File Nos.   333-82329
                                                                       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.  6                               (X)

REGISTRATION  STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940           (X)
            Amendment  No.    131                                          (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 ALTERITY TM

                            VARIABLE ANNUITY CONTRACT

                                    issued by

                         ALLIANZ LIFE VARIABLE ACCOUNT B

                                       and

                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA



This prospectus  describes a 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.  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  Choices. 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.


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

Index of Terms                                            4

Summary                                                   5

Fee Table                                                 7

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                     21
         - Traditional Guaranteed Minimum Income
           Benefit (Traditional GMIB)
         - Enhanced Guaranteed Minimum Income
           Benefit (Enhanced GMIB)
         - GMIB Examples


3. Purchase                                              22

     Purchase Payments                                   22
     Automatic Investment Plan                           22
     Allocation of Purchase Payments                     22
     Tax-Free Section 1035 Exchanges                     23
     Faxed Applications                                  23
     Free Look                                           23
     Accumulation Units                                  23

4. Investment Options                                    24

     Substitution and Limitation on
     Further Investments                                 28
     Transfers                                           29
     Dollar Cost Averaging Program                       30
     Flexible Rebalancing                                30
     Financial Advisers - Asset
         Allocation Programs                             31
     Voting Privileges                                   31
     Substitution                                        31


5. Fixed Account                                         31



6. Expenses                                              31

     Insurance Charges                                   31
         Mortality and Expense Risk Charge               31
         Administrative Charge                           32
         Distribution Expense Charge                     32
     Contract Maintenance Charge                         32
     Contingent Deferred Sales Charge                    32
     Partial Withdrawal Privilege                        33
           Waiver of Contingent Deferred
         Sales Charge Benefits                           33
      Reduction or Elimination of the
     Contingent Deferred Sales Charge                    33
     Commutation Fee                                     33
     Transfer Fee                                        34
     Premium Taxes                                       34
     Income Taxes                                        34
     Investment Option Expenses                          34

7. Taxes                                                 34

    Annuity Contracts in General                         34
    Qualified and Non-Qualified Contracts                34
    Multiple Contracts                                   35
    Partial 1035 Exchanges                               35
    Withdrawals-- Non-Qualified Contracts                35
    Withdrawals-- Qualified Contracts                    36
    Withdrawals-- Tax-Sheltered Annuities                36
    Death Benefits                                       36
    Diversification                                      37

8. Access to Your Money                                  37


    Guaranteed Partial Withdrawal Benefit (GPWB)-
         New Contracts only                              37
    Systematic Withdrawal Program                        37
    Minimum Distribution Program                         38
    Suspension of Payments or Transfers                  38


9. Performance and Illustrations                         38


10. Death Benefit                                        39


    Upon Your Death                                      39
    Traditional Guaranteed Minimum Death Benefit
       (Traditional GMDB)                                40
    Enhanced Guaranteed Minimum Death Benefit
       (Enhanced GMDB)                                   40
    Earnings Protection Guaranteed Minimum Death
       Benefit (EP GMDB)                                 40
    Death Benefit Examples
    Death Benefit Options                                41
    Death of Annuitant                                   42


11. Other Information                                    42

    Allianz Life                                         42
    The Separate Account                                 42
    Distribution                                         42
    Additional Credits for Certain Groups                43
    Administration                                       43
    Financial Statements                                 43


12. Glossary                                             43

13. Table of Contents of the Statement of Additional
     Information                                         43

14. Privacy Notice                                       44

    Appendix A - Condensed Financial
    Information                                          51




<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 both "New  Contracts" and "Old  Contracts." The product
features  and  expenses of New  Contracts  and Old  Contracts  differ in certain
respects, as set out in this prospectus. Only one type of Contract is 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 you may instead select the Enhanced
Guaranteed  Minimum Death Benefit (Enhanced GMDB) for an additional  charge. The
Enhanced  GMDB  guarantees  a minimum  death  benefit of the greater of: (a) the
Annual  Increase  Amount prior to any owner's 81st birthday,  or (b) the Maximum
Anniversary  Value (MAV) on each Contract  anniversary prior to any owner's 81st
birthday.  This  amount is  adjusted  for  subsequent  partial  withdrawals  and
subsequent Purchase Payments.

If you and any Joint Owner are 75 or younger, you may instead elect the Earnings
Protection  Guaranteed Minimum Death Benefit (EP GMDB) for an additional charge.
The EP GMDB  may  provide  an  additional  death  benefit  amount  based on your
Contract performance or Purchase Payments.

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

Old Contracts  automatically  include the Traditional  Guaranteed Minimum Income
Benefit  (Traditional  GMIB) at no additional  charge. New Contracts provide the
Traditional GMIB as an optional benefit for an additional charge. If you and any
Joint  Owner are 79 or younger  you may elect the  Enhanced  Guaranteed  Minimum
Income Benefit (Enhanced GMIB) for an additional  charge.  The GMIBs guarantee a
minimum level of income  through  Annuity  Payments  after the seventh  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 Annual  Increase  Amount  prior to any owner's  81st
birthday,  or (b) the MAV on each Contract anniversary prior to any owner's 81st
birthday. The Enhanced GMIB value is 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  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 GMIB value.  Payments
you receive  under the GPWB will be taxed as a  withdrawal.  If you exercise the
GPWB,  your GMIB and GMDB 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 at Contract  issue  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 the New  Contract  with  $25,000 or more if you choose to
include a GMIB in your  Contract.  Otherwise,  you can  purchase a Contract  for
$10,000  or  more.  You can add  $250 or more  any  time  you  like  during  the
Accumulation Phase until you exercise your GPWB benefit, if applicable.  In some
states,  additional  Purchase  Payments may be restricted to the first  Contract
year. See Section 3 - "Purchase - Allocation of Purchase Payments."

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 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 value of your Contract is at least $100,000.

Allianz Life deducts a mortality and expense risk charge which varies  depending
upon the death and income  benefits  you choose.  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 table that follows shows
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.
<TABLE>
<CAPTION>
SEPARATE ACCOUNT ANNUAL EXPENSES:*

FOR NEW CONTRACTS:
                                                          CHARGES FOR            CHARGES FOR             CHARGES FOR
                                                         CONTRACT WITH          CONTRACT WITH           CONTRACT WITH
                                                            NO GMIB          TRADITIONAL GMIB**        ENHANCED GMIB**
         <S>                                                 <C>                    <C>                      <C>
         Traditional Guaranteed Minimum
         Death Benefit                                       1.50%                  1.70%                    2.20%

         Earnings Protection Guaranteed
         Minimum Death Benefit                               1.80%                  2.00%                    2.45%

         Enhanced Guaranteed Minimum
         Death Benefit                                       1.80%                  1.95%                    2.40%
</TABLE>

<TABLE>
<CAPTION>
FOR OLD CONTRACTS:
                                                          CHARGES FOR            CHARGES FOR
                                                         CONTRACT WITH          CONTRACT WITH
                                                       TRADITIONAL GMIB        ENHANCED  GMIB
         <S>                                                 <C>                    <C>
         Traditional Guaranteed Minimum
         Death Benefit                                       1.40%                  1.70%

         Earnings Protection Guaranteed
         Minimum Death Benefit                               1.60%                  1.90%

         Enhanced Guaranteed Minimum
         Death Benefit                                       1.70%                  1.90%
<FN>
*        Some or all of the guaranteed benefits may not be available in all states.

** If you  choose a GMIB in a New  Contract,  a  Guaranteed  Partial  Withdrawal
Benefit (GPWB) is automatically included without additional charge.
</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 7% in the first Contract year and declines to 0%
after 6 complete  Contract  years after each  Purchase  Payment was  received (5
complete Contract years for Old Contracts).

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.

Each Investment Option deducts  portfolio  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.

