                                                                                                        improve
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ PIMCO Value Fund                        X            Long-term growth of   At least 65% of its total
                                                                                  capital and income    assets in common stocks of
                                                                                                        companies with market
                                                                                                        capitalizations of more than
                                                                                                        $5 billion at the time of
                                                                                                        investment
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
SELIGMAN                Seligman Small-Cap                                 X      Long-term capital     At least 80% of net assets
o  managed by J. & W.   Value Portfolio                                           appreciation          in common stocks of "value"
   Seligman & Co.                                                                                       companies with small market
   Incorporated                                                                                         capitalization (up to $2
                                                                                                        billion) at the time of
                                                                                                        purchase by the portfolio
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------

USAZ                    USAZ Money Market Fund        X                           Current income        At least 80% of total assets
o  managed by USAllianz                                                           consistent with       in portfolio of high
   Advisers, LLC/                                                                  stability of         quality, money market
   Prudential Investment                                                           principal            investments
   Management, Inc.
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------


VAN KAMPEN              USAZ Van Kampen                                        X  Capital growth        At least 65% of total assets
o  managed by USAllianz Aggressive Growth Fund                                                          in common stocks and other
   Advisers, LLC/Van                                                                                    equity securities the
   Kampen Investment                                                                                    adviser believes have an
   Advisory Corp.                                                                                       above-average potential for
                                                                                                        capital growth
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by USAllianz USAZ Van Kampen                              X            Capital growth and    Invests primarily
   Advisers, LLC/Van    Comstock Fund                                             income                in common stocks
   Kampen Asset
   Management Inc.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Van Kampen                                 X         Capital               Invests primarily
                        Emerging Growth Fund                                      appreciation          in portfolios of common
                                                                                                        stocks of emerging growth
                                                                                                        companies
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Van Kampen                              X            Income and            Invests primarily
                        Growth and Income Fund                                    long-term growth of   in income-producing
                                                                                  capital               equity securities, including
                                                                                                        common stocks and
                                                                                                        convertible securities; also
                                                                                                        in non-convertible preferred
                                                                                                        stocks and debt securities
                                                                                                        rated "investment grade"
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by USAllianz USAZ Van Kampen                                        X  Capital growth        Invests primarily
   Advisers, LLC/Van    Growth Fund                                                                     in common stocks and other
   Kampen Investment                                                                                    equity securities of growth
   Advisory Corp.                                                                                       companies; also in preferred
                                                                                                        stocks and securities
                                                                                                        convertible into common
                                                                                                        stocks or other equity
                                                                                                        securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
</TABLE>

Shares of the  Investment  Options  may be offered in  connection  with  certain
variable  annuity  contracts  and variable  life  insurance  policies of various
insurance  companies  which  may or may not be  affiliated  with  Allianz  Life.
Certain  Investment  Options may also be sold directly to pension and retirement
plans that qualify under Section 401 of the Internal  Revenue Code. As a result,
a material conflict of interest may arise between insurance companies, owners of
different types of contracts and retirement  plans or their  participants.  Each
Investment  Option's  Board of Directors  will monitor for the  existence of any
material conflicts, and determine what action, if any, should be taken.

Allianz Life may enter into certain  arrangements  under which it is compensated
by the Investment  Options'  advisers,  distributors  and/or  affiliates for the
administrative  services which it provides to the Investment Options. The amount
of the  compensation  usually is based on the aggregate assets of the Investment
Options  or  other  investment  portfolios  from  Contracts  that  we  issue  or
administer.  Some  advisers may pay us more or less than others.  The amounts we
receive under these arrangements may be significant.  In addition, our affiliate
USAllianz Investor Services,  LLC, the principal  underwriter for the Contracts,
will  receive  12b-1  fees  deducted  from  certain   Investment  Option  assets
attributable to the Contract for providing  distribution and shareholder support
services  to some  Investment  Options.  Because  12b-1  fees are paid out of an
Investment Options' assets on an ongoing basis, over time they will increase the
cost of an investment in Investment Option shares.

SUBSTITUTION AND LIMITATION ON FURTHER INVESTMENTS

We may substitute  another  Investment Option for one of the Investment  Options
you  have  selected.   Substitutions  may  be  made  with  respect  to  existing
investments,  the  investment  of  future  Purchase  Payments,  or both.  New or
substitute  Investment  Options may have different fees and expenses,  and their
availability  may be  limited to certain  classes  of  purchasers.  We may limit
further  investment in or transfers to an Investment  Option if marketing or tax
considerations  or  investment   considerations   warrant.  We  also  may  close
Investment  Options to allocations of Purchase  Payments or Contract  Value,  or
both,  at any time and at our sole  discretion.  The fund  companies  which sell
shares of the Investment Options to us pursuant to participation  agreements may
terminate those  agreements and discontinue  offering their shares to us. We may
not  substitute  any shares without notice to you and prior approval of the SEC,
to the extent required by the Investment Company Act of 1940 or other applicable
law.

TRANSFERS


You  can  transfer  money  among  the  Investment  Choices  subject  to  certain
restrictions.  Transfers may be subject to a transfer fee and  transfers  from a
Fixed Account  Investment  Coice may be subject to a MVA. Allianz Life currently
allows you to make as many transfers as you want to each year.  Allianz Life may
change this  practice in the future.  However,  this product is not designed for
professional  market timing  organizations  or other  persons using  programmed,
large, or frequent  transfers.  Such activity may be disruptive to an Investment
Choice. We reserve the right to reject any specific Purchase Payment  allocation
or transfer  request from any person,  if in the  Investment  Option  investment
adviser's or Allianz Life's  judgment,  an Investment  Choice would be unable to
invest  effectively in accordance  with its investment  objectives and policies.
Excess trading activity can disrupt  management  strategy and increase expenses,
which are borne by all Contract Owners who allocated  Purchase  Payments or made
transfers to the Investment Choice, regardless of their actlivity.

The following applies to any transfer:

1. We may choose to not allow you to make transfers during the free look period.

2. Your request for a transfer must clearly state:

    o which Investment Choice is involved in the transfer; and

    o how much the transfer is for.

3.  Transfers from a Fixed Account Investment Choice may be subject to a MVA.

4.  You cannot make any transfers  within 7 calendar days prior to the date your
    first Annuity Payment is due.

5.  After the  Income  Date,  you may not make a transfer  from a fixed  Annuity
    Option to a variable Annuity Option.

6.  After the Income Date, you can transfer from a variable  Annuity Option to a
    fixed Annuity Option.

7.  Your right to make transfers is subject to  modification  if we determine in
    our sole opinion that the  exercising  of the right by one or more  Contract
    Owners  is, or would  be,  to the  disadvantage  of other  Contract  Owners.
    Restrictions may be applied in any manner reasonably designed to prevent any
    use of the  transfer  right which we consider to be to the  disadvantage  of
    other Contract  Owners.  A modification  could be applied to transfers to or
    from one or more of the  Investment  Options and could  include,  but is not
    limited to:

     o    the requirement of a minimum time period between each transfer;

     o    not  accepting a transfer  request  from a  registered  representative
          acting on behalf of more than one Contract Owner;

     o    limiting  the  dollar  amount  that  you  may  transfer   between  the
          Investment Choices, at any one time; or

     o    not accepting transfer requests received by telephone or fax.

If a transfer request is rejected,  we will call your registered  representative
to request alternate  instructions.  If we are unable to contact your registered
representative,  we will contact you directly.  If the transfer is rejected,  we
will send you a written notification within 5 business days.

Allianz  Life has  reserved  the right at any time  without  prior notice to any
party to modify the  transfer  provisions  subject to the  guarantees  described
above and subject to applicable state law.

TELEPHONE TRANSFERS. You can make transfers by telephone or by fax. We may allow
you to  authorize  someone  else to make  transfers  by telephone or fax on your
behalf. If you own the Contract with a Joint Owner,  unless you instruct Allianz
Life otherwise, we will accept instructions from either one of you. Allianz Life
will use  reasonable  procedures  to confirm  that  instructions  given to us by
telephone are genuine.  If we do not use such  procedures,  we may be liable for
any losses due to  unauthorized  or fraudulent  instructions.  Allianz Life tape
records  all  telephone  instructions.  We reserve the right to  discontinue  or
modify the telephone/fax transfer privilege at any time and for any reason.

We do not currently accept transfer  instructions via e-mail, web site, or other
electronic communications. This service may be available in the future.

Please note that telephone, fax and/or electronic  communications may not always
be available.  Any telephone,  fax and/or computer system,  whether it is yours,
your service  provider's,  or your registered  representative's,  can experience
outages or slowdowns  for a variety of reasons.  These  outages or slowdowns may
delay  or  prevent  our  processing  of your  request.  Although  we have  taken
precautions  to help our systems  handle heavy use, we cannot  promise  complete
reliability  under all  circumstances.  If you are  experiencing  problems,  you
should make your transfer by writing to our service center.


EXCESSIVE  TRADING.  We may allow you to give third  parties the right to effect
transfers on your behalf. However, when the same third party makes transfers for
Contract  Owners,  the  result can be  simultaneous  transfers  involving  large
amounts of Contract Value. Such transfers can disrupt the orderly  management of
the  Investment  Choices,  can result in higher  costs to Contract  Owners,  and
generally are not compatible with the long-range  goals of Contract  Owners.  We
believe that such simultaneous  transfers effected by such third parties may not
be in the best interests of all  shareholders of the Investment  Options and the
management of the  Investment  Options share this  position.  Therefore,  we may
place  restrictions  designed  to prevent  any use of a transfer  right which we
consider to be to the disadvantage of the Contract Owners.


DOLLAR COST AVERAGING PROGRAM


The Dollar Cost Averaging  Program allows you to  systematically  transfer a set
amount of money  each  month or quarter  from any one  Investment  Option or any
available  Fixed Account  option to other  Investment  Options.  The  Investment
Option(s) you transfer from may not be the Investment  Option(s) you transfer to
in this  program.  By  allocating  amounts on a regularly  scheduled  basis,  as
opposed to allocating the total amount at one  particular  time, you may be less
susceptible to the impact of market  fluctuations.  You may only  participate in
this program during the Accumulation Phase.

There may be two Dollar Cost Averaging  options.  The first option is the Dollar
Cost Averaging  Fixed Option.  It is available for New Contracts for either 6 or
12 months for both initial and additional Purchase Payments.  You will receive a
fixed  interest rate  guaranteed for the period by Allianz Life. The Dollar Cost
Averaging Fixed Option may not be available in your state.

The second option is the Standard  Dollar Cost Averaging  Option.  It requires a
$1,500  minimum  investment  and  participation  for at least six months (or two
quarters).

All Dollar Cost  Averaging  transfers  will be made on the 10th day of the month
unless that day is not a business  day. If it is not,  then the transfer will be
made the next business day. You may elect either program by properly  completing
the Dollar Cost Averaging form provided by Allianz Life.

Your participation in the program will end when any of the following occurs:

     o    the number of desired transfers has been made;

     o    you do not have  enough  money in the  Investment  Choices to make the
          transfer (if less money is available,  that amount will be dollar cost
          averaged and the program will end);

     o    you request to terminate the program (your request must be received by
          us by the first of the month to terminate that month); or

     o    the Contract is terminated.

If you  participate  in the Dollar Cost  Averaging  Program,  the transfers made
under the program are not taken into account in determining any transfer fee. We
reserve the right to discontinue or modify the Dollar Cost Averaging  program at
any time and for any reason.

FLEXIBLE REBALANCING


Once your money has been invested, the performance of the Investment Options may
cause your chosen allocation to shift.  Flexible Rebalancing is designed to help
you  maintain  your  specified  allocation  mix among the  different  Investment
Options.  Fixed Account Investment Choices are not part of Flexible Rebalancing.
You can direct us to readjust your Rewards Value on a quarterly,  semi-annual or
annual basis to return to your original Investment Option allocations.  Flexible
Rebalancing  transfers will be made on the 20th day of the month unless that day
is not a  business  day.  If it is not,  then the  transfer  will be made on the
previous business day. If you participate in Flexible Rebalancing, the transfers
made under the program are currently not taken into account in  determining  any
transfer  fee.  We  reserve  the right to  discontinue  or modify  the  Flexible
Rebalancing program at any time and for any reason.


FINANCIAL ADVISERS - ASSET ALLOCATION PROGRAMS

Allianz  Life  understands  the  importance  of advice from a financial  adviser
regarding your investments in the Contract (asset allocation  program).  Certain
investment  advisers  have  made  arrangements  with us to make  their  services
available to you.  Allianz Life has not made any  independent  investigation  of
these advisers and is not endorsing such programs.  You may be required to enter
into an advisory  agreement with your  investment  adviser to have the fees paid
out of your Contract during the  Accumulation  Phase.  Allianz Life does not set
the  amount of the fees  charged  or  receive  any  portion of the fees from the
adviser. Allianz Life does not review or approve the actions of any adviser, and
does not assume any responsibility for these actions.

Allianz Life will,  pursuant to an agreement with you, make a partial withdrawal
from the  value  of your  Contract  to pay for the  services  of the  investment
adviser.  If the Contract is Non-Qualified,  the withdrawal will be treated like
any other  distribution  and may be  included  in gross  income for  federal tax
purposes  and, if you are under age 59 1/2, may be subject to a tax penalty.  If
the Contract is  Qualified,  the  withdrawal  for the payment of fees may not be
treated as a taxable  distribution  if certain  conditions  are met.  You should
consult a tax adviser  regarding  the tax treatment of the payment of investment
adviser fees from your Contract.

VOTING PRIVILEGES

Allianz Life is the legal owner of the Investment Option shares.  However,  when
an Investment  Option solicits  proxies in conjunction  with a shareholder  vote
which  affects  your  investment,  Allianz  Life will  obtain from you and other
affected  Contract Owners  instructions as to how to vote those shares.  When we
receive those instructions,  we will vote all of the shares we own in proportion
to those instructions.  This will also include any shares that Allianz Life owns
on its own behalf.  Should Allianz Life determine that it is no longer  required
to comply with the above, we will vote the shares in our own right.

SUBSTITUTION

Allianz Life may substitute one of the Investment Options you have selected with
another  Investment  Option.  We would not do this without the prior approval of
the Securities and Exchange Commission,  to the extent legally required. We will
give  you  notice  of our  intention  to do  this.  We may  also  limit  further
investment  in  or  transfers  to an  Investment  Option  if  marketing  or  tax
considerations or investment considerations warrant.



5.THE FIXED ACCOUNT
--------------------------------------------------------------------------------


Any amounts that you allocate to any available Fixed Account  Investment  Choice
or a fixed Annuity  Payment become part of the Fixed  Account,  which is part of
our general  account.  The general  account  consists of all of our assets other
than those in our separate accounts. We have complete ownership of all assets in
our general account and we use these assets to support our insurance and annuity
obligations other than those funded by our separate  accounts.  These assets are
subject  to  our  general  liabilities  from  business  operations.  Subject  to
applicable law, we have sole discretion over the investment of the assets of the
general account.

If you allocate money to a fixed interest  Investment  Choice, we guarantee both
the principal and the interest on amounts you allocate to the Fixed Account.  We
will credit  interest at an  effective  annual rate of at least 3% in the manner
described in the Contract.  The rate we credit is  independent of the investment
experience  of the  Fixed  Account.  From  time  to time  we  may,  in our  sole
discretion,  offer  guaranteed  interest  rates higher than the 3% minimum.  You
assume the risk that the interest we credit to the Fixed Account as described in
the Contract may not exceed the minimum guaranteed rate of 3%.

We have not  registered  the Fixed  Account as an  investment  company under the
Investment  Company Act of 1940,  nor have we registered  interests in the fixed
account under the Securities Act of 1933. As a result,  the SEC has not reviewed
the disclosures in this prospectus relating to the fixed account.


We do not currently offer any Fixed Account Investment Choices.  However, we may
offer  these  choices  or change the terms of the Fixed  Account in the  future.
Please contact us for the most current terms.
--------------------------------------------------------------------------------




6.EXPENSES



There are charges and other  expenses  associated  with the  Contract  that will
reduce your investment return. These charges and expenses are:


SEPARATE ACCOUNT EXPENSES

Each day, Allianz Life makes a deduction for its insurance charges. Allianz Life
does this as part of its calculation of the value of the Accumulation  Units and
the Annuity Units. The insurance charge consists of:

1) the mortality and expense risk charge, and

2) the administrative charge.

The total  Separate  Account  expenses  are  reflected  in the tables below as a
percentage of average annual Rewards account value.*
<TABLE>
<CAPTION>

FOR NEW CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT       CHARGES FOR A CONTRACT
                                                    WITH NO GMIB         WITH THE TRADITIONAL GMIB**  WITH THE ENHANCED GMIB**
                                               M&E   Admin.   Total         M&E   Admin.    Total         M&E   Admin.  Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE       CHARGE  CHARGE CHARGE
<S>                                           <C>     <C>     <C>          <C>     <C>      <C>           <C>    <C>    <C>
Traditional GMDB                              1.55%   0.15%   1.70%        1.75%   0.15%    1.90%         2.25%  0.15%  2.40%
Enhanced GMDB                                 1.85%   0.15%   2.00%        2.00%   0.15%    2.15%         2.45%  0.15%  2.60%

FOR ORIGINAL CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT       CHARGES FOR A CONTRACT
                                                    WITH NO GMIB         WITH THE TRADITIONAL GMIB**   WITH THE ENHANCED GMIB**
                                               M&E   Admin.   Total         M&E   Admin.    Total         M&E   Admin.  Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE       CHARGE  CHARGE CHARGE
Traditional GMDB                              1.50%   0.15%   1.65%        1.70%   0.15%    1.85%         2.20%  0.15%  2.35%
Enhanced GMDB                                 1.70%   0.15%   1.85%        1.90%   0.15%    2.05%         2.40%  0.15%  2.55%

FOR REVISED CONTRACTS:

                                               CHARGES FOR  A CONTRACT     CHARGES FOR A CONTRACT
                                                   WITH NO GMIB             WITH THE ENHANCED GMIB
                                              M&E    Admin.  Total         M&E    Admin.   Total
                                             CHARGE  CHARGE  CHARGE       CHARGE  CHARGE   CHARGE
Traditional GMDB                              1.50%   0.15%   1.65%        1.80%   0.15%    1.95%
Enhanced GMDB                                 1.80%   0.15%   1.95%        2.00%   0.15%    2.15%

<FN>

* Some or all of the guaranteed benefits may not be available in all states.
**   If you choose a GMIB in a New or Original  Contract,  a Guaranteed  Partial
     Withdrawal  Benefit (GPWB) is  automatically  included  without  additional
     charge. GMIB options will be made available to owners of Original Contracts
     upon state approval.
</FN>
</TABLE>

MORTALITY AND EXPENSE RISK CHARGE.  Allianz Life deducts a mortality and expense
risk  charge  which  varies  depending  upon the death and income  benefits  you
choose.


This  charge  compensates  us for all the  insurance  benefits  provided by your
Contract (for example, our contractual  obligation to make Annuity Payments, the
death benefits,  certain expenses related to the Contract,  and for assuming the
risk (expense risk) that the current  charges will be insufficient in the future
to cover the cost of administering the Contract).


If the mortality and expense risk charges are sufficient to cover such costs and
risks, any excess will be profit to us. We anticipate making such a profit,  and
using it to cover distribution expenses as well as the cost of providing certain
features under the Contract.

ADMINISTRATIVE CHARGE. This charge is equal, on an annual basis, to 0.15% of the
average  daily value of the  Contract  invested in an  Investment  Option.  This
charge,  together  with the  contract  maintenance  charge  (which is  explained
below),  is for all the  expenses  associated  with  the  administration  of the
Contract.  Some  of  these  expenses  include:   preparation  of  the  Contract,
confirmations,  annual  statements,  maintenance of Contract records,  personnel
costs, legal and accounting fees, filing fees, and computer and systems costs.

CONTRACT MAINTENANCE CHARGE


On each Contract anniversary, Allianz Life deducts $40 from the Rewards Value of
your Contract as a contract  maintenance charge. The fee is assessed on the last
day of each Contract  year.  The charge is deducted pro rata from the Investment
Options and from the Fixed  Account  where  indicated  by the  Contract.  If the
charge is first  deducted from the  Investment  Options and the Rewards Value in
the Investment  Options in which you are invested is  insufficient  to cover the
contract  maintenance  charge, we will deduct the remaining charge pro rata from
any available Fixed Account Investment Choices. The charge is for administrative
expenses (see above). This charge cannot be increased.

However, during the Accumulation Phase, if the Rewards Value of your Contract is
at least $75,000 when the  deduction for the charge is to be made,  Allianz Life
will not deduct this  charge.  If you own more than one Contract  offered  under
this prospectus, Allianz Life will determine the total Rewards Value of all your
Contracts. If the total Rewards Value of all Contracts registered under the same
social  security  number is at least  $75,000,  Allianz Life will not assess the
contract  maintenance  charge  (except in Texas).  If the Contract is owned by a
non-individual (e.g., a qualified plan or trust),  Allianz Life will look to the
Annuitant to determine if it will assess the charge.

If you make a complete  withdrawal  from your Contract  other than on a Contract
anniversary  and your  Rewards  Value is less than  $75,000,  Allianz  Life will
deduct the full contract  maintenance  charge.  During the Payout Phase, in most
states, the charge will be collected monthly out of each Annuity Payment.


In some states we are not  permitted to assess the contract  maintenance  charge
against the Fixed Account, during the Payout Phase or both.

CONTINGENT DEFERRED SALES CHARGE


Withdrawals  may be subject to a contingent  deferred  sales charge.  During the
Accumulation  Phase, you can make  withdrawals from your Contract.  Allianz Life
keeps  track of each  Purchase  Payment you make.  The amount of the  contingent
deferred  sales  charge  depends  upon the  length  of time  since you made your
Purchase Payment. The charge (as a percentage of Purchase Payments) is:


                              NUMBER OF COMPLETE
                             YEARS SINCE RECEIPT
                              OF PURCHASE PAYMENT          CHARGE
------------------------------------------------------------------
                                     0-1                    8.5%
                                     1-2                    8.5%
                                     2-3                    8.5%
                                     3-4                    8.5%
                                     4-5                    8.0%
                                     5-6                    7.0%
                                     6-7                    6.0%
                                     7-8                    5.0%
                                     8-9                    4.0%
                                    9-10                    3.0%
                              10 years or more              0.0%



However,  after Allianz Life has had a Purchase Payment for 10 full years, there
is no charge when you withdraw that Purchase  Payment.  The charge is calculated
at the time of each withdrawal. For partial withdrawals,  the charge is deducted
from the remaining  Rewards  Value and is deducted pro rata from the  Investment
Choices.  For purposes of the  contingent  deferred  sales charge,  Allianz Life
treats  withdrawals as coming from the oldest Purchase  Payments first.  Bonuses
and any earnings thereon are treated as earnings under the Contract for purposes
of the  contingent  deferred  sales  charge.  Allianz  Life does not  assess the
contingent deferred sales charge on any payments paid out as Annuity Payments or
as death benefits. The contingent deferred sales charge compensates Allianz Life
for expenses associated with selling the Contract. (In Connecticut,  there is no
contingent deferred sales charge assessed after 9 complete contract years).

NOTE:  FOR TAX PURPOSES,  WITHDRAWALS  ARE CONSIDERED TO HAVE COME FROM THE LAST
MONEY YOU PUT INTO THE CONTRACT. THUS, FOR TAX PURPOSES, EARNINGS ARE CONSIDERED
TO COME OUT FIRST.

PARTIAL  WITHDRAWAL  PRIVILEGE.  Each  Contract  year,  you  can  make  multiple
withdrawals up to 10% of Purchase Payments (less any previous  withdrawals taken
in the current  Contract  year which were not subject to a  contingent  deferred
sales charge ) and no contingent deferred sales charge will be deducted from the
10% you take out.  This right is  non-cumulative  which means that if you do not
use the 10% in a year,  you will not carry over to the next year.  If you make a
withdrawal  of more than 10%,  the amount  over the 10% amount may be subject to
the contingent  deferred sales charge.  Purchase  Payments  withdrawn under this
privilege  will be subject to a contingent  deferred  sales charge if you make a
total withdrawal.  If you make a total withdrawal,  Allianz Life will assess the
contingent  deferred sales charge with no reductions for the Partial  Withdrawal
Privilege.

You may also elect to participate in the  Systematic  Withdrawal  Program or the
Minimum  Distribution  Program.  These  programs  allow you to make  withdrawals
without the  deduction of the  contingent  deferred  sales charge under  certain
circumstances.  See section 8. Access to Your Money,  for a  description  of the
Systematic Withdrawal Program and the Minimum Distribution Program.

You may also elect to participate in the  Systematic  Withdrawal  Program or the
Minimum  Distribution  Program.  These  programs  allow you to make  withdrawals
without the  deduction of the  contingent  deferred  sales charge under  certain
circumstances.  If you elect to exercise the GPWB,  (if  applicable) it replaces
the partial withdrawal privilege and all other withdrawal programs.  See "Access
to Your Money," for a description of the Systematic  Withdrawal  Program and the
Minimum Distribution Program.



WAIVER OF CONTINGENT DEFERRED SALES CHARGE BENEFITS.  (AVAILABLE ON ORIGINAL AND
REVISED CONTRACTS ONLY.) Under certain  circumstances,  Allianz Life will permit
you to take your  money  out of the  Contract  without  deducting  a  contingent
deferred sales charge:

     1)   if after the third year of the Contract, you or the Joint Owner become
          confined to a nursing home or hospital for 90 consecutive days; or

     2)   if after the first year of the Contract, you or the Joint Owner become
          terminally  ill,  which is defined as life  expectancy of 12 months or
          less (a full withdrawal of the Contract will be required).

The  waiver  will not apply if any of the above  conditions  existed on the date
your Contract was issued.

Also, after the first Contract year, if you or the Joint Owner become unemployed
for at least 90  consecutive  days,  you can take up to 50% of your money out of
the Contract without incurring a contingent  deferred sales charge. This benefit
is  available  only once during the life of the  Contract.  You may not use both
this benefit and the 10% Partial Withdrawal Privilege in the same Contract year.

THESE  BENEFITS VARY FROM STATE TO STATE AND MAY NOT BE AVAILABLE IN YOUR STATE.
(CHECK WITH YOUR REGISTERED REPRESENTATIVE.)

Withdrawals  may be subject to a 10% tax penalty in addition to any income taxes
due.

REDUCTION OR ELIMINATION OF THE CONTINGENT  DEFERRED SALES CHARGE.  Allianz Life
may reduce or eliminate the amount of the contingent  deferred sales charge when
the Contract is sold under circumstances  which reduce its sales expenses.  Some
examples are: if there is a large group of  individuals  that will be purchasing
the Contract or a prospective  purchaser already had a relationship with Allianz
Life.  Allianz Life may choose not to deduct a contingent  deferred sales charge
under a Contract  issued to an officer,  director or employee of Allianz Life or
any of its affiliates.  Also, Allianz Life may reduce or not deduct a contingent
deferred sales charge when a Contract is sold by an agent of Allianz Life to any
members of his or her immediate family and the commission is waived.  We require
our prior approval for any reduction or  elimination of the contingent  deferred
sales charge.


COMMUTATION FEE


If you  elect  variable  payouts  under  Annuity  Option  2,  4 or 6 and  make a
liquidation,  a commutation fee may be assessed  against the amount  liquidated.
The commutation fee is a percentage of the amount liquidated and is equal to:



            YEARS SINCE           COMMUTATION
             INCOME DATE             FACTOR

                0 - 1                 7%
                1 - 2                 6%
                2 - 3                 5%
                3 - 4                 4%
                4 - 5                 3%
                5 - 6                 2%
                Over 6                1%

TRANSFER FEE


You can currently make 12 free  transfers  every Contract year. If you make more
than 12 transfers in a Contract  year,  we will deduct a transfer fee of $25 for
each additional transfer. Transfers from the Fixed Account Investment Choice may
be subject to a Market Value Adjustment (MVA) which may increase or decrease the
amount transferred. The transfer fee will be deducted from the Investment Choice
from which the transfer is made. If the entire amount in the  Investment  Choice
is  transferred,  then  the  transfer  fee  will be  deducted  from  the  amount
transferred. If the transfer is from or to multiple accounts, it will be treated
as a single transfer. Any transfer fee will be deducted  proportionally from the
source account if less than the entire amount in the account is transferred.  If
the  transfer  is  part  of  the  Dollar  Cost  Averaging  Program  or  Flexible
Rebalancing, it will not currently count in determining the transfer fee.


PREMIUM TAXES

Some  states  and other  governmental  entities  (e.g.,  municipalities)  charge
premium taxes or similar taxes.  Allianz Life is responsible  for the payment of
these taxes.  We will make a deduction  from the value of the Contract for them.
Some of these  taxes are due when the  Contract  is issued,  others are due when
Annuity  Payments begin. It is Allianz Life's current practice to not charge you
for these taxes  until you die,  Annuity  Payments  begin or you make a complete
withdrawal.  Allianz Life may discontinue this practice in the future and assess
the charge when the tax is due. Premium taxes generally range from 0% to 3.5% of
the Purchase Payment, depending on the state.

INCOME TAXES

Allianz  Life  reserves  the right to deduct from the  Contract any income taxes
which it may incur  because  of the  Contract.  Currently,  Allianz  Life is not
making any such deductions.

INVESTMENT OPTION EXPENSES

There are  deductions  from the assets of the  various  Investment  Options  for
operating expenses  (including  management fees), which are described in the Fee
Table in this prospectus and the Investment Option prospectuses.


7.TAXES
--------------------------------------------------------------------------------


NOTE: ALLIANZ LIFE HAS PREPARED THE FOLLOWING  INFORMATION ON TAXES AS A GENERAL
DISCUSSION OF THE SUBJECT.  IT IS NOT INTENDED AS TAX ADVICE. YOU SHOULD CONSULT
YOUR OWN TAX ADVISER  ABOUT YOUR OWN  CIRCUMSTANCES.  ALLIANZ  LIFE HAS INCLUDED
ADDITIONAL   INFORMATION   REGARDING   TAXES  IN  THE  STATEMENT  OF  ADDITIONAL
INFORMATION.

ANNUITY CONTRACTS IN GENERAL

Annuity  contracts are a means of setting aside money for future needs - usually
retirement.  Congress  recognized  how important  saving for  retirement was and
provided special rules in the Internal Revenue Code (Code) for annuities.

Basically, these rules provide that you will not be taxed on any earnings on the
money  held in your  annuity  Contract  until  you take the money  out.  This is
referred to as Tax Deferral. There are different rules regarding how you will be
taxed  depending  upon how you take the  money  out and the type of  Contract  -
Qualified or Non-Qualified (see following sections).

When a  Non-Qualified  Contract  is  owned  by a  non-natural  person  (e.g.,  a
corporation or certain other entities other than a trust holding the Contract as
an agent for a natural person), the Contract will generally not be treated as an
annuity  for tax  purposes.  This means that the  Contract  may not  receive the
benefits of Tax Deferral. Income may be taxed as ordinary income every year.