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 59 1/2 when 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 can also
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 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 you have  selected.  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 the value
of your  Contract 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)




FOR NEW CONTRACTS:

             NUMBER OF COMPLETE CONTRACT YEARS
             SINCE RECEIPT OF PURCHASE PAYMENT      CHARGE
                             0                        7%
                             1                        6%
                             2                        5%
                             3                        4%
                             4                        3%
                             5                        2%
                      6 years or more                 0%

FOR OLD  CONTRACTS:  The  Contingent  Deferred Sales Charge is the same as above
except that 5 complete  Contract years after your Purchase  Payment is received,
the charge is 0%.
<TABLE>
<CAPTION>
Commutation Fee**

(as a percentage of amount liquidated under Annuity Option 2 or 4)   ( as a percentage of amount liquidated under Annuity Option 6
for Old Contracts)

                        YEARS SINCE                                NUMBER OF COMPLETE CONTRACT YEARS
                        INCOME DATE               CHARGE            SINCE RECEIPT OF PURCHASE PAYMENT    CHARGE
<S>                         <C>                     <C>                            <C>                      <C>
                            0-1                     5%                             0                        7%
                            1-2                     4%                             1                        6%
                            2-3                     3%                             2                        5%
                            3-4                     2%                             3                        4%
                          over 4                    1%                             4                        3%
                                                                            5 years or more                 0%

Transfer Fee........................................You will always be allowed at least 12 free transfers in any Contract year.
                                                    For transfers in excess of the free transfers permitted, the maximum Transfer
                                                    fee will be $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>

<TABLE>
<CAPTION>

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

FOR NEW CONTRACTS:

                                              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         1.35%    .15%   1.50%        1.55%    .15%    1.70%      2.05%  .15%  2.20%
Earnings Protection Guaranteed Minimum Death Benefit 1.65%    .15%   1.80%        1.85%    .15%    2.00%      2.30%  .15%  2.45%
Enhanced Guaranteed Minimum Death Benefit            1.65%    .15%   1.80%        1.80%    .15%    1.95%      2.25%  .15%  2.40%

FOR OLD CONTRACTS:
                                       CHARGES FOR CONTRACT WITH TRADITIONAL GMIB   CHARGES FOR CONTRACT WITH ENHANCED GMIB
                                                          M&E      Admin.     Total    M&E     Admin.    Total
                                                         CHARGE    CHARGE    CHARGE   CHARGE    CHARGE   CHARGE
Traditional Guaranteed Minimum Death Benefit              1.25%      .15%     1.40%    1.55%     .15%     1.70%
Earnings Protection Guaranteed Minimum Death Benefit      1.45%      .15%     1.60%    1.75%     .15%     1.90%
Enhanced Guaranteed Minimum Death Benefit                 1.55%      .15%     1.70%    1.75%     .15%     1.90%

<FN>
*   Each year, on a cumulative  basis (minus any previous  withdrawals  you make
    which are not subject to a contingent  deferred sales charge),  you may make
    partial  withdrawals  of up  to  10%  of  total  Purchase  Payments  and  no
    contingent  deferred  sales  charge  will be  assessed.  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 value of your
    Contract is at least  $100,000.  If you own more than one  Contract  offered
    under this Prospectus  (registered with the same social security number), we
    will determine the total value of all your Contracts.  If the total value of
    all your Contracts is at least $100,000, the charge is waived on all of your
    Contracts.
</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 Old 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  surrender  your Contract at the end of each
time period for Contracts with:

a)   selection of the Enhanced  GMIB and the EP GMDB (which  carries the highest
     total Separate Account expenses of 2.45%).

b)   selection  of the  Traditional  GMDB and no GMIB (which  carries the lowest
     total Separate Account expenses of 1.50%).

<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)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Blue Chip Fund                           (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Dent Demographic Trends Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM International Equity Fund                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------
USAZ Alliance Capital Growth and Income Fund      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Large Cap Growth Fund       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Technology Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Financial Portfolio                      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Value Portfolio                          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Small Cap Stock Index Fund                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Stock Index Fund                          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Global Communications Securities Fund    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Growth and Income Securities Fund        (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin High Income Fund                         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Income Securities Fund                   (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Large Cap Growth Securities Fund         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Real Estate Fund                         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Rising Dividends Securities Fund         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Fund                           (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Value Securities Fund          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin U.S. Government Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2005                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2010                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Mutual Discovery Securities Fund                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Mutual Shares Securities Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Developing Markets Securities Fund      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Foreign Securities Fund                 (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Growth Securities Fund                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Templeton Developed Markets Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------
Jennison 20/20 Focus Portfolio                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------
SP Jennison International Growth Portfolio        (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

SP Strategic Partners Focused Growth Portfolio    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Global Securities Fund/VA             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer High Income Fund/VA                   (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Main Street Growth & Income Fund/VA   (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Oppenheimer Emerging Growth Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT High Yield Portfolio                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth and Income Portfolio  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT Total Return Portfolio                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Growth and Income Fund                 (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Renaissance Fund                       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Value Fund                             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Seligman Small-Cap Value Portfolio                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Money Market Fund                            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Aggressive Growth Fund            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Comstock Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Emerging Growth Fund              (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth and Income Fund            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth Fund                       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------
</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  surrendered or if you apply
your Contract value to an Annuity Option for Contracts with:

a)   selection of the Enhanced  GMIB and the EP GMDB (which  carries the highest
     total Separate Account expenses of 2.45%).

b)   selection  of the  Traditional  GMDB and no GMIB (which  carries the lowest
     total Separate Account expenses of 1.50%).

<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)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Blue Chip Fund                           (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM Dent Demographic Trends Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ AIM International Equity Fund                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Growth and Income Fund      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Large Cap Growth Fund       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Technology Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Financial Portfolio                      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Davis VA Value Portfolio                          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Small Cap Stock Index Fund                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Dreyfus Stock Index Fund                          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Global Communications Securities Fund    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Growth and Income Securities Fund        (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin High Income Fund                         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Income Securities Fund                   (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Large Cap Growth Securities Fund         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Real Estate Fund                         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Rising Dividends Securities Fund         (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Fund                           (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Small Cap Value Securities Fund          (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin U.S. Government Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2005                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Franklin Zero Coupon Fund 2010                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Mutual Discovery Securities Fund                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Mutual Shares Securities Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Developing Markets Securities Fund      (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Foreign Securities Fund                 (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Templeton Growth Securities Fund                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Templeton Developed Markets Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Jennison 20/20 Focus Portfolio                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

SP Jennison International Growth Portfolio        (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

SP Strategic Partners Focused Growth Portfolio    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Global Securities Fund/VA             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer High Income Fund/VA                   (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Oppenheimer Main Street Growth and Income Fund/VA (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Oppenheimer Emerging Growth Fund             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT High Yield Portfolio                    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT StocksPLUS Growth & Income Portfolio    (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

PIMCO VIT Total Return Portfolio                  (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Growth and Income Fund                 (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Renaissance Fund                       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ PIMCO Value Fund                             (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

Seligman Small-Cap Value Portfolio                (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Money Market Fund                            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Aggressive Growth Fund            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Comstock Fund                     (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Emerging Growth Fund              (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth and Income Fund            (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------

USAZ Van Kampen Growth Fund                       (a)               (a)               (a)              (a)

                                                  (b)               (b)               (b)              (b)
------------------------------------------------------------------------------------------------------------------------------------
</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 with a Fixed Account  offered by Allianz Life.  All  references in this
prospectus to "we," "us" and "our" refer to Allianz Life.


o   Flexible  Purchase  Payments  means  that you may  choose  to make  Purchase
    Payments at any time during the Accumulation  Phase (until you exercise your
    GPWB benefits, where applicable),  in whatever amount you choose, subject to
    certain minimum and maximum 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  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 two years after you
buy 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
Choices 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  individual  on  whose  life we base  Annuity
Payments.  You name the  Annuitant.  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 2 years after you buy 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 7th Contract
anniversary (and 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,  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
whether you select the  Traditional  GMIB or the  Enhanced  GMIB and whether you
have an Old  Contract or a 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 as:

o a variable payout,

o a fixed payout, or

o a combination of both.

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  all 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.  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  value of your  Contract  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.