QUALIFIED AND NON-QUALIFIED CONTRACTS

If you purchase the Contract under a Qualified  plan,  your Contract is referred
to  as a  Qualified  Contract.  Examples  of  Qualified  plans  are:  Individual
Retirement Annuities (IRAs),  Tax-Sheltered  Annuities (sometimes referred to as
403(b) contracts),  and pension and  profit-sharing  plans, which include 401(k)
plans and H.R. 10 plans.  Qualified  Contracts  are subject to special tax rules
and the terms of the retirement plan itself. Adverse tax consequences may result
if  contributions,   distributions  and  transactions  in  connection  with  the
Qualified  Contracts  do not comply  with the law.  If you do not  purchase  the
Contract under a Qualified plan, your Contract is referred to as a Non-Qualified
Contract.

A Qualified  Contract will not provide any necessary or additional  Tax Deferral
if it is used to fund a  Qualified  plan  that  is Tax  Deferred.  However,  the
Contract has features and benefits  other than Tax Deferral  that may make it an
appropriate investment for a Qualified plan. You should consult your tax adviser
regarding these features and benefits prior to purchasing a Qualified Contract.

MULTIPLE CONTRACTS

The Code provides that multiple  Non-Qualified  deferred annuity contracts which
are  issued  within a calendar  year  period to the same  Contract  Owner by one
company or its  affiliates  are treated as one annuity  Contract for purposes of
determining the tax consequences of any distribution.  Such treatment may result
in adverse tax  consequences,  including more rapid taxation of the  distributed
amounts from such combination of contracts. For purposes of this rule, contracts
received in a Section 1035 exchange will be considered issued in the year of the
exchange.  You should  consult a tax adviser prior to  purchasing  more than one
Non-Qualified annuity Contract in any calendar year period.

PARTIAL 1035 EXCHANGES

Section 1035 of the Code provides that an annuity contract may be exchanged in a
tax-free transaction for another annuity contract. Historically, it was presumed
that only the exchange of an entire contract,  as opposed to a partial exchange,
would be accorded tax-free status. In 1998 in CONWAY VS.  COMMISSIONER,  the Tax
Court held that the direct  transfer  of a portion of an annuity  contract  into
another annuity contract  qualified as a non-taxable  exchange.  On November 22,
1999, the Internal  Revenue  Service filed an Action on Decision which indicated
that  it  acquiesced  in the Tax  Court  decision  in  CONWAY.  However,  in its
acquiescence  with the decision of the Tax Court,  the Internal  Revenue Service
stated that it will challenge  transactions  where taxpayers enter into a series
of partial exchanges and annuitizations as part of a design to avoid application
of the 10%  premature  distribution  penalty  or other  limitations  imposed  on
annuity  contracts  under the Code. In the absence of further  guidance from the
Internal  Revenue Service it is unclear what specific types of partial  exchange
designs and transactions will be challenged by the Internal Revenue Service. Due
to the  uncertainty  in this area owners  should  consult their own tax advisers
prior to entering into a partial exchange of an annuity contract.

WITHDRAWALS - NON-QUALIFIED CONTRACTS


You, as the Contract Owner,  will not be taxed on increases in the value of your
Contract  until a  distribution  occurs  either as a  withdrawal  or as  Annuity
Payments.  When you make a withdrawal from your Contract, the Code treats such a
withdrawal as first coming from  earnings and then from your Purchase  Payments.
You will be taxed on the  amount of the  withdrawal  that is  earnings.  In most
cases,  such withdrawn  earnings are included in income.  For Annuity  Payments,
different  rules apply.  A portion of each  Annuity  Payment you receive will be
treated as a partial return of your Purchase Payments and will not be taxed. The
remaining portion of the Annuity Payment will be treated as ordinary income. How
the Annuity Payment is divided between taxable and non-taxable  portions depends
upon the period over which the Annuity Payments are expected to be made. Annuity
Payments  received  after you have  received all of your  Purchase  Payments are
fully includible in income.


The Code also provides that any amount received under an annuity  Contract which
is included in income may be subject to a tax penalty. The amount of the penalty
is equal to 10% of the amount that is  includible  in income.  Some  withdrawals
will be exempt from the penalty. They include any amounts:

1) paid on or after the taxpayer reaches age 59 1/2;

2) paid after you die;

3) paid if the taxpayer becomes totally disabled (as that term is defined in the
Code);

4) paid in a series of  substantially  equal  payments  made  annually  (or more
frequently) for life or a period not exceeding life expectancy;

5) paid under an immediate annuity; or

6) which come from Purchase Payments made prior to August 14, 1982.


With  respect  to (4)  above,  if the  series of  substantially  equal  periodic
payments is modified  before the later of your  attaining  age 59 1/2 or 5 years
from the date of the  first  Annuity  Payment,  then the tax for the year of the
modification  is  increased  by the  penalty  tax that would  have been  imposed
without the  exception,  plus  interest for the tax years in which the exception
was used. A partial liquidation  (withdrawal) during the Payout Phase may result
in  the  modification  of  the  series  of  Annuity  Payments  made  after  such
liquidation  and therefore could result in the imposition of the 10% penalty tax
and interest for the period as described  above unless another  exception to the
penalty tax applies.  You should obtain competent tax advice before you make any
liquidations from your Contract.

WITHDRAWALS - QUALIFIED CONTRACTS

If you  make a  withdrawal  from  your  Qualified  Contract,  a  portion  of the
withdrawal is treated as taxable  income.  This portion  depends on the ratio of
pre-tax Purchase  Payments to the after-tax  Purchase Payments in your Contract.
If all of your  Purchase  Payments  were made with  pre-tax  money then the full
amount of any  withdrawal  is includible  in taxable  income.  Special rules may
apply to withdrawals from certain types of Qualified  Contracts,  including Roth
IRAs.


The Code also provides that any amount received under a Qualified Contract which
is included in income may be subject to a penalty.  The amount of the penalty is
equal to 10% of the amount that is includible in income.  Some  withdrawals will
be exempt from the penalty. They include any amounts:

1) paid on or after you reach age 59 1/2;

2) paid after you die;

3) paid if you become totally disabled (as that term is defined in the Code);

4) paid to you after leaving your employment in a series of substantially  equal
  periodic payments made annually (or more frequently) under a lifetime annuity;

5) paid to you after you have attained age 55 and you have left your employment;

6) paid for certain allowable medical expenses (as defined in the Code);

7) paid pursuant to a qualified domestic relations order;

8) paid on account of an IRS levy upon the Qualified Contract;

9) paid from an IRA for medical insurance (as defined in the Code);

10) paid from an IRA for qualified higher education expenses; or

11) paid  from an IRA for up to  $10,000  for  qualified  first-time  homebuyer
    expenses (as defined in the Code).

The  exceptions in (5) and (7) above do not apply to IRAs.  The exception in (4)
above applies to IRAs but without the requirement of leaving employment.

We have  provided a more  complete  discussion  in the  Statement of  Additional
Information.


WITHDRAWALS - TAX-SHELTERED ANNUITIES



The Code limits the withdrawal of amounts attributable to Purchase Payments made
pursuant to a salary reduction  agreement by Contract Owners from  Tax-Sheltered
Annuities. Withdrawals can only be made when a Contract Owner:


1)  reaches age 59 1/2;

2)  leaves his/her job;

3)  dies;

4)  becomes disabled (as that term is defined in the Code); or

5)  in the case of  hardship.  However,  in the case of  hardship,  the Contract
    Owner can only withdrawal the Purchase Payments and not any earnings.

DEATH BENEFITS

For  Contracts  which  contain  separate  charges for enhanced  death  benefits:
Certain death  benefits may be purchased  under your  Contract.  Although  these
types of benefits are used as investment  protection and should not give rise to
any adverse tax effects,  the Internal  Revenue  Service could take the position
that some or all of the charges for these death benefits  should be treated as a
partial  withdrawal  from the Contract.  In such case, the amount of the partial
withdrawal may be includible in taxable income and subject to the 10% penalty if
the owner is under age 59 1/2.

If an enhanced  death benefit is selected for a Qualified  Contract,  such death
benefits may be considered by the Internal Revenue Service as "incidental  death
benefits."  The Code imposes  limits on the amount of incidental  death benefits
allowable for Qualified Contracts, and if the death benefits selected by you are
considered to exceed such limits,  the  provisions of such benefits could result
in  currently  taxable  income  to  the  owners  of  the  Qualified   Contracts.
Furthermore,  the Code provides that the assets of an IRA (including Roth IRA's)
may not be  invested  in life  insurance,  but may  provide in the case of death
during the  accumulation  phase for a death benefit payment equal to the greater
of purchase  payments or account value. The Contract offers death benefits which
may exceed the greater of purchase  payments  or account  value.  If these death
benefits are  determined  by the  Internal  Revenue  Service as  providing  life
insurance,  the  Contract  may not  qualify  as an IRA  (including  Roth  IRAs),
resulting  in the  individual  taxation of amounts  held in the Contract and the
imposition of penalty taxes. You should consult your tax adviser regarding these
features and benefits prior to purchasing a Contract.


DIVERSIFICATION

The Code provides that the underlying  investments for a Non-Qualified  variable
annuity must satisfy certain diversification requirements in order to be treated
as an annuity  Contract.  Allianz Life believes that the Investment  Options are
being managed so as to comply with the requirements.


Neither the Code nor the Internal  Revenue  Service  Regulations  issued to date
provide guidance as to the circumstances  under which you, because of the degree
of control you exercise over the underlying  investments,  and not Allianz Life,
would be considered  the owner of the shares of the Investment  Options.  If you
are  considered  the  owner of the  shares,  it will  result  in the loss of the
favorable tax  treatment  for the  Contract.  It is unknown to what extent under
federal tax law Contract Owners are permitted to select Investment  Options,  to
make transfers among the Investment Options or the number and type of Investment
Options  Contract  Owners may select from without being  considered the owner of
the shares. If any guidance is provided which is considered a new position, then
the guidance would generally be applied prospectively. However, if such guidance
is considered not to be a new position,  it may be applied  retroactively.  This
would mean that you, as the Owner of the Contract, could be treated as the owner
of the Investment Options.


Due to the  uncertainty in this area,  Allianz Life reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.


8.ACCESS TO YOUR MONEY
--------------------------------------------------------------------------------


You can have access to the money in your Contract:

o by making a partial or total withdrawal;

o by receiving Annuity Payments; or

o when a death benefit is paid to your Beneficiary.


In general,  withdrawals can only be made during the Accumulation  Phase.  Under
certain circumstances,  you can take money out of the Contract during the Payout
Phase if you select  variable  payouts under Annuity Option 2 or 4. (See section
2. Annuity  Payments -The Payout Phase.  If you bought your Contract before June
16,  2000 you can also take money out during the Payout  Phase if you elected to
receive variable payouts under Annuity Option 6.


When you make a complete  withdrawal you will receive your Contract Value on the
day the withdrawal request is received at the USAllianz Service Center:

o less any applicable contingent deferred sales charge,

o less any premium tax, and

o less any contract maintenance charge.

(See section 6. Expenses for a discussion of the charges.)

Any  partial  withdrawal  must be for at least  $500.  Unless  you  instruct  us
otherwise,  we will make any  partial  withdrawal  pro rata from the  Investment
Choices  unless you have a Fixed  Account  Investment  Choice with a MVA. If you
have a Fixed  Account  Investment  Choice  with a MVA,  we will make any partial
withdrawal pro rata from the Investment Options. If the amount in the Investment
Options is less than the partial withdrawal, then the remaining amount will come
pro rata from any other available Investment Choices.

In the event that there are multiple  bonuses  applied to the Contract,  we will
reduce the oldest unvested bonus amounts first.

Partial  withdrawals in excess of the Partial  Withdrawal  Privilege will reduce
unvested bonus amounts by such excess amount's  percentage of the Contract Value
at the time of the  withdrawal.  This  percentage  is determined by dividing the
amount of the  partial  withdrawal  (including  any  contingent  deferred  sales
charge) in excess of the Partial  Withdrawal  Privilege  amount by the  Contract
Value.

EXAMPLE:
You deposit $100,000 on 5/1/2001
Bonus of $6,000 is also deposited into the Contract by Allianz Life.

On 4/1/2002, the Contract Value is $110,600.
On 4/1/2002, the Rewards Value is $116,600.

You request a $50,000 partial  withdrawal.  The contingent deferred sales charge
is 8.5%; bonus is not vested at all. You get $50,000.

The contingent deferred sales charge is .085 x ($50,000 - $10,000) = $3,400.

Contract Value decreases to $110,600 - $50,000 - $3,400 = $57,200.

Bonus Change = $6,000 x ($53,400 - $10,000)/$110,600 = $2,354.

Rewards Value = Contract Value + ($6,000 - $2,354) = $57,200 + $3,646 = $60,846.

Bonus Remaining = $6,000 - $2,354 = $3,646.

We will pay the amount of any  withdrawal  from the  Investment  Options  within
seven  (7)  days of when we  receive  your  request  in good  order  unless  the
Suspension of Payments or Transfers provision is in effect (see below).

INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.

There  are  limits on  withdrawals  from a TSA or  403(b)  Contract.  For a more
complete explanation see "Taxes" and the discussion in the SAI.


GUARANTEED PARTIAL WITHDRAWAL BENEFIT (GPWB) - ORIGINAL AND NEW CONTRACTS ONLY

If you  choose to  include a GMIB in your  Original  or New  Contract,  you will
automatically  receive  a GPWB  for no  additional  charge.  The GPWB may not be
available in your state,  please check with your registered  representative  for
availability.

The GPWB is not available until your tenth Contract  anniversary and can only be
exercised  within 30 days of a  Contract  anniversary.  If you elect to  receive
income  under  your GMIB  feature,  (i.e.  annuitize  the GMIB  value)  the GPWB
cancels.

If you exercise the GPWB,  you will receive  guaranteed  annual  payments in the
form of partial  withdrawals  of 10% of your GPWB value on the date you exercise
the GPWB. Your GPWB value is equal to your GMIB value. Each GPWB payment reduces
the remaining GPWB value.  Any additional  partial  withdrawals in excess of the
GPWB payment will reduce the GPWB value by the  percentage of the Contract Value
you withdraw  (prior to any MVA, but including  any  contingent  deferred  sales
charge)  for each  withdrawal  you make.  We will deduct the amount of your GPWB
payment pro rata from your  Investment  Choices.  A Market Value  Adjustment may
apply to amounts removed from certain types of Fixed Account Investment Choices.
The MVA will not affect  your GPWB  payment  but it will  affect  your  Contract
Value.

Contingent  deferred  sales  charges  will apply to amounts  withdrawn  for GPWB
payments.   However,  contingent  deferred  sales  charges  will  apply  to  any
additional  partial  withdrawals  you make in excess of the GPWB  payment.  Your
partial withdrawal  privilege and other withdrawal programs no longer apply once
you elect to begin  receiving GPWB payments.  GPWB payments will be taxed in the
same manner as a withdrawal.

If you exercise the GPWB, you can no longer make additional  Purchase  Payments.
We will continue to allocate your Contract  Value among the  Investment  Choices
according  to your  instructions  while  the  GPWB is in  effect.  You can  also
continue to make transfers  between the Investment  Choices  (subject to certain
restrictions  set out in section 4.  Investment  Options - Transfers)  while the
GPWB is in effect.

You cannot receive GPWB payments and payments  under the  systematic  withdrawal
program or the minimum  distribution program at the same time. Once you elect to
receive GPWB payments,  your participation in the systematic  withdrawal program
or the minimum distribution program will stop.

THE TRADITIONAL  GMIB, THE ENHANCED GMIB, THE TRADITIONAL  GMDB AND THE ENHANCED
GMDB VALUES FREEZE ONCE YOU ELECT TO BEGIN RECEIVING GPWB PAYMENTS.  HOWEVER, WE
WILL CONTINUE TO ADJUST THESE VALUES BY:

     |X|  reducing them for each GPWB payment you receive, and;

     |X|  if you make any additional partial withdrawals, we will reduce them by
          the percentage of the Contract  Value you withdraw  (prior to any MVA,
          but  including  any   contingent   deferred  sales  charge)  for  each
          withdrawal you make.

Once you exercise your GPWB  election,  we will make GPWB payments to you on the
30th day after your Contract  anniversary unless that day is not a business day.
If the 30th day after your Contract  anniversary  is not a business day, we will
make payment to you on the next business day.

Annual  payments under the GPWB will generally  continue until the GPWB value is
less than your annual GPWB payment, at which time we will pay you the balance of
your GPWB value. If you make no additional partial withdrawals while the GPWB is
in  effect,  we would pay the GPWB value to you within ten years of the time you
exercise the benefit.  At the time the last GPWB benefit has been paid, you have
the option of either annuitizing the Contract or receiving a lump sum payment of
the  remaining  Contract  Value  adjusted  for  any  applicable  MVA  (less  any
contingent  deferred sales charges and applicable  premium taxes).  We will send
you notice at least 30 days  before the last GPWB  payment  date to ask for your
instructions. If we do not receive any instructions by the date we make the last
GPWB payment, we will pay you the remaining value in a lump sum.

Once you exercise  the GPWB you may elect to stop  receiving  GPWB  payments and
instead receive Annuity Payments.  You can either receive Annuity Payments under
your GMIB feature or you can elect to annuitize  your  remaining  Contract Value
under a  fixed/variable  Annuity  Option.  You can  elect to  switch  from  GPWB
payments to Annuity  Payments any time within 30 days of a Contract  anniversary
if using the GMIB and before we make a GPWB payment to you.

SYSTEMATIC WITHDRAWAL PROGRAM


If the value of your Contract is at least $25,000, Allianz Life offers a program
which  provides  automatic  monthly or quarterly  payments to you each year. The
Systematic  Withdrawal  Program is subject to the Partial  Withdrawal  Privilege
which  means  that the  total  systematic  withdrawals  which  you can make each
Contract year without Allianz Life deducting a contingent  deferred sales charge
is limited to 10% of your  Purchase  Payments.  This is  determined  on the last
business  day  prior  to the  day  your  request  is  received.  All  systematic
withdrawals  will be made on the 9th day of the month  unless  that day is not a
business  day.  If it is not,  then the  withdrawal  will be made  the  previous
business day. You cannot  exercise the GPWB and  participate  in the  systematic
withdrawal program at the same time.


INCOME TAXES,  TAX PENALTIES  AND CERTAIN  RESTRICTIONS  MAY APPLY TO SYSTEMATIC
WITHDRAWALS.

MINIMUM DISTRIBUTION PROGRAM


If you  own a  Qualified  Contract,  you may  select  the  Minimum  Distribution
Program.  Under this  program,  Allianz Life will make payments to you from your
Contract  that  are  designed  to  meet  the  applicable  minimum   distribution
requirements imposed by the Code for Qualified Contracts.  Such withdrawals will
not be subject to a  contingent  deferred  sales  charge.  Payments  may be made
monthly,  quarterly,  or annually  unless your  Contract is less than $25,000 in
which case the  payments  will only be made  annually.  If you have  elected the
Minimum  Distribution  Program,  any  additional  withdrawals in a Contract year
which exceed 10% of Purchase  Payments when  combined with Minimum  Distribution
withdrawals will be subject to any applicable contingent deferred sales charge.

You cannot  participate  in the  systematic  withdrawal  program and the minimum
distribution  program at the same time.  You also cannot  exercise  the GPWB and
participate in the minimum distribution program at the same time.


SUSPENSION OF PAYMENTS OR TRANSFERS

Allianz Life may be required to suspend or postpone  payments for withdrawals or
transfers for any period when:

1. the New York Stock  Exchange  is closed  (other  than  customary  weekend and
holiday closings);

2. trading on the New York Stock Exchange is restricted;

3. an emergency  exists as a result of which disposal of the  Investment  Option
shares is not reasonably practicable or Allianz Life cannot reasonably value the
Investment Option shares;

4. during any other  period when the  Securities  and  Exchange  Commission,  by
order, so permits for the protection of Contract Owners.

Allianz  Life has  reserved  the  right to defer  payment  for a  withdrawal  or
transfer from the Fixed Account for the period permitted by law but not for more
than six months.


9.PERFORMANCE and illustrations
--------------------------------------------------------------------------------


Allianz  Life  periodically  advertises  performance  of  the  divisions  of the
Separate  Account  (also known as  sub-accounts).  Allianz  Life will  calculate
performance by determining the percentage change in the value of an Accumulation
Unit by  dividing  the  increase  (decrease)  for that  unit by the value of the
Accumulation  Unit at the  beginning  of the  period.  This  performance  number
reflects  the  deduction  of the  insurance  charges and the  Investment  Option
expenses. It may not reflect the deduction of any applicable contingent deferred
sales charge and contract  maintenance  charge.  The deduction of any applicable
contract  maintenance charges and contingent deferred sales charges would reduce
the  percentage   increase  or  make  greater  any  percentage   decrease.   Any
advertisement  will also  include  average  annual total  return  figures  which
reflect the deduction of the insurance charges,  contract  maintenance  charges,
contingent  deferred sales charges and the expenses of the  Investment  Options.
Bonus amounts will not be reflected in any performance information.

Allianz Life may also advertise cumulative total return information.  Cumulative
total  return  is  determined  the same way  except  that  the  results  are not
annualized.  Performance  information  for the  Investment  Options  may also be
advertised; see the Investment Option prospectuses for more information.

Certain  Investment  Options  have  been in  existence  for  some  time and have
investment   performance  history.  In  order  to  demonstrate  how  the  actual
investment  experience of the  Investment  Options may affect your  Accumulation
Unit  values,  Allianz Life has prepared  performance  information  which can be
found in the SAI.

Allianz Life may in the future also advertise yield information.  If it does, it
will  provide  you with  information  regarding  how yield is  calculated.  More
detailed  information  regarding how  performance  is calculated is found in the
SAI.

Any  performance  advertised  will be  based  on  historical  data.  It does not
guarantee future results of the Investment Options.

Allianz Life may also provide  illustrations to customers.  These  illustrations
may provide  hypothetical  depictions  of either the  "payin",  or  accumulation
phase, or the "payout", or annuitization phase.  Illustrations may be based upon
historical  performance  of the  Investment  Options,  as  adjusted  for certain
expenses.  (Any adjusted historical performance  information will be accompanied
by  "standardized"   performance  information.)  In  the  alternative,   certain
illustrations  may be based upon an assumed rate of return not to exceed 12%. As
another illustration alternative, we may use the Standard & Poor's 500 Composite
Price  Index or other  recognized  investment  benchmark  to show how values may
vary. "Pay-in" and "pay-out" illustration may have various features as follows:

|X|  Payin  illustrations  assume an initial lump sum  Purchase  Payment and are
     designed to show how adjusted historical  performance or an assumed rate of
     return would have affected Contract values, withdrawal values, or the death
     benefit.  Payin  illustrations  may also be  designed to show the effect of
     periodic additional Purchase Payments and withdrawals.  Payin illustrations
     based upon  adjusted  historical  performance  may assume  that  monies are
     allocated to a single Investment Option or to multiple  Investment Options.
     In  the  event  that  monies  are  hypothetically   allocated  to  multiple
     Investment Options, performance may be shown on a weighted aggregate basis.
     Dollar  cost  averaging  illustrations,   which  are  based  upon  adjusted
     historical performance, would compare the hypothetical effect of a lump sum
     or Purchase Payment into the specified  Investment  Options,  as contrasted
     with dollar cost averaging into the Investment Options over some period.

|X|  Payout  illustrations  are  designed  to show the  hypothetical  effect  of
     annuitizing a Contact,  or receiving a stream of periodic  payments.  These
     illustrations  may  depict  either  a  variable  annuitization  or a  fixed
     annuitization.  A  variable  payout  illustration  would  be  based  upon a
     combination of adjusted historical performance and an assumed interest rate
     (AIR),  whereas  a fixed  payout  illustration  would  be  based  upon  the
     annuitant's  age, the payout option  selected,  and the payout factor rates
     currently  in  effect  on the  date of the  illustration.  Variable  payout
     illustrations  may also show the  portion of each payout that is subject to
     income tax and the portion that is non-taxable.  Where applicable, a payout
     illustration  will  show  the  effect  of the  GMIB or GMDB  value  that is
     credited  to a  Contract  in the event of certain  annuitizations  or death
     benefit payouts. In addition to variable and fixed payout illustrations, an
     illustration  may also be prepared  showing the effect of required  minimum
     distribution payments from qualified Contracts.

The values illustrated will be calculated reflecting the deduction of Investment
Option  expenses for the specific  Investment  Options  selected,  mortality and
expense risk charges,  and other Contract charges.  Contract maintenance charges
may or may not be deducted from a particular  illustration.  For assumed rate or
investment  benchmark  pay-in  illustrations,  where no  Investment  Options are
selected, an arithmetic average of Investment Option expenses will be reflected.
The amount of the mortality  and expense risk charges  shown in an  illustration
will vary,  depending  upon the  Contract  features you select.  For  withdrawal
values, the contingent deferred sales charges are also reflected.  Illustrations
will not reflect the  deduction of any state premium tax or any Federal or state
income tax or penalties.

The  illustrations  that are given to  customers by Allianz Life are designed to
assist  customers  in  understanding  how a Contract  may  function in different
scenarios.  They are not guarantees or  representations as to future performance
or any specific rate of return.

A sample  format of a customer  illustration  is  attached  as Appendix A to the
Statement of Additional Information and is incorporated herein by reference.


10.DEATH BENEFIT
--------------------------------------------------------------------------------



At the time you purchase the Contract, you may be able to select a death benefit
option. If you do not make a selection,  the Traditional GMDB will apply to your
Contract.  If you own the  Contract  jointly,  we will use the age of the  older
Contract Owner to determine the death benefit.

If all owners are age 79 or younger on the issue date, you may instead elect the
Enhanced GMDB for an additional  mortality and expense risk charge. The Enhanced
GMDB  does  not  provide  any  additional  benefit  before  the  first  Contract
anniversary and it may be less  advantageous if any owner is age 75 to 79 on the
issue date because the benefit values may be limited after age 81.

ONCE YOU SELECT A DEATH  BENEFIT YOU CANNOT CHANGE IT. THE ENHANCED GMDB MAY NOT
BE AVAILABLE IN YOUR STATE. CHECK WITH YOUR REGISTERED  REPRESENTATIVE REGARDING
AVAILABILITY  AND BE SURE TO DISCUSS  WHETHER  YOUR  SELECTED  DEATH  BENEFIT IS
APPROPRIATE FOR YOUR SITUATION.

If the Contract is owned by a non-individual,  the death benefit may be based on
the Annuitant.

PLEASE REFER TO THE  APPLICABLE  ENDORSEMENTS  TO YOUR CONTRACT FOR THE SPECIFIC
TERMS AND CONDITIONS OF THE DEATH BENEFITS.

UPON YOUR DEATH

If you or any Joint Owner die during the Accumulation Phase, we will pay a death
benefit to your  Beneficiary  (see below).  If you or any Joint Owner die during
the Payout Phase,  the  Beneficiary  becomes the Contract  Owner and any benefit
will be as provided for in the Annuity Option selected. If the Contract is owned
by a non-individual, then all references to you mean the Annuitant.

Any part of the death benefit  amount that had been  invested in the  Investment
Options remains in the Investment  Options until distribution  begins.  From the
time the death benefit is determined until we make a complete distribution,  any
amount in the Investment Options will be subject to investment risk that will be
borne by the Beneficiary.

In the case of Joint Owners,  if one Joint Owner dies, the surviving Joint Owner
will be considered the primary Beneficiary.  We will treat any other Beneficiary
designation  on record at the time of death as a contingent  Beneficiary.  Joint
Owners  generally must be spouses  (although this  requirement  may not apply in
certain states).



TRADITIONAL GUARANTEED MINIMUM DEATH BENEFIT (TRADITIONAL GMDB)

If the  Traditional  GMDB applies,  the amount of the death  benefit  before the
exercise  of the GPWB (if  applicable)  will be the  greater of 1 or 2, less any
applicable premium tax.

1.       The Contract Value  determined as of the end of the business day during
         which  both due proof of death  and an  election  of the death  benefit
         payment option have been received at our Service Center;

2.       The  guaranteed  minimum  death  benefit,  which  is the  total  of all
         Purchase  Payments  you have  made  reduced  by the  percentage  of the
         Contract  Value  withdrawn   (prior  to  any  MVA,  but  including  any
         contingent deferred sales charge).

ENHANCED GUARANTEED MINIMUM DEATH BENEFIT (ENHANCED GMDB) -ORIGINAL CONTRACTS

If the  Enhanced  GMDB  applies,  the  amount of the death  benefit  before  the
exercise  of the GPWB (if  applicable)  will be the  greater of 1 or 2, less any
applicable premium tax.

1.       The Contract value  determined as of the end of the business day during
         which  both due proof of death  and an  election  of the death  benefit
         payment option have been received at our Service Center;

2.       The guaranteed  minimum death  benefit,  which is the greater of A or C
         (see below),  determined as of the end of the business day during which
         both due  proof of death and  election  of the  death  benefit  payment
         option have been received at our Service Center.

ENHANCED  GUARANTEED  MINIMUM DEATH  BENEFIT  (ENHANCED  GMDB)  -REVISED AND NEW
CONTRACTS

If the  Enhanced  GMDB  applies,  the  amount of the death  benefit  before  the
exercise  of the GPWB (if  applicable)  will be the  greater of 1 or 2, less any
applicable premium tax.

1.       The Contract value  determined as of the end of the business day during
         which  both due proof of death  and an  election  of the death  benefit
         payment option have been received at our Service Center;

2.       The guaranteed  minimum death  benefit,  which is the greater of B or C
         (see below),  determined as of the end of the business day during which
         both due  proof of death and  election  of the  death  benefit  payment
         option have been received at our Service Center.

A.       TOTAL PURCHASE PAYMENTS

The total of all Purchase  Payments you have made reduced by the  percentage  of
the Contract  Value  withdrawn  (prior to any MVA, but including any  contingent
deferred sales charge).

B. ANNUAL INCREASE AMOUNT

The Annual Increase Amount is initially equal to your Purchase Payment.

On each  business day other than a Contract  anniversary  and before the date of
your death, the Annual Increase Amount is equal to:

     |X|  its value on the immediately preceding business day,

     |X|  plus any additional Purchase Payments received that day, and

On every Contract anniversary prior to your 81st birthday and before the date of
your death, the Annual Increase Amount is equal to:

     |X|  for Revised Contracts, its value on the immediately preceding business
          day increased by 5%;

     |X|  for New Contracts, its value on the immediately preceding business day
          increased by 3%;

     |X|  plus any additional Purchase Payments received that day, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you make that day.

Beginning  with the  Contract  anniversary  that  occurs  on or after  your 81st
birthday  and before the date of your death,  we calculate  the Annual  Increase
Amount  in the same way that we do on any  business  day other  than a  Contract
anniversary.

For Revised  Contracts,  we limit the Annual Increase Amount to a maximum of two
times your total  Purchase  Payments  minus the percentage of any Contract Value
withdrawn (prior to any MVA, but including any contingent deferred sales charge)
for each withdrawal you made.