You can choose a 3%, 5% or 7% assumed  investment rate (AIR).  The 7% AIR is not
available in all states. If the actual performance exceeds the AIR you selected,
your Annuity Payments will increase.  Similarly, if the actual rate is less than
the AIR you selected, 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  Annuity  Option 2 with 5 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 5,  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)  of an amount up to 75% of the Total  Liquidation  Value,  less any
previously  liquidated  amounts.  The  Total  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, less a commutation fee, or as set forth in
your  Contract.  The minimum amount that you can liquidate is the lesser of $500
or the remaining portion of the Total  Liquidation Value available.  The partial
liquidation  will be processed on the next annuity  calculation  date after your
written request is received.


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 can be equal
to 100%, 75% or 50% 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 5, 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 later 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.


While  either  the  Annuitant  or Joint  Annuitant  is alive  and the  number of
variable  Annuity  Payments we have made is less than the  guaranteed  number of
payments  elected,  you may  request a  withdrawal  (partial  Liquidation).  The
minimum  amount that you can  liquidate  is the lesser of $500 or the  remaining
portion of the Total Liquidation Value available.  The partial  liquidation will
be processed on the next annuity  calculation date after your written request is
received commuted as set forth in your Contract.


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

For a fixed Annuity Payment,  the amount of the refund will be any excess of the
amount  applied to this Annuity Option over the total of all payments made under
this option.  For a variable Annuity  Payment,  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 Annuity Units 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 (For New Contracts,  this option is
generally  only  available as a ten-year or more period  certain fixed payout of
the GMIB value.  Annuity  Option 6 may be available  for fixed  and/or  variable
payouts in some states for all 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 5 to 30. If at the time of the
death of the later 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 liquidation  at least
once  each  Contract  year of up to 100% of the Total  Liquidation  Value in the
Contract. The liquidation will be processed on the next annuity calculation date
after your written request is received commuted as set forth in the Contract.


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

Old Contracts  automatically  include the Traditional  Guaranteed Minimum Income
Benefit  (Traditional  GMIB) at no additional  charge. New Contracts provide the
Traditional GMIB as an optional benefit for an additional  mortality and expense
risk charge.  If you and any Joint Owner are 79 or younger at Contract issue you
may elect the Enhanced  Guaranteed Minimum Income Benefit (Enhanced GMIB) for an
additional mortality and expense risk charge. Once you select a GMIB, you cannot
change it. The Enhanced GMIB may not be appropriate for owners who are age 75 to
79 on the Issue Date  because  the GMIB value is limited  after age 81. You must
hold your Contract for seven  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 seven 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 seventh 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. For Old Contracts with the Enhanced
GMIB and for all New  Contracts,  if 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 two 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)
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
The Annual Increase Amount is initially equal to your Purchase Payment.

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 Old  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,  we calculate the Annual Increase Amount in the same way that we do on
any business day other than a Contract anniversary.

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.

B. MAXIMUM  ANNIVERSARY  VALUE (MAV) The MAV is initially equal to your Purchase
Payment.

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 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
any applicable premium taxes).

GMIB EXAMPLES
o    You purchase a New Contract with an initial Purchase Payment of $100,000 on
     Jan. 1, 2004. 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:
               Purchase Payment made on Jan. 1, 2004                                    $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
$131,250.
</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 is  $25,000.  For all other  Contracts,  the  minimum  initial
     payment we will accept is $10,000.

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

o    You can make  additional  Purchase  Payments  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.

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 90 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.

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 or checking  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 to the
Investment  Choices you have  selected.  We ask that you allocate  your money in
either  whole  percentages  or  round  dollars.  Transfers  do  not  change  the
allocation  instructions  for  payments.  You can  instruct  us how to  allocate
additional  Purchase  Payments  you  make.  If you do not  instruct  us, we will
allocate  them in the  same way as your  previous  instructions  to us.  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
Choices. We may change this in the future.  However, we will always allow you to
invest in at least five Investment Choices.


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 surrender charge
on your old contract;  there will be a new  surrender  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:

1.   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

2.   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  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  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. 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 $3,000 by $13.25 and
credit your Contract on Wednesday night with $226.41509 Accumulation Units.


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
Financial  Adviser 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 funds 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 Choice 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
Option. 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  Option 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 activity.

The following applies to any transfer:

1.  The minimum  amount which you can transfer is $1,000 ($500 in New Jersey) or
    your entire value in the Investment  Choice,  if less.  This  requirement is
    waived if the  transfer  is in  connection  with the Dollar  Cost  Averaging
    Program or Flexible Rebalancing (description as follows).

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

3.  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.

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

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

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

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

8.  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; or

     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 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. The Fixed Account is not part of Flexible  Rebalancing.  You can direct
us to readjust your Contract  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 table  below as a
percentage of average annual account value.

<TABLE>
<CAPTION>
FOR NEW CONTRACTS:
                                                             CHARGES FOR            CHARGES FOR             CHARGES FOR
                                                            CONTRACT WITH          CONTRACT WITH           CONTRACT WITH
                                                               NO GMIB          TRADITIONAL  GMIB**       ENHANCED GMIB**
<S>                                                             <C>                    <C>                      <C>
         Traditional Guaranteed Minimum Death Benefit           1.50%                  1.70%                    2.20%
         Earnings Protection Guaranteed Minimum Death Benefit   1.80%                  2.00%                    2.45%
         Enhanced Guaranteed Minimum Death Benefit              1.80%                  1.95%                    2.40%

FOR OLD CONTRACTS:                                                        CHARGES FOR CONTRACT      CHARGES FOR CONTRACT
                                                                          WITH TRADITIONAL GMIB      WITH ENHANCED GMIB
         Traditional Guaranteed Minimum Death Benefit                           1.40%                        1.70%
         Earnings Protection Guaranteed Minimum Death Benefit                   1.60%                        1.90%
         Enhanced Guaranteed Minimum Death Benefit                              1.70%                        1.90%
<FN>
**The guaranteed benefits may not be available in all states.
</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 .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 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
the Fixed Account. The charge is for administrative expenses (see above).


However,  during the  Accumulation  Phase,  if the value of your  Contract is at
least  $100,000 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  value of all your
Contracts.  If the total value of all Contracts registered under the same social
security number is at least $100,000,  Allianz Life will not assess the contract
maintenance charge (except in New Jersey).  Currently, the charge is also waived
during  the Payout  Phase if the value of your  Contract  at the Income  Date is
$100,000  (except in New Jersey).  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,  Allianz Life will deduct the 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 annuity period 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 is:


FOR NEW CONTRACTS:

                 NUMBER OF COMPLETE CONTRACT
                     YEARS SINCE RECEIPT
                      OF PURCHASE PAYMENT         CHARGE
                               0                    7%
                               1                    6%
                               2                    5%
                               3                    4%
                               4                    3%
                               5                    2%
                        6 YEARS OR MORE             0%

FOR OLD  CONTRACTS:  The  contingent  deferred sales charge is the same as above
except that 5 complete  Contract  years after your Purchase  Payment is received
the charge is 0%.

However, after Allianz Life has had a Purchase Payment for 6 full Contract years
for New Contracts (5 complete  Contract  years for Old  Contracts),  there is no
charge when you withdraw that Purchase  Payment.  For purposes of the contingent
deferred sales charge, Allianz Life treats withdrawals as coming from the oldest
Purchase  Payments first.  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.

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, on a cumulative basis (minus
any previous  withdrawals you have made which were not subject to the contingent
deferred  sales charge) you can make multiple  withdrawals up to 10% of Purchase
Payments and no contingent  deferred  sales charge will be deducted from the 10%
you take out. Cumulative means that if you do not use the 10% in a year, you may
carry it over to the next year.  (The 10% may be increased  when the Contract is
issued to a charitable  remainder  trust.) If you make a withdrawal of more than
10%,  the amount over the 10% amount may be subject to the  contingent  deferred
sales  charge.  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 "Access to Your Money" for a description  of the  Systematic
Withdrawal Program and the Minimum Distribution Program.

WAIVER  OF   CONTINGENT   DEFERRED   SALES  CHARGE   BENEFITS.   Under   certain
circumstances,  after the first Contract  year,  Allianz Life will permit you to
take your money out of the  Contract  without  deducting a  contingent  deferred
sales charge:

1.  if you become confined to a nursing home;

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

3.  if you become totally disabled for at least 90 consecutive days.

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 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.)

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.  The  commutation  fee is a
percentage of the amount liquidated and is equal to:

For Annuity Options 2 and 4:

                         YEARS SINCE              COMMUTATION
                          INCOME DATE               FACTOR
                             0 - 1                    5%
                             1 - 2                    4%
                             2 - 3                    3%
                             3 - 4                    2%
                            Over 4                    1%


For Annuity Option 6 (Old Contracts only):

                  NUMBER OF COMPLETE CONTRACT
                      YEARS SINCE RECEIPT         COMMUTATION
                      OF PURCHASE PAYMENT           FACTOR
                               0                      7%
                               1                      6%
                               2                      5%
                               3                      4%
                               4                      3%
                        5 years or more               0%

TRANSFER FEE


You can currently make 12 free transfers  every year. We measure a year from the
day we issue your  Contract.  If you make more than 12 transfers a year, we will
deduct a transfer fee of $25 for each  additional  transfer.  Transfers from the
Fixed  Account  Investment  Choices 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 account 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) do not apply to IRAs. The exception in 4) 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 withdraw 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 IRAs)
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, 4 or 6 (See
"Annuity Payments -The Payout Phase)."


When you make a complete  withdrawal  you will receive the value of the Contract
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 "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.


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) - NEW CONTRACTS ONLY

If you choose to  include a GMIB in your 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 seventh  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. Your GPWB value is equal
to your GMIB value.  Each GPWB payment  reduces the 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 will affect the Contract value reduction.

Any  contingent  deferred  sales  charges  will not  apply to the GPWB  benefit.
However,  any  contingent  deferred  sales  charge will apply to any  additional
partial  withdrawals  in excess of the GPWB  payment.  Your  partial  withdrawal
privilege no longer  applies once you elect to begin  receiving  GPWB  payments.
GPWB payments will be taxed in the same manner as a withdrawal.

Once you elect to GPWB, you can no longer make any 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 transfer
money 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, THE ENHANCED GMDB
AND THE EP 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  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).  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 can only stop  receiving  GPWB  payments if you
instead  elect to  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.

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.  If the amount you take
out under the Systematic  Withdrawal Program is less than the Partial Withdrawal
Privilege  then the balance (in dollar  value) is carried over to the  following
year. 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.

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.

For the Franklin Templeton Variable Insurance Products Trust, the performance is
based on the Investment  Option's Class 1 shares.  Class 2 shares are relatively
new and effective  July 1, 1999 currently have Rule 12b-1 Plan expenses of 0.25%
per year which will affect future performance. Prior to July 1, 1999 the Class 2
shares had 12b-1 plan expenses of 0.30% per year. The  information is based upon
the historical experience of the Investment Options' Class 1 shares and does not
represent past performance or predict future performance.

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%.
"Payin" and "payout" illustrations may have various features, as follows:


     o    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.

     o    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 fixed  payin
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 charges shown in an illustration will vary,  depending upon
the Contract features you select. For surrender 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 desired,  you may elect one of two optional  GMDBs.  Both involve  additional
mortality and expense risk charges. The Enhanced GMDB is available if all owners
are age 79 or younger on the issue date.  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. The EP GMDB is  available if all owners are
age 75 or younger on the Issue Date.  The EP GMDB benefit  values are limited if
any owner is age 70 or older on the issue date.

ONCE YOU SELECT A DEATH  BENEFIT YOU CANNOT  CHANGE IT. THE ENHANCED GMDB AND/OR
THE EP 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  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)

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, as defined 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.

The guaranteed minimum death benefit is equal to the greater of A or B:

A. 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

|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 Annual Increase Amount is equal to:

|X|  for Old 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 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)

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 Contrac
     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.

EARNINGS PROTECTION GUARANTEED MINIMUM DEATH BENEFIT (EP GMDB)

If the EP GMDB applies,  the amount of the death benefit will be the greatest of
1, 2 or 3 (described below) 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.  Total Purchase Payments less adjusted partial withdrawals.

AN ADJUSTED PARTIAL WITHDRAWAL   =  PW  X  DB
                                    ---------
                                        CV

         PW = the  partial  withdrawal  prior  to any  MVA,  but  including  any
         contingent  deferred  sales  charge.

         DB = the greater of
          (a)  Contract  value,  or
          (b)  total Purchase Payments minus prior adjusted partial withdrawals,
               on the date of (but prior to) the current partial withdrawal.  CV
               = the  Contract  value on the date of (but prior to) the  partial
               withdrawal.

3.   The  Contract  value at 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,

         PLUS

FOR OLD CONTRACTS:

|X|  If you are 69 or younger on the issue date, 40% of the lesser of (a) or
     (b), or

|X|  If you are 70 or older on the issue date, 25% of the lesser of (a) or (b).

     (a)  is the  Contract  value as  determined  in number 1 above  minus total
          Purchase Payments.

     (b)  is the total Purchase Payments.

FOR NEW CONTRACTS:

|X|  If you are 69 or younger on the issue date, 50% of the lesser of (a) or
     (b), or

|X|  If you are 70 or older on the issue date, 30% of the lesser of (a) or (b).

     (a)  is the  Contract  value as  determined  in number 1 above  minus total
          Purchase Payments.

     (b)  is three times the total  Purchase  Payments you make in the first two
          Contract Years.

THE  TRADITIONAL  GMDB, THE ENHANCED GMDB AND THE EP 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
any applicable premium taxes).

DEATH BENEFIT EXAMPLES
o    You purchase a New Contract with an initial Purchase Payment of $100,000 on
     Jan. 1, 2004  allocated only to the  Investment  Options.  You are the only
     owner and are 69 or younger on the issue date.
o    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 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.
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.

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:
<TABLE>
<CAPTION>

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

         1) The Annual Increase Amount:
<S>                                                                                    <C>
               Purchase Payment made on Jan. 1, 2004                                    $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.

EP GMDB:

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

         1) Contract value:                                                            $140,000

         2) Total Purchase Payments                                                    $100,000
               Less adjusted partial withdrawals calculated
                 as PW  x  DB/CV:
                 ($20,000 x $160,000 / $160,000) = $20,000  x  1  =                   -  20,000
                                                                                       $ 80,000

         3) Contract value                                                             $140,000
               Plus 50% of the lesser of (a) or (b).
(a) Contract value minus total Purchase
                     Payments: $140,000  -  $100,000  =   $  40,000
(b) Three times your total Purchase Payments
                     received in the first two Contract years:  $300,000
                 (c) is less than (b), so 50% of (a) =  0.50  x  $40,000  =            $ 20,000
                                                                                       $160,000

Therefore, the death benefit under the EP GMDB on the tenth Contract anniversary
is $160,000.
</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.  With
respect to the EP GMDB, the Contract value is then treated as the total Purchase
Payments in the  calculation of the death benefit for the Contract  continued by
the spouse. 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  person (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,  Minnesota 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 form 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%  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% 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  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 ten  Investment  Choices  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 a base
death benefit of the  Traditional  Guaranteed  Minimum Death Benefit for a total
Separate Account annual expense of 1.50%.

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

OLD  CONTRACTS  - a Contract  that has a base death  benefit of the  Traditional
Guaranteed  Minimum Death Benefit for a total Separate Account annual expense of
1.40%.

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").

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                                      12

Federal Tax Status                                 12

Annuity Provisions                                 20

Mortality and Expense Risk Guarantee               21

Financial Statements                               21

Appendix A - Illustrations                         22

Appendix B - Condensed Financial Information       45



<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.