For New Contracts, we limit the Annual Increase Amount to a maximum of 1.5 times
your  total  Purchase  Payments  minus  the  percentage  of any  Contract  Value
withdrawn (prior to any MVA, but including any contingent deferred sales charge)
for each withdrawal you made.

C. MAXIMUM ANNIVERSARY VALUE (MAV)

The MAV is initially equal to your Purchase Payment.

On each  business day other than a Contract  anniversary  and before the date of
your death, the MAV is equal to:

     |X|  its value on the immediately preceding business day,

     |X|  plus any additional Purchase Payments received that day, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you make that day.

On every Contract anniversary prior to your 81st birthday and before the date of
your death, the MAV is equal to:

     |X|  the highest Contract value that occurred on any Contract anniversary,

     |X|  plus  subsequent  additional  Purchase  Payments  you made  since that
          Contract anniversary, and

     |X|  minus the  percentage of any Contract  Value  withdrawn  (prior to any
          MVA, but  including  any  contingent  deferred  sales charge) for each
          withdrawal you made since that Contract anniversary.

Beginning  with the  Contract  anniversary  that  occurs  on or after  your 81st
birthday and before the date of your death, we calculate the MAV in the same way
that we do on any business day other than a Contract anniversary.

THE TRADITIONAL GMDB AND THE ENHANCED GMDB VALUES FREEZE ONCE YOU ELECT TO BEGIN
RECEIVING GPWB PAYMENTS. HOWEVER, WE WILL CONTINUE TO ADJUST THESE VALUES BY:

     |X|  reducing them for each GPWB payment you receive; and

     |X|  if you make any additional partial withdrawals, we will reduce them by
          the percentage of the Contract  value you withdraw  (prior to any MVA,
          but  including  any   contingent   deferred  sales  charge)  for  each
          withdrawal you make.

At the time the last GPWB  benefit has been paid,  you have the option of either
annuitizing  or  receiving a lump sum payment of the  remaining  Contract  value
adjusted for any applicable MVA (less any contingent  deferred sales charges and
applicable premium taxes).

DEATH BENEFIT EXAMPLES

     |X|  You  purchase  a New  Contract  with an  initial  Purchase  Payment of
          $100,000  allocated only to the Investment  Options.  You are the only
          owner and are 69 or younger on the issue date.

     |X|  You make no additional Purchase Payments.

     |X|  The MAV on the ninth Contract anniversary is $180,000.

     |X|  You take a partial withdrawal of $20,000 (this includes the contingent
          deferred  sales  charge) in the tenth  Contract year when the Contract
          value  on the  date  of  (but  prior  to the  partial  withdrawal)  is
          $160,000. You take no other partial withdrawals.

     |X|  The Contract value on the tenth Contract anniversary is $140,000.

     |X|  You have not yet reached your 81st  birthday as of the tenth  Contract
          anniversary.

TRADITIONAL GMDB:

We calculate the death benefit on the tenth Contract  anniversary as the greater
of:

1) Contract value:                                                $140,000

2) The guaranteed minimum death benefit:

      Total Purchase Payments                                     $100,000

      Minus the percentage of Contract value
          withdrawn:   ($20,000 / $160,000) = 0.125 x $100,000 = -  12,500

                                                                  $ 87,500

Therefore,  the death benefit under the  Traditional  GMDB on the tenth Contract
anniversary is $140,000.

ENHANCED GMDB:

We calculate the death benefit on the tenth Contract  anniversary as the greater
of:
<TABLE>
<CAPTION>

<S>                                                                          <C>

1) The Annual Increase Amount:
      Initial Purchase Payment                                                   $100,000.00
      Increased by 3% on the first Contract anniversary                      X          1.03
                                                                                 $103,000.00
      Increased by 3% on the second Contract anniversary                    X           1.03
                                                                                 $106,090.00
      Increased by 3% on the third Contract anniversary                     X           1.03
                                                                                 $109,272.70
      On the ninth Contract anniversary the
          Annual Increase Amount is                                              $130,477.32
      Minus the percentage of Contract value
          withdrawn:   ($20,000 / $160,000) = 0.125 x $130,477.32 =            -   16,309.66
                                                                                 $114,167.65
      Increased by 3% on the tenth Contract anniversary                     X           1.03
                                                                                 $117,592.68
      Verifying that the Annual Increase Amount is within the maximum limit:
              1.5 times Purchase Payments:    1.5 x $100,000 =                      $150,000
              Minus the percentage of Contract value
                 withdrawn:   ($20,000 / $160,000) = 0.125 x $150,000 =           -   18,750
                                                                                    $131,250
2) The MAV:
      The MAV on the ninth Contract anniversary                                     $180,000
      Minus the percentage of Contract value
          withdrawn:   ($20,000 / $160,000) = 0.125 x $180,000 =                   -  22,500
                                                                                    $157,500
Therefore, the death benefit for the Enhanced GMDB is $157,500.
</TABLE>

DEATH BENEFIT PAYMENT OPTIONS

If you  have  not  previously  designated  a death  benefit  payment  option,  a
Beneficiary  must  request  the  death  benefit  be paid  under one of the death
benefit  payment options below. If the Beneficiary is the spouse of the Contract
Owner,  he/she can choose to  continue  the  Contract in his/her own name at the
then current Contract value, or if greater, the death benefit value. An election
by the spouse to continue the Contract must be made in a form satisfactory to us
at our  Service  Center  within 60 days after the death  benefit  first  becomes
payable by us. If a lump sum  payment  is  requested,  the  amount  will be paid
within seven days of receipt of proof of death and the valid election, including
any required  governmental forms, unless the suspension of payments or transfers
provision  is in effect.  Payment of the death  benefit  may be delayed  pending
receipt of any applicable tax consents and/or forms from a state.

OPTION A: lump sum payment of the death  benefit.  Allianz  Life will not deduct
the  contract  maintenance  charge at the time of a complete  withdrawal  if the
distribution is due to death.

OPTION B: payment of the entire death benefit  within 5 years of the date of the
Contract  Owner's  or any Joint  Owner's  death.  Allianz  Life will  assess the
contract maintenance charge to each Beneficiary on each Contract anniversary.

OPTION C: payment of the death benefit under an Annuity Option over the lifetime
of the Beneficiary or over a period not extending  beyond the life expectancy of
the  Beneficiary.  Distribution  under this option must begin within one year of
the date of the  Contract  Owner's  or any Joint  Owner's  death.  The  contract
maintenance charge will continue to be assessed to each Beneficiary's  share pro
rata over the payments.

Any portion of the death benefit not applied under an Annuity  Option within one
year of the date of the Contract  Owner's death must be distributed  within five
years of the date of death.

If the Beneficiary wants to receive the payment other than in a lump sum, he/she
may only make such an election  during the 60 day period  after the day that the
lump sum first became payable by Allianz Life.

If you (or any Joint  Owner) die  during  the  Payout  Phase and you are not the
Annuitant,  any payments which are remaining  under the Annuity Option  selected
will continue at least as rapidly as they were being paid at your death.  If you
die during the Payout Phase, the Beneficiary becomes the Contract Owner.

DEATH OF ANNUITANT

If the Annuitant,  who is not a Contract  Owner or Joint Owner,  dies during the
Accumulation  Phase,  you can name a new Annuitant,  subject to our underwriting
rules at that  time.  If you do not name a new  Annuitant  within 30 days of the
death of the Annuitant, you will become the Annuitant.  However, if the Contract
Owner is a non-individual  (e.g., a qualified plan or trust),  then the death of
the  Annuitant  will be treated as the death of the  Contract  Owner,  and a new
Annuitant may not be named.

If the Annuitant dies after Annuity Payments have begun,  the remaining  amounts
payable,  if any, will be as provided for in the Annuity  Option  selected.  The
remaining amounts payable will be paid to the Contract Owner at least as rapidly
as they were being paid at the Annuitant's death.


11.OTHER INFORMATION
--------------------------------------------------------------------------------


ALLIANZ LIFE

Allianz Life  Insurance  Company of North America  (Allianz  Life),  5701 Golden
Hills Drive,  Minneapolis,  Minnesota 55416, was organized under the laws of the
state of  Minnesota  in 1896.  Allianz  Life  offers  fixed  and  variable  life
insurance and annuities and group life,  accident and health insurance.  Allianz
Life is  licensed  to do  direct  business  in 49  states  and the  District  of
Columbia.  Allianz Life is a wholly-owned subsidiary of Allianz Versicherungs-AG
Holding.

THE SEPARATE ACCOUNT

Allianz Life  established  Allianz Life  Variable  Account B (Separate  Account)
under  Minnesota  insurance  law  on May  31,  1985.  The  Separate  Account  is
registered  with the  Securities  and Exchange  Commission as a unit  investment
trust under the  Investment  Company Act of 1940. The SEC does not supervise our
management of the Separate Account.

The Separate Account holds the assets that underlie the Contracts, except assets
allocated to the Fixed Account.  We keep the Separate  Account  assets  separate
from the assets of our general account and other separate accounts. The Separate
Account is divided into  subaccounts,  each of which  invests  exclusively  in a
single Investment Option.

Allianz  Life owns the assets of the  Separate  Account.  We credit  gains to or
charge losses against the Separate  Account without regard to the performance of
other investment accounts.  The Separate Account's assets may not be used to pay
any of our  liabilities  other than those  arising  from the  Contracts.  If the
Separate Account's assets exceed the required reserves and other liabilities, we
may transfer the excess to our general account.

DISTRIBUTION

Our  wholly-owned  subsidiary,  USAllianz  Investor  Services,  LLC (USAllianz),
serves  as  principal  underwriter  for  the  Contracts.  USAllianz,  a  limited
liability  company,  organized  in  Minnesota,  is located at 5701 Golden  Hills
Drive,  Minneapolis,  MN 55416.  USAllianz is registered as a broker/dealer with
the Securities and Exchange Commission under the Securities Exchange Act of 1934
as well as with the  securities  commissions in the states in which it operates,
and is a member of the National Association of Securities Dealers,  Inc. (NASD).
More  information  about  USAllianz is available at  http://www.nasdr.com  or by
calling  1-800-289-9999.  You also can  obtain an  investor  brochure  from NASD
Regulation describing its Public Disclosure Program.

Commissions   will  be  paid  to   broker/dealers   who  sell   the   Contracts.
Broker/dealers  will  be paid  commissions  up to  6.5%  of  Purchase  Payments.
Sometimes,  Allianz Life enters into an agreement with the  broker/dealer to pay
the  broker/dealer  commissions  as a  combination  of a  certain  amount of the
commission at the time of sale and a trail commission  (which when totaled could
exceed 6.5% of Purchase Payments).

Other compensation options also may be made available.  USAllianz may enter into
selling  agreements with other  broker/dealers  registered  under the Securities
Exchange  Act of 1934.  Under the  agreements  with  those  broker/dealers,  the
commission paid to the broker/dealer on behalf of the registered  representative
will not exceed those  described  above;  selling  firms may retain a portion of
commissions.  We may pay additional expenses. The registered  representative may
receive  a  portion  of  the  expense   reimbursement   allowance  paid  to  the
broker/dealer.

In addition, Allianz Life may also periodically pay certain sellers a commission
bonus on aggregate sales for special  promotional  programs.  Commissions may be
recovered  from a  broker/dealer  if a withdrawal  occurs  within 12 months of a
Purchase Payment.

We intend to  recoup  commissions  and other  sales  expenses  through  fees and
charges imposed under the Contract.  Commissions paid on the Contract, including
other incentives or payments, are not charged directly to the Contract owners or
the Separate Account.

We offer the  Contracts  to the  public on a  continuous  basis.  We  anticipate
continuing  to offer the  Contracts,  but reserve the right to  discontinue  the
offering.

ADDITIONAL CREDITS FOR CERTAIN GROUPS

Allianz Life may credit  additional  amounts to a Contract  instead of modifying
charges  because  of  special  circumstances  that  result  in  lower  sales  or
administrative  expenses  or  better  than  expected  mortality  or  persistency
experience.

ADMINISTRATION

Allianz Life has hired Delaware Valley  Financial  Services,  Inc.  (DVFS),  300
Berwyn Park, Berwyn,  Pennsylvania,  to perform certain administrative  services
regarding the Contracts.  The  administrative  services  include issuance of the
Contracts and maintenance of Contract Owner's records.

To reduce expenses,  only one copy of most financial  reports and  prospectuses,
including reports and prospectuses for the Investment Options, will be mailed to
your  household,  even if you or other persons in your  household have more than
one contract issued by Allianz or an affiliate.  Call (800) 542-5427 if you need
additional copies of financial reports,  prospectuses, or annual and semi-annual
reports,  or if you would like to receive  one copy for each  contract in future
mailings.

FINANCIAL STATEMENTS

The consolidated  financial  statements of Allianz Life and the Separate Account
have been included in the Statement of Additional Information.



<PAGE>




12. Glossary
--------------------------------------------------------------------------------


This  prospectus  is written in plain  English to make it as  understandable  as
possible.  However,  there are some  technical  words or terms that are  defined
below and are capitalized in the prospectus.

ACCUMULATION  PHASE - the  period of time  before  you elect to begin  receiving
Annuity Payments. You can make additional Purchase Payments during this time.

ACCUMULATION  UNIT - the units  into which we convert  amounts  invested  in the
subaccounts during the Accumulation Phase.

ANNUITANT - the natural  person upon whose life the Annuity  Payments are based.
The  Annuitant  must  be the  Contract  Owner  if the  Contract  is a  Qualified
Contract. The Contract Owner names the Annuitant at Contract issue.

ANNUITY OPTIONS - the income or payout options available under your Contract.

ANNUITY  PAYMENTS - payments  made by us to the payee  pursuant  to the  Annuity
Option chosen. Annuity Payments may be variable,  fixed or a combination of both
variable and fixed.

ANNUITY  UNIT  - the  units  into  which  we  convert  amounts  invested  in the
subaccounts during the Payout Phase.

BENEFICIARY  - the  person(s) or entity the Contract  Owner names to receive any
death benefit. The Beneficiary is named at Contract issue. Unless an irrevocable
Beneficiary  has been named,  the Contract  Owner can change the  Beneficiary or
contingent  Beneficiary.  If no Beneficiary is named, the owner's estate becomes
the Beneficiary.

CONTRACT - a deferred  annuity  contract that allows you to accumulate money tax
deferred by making one or more  Purchase  Payments.  It provides for lifetime or
other forms of Annuity Payments beginning on the Income Date.

CONTRACT  VALUE - on any  business day it is equal to the sum of your amounts in
the Fixed Account and Separate Account, less any unvested bonus amounts.

CONTRACT  OWNER - "you",  "your" and "yours".  The person or entity named in the
Contract who may exercise all rights granted by the Contract. The Contract Owner
is designated at Contract issue, unless changed. A Non-Qualified Contract can be
owned by up to two JOINT OWNERS. Any Joint Owner must be the spouse of the other
Contract Owner (this requirement may not apply in certain states).

FIXED ACCOUNT - part of our general account. The general account consists of all
of our assets  other  than  those in our  variable  separate  accounts.  We have
complete ownership and control of all of these assets.

INCOME  DATE - the date that you begin  receiving  Annuity  Payments  under your
Contract. This date must be the first day of a calendar month.

INVESTMENT  CHOICES - the  variable  Investment  Options  and any Fixed  Account
options available under the Contract for Purchase Payments or transfers. You may
not  invest  in more than 10  Investment  Options  at any one time.  We may add,
substitute or remove Investment Choices in the future.

INVESTMENT  OPTIONS  - the  variable  Investment  Choices  available  under  the
Separate Account.

MARKET VALUE  ADJUSTMENT  (MVA) - a positive or negative  adjustment  to amounts
withdrawn or  transferred  more than 30 days before the end of an account period
from certain types of Fixed Account Investment Choices.

NEW CONTRACTS - a Contract  purchased on or after May 1, 2003 that has an option
of an Enhanced  Guaranteed  Minimum  Death  Benefit  based on the greater of the
Annual  Increase  Amount of 3%, or the Maximum  Anniversary  Value.  The maximum
total annual Separate Account expense you can incur for this Contract is 2.60%.

NON-QUALIFIED  CONTRACT - a Contract  that is not  purchased  under a pension or
retirement plan qualified under sections of the Internal Revenue Code.

ORIGINAL  CONTRACTS - a Contract purchased before September 27, 2002 that has an
option of an Enhanced  Guaranteed  Minimum Death Benefit based on the greater of
total  Purchase  Payments  adjusted  for  partial  withdrawals,  or the  Maximum
Anniversary  Value.  The maximum total annual  Separate  Account expense you can
incur for this Contract is 2.55%.

PAYOUT PHASE - the phase your Contract is in once Annuity Payments begin.

PURCHASE PAYMENT - the money you put in the Contract.

QUALIFIED  CONTRACT - a Contract  purchased  under a pension or retirement  plan
qualified under sections of the Internal  Revenue Code (e.g.  401(k) and H.R. 10
plans),  Individual  Retirement  Annuities  (IRAs),  or Tax-Sheltered  Annuities
(referred to as TSA, 403(b), or "90-24 rollover" contracts).  Currently we issue
Qualified  Contracts  which  include  but  may  not be  limited  to  Roth  IRAs,
Traditional  IRAs,  Simplified  Employee  Pension  (SEP)  IRAs and TSA or 403(b)
rollover Contracts (90-24 rollovers").

REVISED CONTRACTS - a Contract purchased on or after September 27, 2002 that has
an option of an Enhanced  Guaranteed  Minimum Death Benefit based on the greater
of the Annual  Increase  Amount of 5%, or the  Maximum  Anniversary  Value.  The
maximum total annual Separate Account expense you can incur for this Contract is
2.15%.

REWARDS  VALUE - on any  business  day it is equal to the sum of your amounts in
the Fixed Account and Separate Account,  including all vested and unvested bonus
amounts.

SEPARATE  ACCOUNT - Allianz Life Variable Account B is the Separate Account that
issues your Contract.  It is a separate  investment account of Allianz Life. The
Separate  Account  holds the assets  invested  in the  Investment  Options  that
underlie the Contracts.  The Separate Account is divided into subaccounts,  each
of which invests exclusively in a single Investment Option.

SERVICE CENTER - The USAllianz  Service  Center.  Our Service Center address and
phone number are at the back of this prospectus.

<PAGE>



13.   TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

Insurance Company .............................  2

Experts .......................................  2

Legal Opinions ................................  2

Distributor.................................... 2

Reduction or Elimination of the
    Contingent Deferred Sales Charge ..........  2

Calculation of Performance Data................  3

Illustrations.................................. 10

Federal Tax Status............................. 11

Annuity Provisions ............................ 17

Mortality and Expense Risk Guarantee........... 17

Financial Statements .......................... 18

Appendix A - Illustrations..................... 19



<PAGE>



--------------------------------------------------------------------------------
14. PRIVACY NOTICE

WE CARE ABOUT YOUR PRIVACY!

In compliance with  Gramm-Leach-Bliley  (GLB), this notice describes the privacy
policy  and  practices  followed  by  Allianz  Life  Insurance  Company of North
America, and their affiliated companies (herein referred to as "Allianz").

Your  privacy is a high  priority for us and it will be treated with the highest
degree of confidentiality. In order for us to be able to provide these insurance
products and services, we need to collect certain information from you. However,
we want to emphasize  that we are committed to  maintaining  the privacy of this
information  in  accordance  with law. All  individuals  with access to personal
information about our customers are required to follow this policy.

NON-PUBLIC INFORMATION COLLECTED.

o    Information we receive from you on insurance and annuity  applications,
     claim forms or other forms such as your name, address, date and location of
     birth,  marital status, sex, social security number,  medical  information,
     beneficiary information, etc.

o    Information  about your transactions with us, our affiliates or others such
     as premium payment history, tax information,  investment  information,  and
     accounting information; and

o    Information  we receive  from  consumer  reporting  agencies,  such as your
     credit history.

NON-PUBLIC INFORMATION DISCLOSED.

o    We may provide the non-public  information that we collect to affiliated or
     nonaffiliated persons or entities involved in the underwriting, processing,
     servicing and  marketing of your Allianz  insurance  products.  We will not
     provide this  information to a  nonaffiliated  third party unless we have a
     written   agreement   that   requires   the  third  party  to  protect  the
     confidentiality of this information.

o    We may have to provide the above described  non-public  information that we
     collect to  authorized  persons or  entities  to comply  with a subpoena or
     summons by federal,  state or local  authorities and to respond to judicial
     process or regulatory  authorities having jurisdiction over our company for
     examination, compliance or other purposes as required by law.

o    We do not disclose any non-public personal  information about our customers
     to anyone except as permitted or required by law.

CONFIDENTIALITY AND SECURITY OF YOUR NON-PUBLIC PERSONAL INFORMATION.

o    We restrict  access of non-public  personal  information  about you to only
     those  persons  who need to know  about  that  information  to  underwrite,
     process, service or market Allianz insurance products and services.

o    We maintain  physical,  electronic,  and procedural  safeguards that comply
     with  state  and  federal  standards  to  guard  your  non-public  personal
     information.

o    If we become aware that an item of personal  information  may be materially
     inaccurate,  we will make  reasonable  effort to re-verify its accuracy and
     correct any error as appropriate.


INFORMATION ABOUT FORMER CUSTOMERS.

Non-public  information about our former customers is maintained by Allianz on a
confidential  and secure basis.  If any such disclosure is made, it would be for
reasons and under the  conditions  described in this notice.  We do not disclose
any non-public personal  information about our former customers to anyone except
as permitted or required by law.

FURTHER INFORMATION.

o You have a right to access and request correction of your personal information
that is recorded with Allianz.

o    Information  obtained  from  a  report  prepared  by an  insurance  support
     organization  may be retained by the  insurance  support  organization  and
     disclosed to other persons.

*You are  entitled  to  receive,  upon  request  to  Allianz,  a  record  of any
subsequent  disclosures of medical record  information made by Allianz including
the following:

1.   the name,  address and  institutional  affiliation,  if any, of each person
     receiving or examining the medical  information  during the preceding three
     years prior to your receipt of this privacy notice;

2.   the date of the receipt or examination; and

3.   to the extent practicable, a description of the information disclosed.

         *FOR MONTANA RESIDENTS ONLY

If you have any  questions  about our privacy  policy,  please  write,  call, or
email:
Allianz Life Insurance Company of North America
PO Box 1344, Minneapolis, MN  55440-1344
800/328-5600, www.allianzlife.com


<PAGE>




APPENDIX A - condensed financial information
--------------------------------------------------------------------------------


The consolidated financial statements of Allianz Life Insurance Company of North
America and the financial  statements of Allianz Life Variable  Account B may be
found in the Statement of Additional Information.

Accumulation  Unit Value  (AUV)  information  corresponding  to the  highest and
lowest  combination of charges is reflected in the tables below. AUV information
reflecting the additional combination of charges is disclosed in the Appendix to
the Statement of Additional Information.

This information should be read in conjunction with the financial statements and
related  notes of the Separate  Account  included in the Statement of Additional
Information.

THE TABLE BELOW WILL BE UPDATED UPON AMENDMENT

<TABLE>
<CAPTION>

(NUMBER OF UNITS IN THOUSANDS)      YEAR OR PERIOD ENDED DECEMBER 31, 2001      PERIOD FROM INCEPTION (02/01/2000)
                                                                                                                TO DECEMBER 31, 2000
                                       TRADITIONAL DEATH       ENHANCED DEATH               TRADITIONAL DEATH       ENHANCED DEATH
INVESTMENT OPTIONS:                         BENEFIT                BENEFIT                       BENEFIT                BENEFIT
------------------------------------------------------------------------------------------------------------------------------------
USAZ ALLIANCE CAPITAL GROWTH AND INCOME
<S>                                        <C>                    <C>                           <C>                     <C>
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.439                $10.435                            NA                    NA
Number of units outstanding at end of period    18                     10                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ ALLIANCE CAPITAL LARGE CAP GROWTH
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.522                $10.518                            NA                    NA
Number of units outstanding at end of period    33                     11                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ ALLIANCE CAPITAL TECHNOLOGY
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.741                $10.738                            NA                    NA
Number of units outstanding at end of period     6                      1                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
DAVIS VA FINANCIAL
Unit value at beginning of period          $13.289                $13.265                            NA                    NA
Unit value at end of period                $11.714                $11.669                       $13.289               $13.265
Number of units outstanding at end of period   192                    134                            90                    76
------------------------------------------------------------------------------------------------------------------------------------
DAVIS VA VALUE
Unit value at beginning of period          $10.894                $10.874                            NA                    NA
Unit value at end of period                 $9.601                 $9.565                       $10.894               $10.874
Number of units outstanding at end of period   441                    227                           130                    68
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN GLOBAL COMMUNICATIONS SECURITIES
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $17.294                $16.857                            NA                    NA
Number of units outstanding at end of period     0                      1                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN GROWTH AND INCOME SECURITIES
Unit value at beginning of period          $30.892                $30.769                            NA                    NA
Unit value at end of period                $29.692                $29.515                       $30.892               $30.769
Number of units outstanding at end of period    76                     62                            15                    10
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN HIGH INCOME
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $17.756                $17.308                            NA                    NA
Number of units outstanding at end of period     0                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN INCOME SECURITIES
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $27.495                $26.801                            NA                    NA
Number of units outstanding at end of period     6                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN LARGE CAP GROWTH SECURITIES
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $18.045                $17.841                            NA                    NA
Number of units outstanding at end of period     6                      4                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN REAL ESTATE
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $28.527                $27.807                            NA                    NA
Number of units outstanding at end of period     7                      5                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN RISING DIVIDENDS SECURITIES
Unit value at beginning of period          $22.634                $22.545                            NA                    NA
Unit value at end of period                $25.282               $25.131                        $22.634               $22.545
------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding at end of period   135                     90                             9                     5
FRANKLIN SMALL CAP
Unit value at beginning of period          $23.833                $23.739                            NA                    NA
Unit value at end of period                $19.867                $19.748                       $23.833               $23.739
Number of units outstanding at end of period   143                     73                            96                    21
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN SMALL CAP VALUE SECURITIES
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.576                $10.498                            NA                    NA
Number of units outstanding at end of period    19                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN U.S. GOVERNMENT
Unit value at beginning of period          $20.771                $20.689                            NA                    NA
Unit value at end of period                $21.935                $21.804                       $20.771               $20.689
Number of units outstanding at end of period   243                    113                            64                    19
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN ZERO COUPON 2005
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $26.797                $26.121                            NA                    NA
Number of units outstanding at end of period     1                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
FRANKLIN ZERO COUPON 2010
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $28.536                $27.816                            NA                    NA
Number of units outstanding at end of period     2                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
MUTUAL DISCOVERY SECURITIES
Unit value at beginning of period          $14.864                $14.806                            NA                    NA
Unit value at end of period                $14.654                $14.567                       $14.864               $14.806
Number of units outstanding at end of period   100                     41                            13                     3
------------------------------------------------------------------------------------------------------------------------------------
MUTUAL SHARES SECURITIES
Unit value at beginning of period          $14.812                $14.754                            NA                    NA
Unit value at end of period                $15.594                $15.502                       $14.812               $14.754
Number of units outstanding at end of period   240                    164                             5                     4
------------------------------------------------------------------------------------------------------------------------------------
TEMPLETON DEVELOPING MARKETS SECURITIES
Unit value at beginning of period           $8.489                 $8.455                            NA                    NA
Unit value at end of period                 $7.675                 $7.629                        $8.489                $8.455
Number of units outstanding at end of period    33                     29                            11                    NA
------------------------------------------------------------------------------------------------------------------------------------
TEMPLETON FOREIGN SECURITIES
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $17.329                $16.990                            NA                    NA
Number of units outstanding at end of period     4                      1                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
TEMPLETON GROWTH SECURITIES
Unit value at beginning of period          $19.584                $19.507                            NA                    NA
Unit value at end of period                $19.009                $18.896                       $19.584               $19.507
Number of units outstanding at end of period    64                     49                             6                     8
------------------------------------------------------------------------------------------------------------------------------------
USAZ TEMPLETON DEVELOPED MARKETS FUND
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.223                $10.219                            NA                    NA
Number of units outstanding at end of period     0                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
SP JENNISON INTERNATIONAL GROWTH
Unit value at beginning of period           $8.484                 $8.484                            NA                    NA
Unit value at end of period                 $5.347                 $5.336                        $8.484                $8.484
Number of units outstanding at end of period    41                      2                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
SP STRATEGIC PARTNERS FOCUSED GROWTH
Unit value at beginning of period           $7.948                 $7.947                            NA                    NA
Unit value at end of period                 $6.588                 $6.574                        $7.948                $7.947
Number of units outstanding at end of period    30                     53                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
OPPENHEIMER GLOBAL SECURITIES
Unit value at beginning of period           $8.945                 $8.929                            NA                    NA
Unit value at end of period                 $8.959                 $8.924                        $8.945                $8.929
Number of units outstanding at end of period   311                    124                           207                    41
------------------------------------------------------------------------------------------------------------------------------------
OPPENHEIMER HIGH INCOME
Unit value at beginning of period           $8.542                 $8.527                            NA                    NA
Unit value at end of period                 $9.536                 $9.500                        $8.542                $8.527
Number of units outstanding at end of period   157                     63                            79                     6
------------------------------------------------------------------------------------------------------------------------------------
OPPENHEIMER MAIN STREET GROWTH & INCOME
Unit value at beginning of period           $8.893                 $8.877                            NA                    NA
Unit value at end of period                 $8.305                 $8.273                        $8.893                $8.877
Number of units outstanding at end of period   462                    473                           284                   170
------------------------------------------------------------------------------------------------------------------------------------
PIMCO VIT HIGH YIELD
Unit value at beginning of period           $9.460                 $9.442                            NA                    NA
Unit value at end of period                 $9.535                 $9.498                        $9.460                $9.442
Number of units outstanding at end of period    77                     46                            14                     2
------------------------------------------------------------------------------------------------------------------------------------
PIMCO VIT STOCKSPLUS GROWTH AND INCOME
Unit value at beginning of period           $8.809                 $8.793                            NA                    NA
Unit value at end of period                 $8.227                 $8.195                        $8.809                $8.793
Number of units outstanding at end of period   127                     79                            50                    18
------------------------------------------------------------------------------------------------------------------------------------
PIMCO VIT TOTAL RETURN
Unit value at beginning of period          $10.652                $10.632                            NA                    NA
Unit value at end of period                $11.358                $11.314                       $10.652               $10.632
Number of units outstanding at end of period   568                    310                           117                     3
------------------------------------------------------------------------------------------------------------------------------------
USAZ PIMCO GROWTH AND INCOME
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.136                $10.133                            NA                    NA
Number of units outstanding at end of period     4                      0                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ PIMCO RENAISSANCE
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.991                $10.987                            NA                    NA
Number of units outstanding at end of period    31                     27                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ PIMCO VALUE
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                $10.934                $10.930                            NA                    NA
Number of units outstanding at end of period     2                      5                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
SELIGMAN SMALL-CAP VALUE
Unit value at beginning of period          $13.641                $13.616                            NA                    NA
Unit value at end of period                $16.572                $16.509                       $13.641               $13.616
Number of units outstanding at end of period   328                    149                            76                    16
------------------------------------------------------------------------------------------------------------------------------------
USAZ MONEY MARKET
Unit value at beginning of period          $10.349                $10.330                            NA                    NA
Unit value at end of period                $10.529                $10.489                       $10.349               $10.330
Number of units outstanding at end of period  1514                    790                           922                    55
------------------------------------------------------------------------------------------------------------------------------------
USAZ VAN KAMPEN AGGRESSIVE GROWTH
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                 $8.011                 $8.000                            NA                    NA
Number of units outstanding at end of period    39                     21                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ VAN KAMPEN COMSTOCK
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                 $9.315                 $9.302                            NA                    NA
Number of units outstanding at end of period   161                    446                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ VAN KAMPEN EMERGING GROWTH
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                 $9.118                 $9.106                            NA                    NA
Number of units outstanding at end of period   102                     69                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ VAN KAMPEN GROWTH AND INCOME
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                 $9.651                 $9.638                            NA                    NA
Number of units outstanding at end of period   138                    743                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
USAZ VAN KAMPEN GROWTH
Unit value at beginning of period               NA                     NA                            NA                    NA
Unit value at end of period                 $9.504                 $9.491                            NA                    NA
Number of units outstanding at end of period    37                    335                            NA                    NA
------------------------------------------------------------------------------------------------------------------------------------
<FN>

The  USAZ  AIM  Basic  Value  Fund,  USAZ  AIM  Blue  Chip  Fund,  USAZ AIM Dent
Demographic  Trends Fund, USAZ AIM International  Equity Fund, Dreyfus Small Cap
Stock Index Fund,  Dreyfus Stock Index Fund,  Jennison 20/20 Focus Portfolio and
the USAZ  Oppenheimer  Emerging  Growth  Fund  commenced  operations  under this
Contract as of May 1, 2002,  therefore no Accumulation Units are shown for these
Investment Options.