<TABLE>
<CAPTION>


THE TABLE BELOW WILL BE UPDATED UPON AMENDMENT



(NUMBER OF UNITS IN THOUSANDS)       PERIOD OR YEAR ENDED DECEMBER 31, 2001             INCEPTION (02/01/2000) TO DECEMBER 31, 2000

                                                          ENHANCED GMDB OR
                                   TRADITIONAL GMDB   EARNINGS PROTECTION GMDB           TRADITIONAL GMDB        ENHANCED GMDB
                                          AND                   AND                             AND                   AND
INVESTMENT OPTIONS:                TRADITIONAL GMIB        ENHANCED GMIB                 TRADITIONAL GMIB        ENHANCED GMIB
------------------------------------------------------------------------------------------------------------------------------------
                                          1.40%                1.90%                            1.40%                 1.90%
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                  <C>                          <C>                    <C>
USAZ ALLIANCE CAPITAL GROWTH AND INCOME
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.443              $10.435                              NA                   NA
Number of units outstanding at end of period   2                    9                              NA                   NA
USAZ ALLIANCE CAPITAL LARGE CAP GROWTH
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.526              $10.518                              NA                   NA
Number of units outstanding at end of period   4                   18                              NA                   NA
USAZ ALLIANCE CAPITAL TECHNOLOGY
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.746              $10.737                              NA                   NA
Number of units outstanding at end of period   0                   13                              NA                   NA
DAVIS VA FINANCIAL
Unit value at beginning of period        $13.319              $13.258                              NA                   NA
Unit value at end of period              $11.771              $11.658                         $13.319              $13.258
Number of units outstanding at end of period  88                  132                              25                    7
DAVIS VA VALUE
Unit value at beginning of period        $10.919              $10.869                              NA                   NA
Unit value at end of period               $9.648               $9.556                         $10.919              $10.869
Number of units outstanding at end of period 256                  243                              41                    8
FRANKLIN GLOBAL COMMUNICATIONS SECURITIES
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $17.855              $16.750                              NA                   NA
Number of units outstanding at end of period   0                    0                              NA                   NA
FRANKLIN GROWTH AND INCOME SECURITIES
Unit value at beginning of period        $30.377              $28.664                              NA                   NA
Unit value at end of period              $29.270              $27.482                         $30.377              $28.664
Number of units outstanding at end of period  67                   70                               8                    1
FRANKLIN HIGH INCOME
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $18.333              $17.198                              NA                   NA
Number of units outstanding at end of period   1                    2                              NA                   NA
FRANKLIN INCOME SECURITIES
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $28.387              $26.630                              NA                   NA
Number of units outstanding at end of period   1                    0                              NA                   NA
FRANKLIN LARGE CAP GROWTH
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $18.303              $17.791                              NA                   NA
Number of units outstanding at end of period   5                    5                              NA                   NA
FRANKLIN REAL ESTATE
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $29.453              $27.630                              NA                   NA
Number of units outstanding at end of period   3                    4                              NA                   NA
FRANKLIN RISING DIVIDENDS SECURITIES
Unit value at beginning of period        $22.438              $21.483                              NA                   NA
Unit value at end of period              $25.126              $23.937                         $22.438              $21.483
Number of units outstanding at end of period  54                   74                               4                   NA
FRANKLIN SMALL CAP
Unit value at beginning of period        $23.825              $23.236                              NA                   NA
Unit value at end of period              $19.910              $19.321                         $23.825              $23.236
Number of units outstanding at end of period  86                   81                              30                   13
FRANKLIN SMALL CAP VALUE SECURITIES
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.673              $10.479                              NA                   NA
Number of units outstanding at end of period   1                    1                              NA                   NA
FRANKLIN U.S. GOVERNMENT
Unit value at beginning of period        $20.421              $19.262                              NA                   NA
Unit value at end of period              $21.619              $20.290                         $20.421              $19.262
Number of units outstanding at end of period  89                   79                               4                    1
FRANKLIN ZERO COUPON 2005
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $27.667              $25.955                              NA                   NA
Number of units outstanding at end of period  45                    1                              NA                   NA
FRANKLIN ZERO COUPON 2010
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $29.462              $27.639                              NA                   NA
Number of units outstanding at end of period  44                    1                              NA                   NA
MUTUAL DISCOVERY SECURITIES
Unit value at beginning of period        $14.890              $14.598                              NA                   NA
Unit value at end of period              $14.717              $14.355                         $14.890              $14.598
Number of units outstanding at end of period  54                   39                              14                    5
MUTUAL SHARES SECURITIES
Unit value at beginning of period        $14.782              $14.491                              NA                   NA
Unit value at end of period              $15.602              $15.219                         $14.782              $14.491
Number of units outstanding at end of period 133                  152                              28                    9
TEMPLETON DEVELOPING MARKETS SECURITIES
Unit value at beginning of period         $8.454               $8.178                              NA                   NA
Unit value at end of period               $7.662               $7.375                          $8.454               $8.178
Number of units outstanding at end of period  10                    7                               5                    1
TEMPLETON FOREIGN SECURITIES
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $17.761              $16.906                              NA                   NA
Number of units outstanding at end of period   1                    2                              NA                   NA
TEMPLETON GROWTH SECURITIES
Unit value at beginning of period        $19.467              $18.833                              NA                   NA
Unit value at end of period              $18.944              $18.234                         $19.467              $18.833
Number of units outstanding at end of period  51                   79                              12                    7
USAZ TEMPLETON DEVELOPED MARKETS
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.227              $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         $8.485               $8.483                              NA                   NA
Unit value at end of period               $5.361               $5.333                          $8.485               $8.483
Number of units outstanding at end of period   5                   15                              NA                   NA
SP STRATEGIC PARTNERS FOCUSED GROWTH
Unit value at beginning of period         $7.949               $7.947                              NA                   NA
Unit value at end of period               $6.605               $6.571                          $7.949               $7.947
Number of units outstanding at end of period  28                   45                              NA                   NA
OPPENHEIMER GLOBAL SECURITIES
Unit value at beginning of period        $10.379              $10.331                              NA                   NA
Unit value at end of period               $9.002               $8.916                         $10.379              $10.331
Number of units outstanding at end of period 168                  239                              44                   33
OPPENHEIMER HIGH INCOME
Unit value at beginning of period         $9.530               $9.487                              NA                   NA
Unit value at end of period               $9.582               $9.491                          $9.530               $9.487
Number of units outstanding at end of period  92                   57                              32                    1
OPPENHEIMER MAIN STREET GROWTH & INCOME
Unit value at beginning of period         $9.420               $9.377                              NA                   NA
Unit value at end of period               $8.344               $8.265                          $9.420               $9.377
Number of units outstanding at end of period 338                  364                             124                   20
PIMCO VIT HIGH YIELD
Unit value at beginning of period         $9.481               $9.438                              NA                   NA
Unit value at end of period               $9.580               $9.489                          $9.481               $9.438
Number of units outstanding at end of period  55                  211                              13                    4
PIMCO VIT STOCKSPLUS GROWTH AND INCOME
Unit value at beginning of period         $8.829               $8.789                              NA                   NA
Unit value at end of period               $8.266               $8.188                          $8.829               $8.789
Number of units outstanding at end of period  40                   73                               8                    1
PIMCO VIT TOTAL RETURN
Unit value at beginning of period        $10.676              $10.628                              NA                   NA
Unit value at end of period              $11.412              $11.303                         $10.676              $10.628
Number of units outstanding at end of period 241                  243                              24                    2
USAZ PIMCO GROWTH AND INCOME
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.140              $10.132                              NA                   NA
Number of units outstanding at end of period   2                    4                              NA                   NA
USAZ PIMCO RENAISSANCE
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.995              $10.986                              NA                   NA
Number of units outstanding at end of period   5                   47                              NA                   NA
USAZ PIMCO VALUE FUND
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period              $10.938              $10.929                              NA                   NA
Number of units outstanding at end of period   3                   14                              NA                   NA
SELIGMAN SMALL-CAP VALUE
Unit value at beginning of period        $13.672              $13.610                              NA                   NA
Unit value at end of period              $16.652              $16.493                         $13.672              $13.610
Number of units outstanding at end of period  78                  141                              15                    1
USAZ MONEY MARKET
Unit value at beginning of period        $10.373              $10.326                              NA                   NA
Unit value at end of period              $10.580              $10.479                         $10.373              $10.326
Number of units outstanding at end of period 299                  375                              93                   11
USAZ VAN KAMPEN AGGRESSIVE GROWTH
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period               $8.024               $7.997                              NA                   NA
Number of units outstanding at end of period   7                   68                              NA                   NA
USAZ VAN KAMPEN COMSTOCK
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period               $9.330               $9.299                              NA                   NA
Number of units outstanding at end of period  37                  445                              NA                   NA
USAZ VAN KAMPEN EMERGING GROWTH
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period               $9.134               $9.103                              NA                   NA
Number of units outstanding at end of period  43                  118                              NA                   NA
USAZ VAN KAMPEN GROWTH AND INCOME
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period               $9.667               $9.635                              NA                   NA
Number of units outstanding at end of period  42                  221                              NA                   NA
USAZ VAN KAMPEN GROWTH
Unit value at beginning of period             NA                   NA                              NA                   NA
Unit value at end of period               $9.520               $9.488                              NA                   NA
Number of units outstanding at end of period   5                   20                              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.
</FN>
</TABLE>





<PAGE>


                                     PART B


                       STATEMENT OF ADDITIONAL INFORMATION

                              USALLIANZ ALTERITYtm
                           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...........................................    12
Federal Tax Status .....................................    13
Annuity Provisions .....................................    20
Mortality and Expense Risk Guarantee....................    21
Financial Statements....................................    21
Appendix A - Illustrations..............................    22
Appendix B - Condensed Financial Information............    44



                                                                     ALTSAI-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 surrendered
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.  The  Insurance   Company  may  advertise  yield
information for the USAZ Money Market Fund. The USAZ 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 and the contract maintenance charge and,
in  certain  instances,   the  value  of  the  Investment   Option's  investment
securities. 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  subaccount'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 USAZ 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 -0.42% and an effective yield of -0.42%.

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 USAZ 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.

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 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 Old 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  1.50%).  Chart B reflects  performance  for New
Contracts  with the  Earnings  Protection  GMDB  and the  Enhanced  GMIB  (total
Separate Account expenses of 2.45%).

The performance figures in Charts C and D reflect  Accumulation Unit performance
from  portfolio  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 1.50%). Chart D reflects performance for New
Contracts  with the  Earnings  Protection  GMDB  and the  Enhanced  GMIB  (total
Separate Account expenses of 2.45%).

Chart E reflects  performance  information for the Investment Options which does
not include any contract fees or expenses.
<TABLE>
<CAPTION>

-------------------------------------------------------------- ------------- ---------------- -----------------
Product Feature                                                Total         Actual           Hypothetical
                                                               Separate      ---------------  Performance
                                                               Account       Performance
                                                               Expenses
-------------------------------------------------------------- ------------- ---------------- -----------------
-------------------------------------------------------------- ------------- ---------------- -----------------
<S>                                                            <C>           <C>              <C>
Traditional GMDB and no GMIB on New Contracts                  1.50%         Chart A          Chart C
-------------------------------------------------------------- ------------- ---------------- -----------------
-------------------------------------------------------------- ------------- ---------------- -----------------
Earnings Protection GMDB and                                   2.45%         Chart B          Chart D
Enhanced GMIB on New Contracts
-------------------------------------------------------------- ------------- ---------------- -----------------
</TABLE>

The performance figures in Column I of each table represent  performance figures
for the Accumulation Units which reflects 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 reflects 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.

CHARTS A-D WILL BE UPDATED UPON AMENDMENT
<TABLE>
<CAPTION>

Chart A -Traditional GMDB and no GMIB (1.50%)
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   InceptionYear     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    -2.66     N/A      N/A     N/A      N/A    4.44
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -1.83     N/A      N/A     N/A      N/A    5.27
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A     0.37     N/A      N/A     N/A      N/A    7.47
Davis VA Financial                  2/1/2000  -18.73      N/A     N/A      N/A     5.92  -11.63      N/A     N/A      N/A    8.95
Davis VA Value                      2/1/2000  -18.74      N/A     N/A      N/A    -5.35  -11.64      N/A     N/A      N/A   -2.01
Franklin Global Communications     1/24/1989  -37.48   -16.67   -3.64     1.81     4.52  -30.38   -14.24   -2.87     1.88    4.58
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -10.74     1.96    7.90     9.27     8.56   -3.64     3.63    8.42     9.34    8.63
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -4.38    -6.73   -1.83     4.63     4.72    2.72    -4.74   -1.10     4.70    4.79
Franklin Income Securities -       1/24/1989   -7.75     2.50    4.93     7.58     8.33   -0.65     4.16    5.51     7.65    8.40
Class 21,2
Franklin Large Cap Growth           5/1/1996  -19.77     3.92    9.73      N/A    11.18  -12.67     5.53   10.21      N/A   11.25
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -0.72     6.89    3.86     9.47     8.64    6.38     8.42    4.47     9.53    8.70
Franklin Rising Dividends          1/27/1992    4.88     4.14    9.86      N/A     9.60   11.98     5.76   10.35      N/A    9.68
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -23.53     9.35    8.48      N/A    11.68  -16.43    10.80    8.99      N/A   11.76
Franklin Small Cap Value            5/1/1998    5.10     9.96     N/A      N/A     0.61   12.20    11.41     N/A      N/A    1.79
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -1.23     2.63    4.72     5.28     6.11    5.87     4.29    5.31     5.36    6.18
22
Franklin Zero Coupon 2005 - Class  3/14/1989    0.31     1.75    5.60     7.21     8.21    7.41     3.43    6.16     7.28    8.27
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -2.95     0.07    5.92     8.06     8.74    4.15     1.81    6.48     8.13    8.80
12
Mutual Discovery Securities -      11/8/1996   -8.27     7.87    7.07      N/A     7.65   -1.17     9.36    7.60      N/A    7.75
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -1.55     8.21    8.11      N/A     8.96    5.55     9.70    8.63      N/A    9.06
21,2
Templeton Developing Markets       3/04/1996  -16.47    -3.33   -8.80      N/A    -3.50   -9.37    -1.49   -7.83      N/A   -3.39
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -24.27    -3.07    1.36      N/A     5.88  -17.17    -1.24    2.01      N/A    5.95
Class 21,2,4
Templeton Growth Securities -      3/15/1994   -9.79     3.46    6.35      N/A     8.44   -2.69     5.08    6.89      N/A    8.52
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -4.82     N/A      N/A     N/A      N/A    2.28
SP Jennison International Growth   12/15/2000 -43.92      N/A     N/A      N/A   -41.91  -36.82      N/A     N/A      N/A  -35.84
SP Strategic Partners Focused      12/15/2000 -24.00      N/A     N/A      N/A   -26.39  -16.90      N/A     N/A      N/A  -20.38
Growth
Oppenheimer Global Securities/VA    2/1/2000  -20.37      N/A     N/A      N/A    -9.81  -13.27      N/A     N/A      N/A   -6.32
Oppenheimer High Income/VA          2/1/2000   -6.56      N/A     N/A      N/A    -5.56    0.54      N/A     N/A      N/A   -2.20
Oppenheimer Main Street Growth &    2/1/2000  -18.52      N/A     N/A      N/A   -13.16  -11.42      N/A     N/A      N/A   -9.56
Income/VA
PIMCO VIT High Yield  - Admin.      2/1/2000   -6.17      N/A     N/A      N/A    -3.62    0.93      N/A     N/A      N/A   -0.32
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000  -19.77      N/A     N/A      N/A   -13.67  -12.67      N/A     N/A      N/A  -10.05
Income - Admin. Class
PIMCO VIT Total Return  - Admin.    2/1/2000   -0.22      N/A     N/A      N/A     5.96    6.88      N/A     N/A      N/A    9.00
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -5.69     N/A      N/A     N/A      N/A    1.41
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     2.87     N/A      N/A     N/A      N/A    9.97
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     2.29     N/A      N/A     N/A      N/A    9.39
Seligman Small-Cap Value - Class 1  2/1/2000   14.70      N/A     N/A      N/A    26.97   21.80      N/A     N/A      N/A   29.56
USAZ Money Market                   2/1/2000   -5.27      N/A     N/A      N/A    -0.22    1.83      N/A     N/A      N/A    2.98
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -26.85     N/A      N/A     N/A      N/A  -19.75
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -13.61     N/A      N/A     N/A      N/A   -6.51
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -15.26     N/A      N/A     N/A      N/A   -8.16
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -10.42     N/A      N/A     N/A      N/A   -3.32
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -11.90     N/A      N/A     N/A      N/A   -4.80
----------------------------------------------------------------------------------------------------------------------------------