The table above does not reflect  unit values  under the  Enhanced  GMIB or GMDB
because they did not become available under this Contract as of the date of this
prospectus.
</FN>
</TABLE>



<PAGE>

                                     PART B


                       STATEMENT OF ADDITIONAL INFORMATION


                              USALLIANZ REWARDS (R)
                           INDIVIDUAL FLEXIBLE PAYMENT
                           VARIABLE ANNUITY CONTRACTS
                                    ISSUED BY
                         ALLIANZ LIFE VARIABLE ACCOUNT B
                                       AND
                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                                   MAY 1, 2003


THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE INDIVIDUAL FLEXIBLE PAYMENT
VARIABLE ANNUITY CONTRACTS WHICH ARE REFERRED TO HEREIN.

THE PROSPECTUS  CONCISELY  SETS FORTH  INFORMATION  THAT A PROSPECTIVE  INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS,  CALL OR WRITE THE
INSURANCE COMPANY AT: 5701 GOLDEN HILLS DRIVE, MINNEAPOLIS, MN 55416-1297, (800)
542-5427.


THIS STATEMENT OF ADDITIONAL INFORMATION AND THE PROSPECTUS ARE DATED May 1,
2003, AND AS MAY BE AMENDED FROM TIME TO TIME.





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

                                                 Page
Insurance Company................................   2
Experts..........................................   2
Legal Opinions...................................   2
Distributor......................................   2
Reduction or Elimination of the
 Contingent Deferred Sales Charge................   2
Calculation of Performance Data..................   3
Illustrations....................................  10
Federal Tax Status...............................  11
Annuity Provisions...............................  17
Financial Statements.............................  18
Appendix A- Illustrations........................  19





                                                                     REWSAI-0503

INSURANCE COMPANY
--------------------------------------------------------------------------------



Allianz Life Insurance Company of North America (the "Insurance Company") is a
stock life insurance company organized under the laws of the state of Minnesota
in 1896. The Insurance Company is a wholly-owned subsidiary of Allianz
Versicherungs-AG Holding ("Allianz"). Allianz is headquartered in Munich,
Germany, and has sales outlets throughout the world. The Insurance Company
offers fixed and variable life insurance and annuities, and group life, accident
and health insurance.

The Insurance Company is rated A++ by A.M. BEST, an independent analyst of the
insurance industry. The financial strength of an insurance company may be
relevant in that it may be a reflection as to the ability of a company to make
fixed Annuity Payments from its general account.


EXPERTS
--------------------------------------------------------------------------------


The financial statements of Allianz Life Variable Account B as of and for the
year ended December 31, 2001 and the consolidated financial statements of the
Insurance Company as of December 31, 2001 and 2000 and for each of the years in
the three years ended December 31, 2001 have been included in this Statement of
Additional Information in reliance upon the reports of KPMG LLP, independent
accountants, included in this Statement of Additional Information and upon the
authority of said firm as experts in accounting and auditing.

The Insurance Company audit report refers to a change in its method of
accounting for derivative instruments in 2001 and a change in its method of
calculating deferred acquisition costs and future benefit reserves for
two-tiered annuities in 1999. The principal business address of KPMG LLP is 4200
Wells Fargo Center, Minneapolis, MN.

LEGAL OPINIONS
--------------------------------------------------------------------------------


Stewart Gregg, Senior Counsel to Allianz Life, has provided legal advice on
certain matters in connection with the issuance of the Contracts.

DISTRIBUTOR
--------------------------------------------------------------------------------


USAllianz Investor Services, LLC, a subsidiary of the Insurance Company, acts as
the distributor. The offering is on a continuous basis.

REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
--------------------------------------------------------------------------------

The amount of the contingent deferred sales charge on the Contracts may be
reduced or eliminated when sales of the Contracts are made to individuals or to
a group of individuals in a manner that results in savings of sales expenses.
The entitlement to a reduction of the contingent deferred sales charge will be
determined by the Insurance Company after examination of the following factors:
1) the size of the group; 2) the total amount of Purchase Payments expected to
be received from the group; 3) the nature of the group for which the Contracts
are purchased, and the persistency expected in that group (i.e., the expectation
that the Contract owners will continue to hold the Contracts for a certain
period of time); 4) the purpose for which the Contracts are purchased and
whether that purpose makes it likely that expenses will be reduced; and 5) any
other circumstances which the Insurance Company believes to be relevant to
determining whether reduced sales or administrative expenses may be expected.
None of the reductions in charges for sales is contractually guaranteed.

The contingent deferred sales charge may be eliminated when the Contracts are
issued to an officer, director or employee of the Insurance Company or any of
its affiliates. The contingent deferred sales charge may be reduced or
eliminated when the Contract is sold by an agent of the Insurance Company to any
members of his or her immediate family and the commission is waived. In no event
will any reduction or elimination of the contingent deferred sales charge be
permitted where the reduction or elimination will be unfairly discriminatory to
any person.

CALCULATION OF PERFORMANCE DATA
--------------------------------------------------------------------------------


TOTAL RETURN

From time to time, the Insurance Company may advertise the performance data for
the divisions of the separate account (also known as subaccounts) in sales
literature, advertisements, personalized hypothetical illustrations, and
Contract Owner communications. Such data will show the percentage change in the
value of an Accumulation Unit based on the performance of a subaccount over a
stated period of time which is determined by dividing the increase (or decrease)
in value for that unit by the Accumulation Unit value at the beginning of the
period.

Any such performance data will include total return figures for the one, five,
and ten year (or since inception) time periods indicated. Such total return
figures will reflect the deduction of the mortality and expense risk charge, the
administrative charge, the operating expenses of the Investment Options and any
applicable contingent deferred sales charge and contract maintenance charge
("Standardized Total Return"). The contingent deferred sales charge and contract
maintenance charge deductions are calculated assuming a Contract is withdrawn at
the end of the reporting period.


The hypothetical value of a Contract purchased for the time periods described
will be determined by using the actual Accumulation Unit values for an initial
$1,000 Purchase Payment, and deducting any applicable contract maintenance
charges and any applicable contingent deferred sales charge to arrive at the
ending hypothetical value. The average annual total return is then determined by
computing the fixed interest rate that a $1,000 Purchase Payment would have to
earn annually, compounded annually, to grow to the hypothetical value at the end
of the time periods described. The formula used in these calculations is:


                           P(1+T)n = ERV

where:

           P      = a hypothetical initial payment of $1,000;

           T      = average annual total return;

           n      = number of years;

           ERV    = ending redeemable value of a hypothetical $1,000 payment
                  made at the beginning of the time periods used at the end of
                  such time periods (or fractional portion thereof).

The Insurance Company may also advertise performance data which will be
calculated in the same manner as described above but which will not reflect the
deduction of the contingent deferred sales charge and the contract maintenance
charge. The Insurance Company may also advertise cumulative and average total
return information over different periods of time. The Company may also present
performance information computed on a different basis ("Non-Standardized Total
Return").

Cumulative total return is calculated in a similar manner, except that the
results are not annualized. Each calculation assumes that no sales load is
deducted from the initial $1,000 payment at the time it is allocated to the
Investment Options and assumes that the income earned by the investment in the
Investment Option is reinvested.

Contract Owners should note that investment results will fluctuate over time,
and any presentation of total return for any period should not be considered as
a representation of what an investment may earn or what a Contract Owner's total
return may be in any future period.

YIELD

The USAZ Money Market Fund ("Money Market Fund"). The Insurance Company may
advertise yield information for the Money Market Fund. The Money Market Fund's
current yield may vary each day, depending upon, among other things, the average
maturity of the Investment Option's investment securities and changes in
interest rates, operating expenses, the deduction of the mortality and expense
risk charge, the administrative charge, the contract maintenance charge and, in
certain instances, the value of the Investment Option's investment securities.
Bonus amounts are not reflected in any performance information. The fact that
the subaccount's current yield will fluctuate and that the principal is not
guaranteed should be taken into consideration when using the subacount's current
yield as a basis for comparison with savings accounts or other fixed-yield
investments. The yield at any particular time is not indicative of what the
yield may be at any other time.

The Money Market Fund's current yield is computed on a base period return of a
hypothetical Contract having a beginning balance of one Accumulation Unit for a
particular period of time (generally seven days). The return is determined by
dividing the net change (exclusive of any capital changes) in such Accumulation
Unit by its beginning value, and then multiplying it by 365/7 to get the
annualized current yield. The calculation of net change reflects the value of
additional shares purchased with the dividends paid by the Investment Option,
and the deduction of the mortality and expense risk charge, the administrative
charge and contract maintenance charge.

The effective yield reflects the effects of compounding and represents an
annualization of the current return with all dividends reinvested. (Effective
yield = [(Base Period Return + 1)365/7] - 1.)

For the seven-day period ending on December 31, 2001, the USAZ Money Market Fund
had a current yield of -0.67% and an effective yield of -0.66%.

OTHER INVESTMENT OPTIONS. The Insurance Company may also quote yield in sales
literature, advertisements, personalized hypothetical illustrations, and
Contract Owner communications for the other Investment Options. Each Investment
Option (other than the USAZ Money Market Fund) will publish standardized total
return information with any quotation of current yield.

The yield computation is determined by dividing the net investment income per
Accumulation Unit earned during the period (minus the deduction for the
mortality and expense risk charge, administrative charge and contract
maintenance charge) by the Accumulation Unit value on the last day of the period
and annualizing the resulting figure, according to the following formula:

                          Yield = 2 [((A-B) + 1)6 - 1]
                                       cd
where:

  a      = net investment income earned during the period by the Investment
         Option attributable to shares owned by the subaccount;

  b      = expenses accrued for the period (net of reimbursements);

  c      = the average daily number of Accumulation Units outstanding during the
         period;

  d      = the maximum offering price per Accumulation Unit on the last day of
         the period.

The above formula will be used in calculating quotations of yield, based on
specified 30-day periods (or one month) identified in the sales literature,
advertisement, or communication. Yield calculations assume no sales load. The
Insurance Company does not currently advertise yield information for any
subaccount (other than the Money Market Fund).

PERFORMANCE RANKING

Total return may be compared to relevant  indices,  including U.S.  domestic and
international indices and data from Lipper Analytical Services, Inc., Standard &
Poor's Indices, or VARDS(R).

From time to time, evaluation of performance by independent sources may also be
used.

PERFORMANCE INFORMATION

Certain Investment Options have been in existence for some time and have
investment performance history. In order to show how investment performance of
the Investment Options affects Accumulation Unit values, the following
performance information was developed. Bonus amounts are not reflected in any
performance information.

The Investment Options of Franklin Templeton Variable Insurance Products Trust
available under this Contract issue Class 2 shares and have a distribution plan
which is referred to as a rule 12b-1 plan. Class 2 shares have Rule 12b-1 plan
expenses currently equal to 0.25% per year, which will affect future
performance.

Because class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton
Developing Markets Securities Fund Fund and Templeton Foreign Securities Fund),
standardized class 2 Investment Option performance for prior periods represents
historical results of class 1 shares. For periods beginning 1/6/99 (or 5/1/97),
class 2's results reflect an additional 12b-1 fee expense, which also affects
future performance.

Ongoing stock market volatility can dramatically change the Investment Options'
short-term performance; current results may differ.


Accumulation Unit performance is reflected in the following tables. These charts
show the highest and lowest expenses for New Contracts. High and low expenses
for Original and Revised Contracts, if shown, would be lower.

The performance figures in Charts A and B reflect Accumulation Unit performance
from Separate Account inception or, if later, the date that a particular
Investment Option was added to the Separate Account. Chart A reflects
performance for New Contracts with the Traditional GMDB and no GMIB (total
Separate Account expenses of 1.70%). Chart B reflects performance for New
Contracts with the Enhanced GMDB and the Enhanced GMIB (total Separate Account
expenses of 2.60%).

The performance figures in Charts C and D reflect Accumulation Unit performance
from Investment Option inception which may pre-date Separate Account Inception
and assumes the Accumulation Units were invested in each of the Investment
Options from the Investment Option inception dates as listed on the table. Chart
C reflects performance for New Contracts with the Traditional GMDB and no GMIB
(total Separate Account expenses of 1.70%). Chart D reflects performance for New
Contracts with the Enhanced GMDB and the Enhanced GMIB (total Separate Account
expenses of 2.60%).

Chart E reflects performance information for the Investment Options which does
not include any contract fees, or expenses.

<TABLE>
<CAPTION>

------------------------------------------------------------- ----------------- ---------------- -----------------
                                                               TOTAL SEPARATE
                                                              ACCOUNT EXPENSES      ACTUAL         HYPOTHETICAL
PRODUCT FEATURE                                                                   PERFORMANCE      PERFORMANCE
------------------------------------------------------------- ----------------- ---------------- -----------------
<S>                                                                <C>
Traditional GMDB and no GMIB on New Contracts                      1.70%            Chart A          Chart C
------------------------------------------------------------- ----------------- ---------------- -----------------
Enhanced GMDB and Enhanced GMIB on New Contracts                   2.60%            Chart B          Chart D
------------------------------------------------------------- ----------------- ---------------- -----------------
</TABLE>


The performance figures in Column I of each table represent performance figures
for the Accumulation Units which reflect the mortality and expense risk charge,
administrative charge, the contract maintenance charge, the operating expenses
of the Investment Options and assumes that you make a withdrawal at the end of
the period (therefore the contingent deferred sales charge is reflected). Column
II represents performance figures for the Accumulation Units which reflect the
deduction of the mortality and expense risk charge, administrative charge, and
the operating expenses of the Investment Options. Past performance does not
guarantee future results.



<PAGE>


[CHARTS A-D WILL BE UPDATED UPON AMENDMENT]
<TABLE>
<CAPTION>


CHART A - NEW CONTRACTS WITH THE SELECTION OF THE TRADITIONAL GMDB AND NO
             GMIB (1.70%); BONUS IS NOT REFLECTED IN PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------


Total Return for the periods ended December 31, 2001:                                             ACTUAL

                                                     COLUMN I (WITH CHARGES)                  COLUMN II (WITHOUT CHARGES)
-----------------------------------------------------------------------------------------------------------------------------------
                               SEPARATE ACCOUNT
                                   INCEPTION   ONE    THREE    FIVE     TEN     SINCE    ONE     THREE    FIVE     TEN     SINCE
INVESTMENT OPTION                    DATE     YEAR    YEAR     YEAR    YEAR   INCEPTION YEAR     YEAR     YEAR    YEAR   INCEPTION
                             IN INVESTMENT OPTION
------------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>          <C>       <C>     <C>      <C>      <C>     <C>      <C>     <C>      <C>     <C>
USAZ Alliance Capital Growth and   11/5/2001     N/A      N/A     N/A      N/A    -4.20     N/A      N/A     N/A      N/A    4.40
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -3.37     N/A      N/A     N/A      N/A    5.23
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A    -1.17     N/A      N/A     N/A      N/A    7.43
Davis VA Financial                  2/1/2000  -20.45      N/A     N/A      N/A     4.40  -11.85      N/A     N/A      N/A    8.68
Davis VA Value                      2/1/2000  -20.47      N/A     N/A      N/A    -6.99  -11.87      N/A     N/A      N/A   -2.25
Franklin Global Communications     1/24/1989  -39.16   -18.62   -5.09     1.29     4.26  -30.56   -14.45   -3.11     1.62    4.32
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -12.48     0.55    6.87     8.86     8.29   -3.88     3.38    8.14     9.07    8.36
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -6.13    -8.34   -3.20     4.16     4.47    2.47    -4.98   -1.35     4.44    4.54
Franklin Income Securities -       1/24/1989   -9.50     1.10    3.82     7.15     8.07   -0.90     3.90    5.25     7.38    8.13
Class 21,2
Franklin Large Cap Growth           5/1/1996  -21.48     2.56    8.75      N/A    10.12  -12.88     5.26    9.94      N/A   10.97
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -2.49     5.57    2.71     9.06     8.37    6.11     8.15    4.21     9.26    8.44
Franklin Rising Dividends          1/27/1992    3.10     2.78    8.88      N/A     9.19   11.70     5.50   10.07      N/A    9.41
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -25.24     8.08    7.47      N/A    10.84  -16.64    10.52    8.72      N/A   11.48
Franklin Small Cap Value            5/1/1998    3.32     8.69     N/A      N/A    -0.88   11.92    11.14     N/A      N/A    1.54
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -3.00     1.23    3.60     4.82     5.85    5.60     4.02    5.05     5.09    5.92
22
Franklin Zero Coupon 2005 - Class  3/14/1989   -1.46     0.33    4.50     6.77     7.94    7.14     3.17    5.90     7.01    8.00
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -4.71    -1.38    4.84     7.64     8.47    3.89     1.55    6.22     7.86    8.53
12
Mutual Discovery Securities -      11/8/1996  -10.01     6.57    6.01      N/A     6.35   -1.41     9.09    7.33      N/A    7.48
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -3.32     6.91    7.08      N/A     7.71    5.28     9.43    8.36      N/A    8.79
21,2
Templeton Developing Markets        3/4/1996  -18.19    -4.86  -10.55      N/A    -4.60   -9.59    -1.74   -8.06      N/A   -3.63
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -25.98    -4.59    0.12      N/A     5.43  -17.38    -1.48    1.75      N/A    5.69
Class 21,2,4
Templeton Growth Securities -      3/15/1994  -11.53     2.08    5.27      N/A     7.79   -2.93     4.82    6.63      N/A    8.25
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -6.36     N/A      N/A     N/A      N/A    2.24
SP Jennison International Growth   12/15/2000 -45.58      N/A     N/A      N/A   -44.53  -36.98      N/A     N/A      N/A  -36.00
SP Strategic Partners Focused      12/15/2000 -25.71      N/A     N/A      N/A   -29.02  -17.11      N/A     N/A      N/A  -20.58
Growth
Oppenheimer Global Securities/VA    2/1/2000  -22.08      N/A     N/A      N/A   -11.50  -13.48      N/A     N/A      N/A   -6.55
Oppenheimer High Income/VA          2/1/2000   -8.31      N/A     N/A      N/A    -7.20    0.29      N/A     N/A      N/A   -2.45
Oppenheimer Main Street Growth &    2/1/2000  -20.24      N/A     N/A      N/A   -14.90  -11.64      N/A     N/A      N/A   -9.78
Income/VA
PIMCO VIT High Yield - Admin.       2/1/2000   -7.92      N/A     N/A      N/A    -5.24    0.68      N/A     N/A      N/A   -0.57
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000  -21.49      N/A     N/A      N/A   -15.41  -12.89      N/A     N/A      N/A  -10.27
Income - Admin. Class
PIMCO VIT Total Return - Admin.     2/1/2000   -1.99      N/A     N/A      N/A     4.44    6.61      N/A     N/A      N/A    8.73
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -7.23     N/A      N/A     N/A      N/A    1.37
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     1.32     N/A      N/A     N/A      N/A    9.92
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     0.75     N/A      N/A     N/A      N/A    9.35
Seligman Small-Cap Value - Class 1  2/1/2000   12.89      N/A     N/A      N/A    25.59   21.49      N/A     N/A      N/A   29.23
USAZ Money Market                   2/1/2000   -7.02      N/A     N/A      N/A    -1.80    1.58      N/A     N/A      N/A    2.72
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -28.49     N/A      N/A     N/A      N/A  -19.89
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -15.26     N/A      N/A     N/A      N/A   -6.66
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -16.92     N/A      N/A     N/A      N/A   -8.32
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -12.08     N/A      N/A     N/A      N/A   -3.48
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -13.55     N/A      N/A     N/A      N/A   -4.95
----------------------------------------------------------------------------------------------------------------------------------

*For Investment Options which have existed less than one year, standard cumulative total returns since inception are shown.

1.Ongoing stock market volatility can dramatically  change the Investment  Options'  short-term  performance;  current results may
differ.

2.Because Class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton  Developing  Markets Securities Fund and Templeton
Foreign Securities Fund),  standardized  Class 2 Investment Option performance for prior periods represents  historical results of
Class 1 shares.  For periods beginning 1/6/99 (or 5/1/97),  Class 2's results reflect an additional 12b-1 fee expense,  which also
affects future performance.

3.For Templeton Developing Markets Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing Markets Fund.

4. For Templeton Foreign Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of Templeton
International Fund.

There is no  performance  shown for the USAZ AIM Basic  Value,  USAZ AIM Blue Chip,  USAZ AIM Dent  Demographic  Trends,  USAZ AIM
International  Equity,  Dreyfus Small Cap Stock Index, Dreyfus Stock Index, Jennison 20/20 Focus and the USAZ Oppenheimer Emerging
Growth  Investment  Options  because they were first offered under this Contract as of May 1, 2002. The product's bonus feature is
not reflected in these charts.
</TABLE>



<TABLE>
<CAPTION>


CHART B- NEW CONTRACTS WITH SELECTION OF THE ENHANCED GMDB AND ENHANCED
             GMIB (2.60%); BONUS IS NOT REFLECTED IN PERFORMANCE
-----------------------------------------------------------------------------------------------------------------------------------


Total Return for the periods ended December 31, 2001:                                ACTUAL

                                                     COLUMN I (WITH CHARGES)                 COLUMN II (WITHOUT CHARGES)
------------------------------------------------------------------------------------------------------------------------------------
                               SEPARATE ACCOUNT
                                   INCEPTION   ONE    THREE    FIVE     TEN     SINCE    ONE     THREE    FIVE     TEN     SINCE
INVESTMENT OPTION                    DATE     YEAR    YEAR     YEAR    YEAR   INCEPTION YEAR     YEAR     YEAR    YEAR   INCEPTION
                             IN INVESTMENT OPTION
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                <C>        <C>       <C>     <C>      <C>      <C>     <C>      <C>     <C>      <C>     <C>
USAZ Alliance Capital Growth and   11/5/2001     N/A      N/A     N/A      N/A    -4.20     N/A      N/A     N/A      N/A    4.40
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -3.37     N/A      N/A     N/A      N/A    5.23
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A    -1.17     N/A      N/A     N/A      N/A    7.43
Davis VA Financial                  7/1/1999  -20.45      N/A     N/A      N/A    -1.72  -11.85      N/A     N/A      N/A    1.79
Davis VA Value                      7/1/1999  -20.47      N/A     N/A      N/A    -5.12  -11.87      N/A     N/A      N/A   -1.43
Franklin Global Communications     1/24/1989  -39.16   -18.62   -5.09     1.29     4.26  -30.56   -14.45   -3.11     1.62    4.32
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -12.48     0.55    6.87     8.86     8.29   -3.88     3.38    8.14     9.07    8.36
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -6.13    -8.34   -3.20     4.16     4.47    2.47    -4.98   -1.35     4.44    4.54
Franklin Income Securities -       1/24/1989   -9.50     1.10    3.82     7.15     8.07   -0.90     3.90    5.25     7.38    8.13
Class 21,2
Franklin Large Cap Growth           5/1/1996  -21.48     2.56    8.75      N/A    10.12  -12.88     5.26    9.94      N/A   10.97
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -2.49     5.57    2.71     9.06     8.37    6.11     8.15    4.21     9.26    8.44
Franklin Rising Dividends          1/27/1992    3.10     2.78    8.88      N/A     9.19   11.70     5.50   10.07      N/A    9.41
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -25.24     8.08    7.47      N/A    10.84  -16.64    10.52    8.72      N/A   11.48
Franklin Small Cap Value            5/1/1998    3.32     8.69     N/A      N/A    -0.88   11.92    11.14     N/A      N/A    1.54
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -3.00     1.23    3.60     4.82     5.85    5.60     4.02    5.05     5.09    5.92
22
Franklin Zero Coupon 2005 - Class  3/14/1989   -1.46     0.33    4.50     6.77     7.94    7.14     3.17    5.90     7.01    8.00
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -4.71    -1.38    4.84     7.64     8.47    3.89     1.55    6.22     7.86    8.53
12
Mutual Discovery Securities -      11/8/1996  -10.01     6.57    6.01      N/A     6.35   -1.41     9.09    7.33      N/A    7.48
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -3.32     6.91    7.08      N/A     7.71    5.28     9.43    8.36      N/A    8.79
21,2
Templeton Developing Markets        3/4/1996  -18.19    -4.86  -10.55      N/A    -4.60   -9.59    -1.74   -8.06      N/A   -3.63
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -25.98    -4.59    0.12      N/A     5.43  -17.38    -1.48    1.75      N/A    5.69
Class 21,2,4
Templeton Growth Securities -      3/15/1994  -11.53     2.08    5.27      N/A     7.79   -2.93     4.82    6.63      N/A    8.25
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -6.36     N/A      N/A     N/A      N/A    2.24
SP Jennison International Growth   12/15/2000 -45.58      N/A     N/A      N/A   -44.53  -36.98      N/A     N/A      N/A  -36.00
SP Strategic Partners Focused      12/15/2000 -25.71      N/A     N/A      N/A   -29.02  -17.11      N/A     N/A      N/A  -20.58
Growth
Oppenheimer Global Securities/VA    2/1/2000  -22.08     9.32   12.46    11.87    10.86  -13.48    11.71   13.51    12.04   10.93
Oppenheimer High Income/VA          2/1/2000   -8.31    -3.95   -0.48     6.70     8.10    0.29    -0.87    1.19     6.93    8.16
Oppenheimer Main Street Growth &    2/1/2000  -20.24    -4.84    3.53      N/A    11.23  -11.64    -1.72    4.96      N/A   11.79
Income/VA
PIMCO VIT High Yield - Admin.       2/1/2000   -7.92    -3.21     N/A      N/A    -2.47    0.68    -0.18     N/A      N/A    0.04
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000  -21.49    -6.15     N/A      N/A     1.97  -12.89    -2.95     N/A      N/A    4.00
Income - Admin. Class
PIMCO VIT Total Return - Admin.     2/1/2000   -1.99     1.37     N/A      N/A     2.82    6.61     4.16     N/A      N/A    4.82
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -7.23     N/A      N/A     N/A      N/A    1.37
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     1.32     N/A      N/A     N/A      N/A    9.92
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     0.75     N/A      N/A     N/A      N/A    9.35
Seligman Small-Cap Value - Class 1  2/1/2000   12.89    26.53     N/A      N/A    14.53   21.49    28.35     N/A      N/A   16.21
USAZ Money Market                   2/1/2000   -7.02      N/A     N/A      N/A    -1.80    1.58      N/A     N/A      N/A    2.72
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -28.49     N/A      N/A     N/A      N/A  -19.89
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -15.26     N/A      N/A     N/A      N/A   -6.66
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -16.92     N/A      N/A     N/A      N/A   -8.32
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -12.08     N/A      N/A     N/A      N/A   -3.48
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -13.55     N/A      N/A     N/A      N/A   -4.95
----------------------------------------------------------------------------------------------------------------------------------

* For Investment Options which have existed less than one year, standard cumulative total returns since inception are shown.

1.Ongoing stock market volatility can dramatically  change the Investment  Options'  short-term  performance;  current results may
differ.

2.Because Class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton  Developing  Markets Securities Fund and Templeton
Foreign Securities Fund),  standardized  Class 2 Investment Option performance for prior periods represents  historical results of
Class 1 shares.  For periods beginning 1/6/99 (or 5/1/97),  Class 2's results reflect an additional 12b-1 fee expense,  which also
affects future performance.

3.For Templeton Developing Markets Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing
Markets Fund.