<FN>
* 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.
</FN>
</TABLE>


Chart B -Earnings Protection GMDB and Enhanced GMIB (2.45%)


Total Return for the periods ended December 31, 2001:                  ACTUAL
<TABLE>
<CAPTION>


                                                  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   InceptionYear     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    -2.74     N/A      N/A     N/A      N/A    4.36
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -1.91     N/A      N/A     N/A      N/A    5.19
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A     0.29     N/A      N/A     N/A      N/A    7.39
Davis VA Financial                  2/1/2000  -19.17      N/A     N/A      N/A     5.37  -12.07      N/A     N/A      N/A    8.41
Davis VA Value                      2/1/2000  -19.19      N/A     N/A      N/A    -5.85  -12.09      N/A     N/A      N/A   -2.49
Franklin Global Communications     1/24/1989  -37.83   -17.13   -4.13     1.30     4.01  -30.73   -14.67   -3.36     1.37    4.07
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -11.22     1.43    7.35     8.73     8.03   -4.12     3.12    7.87     8.80    8.09
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -4.89    -7.22   -2.34     4.10     4.21    2.21    -5.22   -1.59     4.18    4.28
Franklin Income Securities -       1/24/1989   -8.25     1.96    4.40     7.04     7.80   -1.15     3.64    4.98     7.11    7.86
Class 21,2
Franklin Large Cap Growth           5/1/1996  -20.20     3.38    9.17      N/A    10.62  -13.10     5.00    9.66      N/A   10.69
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -1.26     6.33    3.33     8.92     8.10    5.84     7.88    3.95     8.99    8.17
Franklin Rising Dividends          1/27/1992    4.32     3.60    9.30      N/A     9.06   11.42     5.23    9.80      N/A    9.14
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -23.95     8.78    7.93      N/A    11.12  -16.85    10.24    8.44      N/A   11.20
Franklin Small Cap Value            5/1/1998    4.54     9.39     N/A      N/A     0.09   11.64    10.86     N/A      N/A    1.28
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -1.76     2.09    4.19     4.75     5.58    5.34     3.76    4.78     4.83    5.66
22
Franklin Zero Coupon 2005 - Class  3/14/1989   -0.23     1.21    5.06     6.67     7.67    6.87     2.92    5.63     6.74    7.73
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -3.47    -0.46    5.38     7.52     8.20    3.63     1.30    5.95     7.59    8.26
12
Mutual Discovery Securities -      11/8/1996   -8.76     7.30    6.52      N/A     7.11   -1.66     8.82    7.06      N/A    7.21
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -2.08     7.64    7.56      N/A     8.42    5.02     9.15    8.09      N/A    8.52
21,2
Templeton Developing Markets        3/4/1996  -16.92    -3.84   -9.28      N/A    -3.98   -9.82    -1.99   -8.29      N/A   -3.87
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -24.68    -3.58    0.84      N/A     5.36  -17.58    -1.73    1.50      N/A    5.43
Class 21,2,4
Templeton Growth Securities -      3/15/1994  -10.28     2.92    5.80      N/A     7.90   -3.18     4.56    6.36      N/A    7.98
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -4.90     N/A      N/A     N/A      N/A    2.20
SP Jennison International Growth   12/15/2000 -44.24      N/A     N/A      N/A   -42.23  -37.14      N/A     N/A      N/A  -36.16
SP Strategic Partners Focused      12/15/2000 -24.42      N/A     N/A      N/A   -26.79  -17.32      N/A     N/A      N/A  -20.78
Growth
Oppenheimer Global Securities/VA    2/1/2000  -20.80      N/A     N/A      N/A   -10.29  -13.70      N/A     N/A      N/A   -6.79
Oppenheimer High Income/VA          2/1/2000   -7.06      N/A     N/A      N/A    -6.06    0.04      N/A     N/A      N/A   -2.69
Oppenheimer Main Street Growth &    2/1/2000  -18.96      N/A     N/A      N/A   -13.63  -11.86      N/A     N/A      N/A  -10.01
Income/VA
PIMCO VIT High Yield  - Admin.      2/1/2000   -6.68      N/A     N/A      N/A    -4.13    0.42      N/A     N/A      N/A   -0.82
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000  -20.21      N/A     N/A      N/A   -14.14  -13.11      N/A     N/A      N/A  -10.50
Income - Admin. Class
PIMCO VIT Total Return  - Admin.    2/1/2000   -0.76      N/A     N/A      N/A     5.41    6.34      N/A     N/A      N/A    8.45
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -5.76     N/A      N/A     N/A      N/A    1.34
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     2.78     N/A      N/A     N/A      N/A    9.88
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     2.21     N/A      N/A     N/A      N/A    9.31
Seligman Small-Cap Value - Class 1  2/1/2000   14.08      N/A     N/A      N/A    26.31   21.18      N/A     N/A      N/A   28.91
USAZ Money Market                   2/1/2000   -5.78      N/A     N/A      N/A    -0.75    1.32      N/A     N/A      N/A    2.47
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -27.12     N/A      N/A     N/A      N/A  -20.02
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -13.92     N/A      N/A     N/A      N/A   -6.82
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -15.57     N/A      N/A     N/A      N/A   -8.47
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -10.74     N/A      N/A     N/A      N/A   -3.64
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -12.21     N/A      N/A     N/A      N/A   -5.11
----------------------------------------------------------------------------------------------------------------------------------

<FN>
* 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.
</FN>
</TABLE>



Chart C- Traditional GMDB and no GMIB (1.50%)
<TABLE>
<CAPTION>


Total Return for the periods ended December 31, 2001:                              HYPOTHETICAL