4. For Templeton Foreign Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of Templeton
International Fund.

There is no  performance  shown for the USAZ AIM Basic  Value,  USAZ AIM Blue Chip,  USAZ AIM Dent  Demographic  Trends,  USAZ AIM
International  Equity,  Dreyfus Small Cap Stock Index, Dreyfus Stock Index, Jennison 20/20 Focus and the USAZ Oppenheimer Emerging
Growth  Investment  Options  because they were first offered under this Contract as of May 1, 2002. The product's bonus feature is
not reflected in these charts.
</TABLE>


<TABLE>
<CAPTION>

CHART C - NEW CONTRACTS WITH SELECTION OF THE TRADITIONAL GMDB AND NO
             GMIB (1.70%); BONUS IS NOT REFLECTED IN PERFORMANCE
-------------------------------------------------------------------------------------------------------------------


Total Return for the periods ended December 31, 2001:                                 HYPOTHETICAL

                                                     COLUMN I (WITH CHARGES)                  COLUMN II (WITHOUT CHARGES)
-------------------------------------------------------------------------------------------------------------------
                               INVESTMENT OPTION
                                   INCEPTION   ONE    THREE    FIVE     TEN     SINCE    ONE     THREE    FIVE     TEN     SINCE
INVESTMENT OPTION                    DATE     YEAR    YEAR     YEAR    YEAR   INCEPTION YEAR     YEAR     YEAR    YEAR   INCEPTION

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

<S>                                <C>        <C>       <C>     <C>      <C>      <C>     <C>      <C>     <C>      <C>     <C>
USAZ Alliance Capital Growth and   11/5/2001       N/A     N/A      N/A     N/A    -4.68     N/A      N/A      N/A     N/A     3.88
Income*
USAZ Alliance Capital Large Cap    11/5/2001       N/A     N/A      N/A     N/A    -3.85     N/A      N/A      N/A     N/A     4.70
Growth*
USAZ Alliance Capital Technology*  11/5/2001       N/A     N/A      N/A     N/A    -1.66     N/A      N/A      N/A     N/A     6.89
Davis VA Financial                  7/1/1999    -20.85     N/A      N/A     N/A    -2.21  -12.29      N/A      N/A     N/A     1.28
Davis VA Value                      7/1/1999    -20.87     N/A      N/A     N/A    -5.59  -12.31      N/A      N/A     N/A    -1.92
Franklin Global Communications     1/24/1989    -39.46  -19.03    -5.56    0.78     3.74  -30.91   -14.88    -3.59    1.11     3.80
Securities - Class 21,2
Franklin Growth and Income         1/24/1989    -12.92    0.05     6.34    8.32     7.75   -4.36     2.86     7.60    8.52     7.82
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989     -6.60   -8.80    -3.68    3.64     3.95    1.96    -5.46    -1.84    3.92     4.02
Franklin Income Securities -       1/24/1989     -9.95    0.59     3.30    6.61     7.53   -1.40     3.38     4.72    6.84     7.59
Class 21,2
Franklin Large Cap Growth           5/1/1996    -21.87    2.05     8.21     N/A     9.57  -13.32     4.73     9.39     N/A    10.42
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989     -2.98    5.04     2.20    8.51     7.83    5.58     7.61     3.69    8.71     7.90
Franklin Rising Dividends          1/27/1992      2.58    2.27     8.34     N/A     8.64   11.14     4.97     9.52     N/A     8.86
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995    -25.61    7.54     6.93     N/A    10.29  -17.06     9.97     8.18     N/A    10.92
Franklin Small Cap Value            5/1/1998      2.80    8.15      N/A     N/A    -1.38   11.36    10.58      N/A     N/A     1.03
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989     -3.49    0.72     3.08    4.30     5.32    5.07     3.50     4.52    4.56     5.39
22
Franklin Zero Coupon 2005 - Class  3/14/1989     -1.95   -0.17     3.98    6.24     7.40    6.60     2.65     5.37    6.47     7.46
12
Franklin Zero Coupon 2010 - Class  3/14/1989     -5.19   -1.87     4.32    7.10     7.93    3.37     1.04     5.69    7.32     7.99
12
Mutual Discovery Securities -      11/8/1996    -10.46    6.04     5.48     N/A     5.82   -1.90     8.54     6.79     N/A     6.94
Class 21,2
Mutual Shares Securities - Class   11/8/1996     -3.80    6.38     6.54     N/A     7.17    4.75     8.88     7.82     N/A     8.25
21,2
Templeton Developing Markets        3/4/1996    -18.60   -5.34   -11.00     N/A    -5.08  -10.04    -2.23    -8.52     N/A    -4.11
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992    -26.35   -5.07    -0.38     N/A     4.90   -3.42     4.30     6.10     N/A     7.71
Class 21,2,4
Templeton Growth Securities -      3/15/1994    -11.97    1.57     4.74     N/A     7.25  -17.79    -1.97     1.24     N/A     5.16
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001       N/A     N/A      N/A     N/A    -6.83     N/A      N/A      N/A     N/A     1.73
SP Jennison International Growth   12/15/2000   -45.85     N/A      N/A     N/A   -44.81  -37.30      N/A      N/A     N/A   -36.32
SP Strategic Partners Focused      12/15/2000   -26.08     N/A      N/A     N/A   -29.37  -17.52      N/A      N/A     N/A   -20.98
Growth
Oppenheimer Global Securities/VA    2/1/2000    -22.47    8.77    11.90   11.31    10.31  -13.91    11.15    12.94   11.48    10.38
Oppenheimer High Income/VA          2/1/2000     -8.77   -4.43    -0.98    6.17     7.56   -0.21    -1.37     0.68    6.40     7.62
Oppenheimer Main Street Growth &    2/1/2000    -20.64   -5.32     3.01     N/A    10.67  -12.08    -2.21     4.44     N/A    11.23
Income/VA
PIMCO VIT High Yield - Admin.       2/1/2000     -8.38   -3.69      N/A     N/A    -2.96    0.18    -0.68      N/A     N/A    -0.46
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000    -21.88   -6.62      N/A     N/A     1.46  -13.33    -3.44      N/A     N/A     3.48
Income - Admin. Class
PIMCO VIT Total Return - Admin.     2/1/2000     -2.48    0.86      N/A     N/A     2.31    6.08     3.64      N/A     N/A     4.30
Class
USAZ PIMCO Growth and Income*      11/5/2001       N/A     N/A      N/A     N/A    -7.69     N/A      N/A      N/A     N/A     0.86
USAZ PIMCO Renaissance*            11/5/2001       N/A     N/A      N/A     N/A     0.81     N/A      N/A      N/A     N/A     9.37
USAZ PIMCO Value*                  11/5/2001       N/A     N/A      N/A     N/A     0.25     N/A      N/A      N/A     N/A     8.80
Seligman Small-Cap Value - Class 1  2/1/2000     12.33   25.90      N/A     N/A    13.96   20.88    27.71      N/A     N/A    15.63
USAZ Money Market                   2/1/2000     -7.48     N/A      N/A     N/A    -2.29    1.07      N/A      N/A     N/A     2.21
USAZ Van Kampen Aggressive Growth*  5/1/2001       N/A     N/A      N/A     N/A   -28.85     N/A      N/A      N/A     N/A   -20.29
USAZ Van Kampen Comstock*           5/1/2001       N/A     N/A      N/A     N/A   -15.68     N/A      N/A      N/A     N/A    -7.13
USAZ Van Kampen Emerging Growth*    5/1/2001       N/A     N/A      N/A     N/A   -17.82     N/A      N/A      N/A     N/A    -9.27
USAZ Van Kampen Growth and Income*  5/1/2001       N/A     N/A      N/A     N/A   -12.52     N/A      N/A      N/A     N/A    -3.96
USAZ Van Kampen Growth*             5/1/2001       N/A     N/A      N/A     N/A   -13.98     N/A      N/A      N/A     N/A    -5.43
------------------------------------------------------------------------------------------------------------------------------------

* For Investment Options which have existed less than one year, standard cumulative total returns since inception are shown.

1.Ongoing stock market volatility can dramatically  change the Investment  Options'  short-term  performance;  current results may
differ.

2.Because Class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton  Developing  Markets Securities Fund and Templeton
Foreign Securities Fund),  standardized  Class 2 Investment Option performance for prior periods represents  historical results of
Class 1 shares.  For periods beginning 1/6/99 (or 5/1/97),  Class 2's results reflect an additional 12b-1 fee expense,  which also
affects future performance.

3.For Templeton Developing Markets Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing Markets Fund.

4. For Templeton Foreign Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of Templeton
International Fund.

There is no  performance  shown for the USAZ AIM Basic  Value,  USAZ AIM Blue Chip,  USAZ AIM Dent  Demographic  Trends,  USAZ AIM
International  Equity,  Dreyfus Small Cap Stock Index, Dreyfus Stock Index, Jennison 20/20 Focus and the USAZ Oppenheimer Emerging
Growth  Investment  Options  because they were first offered under this Contract as of May 1, 2002. The product's bonus feature is
not reflected in these charts.
</TABLE>


<TABLE>
<CAPTION>


CHART        D - NEW CONTRACTS WITH SELECTION OF THE ENHANCED GMDB AND ENHANCED
             GMIB (2.60%); BONUS IS NOT REFLECTED IN PERFORMANCE
-------------------------------------------------------------------------------------------------------------------
Total Return for the periods ended December 31, 2001:                                HYPOTHETICAL


                                                     COLUMN I (WITH CHARGES)                 COLUMN II (WITHOUT CHARGES)
------------------------------------------------------------------------------------------------------------------
                               INVESTMENT OPTION
                                   INCEPTION   ONE    THREE    FIVE     TEN     SINCE    ONE     THREE    FIVE     TEN     SINCE
INVESTMENT OPTION                    DATE     YEAR    YEAR     YEAR    YEAR   INCEPTION YEAR     YEAR     YEAR    YEAR   INCEPTION

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

<S>                                <C>        <C>       <C>     <C>      <C>      <C>     <C>      <C>     <C>      <C>     <C>
USAZ Alliance Capital Growth and   11/5/2001     N/A      N/A     N/A      N/A    -4.20     N/A      N/A     N/A      N/A    4.40
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -3.37     N/A      N/A     N/A      N/A    5.23
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A    -1.17     N/A      N/A     N/A      N/A    7.43
Davis VA Financial                  7/1/1999  -20.45      N/A     N/A      N/A    -1.72  -11.85      N/A     N/A      N/A    1.79
Davis VA Value                      7/1/1999  -20.47      N/A     N/A      N/A    -5.12  -11.87      N/A     N/A      N/A   -1.43
Franklin Global Communications     1/24/1989  -39.16   -18.62   -5.09     1.29     4.26  -30.56   -14.45   -3.11     1.62    4.32
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -12.48     0.55    6.87     8.86     8.29   -3.88     3.38    8.14     9.07    8.36
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -6.13    -8.34   -3.20     4.16     4.47    2.47    -4.98   -1.35     4.44    4.54
Franklin Income Securities -       1/24/1989   -9.50     1.10    3.82     7.15     8.07   -0.90     3.90    5.25     7.38    8.13
Class 21,2
Franklin Large Cap Growth           5/1/1996  -21.48     2.56    8.75      N/A    10.12  -12.88     5.26    9.94      N/A   10.97
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -2.49     5.57    2.71     9.06     8.37    6.11     8.15    4.21     9.26    8.44
Franklin Rising Dividends          1/27/1992    3.10     2.78    8.88      N/A     9.19   11.70     5.50   10.07      N/A    9.41
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -25.24     8.08    7.47      N/A    10.84  -16.64    10.52    8.72      N/A   11.48
Franklin Small Cap Value            5/1/1998    3.32     8.69     N/A      N/A    -0.88   11.92    11.14     N/A      N/A    1.54
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -3.00     1.23    3.60     4.82     5.85    5.60     4.02    5.05     5.09    5.92
22
Franklin Zero Coupon 2005 - Class  3/14/1989   -1.46     0.33    4.50     6.77     7.94    7.14     3.17    5.90     7.01    8.00
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -4.71    -1.38    4.84     7.64     8.47    3.89     1.55    6.22     7.86    8.53
12
Mutual Discovery Securities -      11/8/1996  -10.01     6.57    6.01      N/A     6.35   -1.41     9.09    7.33      N/A    7.48
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -3.32     6.91    7.08      N/A     7.71    5.28     9.43    8.36      N/A    8.79
21,2
Templeton Developing Markets        3/4/1996  -18.19    -4.86  -10.55      N/A    -4.60   -9.59    -1.74   -8.06      N/A   -3.63
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -25.98    -4.59    0.12      N/A     5.43  -17.38    -1.48    1.75      N/A    5.69
Class 21,2,4
Templeton Growth Securities -      3/15/1994  -11.53     2.08    5.27      N/A     7.79   -2.93     4.82    6.63      N/A    8.25
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -6.36     N/A      N/A     N/A      N/A    2.24
SP Jennison International Growth   12/15/2000 -45.58      N/A     N/A      N/A   -44.53  -36.98      N/A     N/A      N/A  -36.00
SP Strategic Partners Focused      12/15/2000 -25.71      N/A     N/A      N/A   -29.02  -17.11      N/A     N/A      N/A  -20.58
Growth
Oppenheimer Global Securities/VA    2/1/2000  -22.08     9.32   12.46    11.87    10.86  -13.48    11.71   13.51    12.04   10.93
Oppenheimer High Income/VA          2/1/2000   -8.31    -3.95   -0.48     6.70     8.10    0.29    -0.87    1.19     6.93    8.16
Oppenheimer Main Street Growth &    2/1/2000  -20.24    -4.84    3.53      N/A    11.23  -11.64    -1.72    4.96      N/A   11.79
Income/VA
PIMCO VIT High Yield - Admin.       2/1/2000   -7.92    -3.21     N/A      N/A    -2.47    0.68    -0.18     N/A      N/A    0.04
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000  -21.49    -6.15     N/A      N/A     1.97  -12.89    -2.95     N/A      N/A    4.00
Income - Admin. Class
PIMCO VIT Total Return - Admin.     2/1/2000   -1.99     1.37     N/A      N/A     2.82    6.61     4.16     N/A      N/A    4.82
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -7.23     N/A      N/A     N/A      N/A    1.37
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     1.32     N/A      N/A     N/A      N/A    9.92
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     0.75     N/A      N/A     N/A      N/A    9.35
Seligman Small-Cap Value - Class 1  2/1/2000   12.89    26.53     N/A      N/A    14.53   21.49    28.35     N/A      N/A   16.21
USAZ Money Market                   2/1/2000   -7.02      N/A     N/A      N/A    -1.80    1.58      N/A     N/A      N/A    2.72
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -28.49     N/A      N/A     N/A      N/A  -19.89
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -15.26     N/A      N/A     N/A      N/A   -6.66
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -16.92     N/A      N/A     N/A      N/A   -8.32
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -12.08     N/A      N/A     N/A      N/A   -3.48
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -13.55     N/A      N/A     N/A      N/A   -4.95
----------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------      *     For
Investment Options which have existed less than one year, standard cumulative total returns since inception are shown.

1.Ongoing stock market volatility can dramatically  change the Investment  Options'  short-term  performance;  current results may
differ.

2.Because Class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton  Developing  Markets Securities Fund and Templeton
Foreign Securities Fund),  standardized  Class 2 Investment Option performance for prior periods represents  historical results of
Class 1 shares.  For periods beginning 1/6/99 (or 5/1/97),  Class 2's results reflect an additional 12b-1 fee expense,  which also
affects future performance.

3.For Templeton Developing Markets Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing Markets Fund.

4. For Templeton Foreign Securities Fund,  performance prior to the 5/1/00 merger reflects the historical performance of Templeton
International Fund.

There is no  performance  shown for the USAZ AIM Basic  Value,  USAZ AIM Blue Chip,  USAZ AIM Dent  Demographic  Trends,  USAZ AIM
International  Equity,  Dreyfus Small Cap Stock Index, Dreyfus Stock Index, Jennison 20/20 Focus and the USAZ Oppenheimer Emerging
Growth  Investment  Options  because they were first offered under this Contract as of May 1, 2002. The product's bonus feature is
not reflected in these charts.
</TABLE>



<TABLE>
<CAPTION>


CHART E - INVESTMENT OPTION PERFORMANCE (NO CONTRACT CHARGES)


Total Return for the periods ended December 31, 2001
____________________________________________________________________________________________
                                                       ONE      FIVE       TEN        SINCE
INVESTMENT OPTION                                     YEAR      YEAR      YEAR      INCEPTION
                                                        %         %         %           %

<S>                                                      <C>       <C>      <C>         <C>
USAZ Alliance Capital Growth and Income                   N/A       N/A       N/A        4.67
USAZ Alliance Capital Large Cap Growth                    N/A       N/A       N/A        5.50
USAZ Alliance Capital Technology                          N/A       N/A       N/A        7.70
Davis VA Financial                                     -10.37       N/A       N/A        3.48
Davis VA Value                                         -10.39       N/A       N/A        0.21
Franklin Global Communications Securities - Class      -29.40     -1.50      3.40        6.03
21,2
Franklin Growth and Income Securities - Class 21,2      -2.28      9.94     11.22       10.15
Franklin High Income - Class 21,2                        4.18      0.30      6.20        6.25
Franklin Income Securities - Class 21,2                  0.76      7.00      9.26        9.91
Franklin Large Cap Growth Securities - Class 21,2      -11.43     11.77       N/A       12.82
Franklin Real Estate - Class 21,2                        7.88      5.94     11.45       10.22
Franklin Rising Dividends Securities - Class 21,2       13.57     11.90       N/A       11.22
Franklin Small Cap - Class 21,2                        -15.25     10.53       N/A       13.45
Franklin Small Cap Value Securities - Class 21,2        13.79       N/A       N/A        3.23
Franklin U.S. Government - Class 22                      7.37      6.79      6.91        7.69
Franklin Zero Coupon 2005 - Class 12                     8.93      7.66      8.93        9.80
Franklin Zero Coupon 2010 - Class 12                     5.62      7.98      9.87       10.34
Mutual Discovery Securities - Class 21,2                 0.24      9.12       N/A        9.27
Mutual Shares Securities - Class 21,2                    7.04     10.16       N/A       10.60
Templeton Developing Markets Securities - Class         -8.08    -11.78       N/A      -11.10
21,2,3
Templeton Foreign Securities-Class 21,2,4              -15.99      4.63       N/A        9.64
Templeton Growth Securities-Class 21,2                  -1.31      8.40       N/A       10.05
USAZ Templeton Developed Markets                          N/A       N/A       N/A        2.50
SP Jennison International Growth                       -35.92       N/A       N/A      -37.67
SP Strategic Partners Focused Growth                   -20.80       N/A       N/A      -19.93
Oppenheimer Global Securities/VA                       -12.04     15.40     13.91          NA
Oppenheimer High Income/VA                               1.97      2.87      8.71          NA
Oppenheimer Main Street Growth & Income/VA             -10.16      6.71       N/A       13.67
PIMCO VIT High Yield - Admin. Class                      2.35       N/A       N/A        1.70
PIMCO VIT StocksPLUS Growth & Income - Admin. Class    -11.43       N/A       N/A        5.73
PIMCO VIT Total Return - Admin. Class                    8.37       N/A       N/A        6.55
USAZ PIMCO Growth and Income                              N/A       N/A       N/A        1.63
USAZ PIMCO Renaissance                                    N/A       N/A       N/A       10.20
USAZ PIMCO Value                                          N/A       N/A       N/A        9.63
Seligman Small-Cap Value - Class 1                      23.52       N/A       N/A       18.14
USAZ Money Market                                        3.27       N/A       N/A        4.24
USAZ Van Kampen Aggressive Growth                         N/A       N/A       N/A      -19.00
USAZ Van Kampen Comstock                                  N/A       N/A       N/A       -5.63
USAZ Van Kampen Emerging Growth                           N/A       N/A       N/A       -7.80
USAZ Van Kampen Growth and Income                         N/A       N/A       N/A       -2.41
USAZ Van Kampen Growth                                    N/A       N/A       N/A       -3.90

1.Ongoing stock market volatility can dramatically change the Investment
  Options' short-term performance; current results may differ.

2.Because Class 2 shares were not offered until 1/6/99 (or 5/1/97 for Templeton
  Developing Markets Securities Fund and Templeton Foreign Securities Fund),
  standardized Class 2 Investment Option performance for prior periods
  represents historical results of Class 1 shares. For periods beginning 1/6/99
  (or 5/1/97), Class 2's results reflect an additional 12b-1 fee expense, which
  also affects future performance.

3.For Templeton Developing Markets Securities Fund, performance prior to the
  5/1/00 merger reflects the historical performance of the Templeton Developing
  Markets Fund.

4.For Templeton Foreign Securities Fund, performance prior to the 5/1/00 merger
  reflects the historical performance of Templeton International Fund.

There is no performance shown for the USAZ AIM Basic Value, USAZ AIM Blue Chip,
USAZ AIM Dent Demographic Trends, USAZ AIM International Equity, Dreyfus Small
Cap Stock Index, Dreyfus Stock Index, Jennison 20/20 Focus and the USAZ
Oppenheimer Emerging Growth Investment Options because they were first offered
under this Contract,as of May 1, 2002.
</TABLE>


ILLUSTRATIONS
--------------------------------------------------------------------------------


Allianz Life may also provide illustrations to customers. These illustrations
may provide hypothetical depictions of either the "pay-in", or Accumulation
Phase, or the "pay-out", or annuitization phase. Illustrations may be based upon
historical performance of the Investment Options, as adjusted for certain
expenses. (Any adjusted historical performance information will be accompanied
by "standardized" performance information.) In the alternative, certain
illustrations may be based upon an assumed rate of return not to exceed 12%. As
another illustration alternative, we may use the Standard & Poor's 500 Composite
Price Index or other recognized investment benchmark to show how values may
vary. "Pay-in" and "pay-out" illustration may have various features as follows:

o Pay-in  illustrations  assume an initial  lump sum  Purchase  Payment  and are
designed  to show how  adjusted  historical  performance  or an assumed  rate of
return would have affected  Contract  Values,  withdrawal  values,  or the death
benefit.  Pay-in  illustrations  may  also be  designed  to show the  effect  of
periodic  additional  Purchase  Payments and withdrawals.  Pay-in  illustrations
based upon adjusted historical  performance may assume that monies are allocated
to a single Investment Option or to multiple  Investment  Options.  In the event
that  monies  are  hypothetically  allocated  to  multiple  Investment  Options,
performance may be shown on a weighted  aggregate  basis.  Dollar cost averaging
illustrations,  which are based  upon  adjusted  historical  performance,  would
compare  the  hypothetical  effect  of a lump  sum  Purchase  Payments  into the
specified  Investment Options, as contrasted with dollar cost averaging into the
Investment  Options  over some  period.  Pay-in  illustrations  will reflect the
bonus.

o  Pay-out  illustrations  are  designed  to show  the  hypothetical  effect  of
annuitizing  a  Contract,  or  receiving a stream of  periodic  payments.  These
illustrations   may  depict   either  a  variable   annuitization   or  a  fixed
annuitization. A variable pay-out illustration would be based upon a combination
of adjusted historical performance or on the historical returns of an investment
benchmark, an assumed investment return (AIR), and the Annuitant's age whereas a
fixed pay-out  illustration would be based upon the Annuitant's age, the pay-out
option selected, and the pay-out factor rates currently in effect on the date of
the  illustration.  Variable pay-out  illustrations may also show the portion of
each pay-out that is subject to income tax and the portion that is  non-taxable.
Where  applicable,  a pay-out  illustration will show the effect of the Enhanced
GMIB  or  GMDB  that  is  credited  to  a  Contract  in  the  event  of  certain
annuitizations  or death  benefit  payouts.  In addition  to variable  and fixed
pay-out  illustrations,  an illustration may also be prepared showing the effect
of required minimum distribution payments from Qualified Contracts.

The values illustrated will be calculated reflecting the deduction of Investment
Option expenses for the specific Investment Options selected and mortality and
expense risk charges. Contract maintenance charges may or may not be deducted.
For assumed rate or investment benchmark pay-in illustrations, where no
Investment Options are selected, an arithmetic average of Investment Option
expenses will be reflected. The amount of the mortality and expense risk charges
will vary, depending upon the Contract features you select. For withdrawal
values, the contingent deferred sales charges are also reflected. Illustrations
will not reflect the deduction of any Federal or state income tax or penalties.

The illustrations that are given to customers by Allianz Life are designed to
assist customers in understanding how a Contract may function in different
scenarios. They are not guarantees or representations as to future performance
or any specific rate of return.

More detailed information about customer illustrations is found in Appendix A to
this SAI. This information is incorporated herein by reference.

FEDERAL TAX STATUS
-------------------------------------------------------------------------------

Note: The following description is based upon the Insurance Company's
understanding of current federal income tax law applicable to annuities in
general. The Insurance Company cannot predict the probability that any changes
in such laws will be made. Purchasers are cautioned to seek competent tax advice
regarding the possibility of such changes. The Insurance Company does not
guarantee the tax status of the Contracts. Purchasers bear the complete risk
that the Contracts may not be treated as "annuity contracts" under federal
income tax laws. It should be further understood that the following discussion
is not exhaustive and that special rules not described herein may be applicable
in certain situations. Moreover, no attempt has been made to consider any
applicable state or other tax laws.

GENERAL

Section 72 of the Internal Revenue Code of 1986, as amended ("Code") governs
taxation of annuities in general. A Contract Owner is not taxed on increases in
the value of a Contract until distribution occurs, either in the form of a lump
sum payment or as Annuity Payments under the Annuity Option elected. For a lump
sum payment received as a total withdrawal (total redemption) or death benefit,
the recipient is taxed on the portion of the payment that exceeds the cost basis
of the Contract. For Non-Qualified Contracts, this cost basis is generally the
Purchase Payments, while for Qualified Contracts there may be no cost basis. The
taxable portion of the lump sum payment is taxed at ordinary income tax rates.

For Annuity Payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed Annuity Option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period certain or refund
feature) bears to the expected return under the Contract. The exclusion amount
for payments based on a variable Annuity Option is determined by dividing the
cost basis of the Contract (adjusted for any period certain or refund guarantee)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the Contract has been recovered (i.e. when the
total of the excludible amounts equal the investment in the Contract) are fully
taxable. The taxable portion is taxed at ordinary income rates. For certain
types of Qualified Plans there may be no cost basis in the Contract within the
meaning of Section 72 of the Code. Contract Owners, Annuitants and Beneficiaries
under the Contracts should seek competent financial advice about the tax
consequences of any distributions.

The Insurance Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the Separate Account is not a separate entity from
the Insurance Company, and its operations form a part of the Insurance Company.

DIVERSIFICATION

Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the Contract as
an annuity contract would result in imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contracts meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. government securities and securities of other regulated investment
companies.

On March 2, 1989, the Treasury Department issued regulations (Treas. Reg.
1.817-5) which established diversification requirements for the Investment
Options underlying variable contracts such as the Contracts. The regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the regulations, an Investment Option will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
Investment Option is represented by any one investment; (2) no more than 70% of
the value of the total assets of the Investment Option is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
Investment Option is represented by any three investments; and (4) no more than
90% of the value of the total assets of the Investment Option is represented by
any four investments.

The Code provides that for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."

The Insurance Company intends that all Investment Options underlying the
Contract will be managed by the investment managers in such a manner as to
comply with these diversification requirements.

The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Contract Owner control
of the investments of the Separate Account will cause the Contract Owner to be
treated as the owner of the assets of the Separate Account, thereby resulting in
the loss of favorable tax treatment for the Contract. At this time it cannot be
determined whether additional guidance will be provided and what standards may
be contained in such guidance.

The amount of Contract Owner control which may be exercised under the Contract
is different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Contract Owner's ability to transfer
among investment choices or the number and type of investment choices available,
would cause the Contract Owner to be considered as the owner of the assets of
the Separate Account resulting in the imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to
receipt of payments under the Contract.

In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance is not considered to set forth a new
position, it may be applied retroactively resulting in the Contract Owner being
retroactively determined to be the owner of the assets of the Separate Account.
Due to the uncertainty in this area, the Insurance Company reserves the right to
modify the Contract in an attempt to maintain favorable tax treatment.

MULTIPLE CONTRACTS

The Code provides that multiple Non-Qualified deferred annuity contracts which
are issued within a calendar year period to the same contract owner by one
company or its affiliates are treated as one annuity contract for purposes of
determining the tax consequences of any distribution. Such treatment may result
in adverse tax consequences, including more rapid taxation of the distributed
amounts from such combination of contracts. For purposes of this rule, contracts
received in a Section 1035 exchange will be considered issued in the year of the
exchange. Contract Owners should consult a tax adviser prior to purchasing more
than one Non-Qualified annuity contract in any calendar year period.

PARTIAL 1035 EXCHANGES

Section 1035 of the Code provides that an annuity contract may be exchanged in a
tax-free transaction for another annuity contract. Historically, it was presumed
that only the exchange of an entire contract, as opposed to a partial exchange,
would be accorded tax-free status. In 1998 in CONWAY VS. COMMISSIONER, the Tax
Court held that the direct transfer of a portion of an annuity contract into
another annuity contract Qualified as a non-taxable exchange. On November 22,
1999, the Internal Revenue Service filed an Action on Decision which indicated
that it acquiesced in the Tax Court decision in CONWAY. However, in its
acquiescence with the decision of the Tax Court, the Internal Revenue Service
stated that it will challenge transactions where taxpayers enter into a series
of partial exchanges and annuitizations as part of a design to avoid application
of the 10% premature distribution penalty or other limitations imposed on
annuity contracts under the Code. In the absence of further guidance from the
Internal Revenue Service it is unclear what specific types of partial exchange
designs and transactions will be challenged by the Internal Revenue Service. Due
to the uncertainty in this area owners should consult their own tax advisers
prior to entering into a partial exchange of an annuity contract.

CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS

Under Section 72(u) of the Code, the investment earnings on Purchase Payments
for the Contracts will be taxed currently to the Contract Owner if the Owner is
a non-natural person, e.g., a corporation or certain other entities. Such
Contracts generally will not be treated as annuities for federal income tax
purposes. However, this treatment is not applied to Contracts held by a trust or
other entity as an agent for a natural person nor to Contracts held by Qualified
plans. Purchasers should consult their own tax counsel or other tax adviser
before purchasing a Contract to be owned by a non-natural person.

ASSIGNMENTS, PLEDGES AND GRATUITOUS TRANSFERS

Other than in the case of Qualified Contracts (which generally cannot be
assigned or pledged), any assignment or pledge of (or agreement to assign or
pledge) any portion of the Accumulation Value is treated for federal income tax
purposes as a withdrawal of such amount or portion. The investment in the
Contract is increased by the amount includible as income with respect to such
amount or portion, though it is not affected by any other aspect of the
assignment or pledge (including its release). If a Contract Owner transfers a
Contract without adequate consideration to a person other than the Contract
Owner's spouse (or to a former spouse incident to divorce), the Contract Owner
will be taxed on the difference between his or her Accumulation Value and the
investment in the Contract at the time of transfer. In such case, the
transferee's investment in the Contract will be increased to reflect the
increase in the transferor's income.

The transfer or assignment of ownership of the Contract, the designation of an
Annuitant, the selection of certain annuity starting dates, or the exchange of
the Contract may result in certain other tax consequences that are not discussed
herein. A Contract Owner contemplating any such transfer, assignment, or
exchange should consult a tax advisor as to the tax consequences.

DEATH BENEFITS

Any death benefits paid under the Contract are taxable to the Beneficiary. The
rules governing the taxation of payments from an annuity contract, as discussed
above, generally apply to the payment of death benefits and depend on whether
the death benefits are paid as a lump sum or as Annuity Payments. Estate taxes
may also apply.

INCOME TAX WITHHOLDING

All distributions or the portion thereof which is includible in the gross income
of the Contract Owner are subject to federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at the
rate of 10% from non-periodic payments. However, the Contract Owner, in most
cases, may elect not to have taxes withheld or to have withholding done at a
different rate.

Certain distributions from retirement plans qualified under Section 401 or
Section 403(b) of the Code, which are not directly rolled over to another
eligible retirement plan or individual retirement account or individual
retirement annuity, are subject to a mandatory 20% withholding for federal
income tax. The 20% withholding requirement generally does not apply to: (a) a
series of substantially equal payments made at least annually for the life or
life expectancy of the participant or joint and last survivor expectancy of the
participant and a designated Beneficiary, or for a specified period of 10 years
or more; or (b) distributions which are required minimum distributions; or (c)
the portion of the distributions not includible in gross income (i.e. returns of
after-tax contributions); or (d) hardship withdrawals. Participants should
consult their own tax counsel or other tax adviser regarding withholding
requirements.

REQUIRED DISTRIBUTIONS

In order to be treated as an annuity contract for Federal income tax purposes,
Section 72(s) of the Code requires any Non-Qualified Contract to contain certain
provisions specifying how your interest in the Contract will be distributed in
the event of the death of an owner of the Contract. Specifically, section 72(s)
requires that (a) if any owner dies on or after the annuity starting date, but
prior to the time the entire interest in the contract has been distributed, the
entire interest in the contract will be distributed at least as rapidly as under
the method of distribution being used as of the date of such owner's death; and
(b) if any owner dies prior to the annuity starting date, the entire interest in
the contract will be distributed within five years after the date of such
owner's death. These requirements will be considered satisfied as to any portion
of an owner's interest which is payable to or for the benefit of a designated
Beneficiary and which is distributed over the life of such designated
Beneficiary or over a period not extending beyond the life expectancy of that
Beneficiary, provided that such distributions begin within one year of the
owner's death. The designated Beneficiary refers to a natural person designated
by the owner as a Beneficiary and to whom ownership of the contract passes by
reason of death. However, if the designated Beneficiary is the surviving spouse
of the deceased owner, the contract may be continued with the surviving spouse
as the new owner. If the owner of the contract is a non-natural person, then the
death or change of an annuitant is treated as the death of the owner.

The Non-Qualified Contracts contain provisions that are intended to comply with
these Code requirements, although no regulations interpreting these requirements
have yet been issued. We intend to review such provisions and modify them if
necessary to assure that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.



TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS

Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the contract value exceeds the aggregate Purchase
Payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any distribution. However, the penalty is not imposed on amounts received: (a)
after the taxpayer reaches age 59 1/2; (b) after the death of the Contract
Owner; (c) if the taxpayer is totally disabled (for this purpose disability is
as defined in Section 72(m)(7) of the Code); (d) in a series of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the taxpayer or for the joint lives (or joint life
expectancies) of the taxpayer and his Beneficiary; (e) under an immediate
annuity; or (f) which are allocable to Purchase Payments made prior to August
14, 1982.


With respect to (d) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used. A partial liquidation (withdrawal) during
the Payout Phase may result in the modification of the series of Annuity
Payments made after such liquidation and therefore could result in the
imposition of the 10% penalty tax and interest for the period as described above
unless another exception to the penalty tax applies. You should obtain competent
tax advice before you make any liquidations from your Contract.

The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts.")

QUALIFIED PLANS

The Contracts offered by the Prospectus are designed to be suitable for use
under various types of Qualified Plans. Because of the minimum Purchase Payment
requirements, these Contracts may not be appropriate for some periodic payment
retirement plans. Taxation of participants in each Qualified Plan varies with
the type of plan and terms and conditions of each specific plan. Contract
Owners, Annuitants and beneficiaries are cautioned that benefits under a
Qualified Plan may be subject to the terms and conditions of the plan regardless
of the terms and conditions of the Contracts issued pursuant to the plan. Some
retirement plans are subject to distribution and other requirements that are not
incorporated into the Insurance Company's administrative procedures. The Company
is not bound by the terms and conditions of such plans to the extent such terms
conflict with the terms of a Contract, unless the Company specifically consents
to be bound.

A Qualified Contract will not provide any necessary or additional tax deferral
if it is used to fund a Qualified Plan that is tax deferred. However, the
Contract has features and benefits other than tax deferral that may make it an
appropriate investment for a Qualified Plan. Contract Owners, participants and
beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the Contracts comply with applicable law.
Following are general descriptions of the types of Qualified Plans with which
the Contracts may be used. Such descriptions are not exhaustive and are for
general informational purposes only. The tax rules regarding Qualified Plans are
very complex and will have differing applications, depending on individual facts
and circumstances. Each purchaser should obtain competent tax advice prior to
purchasing a Contract issued under a Qualified Plan.

On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Insurance Company in
connection with Qualified Plans will utilize annuity tables which do not
differentiate on the basis of sex. Such annuity tables will also be available
for use in connection with certain Non-Qualified deferred compensation plans.

Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available and described in
this Statement of Additional Information. Generally, Contracts issued pursuant
to Qualified Plans are not transferable except upon withdrawal or annuitization.
Various penalty and excise taxes may apply to contributions or distributions
made in violation of applicable limitations. Furthermore, certain withdrawal
penalties and restrictions may apply to withdrawals from Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts.")

A.  TAX-SHELTERED ANNUITIES

Section 403(b) of the Code permits the purchase of "tax-sheltered annuities" by
public schools and certain charitable, educational and scientific organizations
described in Section 501(c)(3) of the Code. These qualifying employers may make
contributions to the Contracts for the benefit of their employees. Such
contributions are not includible in the gross income of the employee until the
employee receives distributions from the Contract. The amount of contributions
to the tax-sheltered annuity is limited to certain maximums imposed by the Code.
Furthermore, the Code sets forth additional restrictions governing such items as
transferability, distributions, nondiscrimination and withdrawals. (See "Tax
Treatment of Withdrawals - Qualified Contracts" and "Tax-Sheltered Annuities -
Withdrawal Limitations.") Employee loans are not allowed under these Contracts.
Any employee should obtain competent tax advice as to the tax treatment and
suitability of such an investment.

B.  INDIVIDUAL RETIREMENT ANNUITIES

Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed to an
IRA which may be deductible from the individual's taxable income. These IRAs are
subject to limitations on eligibility, contributions, transferability and
distributions. (See "Tax Treatment of Withdrawals - Qualified Contracts.") Under
certain conditions, distributions from other IRAs and other Qualified Plans may
be rolled over or transferred on a tax-deferred basis into an IRA. Sales of
Contracts for use with IRAs are subject to special requirements imposed by the
Code, including the requirement that certain informational disclosure be given
to persons desiring to establish an IRA. Purchasers of Contracts to be qualified
as Individual Retirement Annuities should obtain competent tax advice as to the
tax treatment and suitability of such an investment.

ROTH IRAS

Section 408A of the Code provides that beginning in 1998, individuals may
purchase a new type of non-deductible IRA, known as a Roth IRA. Purchase
payments for a Roth IRA are limited to a maximum amount each year and are not
deductible from taxable income. Lower maximum limitations apply to individuals
with adjusted gross incomes between $95,000 and $110,000 in the case of single
taxpayers, between $150,000 and $160,000 in the case of married taxpayers filing
joint returns, and between $0 and $10,000 in the case of married taxpayers
filing separately. An overall annual limitation continues to apply to all of a
taxpayer's IRA contributions, including Roth IRA and non-Roth IRAs.

Qualified distributions from Roth IRAs are free from federal income tax. A
Qualified distribution requires that an individual has held the Roth IRA for at
least five years and, in addition, that the distribution is made either after
the individual reaches age 59 1/2, on the individual's death or disability, or
as a qualified first-time home purchase, subject to a $10,000 lifetime maximum,
for the individual, a spouse, child, grandchild, or ancestor. Any distribution
which is not a qualified distribution is taxable to the extent of earnings in
the distribution. Distributions are treated as made from contributions first and
therefore no distributions are taxable until distributions exceed the amount of
contributions to the Roth IRA. The 10% penalty tax and the regular IRA
exceptions to the 10% penalty tax apply to taxable distributions from a Roth
IRA.

Amounts may be rolled over from one Roth IRA to another Roth IRA. Furthermore,
an individual may make a rollover contribution from a non-Roth IRA to a Roth
IRA, unless the individual has adjusted gross income over $100,000 or the
individual is a married taxpayer filing a separate return. The individual must
pay tax on any portion of the IRA being rolled over that represents income or a
previously deductible IRA contribution. However, for rollovers in 1998, the
individual may pay that tax ratably over the four taxable year periods beginning
with tax year 1998. Purchasers of Contracts to be qualified as a Roth IRA should
obtain competent tax advice as to the tax treatment and suitability of such an
investment.

C.  PENSION AND PROFIT-SHARING PLANS

Sections 401(a) and 401(k) of the Code permit employers, including self-employed
individuals, to establish various types of retirement plans for employees. These
retirement plans may permit the purchase of the Contracts to provide benefits
under the Plan. Contributions to the Plan for the benefit of employees will not
be includible in the gross income of the employee until distributed from the
Plan. The tax consequences to participants may vary, depending upon the
particular Plan design. However, the Code places limitations and restrictions on
all Plans, including on such items as: amount of allowable contributions; form,
manner and timing of distributions; transferability of benefits; vesting and
nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions and withdrawals.
Participant loans are not allowed under the Contracts purchased in connection
with these Plans. (See "Tax Treatment of Withdrawals - Qualified Contracts.")
Purchasers of Contracts for use with Pension or Profit-Sharing Plans should
obtain competent tax advice as to the tax treatment and suitability of such an
investment.


TAX TREATMENT OF WITHDRAWALS - QUALIFIED CONTRACTS

In the case of a withdrawal under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a Qualified
Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including Contracts
issued and qualified under Code Sections 401 (Pension and Profit-Sharing Plans),
403(b) (Tax-Sheltered Annuities) and 408 and 408A (Individual Retirement
Annuities). To the extent amounts are not includible in gross income because
they have been properly rolled over to an IRA or to another eligible Qualified
Plan, no tax penalty will be imposed. The tax penalty will not apply to the
following distributions: (a) if distribution is made on or after the date on
which the Contract Owner or Annuitant (as applicable) reaches age 59 1/2; (b)
distributions following the death or disability of the Contract Owner or
Annuitant (as applicable) (for this purpose disability is as defined in Section
72(m)(7) of the Code); (c) after separation from service, distributions that are
part of substantially equal periodic payments made not less frequently than
annually for the life (or life expectancy) of the Contract Owner or Annuitant
(as applicable) or the joint lives (or joint life expectancies) of such Contract
Owner or Annuitant (as applicable) and his or her designated Beneficiary; (d)
distributions to a Contract Owner or Annuitant (as applicable) who has separated
from service after he or she has attained age 55; (e) distributions made to the
Contract Owner or Annuitant (as applicable) to the extent such distributions do
not exceed the amount allowable as a deduction under Code Section 213 to the
Contract Owner or Annuitant (as applicable) for amounts paid during the taxable
year for medical care; (f) distributions made to an alternate payee pursuant to
a qualified domestic relations order; (g) distributions made on account of an
IRS levy upon the Qualified Contract; (h) distributions from an Individual
Retirement Annuity for the purchase of medical insurance (as described in
Section 213(d)(1)(D) of the Code) for the Contract Owner or Annuitant (as
applicable) and his or her spouse and dependents if the Contract Owner or
Annuitant (as applicable) has received unemployment compensation for at least 12
weeks (this exception no longer applies after the Contract Owner or Annuitant
(as applicable) has been re-employed for at least 60 days); (i) distributions
from an Individual Retirement Annuity made to the Owner or Annuitant (as
applicable) to the extent such distributions do not exceed the qualified higher
education expenses (as defined in Section 72(t)(7) of the Code) of the Owner or
Annuitant (as applicable) for the taxable year; and (j) distributions from an
Individual Retirement Annuity made to the Owner or Annuitant (as applicable)
which are qualified first-time home buyer distributions (as defined in Section
72(t)(8) of the Code). The exceptions stated in items (d) and (f) above do not
apply in the case of an Individual Retirement Annuity. The exception stated in
item (c) applies to an Individual Retirement Annuity without the requirement
that there be a separation from service.


With respect to (c) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.

A partial liquidation (withdrawal) during the Payout Phase may result in the
modification of the series of Annuity Payments made after such liquidation and
therefore could result in the imposition of the 10% penalty tax and interest for
the period as described above unless another exception to the penalty tax
applies. You should obtain competent tax advice before you make any liquidations
from your Contract.

Generally, distributions from a Qualified Plan must commence no later than April
1 of the calendar year following the later of: (a) the year in which the
employee attains age 70 1/2, or (b) the calendar year in which the employee
retires. The date set forth in (b) does not apply to an Individual Retirement
Annuity or to a "5% owner" (as defined in the Code). Required distributions must
be over a period not exceeding the life expectancy of the individual or the
joint lives or life expectancies of the individual and his or her designated
Beneficiary. If the required minimum distributions are not made, a 50% penalty
tax is imposed as to the amount not distributed.

Many withdrawals from Qualified Contracts can be rolled over to an IRA or
another qualified retirement plan. If you receive a withdrawal from a Qualified
Contract that could be rolled over and you do not elect to make a direct
rollover of that amount to an IRA or qualified plan, 20% of the taxable amount
must by law be withheld by us for taxes. In situations where this mandatory tax
withholding does not apply, other tax amounts may be withheld unless you elect
out of the withholding. You may request more detailed information about income
tax withholding at the time of a withdrawal.


TAX-SHELTERED ANNUITIES - WITHDRAWAL LIMITATIONS


The Code limits the withdrawal of amounts attributable to contributions made
pursuant to a salary reduction agreement (as defined in Section 403(b)(11) of
the Code) to circumstances only when the Contract Owner: (1) attains age 59 1/2;
(2) separates from service; (3) dies; (4) becomes disabled (within the meaning
of Section 72(m)(7) of the Code); or (5) in the case of hardship. However,
withdrawals for hardship are restricted to the portion of the Contract Owner's
Contract Value which represents contributions by the Contract Owner and does not
include any investment results. The limitations on withdrawals became effective
on January 1, 1989 and apply only to salary reduction contributions made after
December 31, 1988, and to income attributable to such contributions and to
income attributable to amounts held as of December 31, 1988. The limitations on
withdrawals do not affect rollovers and transfers between certain Qualified
Plans. Contract Owners should consult their own tax counsel or other tax adviser
regarding any distributions.

Although the likelihood of legislative changes is uncertain, there is always the
possibility that the tax treatment of the Contract could change by legislation
or otherwise. Consult a tax adviser with respect to legislative developments and
their effect on the Contract.

We have the right to modify the Contract in response to legislative changes that
could otherwise diminish the favorable tax treatment that annuity Contract
Owners currently receive. We make no guarantee regarding the tax status of any
Contract and do not intend the above discussion as tax advice.


ANNUITY PROVISIONS
--------------------------------------------------------------------------------

FIXED ANNUITY PAYOUT

A fixed annuity is an annuity with payments which are guaranteed as to dollar
amount by the Insurance Company and do not vary with the investment experience
of an Investment Option. The Fixed Account value on the day immediately
preceding the Income Date will be used to determine the Fixed Annuity monthly
payment. The monthly Annuity Payment will be based upon the Contract Value at
the time of annuitization, the Annuity Option selected, the age of the Annuitant
and any joint Annuitant and the sex of the Annuitant and joint Annuitant where
allowed.

VARIABLE ANNUITY PAYOUT

A variable annuity is an annuity with payments which: (1) are not predetermined
as to dollar amount; and (2) will vary in amount with the net investment results
of the applicable Investment Option(s).

ANNUITY UNIT VALUE

On the Income Date, a fixed number of Annuity Units will be purchased as
follows:

The first Annuity Payment is equal to the Adjusted Contract Value, divided first
by $1,000 and then multiplied by the appropriate Annuity Payment amount for each
$1,000 of value for the Annuity Option selected. In each subaccount the fixed
number of Annuity Units is determined by dividing the amount of the initial
Annuity Payment determined for each subaccount by the Annuity Unit value on the
Income Date. Thereafter, the number of Annuity Units in each subaccount remains
unchanged unless the Contract Owner elects to transfer between Investment
Options. All calculations will appropriately reflect the Annuity Payment
frequency selected.

On each subsequent Annuity Payment date, the total Annuity Payment is the sum of
the Annuity Payments for each subaccount. The Annuity Payment in each subaccount
is determined by multiplying the number of Annuity Units then allocated to such
subaccount by the Annuity Unit value for that subaccount. On each subsequent
valuation date, the value of an Annuity Unit is determined in the following way:

First: The Net Investment Factor is determined as described in the Prospectus
under "Purchase - Accumulation Units."

Second: The value of an Annuity Unit for a valuation period is equal to:

a. the value of the Annuity Unit for the immediately preceding valuation period.

b. multiplied by the Net Investment Factor for the current valuation period;

c. divided by the Assumed Net Investment Factor (see below) for the valuation
period.

The Assumed Net Investment Factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the particular Valuation Period. The Assumed Investment
Return that the Insurance Company will use is 5%. However, the Company may agree
to use a different rate (which will never exceed 7%).



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

The audited consolidated financial statements of the Insurance Company as of and
for the year ended December 31, ____, included herein should be considered only
as bearing upon the ability of the Insurance Company to meet its obligations
under the Contracts. The audited financial statements of the Separate Account as
of and for the year ended December 31, ____ are also included herein.


<PAGE>


                            APPENDIX A - ILLUSTRATIONS                       A-1
                              IMPORTANT DISCLOSURES
                        ADJUSTED HISTORICAL ILLUSTRATION

THIS IS AN ILLUSTRATION NOT A CONTRACT.  The purpose of this  illustration is to
demonstrate  how the  performance of the underlying  Investment  Options offered
through the Contract may affect  Contract  Values,  death  benefits,  and income
benefits  over an  extended  period  of  time.  This  illustration  is  based on
historical  rates of return  and is not  intended  to serve as a  projection  or
prediction of future  investment  returns.  It illustrates how much the Contract
would  hypothetically  be worth,  and how much the guaranteed  death benefit and
guaranteed  minimum income benefit would be, at the end of each year if: (1) the
product  were  offered and the customer  purchased  the variable  annuity on the
hypothetical  Contract  date;  (2) the customer  had made the Purchase  Payments
shown;  and  (3)  the  customer  had  allocated  the  Purchase  Payments  to the
Investment Options indicated.

To assist you in understanding  this  illustration,  mathematical  depictions of
hypothetical performance may be accompanied by visual depictions,  including pie
charts, graphs, and other types of charts.

The  value of a  variable  annuity  will  fluctuate  up and  down,  based on the
performance of the  underlying  Investment  Options,  and the Contract Owner may
experience a gain or loss.  Actual  investment  results may be more or less than
those  shown on this  illustration  and will  depend  on a  number  of  factors,
including  the choice  and  investment  experience  of the  variable  Investment
Options.

 This illustration may illustrate adjusted historical performance for one or
 more Investment Options. If more than one option is illustrated, performance
 may be shown as aggregate performance for all Investment Options selected. In
 addition, if you elect to illustrate more than one Investment Option and to
 hypothetically allocate more money to one option than to other options (for
 example, 50% to one option, 30% to a second option, and 20% to a third option),
 performance may be shown as weighted aggregate performance.

Performance  data for the Investment  Options  illustrated in this  illustration
reflects the deduction of the Contract  separate account  insurance  charges and
contract maintenance charge. The fees and expenses of the underlying  Investment
Options  which serve as funding  vehicles  are also  reflected.  The  contingent
deferred sales charge (CDSC) may or may not be reflected, depending upon what is
being illustrated.  For example, the CDSC would be deducted from cash withdrawal
value figures that are illustrated, but not Contract Value figures. Please refer
to the prospectus for full details on charges, expenses and fees.

STANDARDIZED   AVERAGE  ANNUAL  RETURN:  Any  adjusted  historical   performance
illustration  is  accompanied  by  Standardized  Average  Annual Return for each
Investment  Option  depicted  in  the  illustration.   Standardized   return  is
calculated  using uniform  guidelines as mandated by the Securities and Exchange
Commission.  Standardized  return figures assume a one-time lump sum investment,
and do not reflect the effect of taxation.  Standardized return is shown for the
most  recent  1, 5,  and 10 year  periods,  or from  the  inception  date of the
sub-account,  if later.  In contrast,  illustration  material may depict returns
from  the  inception  date of the  applicable  portfolio,  if  earlier  than the
inception date of the  sub-account.  Standardized  return includes the effect of
all  portfolio  expenses and all Contract  expenses.  If Contract  expenses vary
depending upon which features are selected, standardized return will reflect the
highest  potential  expenses.  In  contrast,  an  illustration  may reflect only
certain expenses.  Standardized  return also assumes the assessment of a CDSC at
the end of each  applicable  period.  Standardized  return is computed as of the
most recent calendar quarter.

The  ADJUSTED  HISTORICAL  AVERAGE  ANNUAL  RETURN  is based  upon the  weighted
aggregate  historical  rate  of  return  on  the  Investment  Options  selected,
commencing on the  hypothetical  purchase  date,  and  calculates  the change in
Contract Value from the beginning of the

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


This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.


 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                             A-2

hypothetical period to the end of the period, adjusted for additional Purchase
Payments and any withdrawals. The adjusted historical average annual return
commences on the inception date of the Investment Option and includes mortality
& expense charges, administration charges, and Investment Option fees, but does
not include CDSC.

Weighted aggregate return for the portfolios selected for the total period shown
is: XX.XX%. Average annual returns for each of the Investment Options selected
for the most recent 1, 5, and 10 year periods (computed as of the most recent
calendar quarter) are shown on another page of this illustration.


TAXES: The effect of income taxes, penalty taxes, and premium taxes have not
been reflected in this illustration.While withdrawals may or may not be depicted
within this illustration, withdrawals from the Contract will be subject to
ordinary income tax to the extent that the Contract Value immediately before the
withdrawal exceeds the total amount of after-tax money paid into the Contract. A
withdrawal in excess of the taxable amount will constitute a nontaxable return
of principal. If the taxpayer has not attained age 59 1/2 at the time of the
distribution, the portion of the withdrawal that is subject to income tax may
also be subject to a 10% premature distribution penalty. Please read the
prospectus for further information.

For any tax-qualified account, e.g., IRA, or TSA, the tax deferred growth
feature is already provided by the tax Qualified retirement plan. Therefore,
product features and benefits other than Tax Deferral should be reasons for
acquiring an annuity in a Qualified retirement plan. If the Contract is an
individual retirement annuity or other Qualified Contract, the Contract Owner
will generally be taxed on all amounts withdrawn, or received on withdrawal. The
tax consequences will be different, however, if the Contract is a Roth IRA, or a
traditional non-deductible IRA. See your tax advisor and read the prospectus for
additional information.


The tax treatment of death benefit proceeds of an annuity Contract differs from
the tax treatment of a life insurance policy. See your tax advisor and the
prospectus for further details.

Please read the prospectus for further information.

BONUS: The Contract provides a bonus during the Accumulation Phase based on
total net Purchase Payments made prior to age 81 based on the following
schedule:

                  NET
                  PURCHASE
                  PAYMENT                             BONUS
                  $0 - $24,999                           4%
                  $25,000 - $99,999                      5%
                  $100,000 - $999,999                    6%
                  $1,000,000 - $4,999,999                7%
                  $5,000,000 +                           8%

Bonus amounts are available for withdrawal, annuitization or payment of the
death benefit only when such amounts become vested as follows:

                                      VESTING
                  YEAR              PERCENTAGE
                    1                      0%
                    2                     35%
                    3                     70%
                    4+                    100%


--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                             A-3

Allianz Life deducts a higher mortality and expense risk charge and assesses a
CDSC based on a longer and higher schedule of charges to cover the cost of
providing the bonus. If you withdraw a portion of your Contract while the CDSC
still applies, your net proceeds may be lower than if you had purchased an
annuity without a bonus. Likewise, over time, the amount of the bonus may be
offset by the higher mortality and expense risk charges.

COSTS AND EXPENSES: The Contract has insurance features and investment features,
and there are costs related to each.

Each year, Allianz Life deducts a $40 contract maintenance charge from your
Contract. Allianz Life currently waives this charge if the value of your
Contract is at least $75,000.

Allianz Life deducts a mortality and expense risk charge which varies depending
upon the Guaranteed Minimum Death Benefit (GMDB) and Guaranteed Minimum Income
Benefit (GMIB) you choose. If you choose a GMIB, a Guaranteed Partial Withdrawal
Benefit (GPWB) will automatically be included in the Contract with no additional
charge. Allianz Life also deducts an administrative charge. These charges,
together with the contract maintenance charge, are for expenses associated with
the administration of the Contract. The table below shows the combinations
available to you and their charges during the Accumulation Phase, as a
percentage of the average daily value of the Contract Value invested in the
Variable Options.

<TABLE>
<CAPTION>

                                             CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACTS WITH
                                                        NO GMIB                   TRADITIONAL  GMIB            ENHANCED GMIB
                                               M&E       Admin.      Total     M&E     Admin.      Total   M&E       Admin.   Total
                                              CHARGE     CHARGE      CHARGE   CHARGE   CHARGE      CHARGE  CHARGE    CHARGE  CHARGE
<S>                                             <C>       <C>        <C>       <C>       <C>        <C>     <C>       <C>     <C>
Traditional Guaranteed Minimum Death Benefit    1.55%     .15%       1.70%     1.75%     .15%       1.90%   2.25%     .15%    2.40%
Enhanced Guaranteed Minimum Death Benefit       1.85%     .15%       2.00%     2.00%     .15%       2.15%   2.45%     .15%    2.60%
</TABLE>

The selection of the GMIB and the GMDB must be made at the time of initial
Purchase Payment. Once selected, they cannot be changed.

The GMIB guarantees that your Annuity Payments will be equal to the guaranteed
fixed payout rates applied to the GMIB value. We will use current fixed payout
rates applied to the Contract Value adjusted for any applicable MVA (less any
contingent deferred sales charges and any applicable premium taxes) to calculate
your Annuity Payments if that produces a greater payment. However, if we do not
use the GMIB value to calculate your Annuity Payments you will incur higher
Contract expenses without receiving any explicit benefit from the GMIB option.

The GMIB is subject to a 10-year waiting period and your Contract must be
annuitized under one of the fixed Annuity Options. If a period certain annuity
option is chosen, the period must be a minimum of 10 years. If you do not hold
your Contract for ten years before the Income Date, you cannot take advantage of
the GMIB benefit.

You can always annuitize your Contract Value (adjusted for any MVA) three years
or more after the Issue Date under a fixed and/or variable Annuity Option. Some
states may require a shorter period of time. The GPWB guarantees an annual
income through partial withdrawals equal to 10% of the GPWB value at the time of
exercise after the 10th Contract Anniversary until the GPWB value is less than
the GPWB benefit. Each GPWB benefit reduces the GPWB value. Any partial
withdrawal made in excess of the GPWB benefit reduces the GPWB value
proportionally, The GPWB benefit is paid until the GPWB benefit is greater than
the GPWB value, at which time the balance is paid. At the time the last GPWB
benefit has been paid, you have the option of either annuitizing or receiving a
lump sum payment of the remaining Contract value adjusted for any applicable MVA
(less any contingent deferred sales charges and any applicable premium taxes).

The Traditional GMIB and GPWB Values are equal to the total Purchase Payments
adjusted for partial withdrawals.

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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                           A-4

The Enhanced GMDB and GMIB and GPWB Values are equal to the greater of:
o    total Purchase Payments adjusted for partial withdrawals increased by 3% on
     each Contract Anniversary prior to age 81 (maximum of 150% of purchase
     payments adjusted for partial withdrawals); or
o    the maximum Contract Value on any Contract Anniversary plus subsequent
     additional Purchase Payments and minus subsequent adjusted partial
     withdrawals prior to age 81.

The Traditional GMDB guarantees the greater of the following, less any
applicable premium tax:
o Contract Value or
o total Purchase Payments adjusted for partial withdrawals.

The Enhanced GMDB guarantees the greater of the following, less any applicable
premium tax:
o Contract Value or
o the enhanced guaranteed minimum death benefit (see above).

 If you take money out of the Contract, Allianz Life may assess a CDSC. The CDSC
starts at 8.5% in the first Contract year and declines to 0% after Contract year
10.

There are also daily investment portfolio charges which currently range, on an
annual basis, from 0.57% to 1.82% of the average daily value of the Portfolio,
depending upon the Portfolio.

This illustration reflects the costs of all optional features you have selected.
It does not reflect costs associated with features you have not selected. If you
choose to add optional features, it will increase costs and reduce returns. Some
optional features must be selected at the issue date, and cannot be added once
the Contract is issued.

The "CONTRACT VALUE" for any point in time is an amount equal to the sum of each
Accumulation Unit Value multiplied by the number of Units allocated to the
Contract for each Investment Option. This value will fluctuate due to the
investment performance of the selected Investment Option(s). The Contract Value
reflects all portfolio expenses and all charges for the Contract features
selected, but does not include the CDSC. It also does not reflect the impact of
premium taxes, income taxes or the 10% federal penalty tax for withdrawals prior
to age 59 1/2.

The "CASH WITHDRAWAL VALUE" reflects all of the expenses and charges assessed
against "Contract Value", and also reflects any CDSC if applicable. It does not
reflect the impact of premium taxes, income taxes or the 10% federal penalty tax
for withdrawals prior to age 59 1/2.

 IMPORTANT CONSIDERATIONS: Past performance is not necessarily indicative of
 future results. Values will fluctuate, so that the value of a Contract
 purchased by you may be worth more or less than your original cost.

 International investing involves some risks not present with U.S. investments,
such as currency fluctuation and political volatility.

An investment in the Money Market fund is neither insured nor guaranteed by the
FDIC or any other governmental agency. Although the fund seeks to preserve your
$1.00 per share, it is possible to lose money in the fund.

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





This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y


<PAGE>



                                                                             A-5
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>


PREPARED FOR:                                                          CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                                       Contract Type: Non-Qualified
                                                                       Guaranteed Minimum Income Benefit (GMIB):
PERIOD BEGINNING:                                                      Guaranteed Minimum Death Benefit (GMDB):


                     STANDARDIZED AVERAGE ANNUAL RETURN AND
                            ADJUSTED PORTFOLIO RETURN
 As of [12/31/2000], a one-time investment of $1,000 if withdrawn would have
 generated the following Standardized Average Annual Return, without regard to
 taxes and without regard to any bonus:



                                                                              SINCE         DATE OF      SINCE         DATE OF
                                                                            PORTFOLIO      PORTFOLIO   SUB-ACCOUNT  SUB-ACCOUNT
INVESTMENT OPTION                              1 YEAR   5 YEAR    10 YEAR   INCEPTION     INCEPTION    INCEPTION       INCEPTION
<S>                                              <C>      <C>       <C>       <C>         <C>            <C>           <C>
USAZ MONEY MARKET FUND                           *         *          *       *                                      5/1/2001
DAVIS VA FINANCIAL PORTFOLIO                     *         *          *       *                                  5/1/2001
DAVIS VA VALUE PORTFOLIO                       XXX%        XXX%     XXX%      XXX%                                   4/19/1995
</TABLE>

Standardized average annual return figures are calculated from the inception
date of the applicable Allianz Life Sub-Account. Figures reflect the deduction
of all Contract and Investment Option charges. Where there is a varying charge
depending upon which feature selected, the highest potential charge is shown.
The effect of the CDSC is reflected at the end of each period shown.
Non-standardized performance reflecting Portfolio returns prior to Sub-Account
inception have been adjusted for Contract expenses. The bonus credited on
Contracts purchased prior to attained age 81 is shown only from the date the
Contracts were first offered, on [date].



Past performance is not necessarily indicative of future results.


       [THIS PAGE MUST ACCOMPANY ANY ACCUMULATION ILLUSTRATION CONTAINING
ADJUSTED HISTORICAL PERFORMANCE.]







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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y




<PAGE>


                                                                             A-6
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>


PREPARED FOR:                                                          CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                                       Contract Type: Non-Qualified
                                                                       Guaranteed Minimum Income Benefit (GMIB):
PERIOD BEGINNING:                                                      Guaranteed Minimum Death Benefit (GMDB):

INVESTMENT OPTIONS AND ALLOCATIONS:

____ Portfolio (___%)
____ Portfolio (___%)

                          EFFECT OF ADJUSTED HISTORICAL
                     RETURNS ON ILLUSTRATED CONTRACT VALUES


--------------- -------- --------------------- ---------- ---------------- ------------ ---------------- ------------ ----------
    END OF        AGE    ADJUSTED HISTORICAL   PURCHASEPAYMENTBONUS/        CONTRACT         CASH           DEATH     ANNUITY
                           AVERAGE ANNUAL                                    VALUE       WITHDRAWAL       BENEFIT      VALUE
     YEAR                       RETURN                    WITHDRAWALS                        VALUE

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

<S>                <C>         <C>              <C>          <C>               <C>            <C>            <C>
   Mm/dd/yyyy      45          Xx.xx%         $x,xxx.00      $(xxx.00)     $x,xxxx.00     $x,xxxx.00      $x,xxx.00


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



     This illustration is based upon adjusted historical returns during the
     period indicated. However, past returns are not indicative of future
     results. This illustration is not intended to serve as a projection or
     prediction of future returns and is presented as of the most recent
     calendar [year/quarter].

</TABLE>








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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y




<PAGE>




                                                                             A-7
                              IMPORTANT DISCLOSURES
                  S&P 500 HYPOTHETICAL HISTORICAL ILLUSTRATION


 THIS IS AN ILLUSTRATION NOT A CONTRACT. The purpose of this illustration is to
 demonstrate how Contract Values, death benefits, and income benefits are
 affected by the underlying rate of return over an extended period of time. This
 illustration is based on historical rates of return of the Standard & Poor's
 500 Composite Price Index (S&P500) and is not intended to serve as a projection
 or prediction of future investment income. The S&P500 is not indicative of the
 performance of any Investment Option and is not necessarily indicative of
 future results. No representation is made as to the future performance of any
 Investment Option. The hypothetical assumed investment rates of return are
 illustrative only and are not a representation of past or future investment
 returns. It illustrates how much the Contract would hypothetically be worth,
 and how much the guaranteed death benefit would be, at the end of each year if:
 (1) the product were offered and the customer purchased the variable annuity on
 the hypothetical Contract date; (2) the customer had made the Purchase Payments
 shown; and (3) the customer had allocated the Purchase Payments to the
 Investment Options indicated.

 To assist you in understanding this illustration, mathematical depictions of
 hypothetical performance may be accompanied by visual depictions, including pie
 charts, graphs, and other types of charts.

 The value of a variable annuity will fluctuate up and down, based on the
 performance of the underlying Investment Options, and the Contract Owner may
 experience a gain or loss. Actual investment results may be more or less than
 those shown on this illustration and will depend on a number of factors,
 including the choice and investment experience of the variable Investment
 Options.

 Rates of return reflect the deduction of the Contract mortality and expense
 risk charge and contract maintenance charge. The contingent deferred sales
 charge (CDSC) may or may not be reflected, depending upon what is being
 illustrated. For example, the CDSC would be deducted from cash withdrawal value
 figures that are illustrated, but not Contract Value figures. Please refer to
 the prospectus for full details on charges, expenses and fees.


 TAXES: The effect of income taxes, penalty taxes, and premium taxes have not
 been reflected in this illustration. While withdrawals may or may not be
 depicted within this illustration, withdrawals from the Contract will be
 subject to ordinary income tax to the extent that the Contract Value
 immediately before the withdrawal exceeds the total amount of after-tax money
 paid into the Contract. A withdrawal in excess of the taxable amount will
 constitute a nontaxable return of principal. If the taxpayer has not attained
 age 59 1/2 at the time of the distribution, the portion of the withdrawal that
 is subject to income tax may also be subject to a 10% premature distribution
 penalty. Please read the prospectus for further information.

For any tax-qualified account, e.g., IRA or TSA, the tax deferred growth feature
is already provided by the tax Qualified retirement plan. Therefore, product
features and benefits other than Tax Deferral should be reasons for acquiring an
annuity in a Qualified retirement plan. If the Contract is an individual
retirement annuity or other Qualified Contract, the Contract Owner will
generally be taxed on all amounts withdrawn, or received on withdrawal. The tax
consequences will be different, however, if the Contract is a Roth IRA, or a
traditional non-deductible IRA. See your tax advisor and read the prospectus for
additional information.


 The tax treatment of death benefit proceeds of an annuity Contract differs from
 the tax treatment of a life insurance policy. See your tax advisor and the
 prospectus for further details.

Please read the prospectus for further information.

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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.



 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                         A-8
BONUS: The Contract provides a bonus during the Accumulation Phase based on
total net Purchase Payments made prior to age 81 based on the following
schedule:

                  NET
                  PURCHASE
                  PAYMENT                             BONUS
                  $0 - $24,999                           4%
                  $25,000 - $99,999                      5%
                  $100,000 - $999,999                    6%
                  $1,000,000 - $4,999,999                7%
                  $5,000,000 +                           8%

Bonus amounts are available for withdrawal, annuitization or payment of the
death benefit only when such amounts become vested as follows:
                                     VESTING
                  YEAR             PERCENTAGE
                    1                   0%
                    2                  35%
                    3                  70%
                   4+                 100%

Allianz Life deducts a higher mortality and expense risk charge and assesses a
CDSC based on a longer and higher schedule of charges to cover the cost of
providing the bonus. If you withdraw a portion of your Contract while the CDSC
still applies, your net proceeds may be lower than if you had purchased an
annuity without a bonus. Likewise, over time, the amount of the bonus may be
offset by the higher mortality and expense risk charges.

COSTS AND EXPENSES: The Contract has insurance features and investment features,
and there are costs related to each.

Each year, Allianz Life deducts a $40 contract maintenance charge from your
Contract. Allianz Life currently waives this charge if the value of your
Contract is at least $75,000.

Allianz Life deducts a mortality and expense risk charge which varies depending
upon the Guaranteed Minimum Death Benefit (GMDB) and Guaranteed Minimum Income
Benefit (GMIB) you choose. If you choose a GMIB, a Guaranteed Partial Withdrawal
Benefit (GPWB) will automatically be included in the Contract with no additional
charge. Allianz Life also deducts an administrative charge. These charges,
together with the contract maintenance charge, are for expenses associated with
the administration of the Contract. The table below shows the combinations
available to you and their charges during the Accumulation Phase, as a
percentage of the average daily value of the Contract Value invested in the
Variable Options.

<TABLE>
<CAPTION>

                                             CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACTS WITH
                                                        NO GMIB                   TRADITIONAL  GMIB            ENHANCED GMIB
                                               M&E       Admin.      Total     M&E     Admin.      Total   M&E       Admin.   Total
                                              CHARGE     CHARGE      CHARGE   CHARGE   CHARGE      CHARGE  CHARGE    CHARGE  CHARGE
<S>                                             <C>       <C>        <C>       <C>       <C>        <C>     <C>       <C>     <C>
Traditional Guaranteed Minimum Death Benefit    1.55%     .15%       1.70%     1.75%     .15%       1.90%   2.25%     .15%    2.40%
Enhanced Guaranteed Minimum Death Benefit       1.85%     .15%       2.00%     2.00%     .15%       2.15%   2.45%     .15%    2.60%
</TABLE>

The selection of the GMIB and the GMDB must be made at the time of initial
Purchase Payment. Once selected, they cannot be changed.


The GMIB guarantees that your Annuity Payments will be equal to the guaranteed
fixed payout rates applied to the GMIB value. We will use current fixed payout
rates applied to the Contract Value adjusted for any applicable MVA (less any
contingent deferred sales charges and any applicable premium taxes) to calculate
your Annuity Payments if that produces a greater payment. However, if we do not
use the

--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.
 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                             A-9
GMIB value to calculate your Annuity Payments you will incur higher Contract
expenses without receiving any explicit benefit from the GMIB option.

The GMIB is subject to a 10-year waiting period and your Contract must be
annuitized under one of the fixed Annuity Options. If a period certain annuity
option is chosen, the period must be a minimum of 10 years. If you do not hold
your Contract for ten years before the Income Date, you cannot take advantage of
the GMIB benefit.

You can always annuitize your Contract Value (adjusted for any MVA) three years
or more after the Issue Date under a fixed and/or variable Annuity Option. Some
states may require a shorter period of time.

The GPWB guarantees an annual income through partial withdrawals equal to 10% of
the GPWB value at the time of exercise after the 10th Contract Anniversary until
the GPWB value is less than the GPWB benefit. Each GPWB benefit reduces the GPWB
value. Any partial withdrawal made in excess of the GPWB benefit reduces the
GPWB value proportionally, The GPWB benefit is paid until the GPWB benefit is
greater than the GPWB value, at which time the balance is paid. At the time the
last GPWB benefit has been paid, you have the option of either annuitizing or
receiving a lump sum payment of the remaining Contract value adjusted for any
applicable MVA (less any contingent deferred sales charges and any applicable
premium taxes).

The Traditional GMIB and GPWB Values are equal to the total Purchase Payments
adjusted for partial withdrawals.

The Enhanced GMDB and GMIB and GPWB Values are equal to the greater of:
o    total Purchase Payments adjusted for partial withdrawals increased by 3% on
     each Contract Anniversary prior to age 81 (maximum of 150% of purchase
     payments adjusted for partial withdrawals); or
o    the maximum Contract Value on any Contract Anniversary plus subsequent
     additional Purchase Payments and minus subsequent adjusted partial
     withdrawals prior to age 81.

The Traditional GMDB guarantees the greater of the following, less any
applicable premium tax:
o Contract Value or
o total Purchase Payments adjusted for partial withdrawals.

The Enhanced GMDB guarantees the greater of the following, less any applicable
premium tax:
o Contract Value or
o the enhanced guaranteed minimum death benefit (see above).

 If you take money out of the Contract, Allianz Life may assess a CDSC. The CDSC
starts at 8.5% in the first Contract year and declines to 0% after Contract year
10.

There are also daily investment portfolio charges which currently range, on an
annual basis, from 0.57% to 1.82% of the average daily value of the Portfolio,
depending upon the Portfolio.

This illustration reflects the costs of all optional features you have selected.
It does not reflect costs associated with features you have not selected. If you
choose to add optional features, it will increase costs and reduce returns. Some
optional features must be selected at the issue date, and cannot be added once
the Contract is issued.The "CONTRACT VALUE" for any point in time is an amount
equal to the sum of each Accumulation Unit Value multiplied by the number of
Units allocated to the Contract for each Investment Option. This value will
fluctuate due to the investment performance of the selected Investment
Option(s). The Contract Value reflects all portfolio expenses and all charges
for the Contract features selected, but does not include the CDSC. It also does
not reflect the impact of premium taxes, income taxes or the 10% federal penalty
tax for withdrawals prior to age 59 1/2.

The "CASH WITHDRAWAL VALUE" reflects all of the expenses and charges assessed
against "Contract Value", and also reflects any CDSC if applicable. It does not
reflect the impact of premium taxes, income taxes or the 10% federal penalty tax
for withdrawals prior to age 59 1/2.

 IMPORTANT CONSIDERATIONS: Past performance is not necessarily indicative of
 future results. Values will fluctuate, so that the value of a Contract
 purchased by you may be worth more or less than your original cost.

--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y

<PAGE>


                                                                           A-10
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>


PREPARED FOR:                                                          CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                                       Contract Type: Non-Qualified
                                                                       Guaranteed Minimum Income Benefit (GMIB):
PERIOD BEGINNING:                                                      Guaranteed Minimum Death Benefit (GMDB):

INVESTMENT OPTIONS AND ALLOCATIONS:

____ Portfolio (___%)
____ Portfolio (___%)

                          EFFECT OF S&P 500 HISTORICAL
                     RETURNS ON ILLUSTRATED CONTRACT VALUES


--------------- -------- --------------------- ---------- ---------------- ------------ ---------------- ------------ ----------
                  AGE    ADJUSTED HISTORICAL   PURCHASEPAYMENTS             CONTRACT         CASH           DEATH     ANNUITY
    END OF                  AVERAGE ANNUAL                BONUS/              VALUE       WITHDRAWAL       BENEFIT      VALUE
     YEAR                       RETURN                    WITHDRAWALS                        VALUE

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

<S>                <C>         <C>             <C>           <C>             <C>            <C>            <C>
   Mm/dd/yyyy      45          Xx.xx%         $x,xxx.00      $(xxx.00)     $x,xxxx.00     $x,xxxx.00      $x,xxx.00


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


     This illustration is based upon adjusted historical S&P 500 returns during
     the period indicated. These S&P 500 returns are not indicative of the
     performance of any Investment Option. Past returns are not indicative of
     future results. This illustration is not intended to serve as a projection
     or prediction of future returns and is presented as of the most recent
     calendar [year/quarter].

</TABLE>














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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.



USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.


xx/xx/2002                                                    Page x of y


<PAGE>


                                                                            A-11
                              IMPORTANT DISCLOSURES
                 HYPOTHETICAL FIXED RATE OF RETURN ILLUSTRATION

THIS IS AN ILLUSTRATION NOT A CONTRACT. THE PURPOSE OF THIS ILLUSTRATION IS TO
DEMONSTRATE HOW A VARYING RATE OF RETURN MAY AFFECT CONTRACT VALUES, DEATH
BENEFITS, AND INCOME BENEFITS OVER AN EXTENDED PERIOD OF TIME. THIS ILLUSTRATION
IS BASED UPON HYPOTHETICAL FIXED RETURNS DURING THE PERIOD INDICATED. THIS
ILLUSTRATION IS NOT INTENDED TO SERVE AS A PROJECTION OR PREDICTION OF FUTURE
RETURNS. IT ILLUSTRATES HOW MUCH THE CONTRACT WOULD HYPOTHETICALLY BE WORTH, AND
HOW MUCH THE GUARANTEED DEATH BENEFIT AND GUARANTEED INCOME BENEFIT WOULD BE,
BASED ON THE HYPOTHETICAL RATE OF RETURN ILLUSTRATED. NO REPRESENTATIONS ARE
MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

The value of a variable annuity will fluctuate up and down, based on the
performance of the underlying Investment Options, and the Contract Owner may
experience a gain or loss. Actual investment results may be more or less than
those reflected in the hypothetical rates of return and will depend on a number
of factors, including the choice and investment experience of the variable
Investment Options.

This illustration, including any accompanying reports and graphs, must be
preceded or accompanied by the current prospectus. Please refer to the
prospectus for full details on charges, expenses, fees and state premium taxes.

TAXES: The effects of income, penalty and state premium taxes have not been
reflected in the illustration. While withdrawals may or may not be depicted
within this illustration, withdrawals from the Contract will be subject to
ordinary income tax to the extent that the Contract Value immediately before the
withdrawal exceeds the total amount of after-tax money paid into the Contract. A
withdrawal in excess of the taxable amount will constitute a nontaxable return
of principal. If the taxpayer has not attained age 59 1/2 at the time of the
distribution, the portion of the withdrawal that is subject to income tax may
also be subject to a 10% premature distribution penalty.

For any tax-qualified account, e.g., IRA or TSA, the tax deferred growth feature
is already provided by the tax Qualified retirement plan. Therefore, product
features and benefits other than tax deferral should be reasons for acquiring an
annuity in a Qualified retirement plan. If the Contract is an individual
retirement annuity or other Qualified Contract, the Contract Owner will
generally be taxed on all amounts withdrawn, or received on withdrawal. The tax
consequences will be different, however, if the Contract is a Roth IRA, or a
traditional non-deductible IRA. See your tax advisor and read the prospectus for
additional information.

THE TAX TREATMENT OF DEATH BENEFIT PROCEEDS OF AN ANNUITY CONTRACT DIFFERS FROM
THE TAX TREATMENT OF A LIFE INSURANCE POLICY. SEE YOUR TAX ADVISOR AND THE
PROSPECTUS FOR FURTHER DETAILS.

Please read the prospectus for further information.














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

This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.


xx/xx/2002                                                    Page x of y


<PAGE>



                                                                           A-12
BONUS: The Contract provides a bonus during the Accumulation Phase based on
total net Purchase Payments made prior to age 81 based on the following
schedule:

                  NET
                  PURCHASE
                  PAYMENT                             BONUS
                  $0 - $24,999                           4%
                  $25,000 - $99,999                      5%
                  $100,000 - $999,999                    6%
                  $1,000,000 - $4,999,999                7%
                  $5,000,000 +                           8%

Bonus amounts are available for withdrawal, annuitization or payment of the
death benefit only when such amounts become vested as follows:

                                      VESTING
                  YEAR              PERCENTAGE
                    1                      0%
                    2                     35%
                    3                     70%
                    4+                    100%

Allianz Life deducts a higher mortality and expense risk charge and assesses a
CDSC based on a longer and higher schedule of charges to cover the cost of
providing the bonus. If you withdraw a portion of your Contract while the CDSC
still applies, your net proceeds may be lower than if you had purchased an
annuity without a bonus. Likewise, over time, the amount of the bonus may be
offset by the higher mortality and expense risk charges.

COSTS AND EXPENSES: The Contract has insurance features and investment features,
and there are costs related to each.

Each year, Allianz Life deducts a $40 contract maintenance charge from your
Contract. Allianz Life currently waives this charge if the value of your
Contract is at least $75,000.

Allianz Life deducts a mortality and expense risk charge which varies depending
upon the Guaranteed Minimum Death Benefit (GMDB) and Guaranteed Minimum Income
Benefit (GMIB) you choose. If you choose a GMIB, a Guaranteed Partial Withdrawal
Benefit (GPWB) will automatically be included in the Contract with no additional
charge. Allianz Life also deducts an administrative charge. These charges,
together with the contract maintenance charge, are for expenses associated with
the administration of the Contract. The table below shows the combinations
available to you and their charges during the Accumulation Phase, as a
percentage of the average daily value of the Contract Value invested in the
Variable Options.

<TABLE>
<CAPTION>

                                             CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACTS WITH
                                                        NO GMIB                   TRADITIONAL  GMIB            ENHANCED GMIB
                                               M&E       Admin.      Total     M&E     Admin.      Total   M&E       Admin.   Total
                                              CHARGE     CHARGE      CHARGE   CHARGE   CHARGE      CHARGE  CHARGE    CHARGE  CHARGE
<S>                                             <C>       <C>        <C>       <C>       <C>        <C>     <C>       <C>     <C>
Traditional Guaranteed Minimum Death Benefit    1.55%     .15%       1.70%     1.75%     .15%       1.90%   2.25%     .15%    2.40%
Enhanced Guaranteed Minimum Death Benefit       1.85%     .15%       2.00%     2.00%     .15%       2.15%   2.45%     .15%    2.60%
</TABLE>

The selection of the GMIB and the GMDB must be made at the time of initial
Purchase Payment. Once selected, they cannot be changed.


-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD. xx/xx/2002 Page x of y


<PAGE>



                                                                            A-13
The GMIB guarantees that your Annuity Payments will be equal to the guaranteed
fixed payout rates applied to the GMIB value. We will use current fixed payout
rates applied to the Contract Value adjusted for any applicable MVA (less any
contingent deferred sales charges and any applicable premium taxes) to calculate
your Annuity Payments if that produces a greater payment. However, if we do not
use the GMIB value to calculate your Annuity Payments you will incur higher
Contract expenses without receiving any explicit benefit from the GMIB option.

The GMIB is subject to a 10-year waiting period and your Contract must be
annuitized under one of the fixed Annuity Options. If a period certain annuity
option is chosen, the period must be a minimum of 10 years. If you do not hold
your Contract for ten years before the Income Date, you cannot take advantage of
the GMIB benefit.

You can always annuitize your Contract Value (adjusted for any MVA) three years
or more after the Issue Date under a fixed and/or variable Annuity Option. Some
states may require a shorter period of time.

The GPWB guarantees an annual income through partial withdrawals equal to 10% of
the GPWB value at the time of exercise after the 10th Contract Anniversary until
the GPWB value is less than the GPWB benefit. Each GPWB benefit reduces the GPWB
value. Any partial withdrawal made in excess of the GPWB benefit reduces the
GPWB value proportionally, The GPWB benefit is paid until the GPWB benefit is
greater than the GPWB value, at which time the balance is paid. At the time the
last GPWB benefit has been paid, you have the option of either annuitizing or
receiving a lump sum payment of the remaining Contract value adjusted for any
applicable MVA (less any contingent deferred sales charges and any applicable
premium taxes).

The Traditional GMIB and GPWB Values are equal to the total Purchase Payments
adjusted for partial withdrawals.

The Enhanced GMDB and GMIB and GPWB Values are equal to the greater of:
o    total Purchase Payments adjusted for partial withdrawals increased by 3% on
     each Contract Anniversary prior to age 81 (maximum of 150% of purchase
     payments adjusted for partial withdrawals); or
o    the maximum Contract Value on any Contract Anniversary plus subsequent
     additional Purchase Payments and minus subsequent adjusted partial
     withdrawals prior to age 81.

The Traditional GMDB guarantees the greater of the following, less any
applicable premium tax:
o Contract Value or
o total Purchase Payments adjusted for partial withdrawals.

The Enhanced GMDB guarantees the greater of the following, less any applicable
premium tax:
o Contract Value or
o the enhanced guaranteed minimum death benefit (see above).

If you take money out of the Contract, Allianz Life may assess a CDSC. The CDSC
starts at 8.5% in the first Contract year and declines to 0% after Contract year
10.

There are also daily investment portfolio charges which currently range, on an
annual basis, from 0.57% to 1.82% of the average daily value of the Portfolio,
depending upon the Portfolio.

This illustration reflects the costs of all optional features you have selected.
It does not reflect costs associated with features you have not selected. If you
choose to add optional features, it will increase costs and reduce returns. Some
optional features must be selected at the issue date, and cannot be added once
the Contract is issued.

The "CONTRACT VALUE" for any point in time is an amount equal to the sum of each
Accumulation Unit Value multiplied by the number of Units allocated to the
Contract for each Investment Option. This value will fluctuate due to the
investment performance of the selected Investment Options. The Contract Value
reflects all Contract charges, and portfolio expenses for the Contract features
selected but does not reflect the CDSC. It does not reflect the impact of
premium taxes, income taxes or the 10% federal penalty tax for withdrawals prior
to age 59 1/2.

-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y

<PAGE>


                                                                            A-14


The "CASH WITHDRAWAL VALUE" reflects all of the expenses and charges assessed
against "Contract Value", and also reflects any CDSC if applicable. It does not
reflect the impact of premium taxes, income taxes or the 10% federal penalty tax
for withdrawals prior to age 59 1/2.

IMPORTANT CONSIDERATIONS: Past performance is not necessarily indicative of
future results. Values will fluctuate, so that the value of a contact purchased
by you may be worth more or less than your cost.

International investing involves some risks not present with U.S. investments,
such as currency fluctuation and political volatility.

An investment in the Money Market fund is neither insured nor guaranteed by the
FDIC or any other governmental agency. Although the fund seeks to preserve your
$1.00 per share, it is possible to lose money in the fund.




























-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.


xx/xx/2002                                                    Page x of y


<PAGE>




--------------------------------------------------------------------------------
                                                                            A-15
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>

PREPARED FOR:                                                                   CONTRACT INFORMATION FOR FEATURES
SELECTED
John Doe
                                                                                Contract Type: Non-Qualified
                                                                                Guaranteed Minimum Income Benefit:
(GMIB):
PERIOD BEGINNING:                                                               Guaranteed Minimum Death Benefit:
(GMDB):

                                                HYPOTHETICAL FIXED RATE OF RETURN ILLUSTRATION
                                                 GROSS RATE OF RETURN X.XX%


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

        END OF       AGE        HYPOTHETICAL        PURCHASE       WITHDRAWALS      CONTRACT        CASH      DEATH          ANNUITY
          YEAR                 GROSS RATE OF       PAYMENTS/                         VALUE       WITHDRAWAL   Benefit
                                   RETURN            BONUS                                         VALUE                     VALUE
                             ------------------

                               (NOT TO EXCEED
                                    12%)
        ---------- --------- ------------------- --------------- ---------------- ------------- ------------- -------------- -------

       <S>            <C>           <C>            <C>              <C>              <C>           <C>           <C>
        Mm/dd/yyyy    45           xx.xx%          $x,xxx.00        ($xxx.00)      $x,xxxx.00    $x,xxxx.00     $x,xxx.00


        ---------- --------- ------------------- --------------- ---------------- ------------- ------------- -------------- -------
</TABLE>

This hypothetical is based on the selected gross rate of return and calculates
the change in Contract Value from the beginning period to the ending period,
adjusted for subsequent Purchase Payments and any withdrawals. Hypothetical
gross rate of return does not include any expenses and charges. However, all
values reflect the contract maintenance charge, and the net rate of return,
which takes into consideration the applicable M&E charge and average portfolio
fee of .XXXX%. The bonus in not included in Hypothetical Gross Rate of Return.
However, it is included in other values shown.

This illustration is not intended to serve as a projection or prediction of
future returns.

        An illustration showing a hypothetical 0% gross rate of return is
contained on the following page.















--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                          Page x of y

<PAGE>


                                                                           A-16
<TABLE>
<CAPTION>

                              USALLIANZ REWARDS(R)
PREPARED FOR:                                                                   CONTRACT INFORMATION FOR FEATURES
SELECTED
John Doe
                                                                                Contract Type: Non-Qualified
                                                                                Guaranteed Minimum Income Benefit:(GMIB):
PERIOD BEGINNING:                                                               Guaranteed Minimum Death Benefit: (GMDB):


                 HYPOTHETICAL FIXED RATE OF RETURN ILLUSTRATION
                            GROSS RATE OF RETURN 0.00%


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

END OF        AGE         HYPOTHETICAL        PURCHASE       WITHDRAWALS    CONTRACT VALUE   CASH WITHDRAWAL   DEATH         ANNUITY
  YEAR                   GROSS RATE OF        PAYMENTS/                                           VALUE        BENEFIT
                             RETURN                                                                                            VALUE
                       ------------------       BONUS

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

<S>            <C>             <C>              <C>             <C>               <C>              <C>           <C>       <C>
Mm/dd/yyyy     45            xx.xx%           $x,xxx.00       ($xxx.00)       $x,xxxx.00       $x,xxxx.00      $x,xxx.00   $x,xxx.00


---------- ----------- ------------------- ---------------- --------------- --------------- ------------------ ------------ --------
</TABLE>

This hypothetical is based on the selected gross rate of return and calculates
the change in Contract Value from the beginning period to the ending period,
adjusted for subsequent Purchase Payments and any withdrawals. Hypothetical
gross rate of return does not include any expenses and charges. However, all
values reflect the contract maintenance charge, and the net rate of return,
which takes into consideration the applicable M & E charge and average portfolio
fee of .XXXX%. The bonus in not included in Hypothetical Gross Rate of Return.
However, it is included in other values shown.


      [This page must accompany any fixed return illustration showing a gross
rate of return in excess of 0%.]



















-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.
xx/xx/2002                                                           Page x of y

<PAGE>


                                                                           A-17
                              IMPORTANT DISCLOSURES
             HYPOTHETICAL VARIABLE AND/OR FIXED PAYOUT ILLUSTRATION

This illustration depicts how a payment option may work when you annuitize your
Contract. THIS ILLUSTRATION IS NOT A CONTRACT, AND IT IS NOT A REPRESENTATION OR
GUARANTEE OF FUTURE RETURNS OR OF ANY SPECIFIC PAYOUT AMOUNT.

If you want to receive regular income from your annuity, you can choose an
Annuity Option at any time after the 36th month of the Contract. You may elect
to receive your Annuity Payments as a variable payout, a fixed payout, or a
combination of both. If you choose to have any part of your payments come from
the Variable Options, the dollar amount of your payments may go up or down based
on the performance of the Portfolios.

The Contract provides that the Contract cannot be annuitized prior to 36 months
after the Contract issue date. For this reason, illustrations that you receive
will be based upon an annuity start date that is at least 36 months after the
issue date.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout illustration
and a fixed payout illustration. THE "VARIABLE" PAYOUT OPTION ILLUSTRATION is
based upon actual historical performance of one or more Investment Options over
the specified period, as adjusted for all applicable portfolio expenses and
applicable Contract expenses. The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying Investment
Options could affect Contract Values and payout amounts when the Contract is
annuitized. Of course, past performance of any Investment Option is not
necessarily indicative of future results, and no representation is made as to
the future performance of any Investment Option.

This illustration may illustrate adjusted historical performance for one or more
Investment Options. If more than one option is illustrated, performance may be
shown as aggregate performance for all Investment Options selected. In addition,
if you elect to illustrate more than one Investment Option and to hypothetically
allocate more money to one option than to other options (for example, 50% to one
option, 30% to a second option, and 20% to a third option), performance may be
shown as weighted aggregate performance.

As an alternative variable payout illustration, the Standard & Poor's 500
Composite Price Index (S&P500) or other recognized investment benchmark may be
used to show how values may vary. The S&P500 is not indicative of the
performance of any Investment Option and is not necessarily indicative of future
results. No representation is made as to the future performance of any
Investment Option. The hypothetical assumed investment rates of return are
illustrative only and are not a representation of past or future investment
returns. The illustration has not been adjusted for state or federal income tax
liability, 10% federal penalty tax for withdrawals prior to age 59 1/2, or any
applicable state premium taxes; values would be lower if such adjustments had
been made.

THE "FIXED" PAYOUT OPTION ILLUSTRATION is not based upon any sort of historical
performance, but rather is based upon fixed payout factors that are in effect on
the date of the illustration. These factors can change, up until the date you
annuitize your Contract.

VARIABLE PAYOUT ANNUITY- Variable Annuity payouts depend on a variety of
factors, including the amount annuitized, annuity payout option selected,
assumed investment rate (AIR), and will vary with the investment performance of
the portfolio(s) selected. The variable income can increase or decrease from the
initial monthly payment and no minimum dollar amount of variable income is
guaranteed. Actual investment results may be more or less than those reflected
in the hypothetical rates of return and will depend on a number of factors,
including the choice and investment experience of the eligible variable
Investment Options.

----------------------------------------------------------------------+---------





This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal. USAllianz products are issued
by Allianz Life Insurance Company of North America and distributed by its
affiliate, USAllianz Investor Services, LLC, 5701 Golden Hills Drive,
Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                         Page x of y

<PAGE>

                                                                           A-18
The AIR was selected by your investment representative. The 3% AIR payments
start at a lower level than the 5% AIR, with the potential for more rapid
increase in payments during later years. Conversely if a 5% AIR is chosen there
is a potential for a more rapid decrease in payments during the later years.

The value of a variable annuity will fluctuate up and down, based on the
performance of the underlying Investment Options, and the investor may
experience a gain or loss. Actual investment results may be more or less than
those shown on this illustration and will depend on a number of factors,
including the choice and investment experience of the variable Investment
Options.

STANDARDIZED AVERAGE ANNUAL RETURN: Any variable payout illustration that is
based upon adjusted historical performance is accompanied by Standardized
Average Annual Return for each Investment Option depicted in the illustration.
Standardized return is calculated using uniform guidelines as mandated by the
Securities and Exchange Commission. Standardized return figures assume a
one-time lump sum investment, and do not reflect the effect of taxation.
Standardized return is shown for the most recent 1, 5, and 10 year periods, or
from the inception date of the sub-account, if later. In contrast, illustration
material may depict returns from the inception date of the applicable portfolio,
if earlier than the inception date of the sub-account. Standardized return
includes the effect of all portfolio expenses and all Contract expenses. If
Contract expenses vary depending upon which features are selected, standardized
return will reflect the highest potential expenses. In contrast, an illustration
may reflect only certain expenses. Standardized return also assumes the
assessment of a CDSC at the end of each applicable period. Standardized return
is computed as of the most recent calendar quarter.

FIXED PAYOUT ANNUITY- Fixed payments will depend on a variety of factors,
including the amount annuitized, payout factor rates when the Contract is
annuitized, date of birth, and annuity payout option selected. Fixed Annuity
payouts, once commenced, will not vary (except as indicated by the Annuity
Option on the death of one of the Joint Annuitants).
BONUS: The Contract provides a bonus during the Accumulation Phase based on
total net Purchase Payments made prior to age 81 based on the following
schedule:

                  NET
                  PURCHASE
                  PAYMENT                             BONUS
                  $0 - $24,999                           4%
                  $25,000 - $99,999                      5%
                  $100,000 - $999,999                    6%
                  $1,000,000 - $4,999,999                7%
                  $5,000,000 +                           8%
Bonus amounts are available for withdrawal, annuitization or payment of the
death benefit only when such amounts become vested as follows:
                                      VESTING
                  YEAR              PERCENTAGE
                    1                      0%
                    2                     35%
                    3                     70%
                    4+                    100%

Allianz Life deducts a higher mortality and expense risk charge and assesses a
CDSC based on a longer and higher schedule of charges to cover the cost of
providing the bonus. If you withdraw a portion of your Contract while the CDSC
still applies, your net proceeds may be lower than if you had purchased an
annuity without a bonus. Likewise, over time, the amount of the bonus may be
offset by the higher mortality and expense risk charges.




-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal. USAllianz products are issued
by Allianz Life Insurance Company of North America and distributed by its
affiliate, USAllianz Investor Services, LLC, 5701 Golden Hills Drive,
Minneapolis, MN 55416-1297. Member NASD. xx/xx/2002 Page x of y


<PAGE>


                                                                            A-19

COSTS AND EXPENSES: The Contract has insurance features and investment features,
and there are costs related to each.

Each year, Allianz Life deducts a $40 contract maintenance charge from your
Contract. Allianz Life currently waives this charge if the value of your
Contract is at least $75,000.

Allianz Life deducts a mortality and expense risk charge which varies depending
upon the Guaranteed Minimum Death Benefit (GMDB) and Guaranteed Minimum Income
Benefit (GMIB) you choose. If you choose a GMIB, a Guaranteed Partial Withdrawal
Benefit (GPWB) will automatically be included in the Contract with no additional
charge. Allianz Life also deducts an administrative charge. These charges,
together with the contract maintenance charge, are for expenses associated with
the administration of the Contract. The table below shows the combinations
available to you and their charges during the Accumulation Phase, as a
percentage of the average daily value of the Contract Value invested in the
Variable Options.

<TABLE>
<CAPTION>

                                             CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACT WITH     CHARGES FOR CONTRACTS WITH
                                                        NO GMIB                   TRADITIONAL  GMIB            ENHANCED GMIB
                                               M&E       Admin.      Total     M&E     Admin.      Total   M&E       Admin.   Total
                                              CHARGE     CHARGE      CHARGE   CHARGE   CHARGE      CHARGE  CHARGE    CHARGE  CHARGE
<S>                                             <C>       <C>        <C>       <C>       <C>        <C>     <C>       <C>     <C>
Traditional Guaranteed Minimum Death Benefit    1.55%     .15%       1.70%     1.75%     .15%       1.90%   2.25%     .15%    2.40%
Enhanced Guaranteed Minimum Death Benefit       1.85%     .15%       2.00%     2.00%     .15%       2.15%   2.45%     .15%    2.60%
</TABLE>

The selection of the GMIB and the GMDB must be made at the time of initial
Purchase Payment. Once selected, they cannot be changed.


The GMIB guarantees that your Annuity Payments will be equal to the guaranteed
fixed payout rates applied to the GMIB value. We will use current fixed payout
rates applied to the Contract Value adjusted for any applicable MVA (less any
contingent deferred sales charges and any applicable premium taxes) to calculate
your Annuity Payments if that produces a greater payment. However, if we do not
use the GMIB value to calculate your Annuity Payments you will incur higher
Contract expenses without receiving any explicit benefit from the GMIB option.

The GMIB is subject to a 10-year waiting period and your Contract must be
annuitized under one of the fixed Annuity Options. If a period certain annuity
option is chosen, the period must be a minimum of 10 years. If you do not hold
your Contract for ten years before the Income Date, you cannot take advantage of
the GMIB benefit.

You can always annuitize your Contract Value (adjusted for any MVA) three years
or more after the Issue Date under a fixed and/or variable Annuity Option. Some
states may require a shorter period of time.

The GPWB guarantees an annual income through partial withdrawals equal to 10% of
the GPWB value at the time of exercise after the 10th Contract Anniversary until
the GPWB value is less than the GPWB benefit. Each GPWB benefit reduces the GPWB
value. Any partial withdrawal made in excess of the GPWB benefit reduces the
GPWB value proportionally, The GPWB benefit is paid until the GPWB benefit is
greater than the GPWB value, at which time the balance is paid. At the time the
last GPWB benefit has been paid, you have the option of either annuitizing or
receiving a lump sum payment of the remaining Contract value adjusted for any
applicable MVA (less any contingent deferred sales charges and any applicable
premium taxes).

The Traditional GMIB and GPWB Values are equal to the total Purchase Payments
adjusted for partial withdrawals.

The Enhanced GMDB and GMIB and GPWB Values are equal to the greater of:
o    total Purchase Payments adjusted for partial withdrawals increased by 3% on
     each Contract Anniversary prior to age 81 (maximum of 150% of purchase
     payments adjusted for partial withdrawals); or
o    the maximum Contract Value on any Contract Anniversary plus subsequent
     additional Purchase Payments and minus subsequent adjusted partial
     withdrawals prior to age 81.

-------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y

<PAGE>


                                                                           A-20

The Traditional GMDB guarantees the greater of the following, less any
applicable premium tax:
o Contract Value or
o total Purchase Payments adjusted for partial withdrawals.

The Enhanced GMDB guarantees the greater of the following, less any applicable
premium tax:
o Contract Value or
o the enhanced guaranteed minimum death benefit (see above).

If you take money out of the Contract, Allianz Life may assess a CDSC. The CDSC
starts at 8.5% in the first Contract year and declines to 0% after Contract year
10.

There are also daily investment portfolio charges which currently range, on an
annual basis, from 0.57% to 1.82% of the average daily value of the Portfolio,
depending upon the Portfolio. This illustration reflects the costs of all
optional features you have selected. It does not reflect costs associated with
features you have not selected. If you choose to add optional features, it will
increase costs and reduce returns. Some optional features must be selected at
the issue date, and cannot be added once the Contract is issued.

IMPORTANT CONSIDERATIONS: Past performance is not necessarily indicative of
future results. No representation is made as to future performance. The value of
an annuity contract will fluctuate, so that it may be worth more or less than
amounts paid in.

International investing involves some risks not present with U.S. investments,
such as currency fluctuation and political volatility. An investment in the
Money Market fund is neither insured nor guaranteed by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per share,
it is possible to lose money in the fund.









--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y


<PAGE>


                                                                           A-21
                       STANDARDIZED AVERAGE ANNUAL RETURN
                          AND ADJUSTED PORTFOLIO RETURN

 As of [12/31/2000], a one time investment of $1,000 if withdrawn would have
 generated the following Standardized Average Annual Return, taking into
 consideration all Contract charges but without regard to taxes and without
 regard to any bonus:


<TABLE>
<CAPTION>

                                                                            SINCE            DATE OF         SINCE        DATE OF
                                                                           PORTFOLIO       PORTFOLIO     SUB-ACCOUNT   SUB-ACCOUNT
INVESTMENT OPTION                          1 YEAR      5 YEAR     10 YEARS  INCEPTION      INCEPTION      INCEPTION      INCEPTION
<S>                                         <C>        <C>           <C>      <C>             <C>            <C>            <C>
USAZ Van Kampen Growth Fund               XXX%          XXX%          *       XXX%                                       4/19/1995

</TABLE>

Standardized average annual return figures are calculated from the inception
date of the applicable Allianz Life Sub-Account. Figures reflect the deduction
of all Contract and Investment Option charges. Where there is a varying charge
depending upon which feature selected, the highest potential charge is shown.
The effect of the CDSC is reflected at the end of each period shown.
Non-standardized performance reflecting Portfolio returns prior to Sub-Account
inception have been adjusted for Contract expenses. The bonus credited on
Contracts purchased prior to attained age 81 is shown only from the date the
Contracts were first offered, on [date].



Past performance is not necessarily indicative of future results.


          [THIS PAGE MUST ACCOMPANY ANY PAYOUT ILLUSTRATION CONTAINING ADJUSTED
HISTORICAL INFORMATION.]























--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y


<PAGE>



                                                                           A-22
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>

PREPARED FOR:                                                 CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                                 Contract Type:  Non-Qualified
PERIOD BEGINNING:                                                Guaranteed Minimum Income Benefit: (GMIB):
                                                                 Guaranteed Minimum Death Benefit: (GMDB):



                    HYPOTHETICAL VARIABLE PAYOUT ILLUSTRATION
                     BASED UPON ADJUSTED HISTORICAL RETURNS

ANNUITY OPTION:
Annuitization Age:                      65, Male                                            Annuity Value:   520,097.92
Federal Tax Rate:                        28%
Assumed Investment Rate (AIR):          3.5%
Annuitization Date:______________                                                                         Cost Basis:     500,000.00
Contract Date: ____________________

  INVESTMENT OPTION                                  ALLOCATION    INVESTMENT OPTION                                   ALLOCATION
  USAZ VAN KAMPEN AGGRESSIVE GROWTH FUND                    90%     USAZ VAN KAMPEN GROWTH FUND                              10%



   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
   PERIOD ENDING DATE         PAYOUT AGE           MONTHLY PAYOUT        EXCLUSION AMOUNT         TAXABLE AMOUNT        CUMULATIVE
                                                                                                                          PAYOUT
   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
<S>                         <C>               <C>                        <C>                    <C>                     <C>





   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
</TABLE>
This illustration is based upon weighted aggregate historical returns during the
period indicated. However, past returns are not indicative of future results.
This illustration is not intended to serve as a projection or prediction of
future returns.
-------------------------------------------------------------------------------

Average annual returns for each of the Investment Options selected for the most
recent 1, 5, and 10 year periods (computed as of the most recent calendar
quarter) are shown on another page of this illustration.



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







This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal. USAllianz products are issued
by Allianz Life Insurance Company of North America and distributed by its
affiliate, USAllianz Investor Services, LLC, 5701 Golden Hills Drive,
Minneapolis, MN 55416-1297. Member NASD.

xx/xx/2002                                                    Page x of y


<PAGE>



                                                                            A-23
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>

PREPARED FOR:                                                  CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                            Contract Type:  Non-Qualified
PERIOD BEGINNING:                                           Guaranteed Minimum Income Benefit (GMIB):
                                                            Guaranteed Minimum Death Benefit (GMDB):

                    HYPOTHETICAL VARIABLE PAYOUT ILLUSTRATION
                      BASED UPON S&P 500 HISTORICAL RETURNS

ANNUITY OPTION:
Annuitization Age:                      65, Male                                       Annuity Value:      520,097.92
Federal Tax Rate:28%
Assumed Investment Rate (AIR):3.5%
Annuitization Date:______________                                                                      CostBasis:       500,000.00
Contract Date: ____________________



   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
   PERIOD ENDING DATE         PAYOUT AGE           MONTHLY PAYOUT        EXCLUSION AMOUNT         TAXABLE AMOUNT        CUMULATIVE
                                                                                                                          PAYOUT
   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
<S>                     <C>                     <C>                        <C>                   <C>
   --------------------

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

   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- -------------
</TABLE>
This illustration is based upon S&P 500 historical returns during the period
indicated. These S&P 500 returns are not indicative of the performance of any
Investment Options. Past returns are not indicative of future results. This
illustration is not intended to serve as a projection or prediction of future
returns and is presented as of the most recent calendar [year/quarter]..
-------------------------------------------------------------------------------









This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.

 xx/xx/2002                                                   Page x of y


<PAGE>


                                                                         A-24
                              USALLIANZ REWARDS(R)
<TABLE>
<CAPTION>

PREPARED FOR:                             CONTRACT INFORMATION FOR FEATURES SELECTED
John Doe
                                                    Contract Type: Non-Qualified
PERIOD BEGINNING:                                   Guaranteed Minimum Income Benefit (GMIB):
                                                    Guaranteed Minimum Death Benefit (GMDB):

                      HYPOTHETICAL FIXED PAYOUT ANNUITIZATION



ANNUITY OPTION:

Annuitization Age:   65, Male                                     Annuity Value:         520,097.92
Federal Tax Rate:
Annuitization Date:                                               Cost Basis:         500,000.00
Contract Date:


                                 Monthly         Exclusion           Taxable
                                 Payout            Amount             Amount
                              <S>                  <C>                 <C>
                             xxxxx.xx              xxxxx.xx            xxxxx.xx





This hypothetical illustration is based upon payout factor rates currently in
effect. These are subject to change, and may be higher or lower when you
annuitize your Contract.

This illustration is not intended to serve as a projection or prediction of
future returns.

</TABLE>










--------------------------------------------------------------------------------
This is a hypothetical variable annuity illustration, not a contract, and is not
complete without all pages. The illustration can only be used when accompanied
or preceded by the Contract prospectus for the USAllianz Rewards(R), a flexible
premium variable annuity. The prospectus contains more information, including
fees, expenses, and risk factors, and should be read carefully before sending
money. All product guarantees are based on the claims paying ability of Allianz
Life Insurance Company of North America. Variable annuities are: not insured by
the FDIC or any other governmental agency; not deposits or obligations of, or
guarantees by, any bank or deposit or institution; and subject to investment
risks, including the possible loss of principal.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate, USAllianz Investor Services, LLC, 5701 Golden
Hills Drive, Minneapolis, MN 55416-1297. Member NASD.


xx/xx/2002                                                    Page x of y



<PAGE>

                                     PART C
                                OTHER INFORMATION

Item 24.  Financial Statements and Exhibits

      a.  Financial Statements (to be filed by amendment)

      b.  Exhibits

      1.   Resolution of Board of Directors of the Company authorizing the
           establishment  of  the  Variable  Account(1)
      2.   Not  Applicable
      3.a. Principal  Underwriter's  Agreement(2)
      3.b. Selling Agreement(6)
      4.   Individual  Variable  Annuity  Contract(5)
      4.a. Waiver  of  Contingent  Deferred  Sales  Charge  Endorsement(5)
      4.b. Traditional Death  Benefit  Endorsement(5)
      4.c. Enhanced Death Benefit Endorsement(5)
      4.d. Individual Retirement Annuity Endorsement(5)
      4.e. Unisex Endorsement(5)
      4.f. Pension Plan and Profit Sharing Plan Endorsement(5)
      4.g. Group Pension Plan Death Benefit Endorsement(5)
      4.h. 403(b) Annuity Endorsement(5)
      4.i. Roth IRA Endorsement(5)
      4.j. GMIB Endorsement (10)
      4.k. Enhanced GMDB Endorsement (10)
      4.l. Revised Schedule Page (10)
      5.a. Application  for  Individual  Variable  Annuity  Contract(5)
      5.b. Revised Application for Individual Variable Annuity Contract (10)
      6.   (i)   Copy  of  Articles  of  Incorporation of the Company(1)
           (ii)  Copy  of  the  Bylaws  of  the  Company(1)
      7.   Not Applicable
      8.a. Form of Fund Participation Agreement between AIM Variable
           Insurance Funds, Inc., Allianz Life Insurance Company of North
           America and NALAC Financial Plans LLC(3)
        b. Form of Fund Participation Agreement between USAllianz Variable
           Insurance Products Trust, Allianz Life Insurance Company of
           North America and BISYS Fund Services Limited Partnership(3)
        c. Form of Fund Participation Agreement between Davis Variable
           Account Fund, Inc., Davis Distributors, LLC and Allianz Life
           Insurance Company of North America(4)
        d. Form of Fund Participation Agreement between Oppenheimer Variable
           Account Funds, Oppenheimer Funds Inc. and Allianz Life Insurance
           Company of North America(4)
        e. Form of Fund Participation Agreement between Allianz Life Insurance
           Company of North America, PIMCO Variable Insurance Trust, and PIMCO
           Fund Distributors, LLC(4)
        f. Form of Fund Participation Agreement between Seligman Portfolios,
           Inc. and Allianz Life Insurance Company of North America(4)
        g. Form of Fund Participation Agreement between The Prudential Series
           Fund, Inc., The Prudential Insurance Company of America, and
           Prudential Investment Management Services LLC(6)
        h. Form of Fund Participation Agreement between Franklin Templeton
           Variable Insurance Products Trust, Templeton Variable Products Series
           Fund, Franklin Templeton Distributors, Inc. and Allianz Life
           Insurance Company of North America (7)
        i. Form of Fund Participation Agreement between Van Kampen Life
           Investment Trust, Van Kampen Funds Inc, Van Kampen Asset
           Management and Allianz Life of North America (8)
        j. Form of Fund Participation Agreement between Van Kampen Funds, Inc.,
           and USAllianz Investor Services, LLC (8)
        k. Portfolio Management Agreement between USAllianz Advisers, LLC,
           USAllianz Variable Insurance Products Trust, and Van Kampen Asset
           Management, Inc. (8)
        l. Portfolio Management Agreement between USAllianz Advisers, LLC,
           USAllianz Variable Insurance Products Trust, and Van Kampen
           Investment Advisory Corporation. (8)
        m. Portfolio Management Agreement between USAllianz Advisers, LLC,
           USAllianz Variable Insurance Products Trust and Van Kampen Asset
           Management, Inc. (8)
        n. Portfolio Management Agreement between USAllianz Advisers, LLC,
           USAllianz Variable Insurance Products Trust, and Alliance Capital
           Management L.P. (8)
        o. Portfolio Management Agreement between USAllianz Advisers,
           LLC, USAllianz Variable Insurance Products Trust, and PIMCO
           Advisers L.P. (8)
        p. Portfolio Management Agreement between USAllianz Advisers,
           LLC, USAllianz Variable Insurance Products Trust and Templeton
           Investment Counsel,LLC. (8)
        q. Form of Fund Participation Agreement between Dreyfus Investment
           Portfolios and Allianz Life Insurance Company of North America (9)
       9.  Opinion and Consent of Counsel (to be filed by amendment)
      10.  Independent Auditors' Consent (to be filed by amendment)
      11.  Not Applicable
      12.  Not Applicable
      13.  Calculation of Performance Data(9)
      14.  Company Organizational Chart(6)
      15.  Powers of Attorney (10)


(1)  Incorporated by reference to Registrant's Form N-4 (File Nos. 333-06709 and
     811-05618) electronically filed on June 24, 1996.
(2)  Incorporated by reference to Pre-Effective  Amendment No. 1 to Registrant's
     Form N-4  (File  Nos.  333-06709  and  811-05618)  electronically  filed on
     December 13, 1996.
(3)  Incorporated by reference to Registrant's Form N-4 (File Nos. 333-06709 and
     811-05618) electronically filed on November 12, 1999.
(4)  Incorporated by reference to Registrant's Pre-Effective Amendment to Form
     N-4 (File Nos. 333-82329 and 811-05618) electronically filed
     December 30, 1999.
(5)  Incorporated by reference to Form N-4 (File Nos. 333-95729 and 811-05618)
     electronically filed on April 27, 2000.
(6)  Incorporated by reference to Post-Effective Amendment No. 1 to Form N-4
     (File Nos. 333-95729 and 811-05618) electronically filed on
     December 15, 2000.
(7)  Incorporated by reference to Post-Effective Amendment No. 2 to Form N-4
     (File Nos. 333-95729 and 811-05618) electronically filed on
     April 26, 2001.
(8)  Incorporated by reference to Post-Effective Amendment No. 3 to Form N-4
     (File Nos. 333-95729 and 811-05618) electronically filed on
     November 1, 2001.
(9)  Incorporated by reference to Post-Effective Amendment No. 4 to Form N-4
     (File Nos. 333-95729 and 811-05618) electronically filed on
     April 24, 2002.
(10) Incorporated by reference to Post-Effective Amendment No. 5 to Form N-4
     (File Nos. 333-95729 and 811-05618) electronically filed on June 21, 2002.


Item  25.    Directors  and  Officers  of  the  Depositor

The following are the Officers and Directors of the Insurance Company:


Name and Principal            Positions and Offices
Business Address              with Depositor
- ----------------------------  ---------------------------------
Robert W. MacDonald             Chairman of the Board
5701 Golden Hills Drive
Minneapolis, MN 55416

Mark A. Zesbaugh                Chief Executive Officer and
5701 Golden Hills Drive         Director
Minneapolis, MN 55416

Gabrielle Matzdorff             Sr. Vice President and
5701 Golden Hills Drive         Chief Financial Officer
Minneapolis, MN 55416

Denise Blizil                   Senior Vice President -
5701 Golden Hills Drive         Chief Administrative Officer
Minneapolis, MN 55416

Charles Kavitsky                President -
5701 Golden Hills Drive         Chief Marketing Officer
Minneapolis, MN 55416

Suzanne Pepin                   Senior Vice President -
5701 Golden Hills Drive         Chief Legal Officer
Minneapolis, MN 55416

Neil McKay                      Senior Vice President -
5701 Golden Hills Drive         Chief Actuary
Minneapolis, MN 55416

Paul M Saffert                  Director
Allianz of America Corp.
777 San Marin Drive
Novato, CA 94998

Michael Diekmann                Director
Allianz AG
Koeniginstrausse 28
D-80802
Munich, Germany

Michael P. Sullivan             Director
7505 Metro Boulevard
Minneapolis, MN 55439

Dr. Gerhard Rupprecht           Director
Reinsburgstrasse 19
D-70178
Stuttgart, Germany

Rev. Dennis Dease               Director
c/o University of St. Thomas
215 Summit Avenue
St. Paul, MN 55105-1096

James R. Campbell               Director
c/o Wells Fargo and Company
Wells Fargo Center
Sixth & Marquette
Minneapolis, MN 55479-0116

Robert M. Kimmitt               Director
Commerce One, Inc.
4440 Rosewood Drive
Pleasanton, CA 94588-3050


Item 26.  Persons  Controlled  by or Under Common  Control with the Depositor or
          Registrant

The Company organizational chart is incorporated by reference to Post-Effective
Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-82329 and 811-05618).



Item 27. Number of Contract Owners

As of December  31, 2002 there were 2,260  qualified  Contract  Owners and 1,735
non-qualified Contract Owners with Contracts in the separate account.


Item 28. Indemnification

The Bylaws of the Insurance Company provide that:

Each person (and the heirs,  executors,  and administrators of such person) made
or threatened to be made a party to any action, civil or criminal,  by reason of
being or having been a Director,  officer, or employee of the corporation (or by
reason of serving  any other  organization  at the  request of the  corporation)
shall  be  indemnified  to the  extent  permitted  by the  laws of the  State of
Minnesota, and in the manner prescribed therein.

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


Item 29. Principal Underwriters

     a.  USAllianz Investor Services, LLC is the  principal underwriter for the
Contracts. It also is the principal underwriter for:

                 Allianz  Life  Variable  Account  A
                 Allianz  Life of NY Variable  Account  C


     b.  The  following  are the  officers(managers)  and  directors  (Board  of
Governors) of USAllianz Investor Services, LLC:

                        Positions and Offices
Business Address        with Underwriter
- --------------------  ----------------------

Christopher H.Pinkerton    Chairman, Chief Executive Officer, President,
5701 Golden Hills Drive    Chief Manager & Director
Minneapolis, MN 55416

Tracy H. Gardner           Chief Administrative Officer &
5701 Golden Hills Drive    Sr. Vice President
Minneapolis, MN 55416

Michael M. Ahles           Chief Financial Officer & Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Catherine Q. Farley        Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Cynthia M. Robeck          Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Jennifer J. Wagner         Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Keith L. Johnson           Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Carol B.Shaw               Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Corey J. Walther           Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Dave Schliesman            Sr. Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Jeffrey W. Kletti          Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Myron Rothstein            Vice President
5701 Golden Hills Drive
Minneapolis, MN  55416

Patrick Allen              Divisional VP - NE
5701 Golden Hills Drive
Minneapolis, MN  55416

Edward Barrett             Divisional VP - SE
5701 Golden Hills Drive
Minneapolis, MN  55416

Kevin Rooney               Divisional VP - MID
5701 Golden Hills Drive
Minneapolis, MN  55416

Gerald Boucher             Divisional VP - W
5701 Golden Hills Drive
Minneapolis, MN  55416

Chris Johnston             Divisional VP - Wirehouse
5701 Golden Hills Drive
Minneapolis, MN  55416

Wayne Peterson             Compliance Officer
5701 Golden Hills Drive
Minneapolis, MN  55416

Stewart Gregg              Secretary
5701 Golden Hills Drive
Minneapolis, MN  55416

Jan Witort                 Assistant Secretary
5701 Golden Hills Drive
Minneapolis, MN  55416


     c.  Not Applicable


Item 30. Location of Accounts and Records

Michael Ahles, whose address is 5701 Golden Hills Drive, Minneapolis,  Minnesota
55416 and Delaware Valley  Financial  Services,  USAllianz  Service Center,  300
Berwyn Park, Berwyn,  Pennsylvania  19312,  maintain physical possession of the
accounts,  books or documents of the Variable  Account required to be maintained
by Section  31(a) of the  Investment  Company Act of 1940,  as amended,  and the
rules promulgated thereunder.


Item 31. Management Services

Not  Applicable


Item 32. Undertakings

     a. Registrant hereby undertakes to file a post-effective  amendment to this
registration  statement as frequently as is necessary to ensure that the audited
financial  statements in the registration  statement are never more than sixteen
(16) months old for so long as payment under the variable annuity  contracts may
be accepted.

     b.  Registrant  hereby  undertakes  to  include  either  (1) as part of any
application to purchase a contract  offered by the  Prospectus,  a space that an
applicant can check to request a Statement of Additional  Information,  or (2) a
postcard  or  similar  written  communication  affixed  to or  included  in  the
Prospectus  that the  applicant can remove to send for a Statement of Additional
Information.

     c.  Registrant  hereby  undertakes  to deliver any  Statement of Additional
Information  and any financial  statements  required to be made available  under
this Form promptly upon written or oral request.




                                 REPRESENTATIONS

Allianz  Life  Insurance  Company of North  America  ("Company")  hereby
represents  that the fees and charges  deducted under the Contract  described in
the  Prospectus,  in the  aggregate,  are reasonable in relation to the services
rendered, the expenses to be incurred and the risks assumed by the Company.

The  Insurance  Company  hereby  represents  that it is relying upon a No Action
Letter issued to the American Council of Life Insurance, dated November 28, 1988
(Commission ref. IP-6-88), and that the following provisions have been complied
with:

   1.  Include  appropriate  disclosure  regarding the redemption restrictions
imposed  by  Section  403(b)(11) in each registration statement, including the
prospectus,  used  in  connection  with  the  offer  of  the  contract;

   2.  Include  appropriate  disclosure  regarding the redemption restrictions
imposed  by Section 403(b)(11) in any sales literature used in connection with
the  offer  of  the  contract;

   3. Instruct sales  representatives who solicit participants to purchase the
contract  specifically to bring the redemption  restrictions  imposed by Section
403(b)(11) to the attention of the potential participants;

   4. Obtain from each plan participant who purchases a Section 403(b) annuity
contract,  prior  to or at  the  time  of  such  purchase,  a  signed  statement
acknowledging  the  participant's  understanding  of  (1)  the  restrictions  on
redemption imposed by Section 403(b)(11),  and (2) other investment alternatives
available  under  the  employer's   Section  403(b)  arrangement  to  which  the
participant may elect to transfer his contract value.






                                   SIGNATURES

As  required by the  Securities  Act of 1933 and the  Investment  Company Act of
1940, as amended,  the Registrant certifies that it has caused this Registration
Statement  to be signed on its  behalf in the City of  Minneapolis  and State of
Minnesota, on this 7th day of February, 2003.


                                  ALLIANZ  LIFE
                                  VARIABLE  ACCOUNT  B
                                  (Registrant)


                                  By:  ALLIANZ  LIFE  INSURANCE COMPANY
                                       OF  NORTH  AMERICA
                                          (Depositor)

                                  By: /S/ STEWART GREGG
                                     --------------------------------
                                          Stewart Gregg
                                          Senior Counsel



                                  ALLIANZ  LIFE  INSURANCE  COMPANY
                                  OF  NORTH  AMERICA
                                   (Depositor)

                                   By: /S/ STEWART GREGG
                                      ------------------------------
                                           Stewart Gregg
                                           Senior Counsel








Pursuant to the  requirements of the Securities Act of 1933,  this  registration
statement has been signed by the following  persons in the capacities and on the
dates indicated.

Signature  and  Title


Robert W. MacDonald*       Chairman of the Board                     02/07/2003
Robert W. MacDonald

Mark A. Zesbaugh*          Director and Chief Executive Officer      02/07/2003
Mark A. Zesbaugh

Michael P. Sullivan*       Director                                  02/07/2003
Michael P. Sullivan

Dr. Gerhard Rupprecht*     Director                                  02/07/2003
Dr. Gerhard Rupprecht

Rev. Dennis J. Dease*      Director                                  02/07/2003
Rev. Dennis J. Dease

James R. Campbell*         Director                                  02/07/2003
James R. Campbell

Robert M. Kimmitt*         Director                                  02/07/2003
Robert M. Kimmitt

Michael Diekmann*          Director                                  02/07/2003
Michael Diekmann

Paul M Saffert*            Director                                  02/07/2003
Paul M Saffert

Gabby Matzdorff*           Sr. Vice President and                    02/07/2003
Gabby Matzdorff            Chief Financial Officer

Charles Kavitsky*          President and                             02/07/2003
Charles Kavitsky           Chief Marketing Officer

Denise Blizil*             Sr. Vice President and                    02/07/2003
Denise Blizil              Chief Administrative Officer



                                    *By    Power  of  Attorney


                                     By: /S/ STEWART GREGG
                                         --------------------
                                         Stewart Gregg
                                         Attorney-in-Fact


<PAGE>



                                    EXHIBITS

                                       TO

                          POST-EFFECTIVE AMENDMENT NO. 9

                                       TO

                                    FORM N-4

                         ALLIANZ LIFE VARIABLE ACCOUNT B

                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA






                                INDEX TO EXHIBITS

EXHIBIT

EX-99.B9    Opinion and Consent of Counsel (to be filed by amendment)

EX-99.B10   Independent Auditors' Consent (to be filed by amendment)