                                                  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   InceptionYear     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    -2.66     N/A      N/A     N/A      N/A    4.44
Income*
USAZ Alliance Capital Large Cap    11/5/2001     N/A      N/A     N/A      N/A    -1.83     N/A      N/A     N/A      N/A    5.27
Growth*
USAZ Alliance Capital Technology*  11/5/2001     N/A      N/A     N/A      N/A     0.37     N/A      N/A     N/A      N/A    7.47
Davis VA Financial                  7/1/1999  -18.73      N/A     N/A      N/A    -0.04  -11.63      N/A     N/A      N/A    2.05
Davis VA Value                      7/1/1999  -18.74      N/A     N/A      N/A    -3.37  -11.64      N/A     N/A      N/A   -1.18
Franklin Global Communications     1/24/1989  -37.48   -16.67   -3.64     1.81     4.52  -30.38   -14.24   -2.87     1.88    4.58
Securities - Class 21,2
Franklin Growth and Income         1/24/1989  -10.74     1.96    7.90     9.27     8.56   -3.64     3.63    8.42     9.34    8.63
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989   -4.38    -6.73   -1.83     4.63     4.72    2.72    -4.74   -1.10     4.70    4.79
Franklin Income Securities -       1/24/1989   -7.75     2.50    4.93     7.58     8.33   -0.65     4.16    5.51     7.65    8.40
Class 21,2
Franklin Large Cap Growth           5/1/1996  -19.77     3.92    9.73      N/A    11.18  -12.67     5.53   10.21      N/A   11.25
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989   -0.72     6.89    3.86     9.47     8.64    6.38     8.42    4.47     9.53    8.70
Franklin Rising Dividends          1/27/1992    4.88     4.14    9.86      N/A     9.60   11.98     5.76   10.35      N/A    9.68
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995  -23.53     9.35    8.48      N/A    11.68  -16.43    10.80    8.99      N/A   11.76
Franklin Small Cap Value            5/1/1998    5.10     9.96     N/A      N/A     0.61   12.20    11.41     N/A      N/A    1.79
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989   -1.23     2.63    4.72     5.28     6.11    5.87     4.29    5.31     5.36    6.18
22
Franklin Zero Coupon 2005 - Class  3/14/1989    0.31     1.75    5.60     7.21     8.21    7.41     3.43    6.16     7.28    8.27
12
Franklin Zero Coupon 2010 - Class  3/14/1989   -2.95     0.07    5.92     8.06     8.74    4.15     1.81    6.48     8.13    8.80
12
Mutual Discovery Securities -      11/8/1996   -8.27     7.87    7.07      N/A     7.65   -1.17     9.36    7.60      N/A    7.75
Class 21,2
Mutual Shares Securities - Class   11/8/1996   -1.55     8.21    8.11      N/A     8.96    5.55     9.70    8.63      N/A    9.06
21,2
Templeton Developing Markets        3/4/1996  -16.47    -3.33   -8.80      N/A    -3.50   -9.37    -1.49   -7.83      N/A   -3.39
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992  -24.27    -3.07    1.36      N/A     5.88  -17.17    -1.24    2.01      N/A    5.95
Class 21,2,4
Templeton Growth Securities -      3/15/1994   -9.79     3.46    6.35      N/A     8.44   -2.69     5.08    6.89      N/A    8.52
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001     N/A      N/A     N/A      N/A    -4.82     N/A      N/A     N/A      N/A    2.28
SP Jennison International Growth   12/15/2000 -43.92      N/A     N/A      N/A   -41.91  -36.82      N/A     N/A      N/A  -35.84
SP Strategic Partners Focused      12/15/2000 -24.00      N/A     N/A      N/A   -26.39  -16.90      N/A     N/A      N/A  -20.38
Growth
Oppenheimer Global Securities/VA   11/12/1990 -20.37    10.57   13.36    12.26    11.13  -13.27    11.99   13.79    12.32   11.20
Oppenheimer High Income/VA         4/30/1986   -6.56    -2.44    0.77     7.14     8.38    0.54    -0.62    1.44     7.20    8.43
Oppenheimer Main Street Growth &    7/5/1995  -18.52    -3.32    4.65      N/A    12.01  -11.42    -1.47    5.22      N/A   12.07
Income/VA
PIMCO VIT High Yield  - Admin.     4/30/1998   -6.17    -1.73     N/A      N/A    -0.92    0.93     0.07     N/A      N/A    0.29
Class
PIMCO VIT StocksPLUS Growth &      12/31/1997 -19.77    -4.59     N/A      N/A     3.29  -12.67    -2.70     N/A      N/A    4.26
Income - Admin. Class
PIMCO VIT Total Return  - Admin.   12/31/1997  -0.22     2.76     N/A      N/A     4.11    6.88     4.42     N/A      N/A    5.08
Class
USAZ PIMCO Growth and Income*      11/5/2001     N/A      N/A     N/A      N/A    -5.69     N/A      N/A     N/A      N/A    1.41
USAZ PIMCO Renaissance*            11/5/2001     N/A      N/A     N/A      N/A     2.87     N/A      N/A     N/A      N/A    9.97
USAZ PIMCO Value*                  11/5/2001     N/A      N/A     N/A      N/A     2.29     N/A      N/A     N/A      N/A    9.39
Seligman Small-Cap Value - Class 1  5/1/1998   14.70    27.58     N/A      N/A    15.67   21.80    28.68     N/A      N/A   16.50
USAZ Money Market                   2/1/2000   -5.27      N/A     N/A      N/A    -0.22    1.83      N/A     N/A      N/A    2.98
USAZ Van Kampen Aggressive Growth*  5/1/2001     N/A      N/A     N/A      N/A   -26.85     N/A      N/A     N/A      N/A  -19.75
USAZ Van Kampen Comstock*           5/1/2001     N/A      N/A     N/A      N/A   -13.61     N/A      N/A     N/A      N/A   -6.51
USAZ Van Kampen Emerging Growth*    5/1/2001     N/A      N/A     N/A      N/A   -15.26     N/A      N/A     N/A      N/A   -8.16
USAZ Van Kampen Growth and Income*  5/1/2001     N/A      N/A     N/A      N/A   -10.42     N/A      N/A     N/A      N/A   -3.32
USAZ Van Kampen Growth*             5/1/2001     N/A      N/A     N/A      N/A   -11.90     N/A      N/A     N/A      N/A   -4.80
----------------------------------------------------------------------------------------------------------------------------------

<FN>
* 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.
</FN>
</TABLE>


Chart D - Enhanced GMDB or Earnings Protection GMDB and Enhanced GMIB (2.40%)
<TABLE>
<CAPTION>


Total Return for the periods ended December 31, 2001:                      HYPOTHETICAL


                                                  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   InceptionYear     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    -2.74     N/A      N/A      N/A     N/A     4.36
Income*
USAZ Alliance Capital Large Cap    11/5/2001       N/A     N/A      N/A     N/A    -1.91     N/A      N/A      N/A     N/A     5.19
Growth*
USAZ Alliance Capital Technology*  11/5/2001       N/A     N/A      N/A     N/A     0.29     N/A      N/A      N/A     N/A     7.39
Davis VA Financial                  7/1/1999    -19.17     N/A      N/A     N/A    -0.56  -12.07      N/A      N/A     N/A     1.54
Davis VA Value                      7/1/1999    -19.19     N/A      N/A     N/A    -3.88  -12.09      N/A      N/A     N/A    -1.68
Franklin Global Communications     1/24/1989    -37.83  -17.13    -4.13    1.30     4.01  -30.73   -14.67    -3.36    1.37     4.07
Securities - Class 21,2
Franklin Growth and Income         1/24/1989    -11.22    1.43     7.35    8.73     8.03   -4.12     3.12     7.87    8.80     8.09
Securities - Class 21,2
Franklin High Income - Class 21,2  1/24/1989     -4.89   -7.22    -2.34    4.10     4.21    2.21    -5.22    -1.59    4.18     4.28
Franklin Income Securities -       1/24/1989     -8.25    1.96     4.40    7.04     7.80   -1.15     3.64     4.98    7.11     7.86
Class 21,2
Franklin Large Cap Growth           5/1/1996    -20.20    3.38     9.17     N/A    10.62  -13.10     5.00     9.66     N/A    10.69
Securities - Class 21,2
Franklin Real Estate - Class 21,2  1/24/1989     -1.26    6.33     3.33    8.92     8.10    5.84     7.88     3.95    8.99     8.17
Franklin Rising Dividends          1/27/1992      4.32    3.60     9.30     N/A     9.06   11.42     5.23     9.80     N/A     9.14
Securities - Class 21,2
Franklin Small Cap - Class 21,2    11/1/1995    -23.95    8.78     7.93     N/A    11.12  -16.85    10.24     8.44     N/A    11.20
Franklin Small Cap Value            5/1/1998      4.54    9.39      N/A     N/A     0.09   11.64    10.86      N/A     N/A     1.28
Securities - Class 21,2
Franklin U.S. Government - Class   3/14/1989     -1.76    2.09     4.19    4.75     5.58    5.34     3.76     4.78    4.83     5.66
22
Franklin Zero Coupon 2005 - Class  3/14/1989     -0.23    1.21     5.06    6.67     7.67    6.87     2.92     5.63    6.74     7.73
12
Franklin Zero Coupon 2010 - Class  3/14/1989     -3.47   -0.46     5.38    7.52     8.20    3.63     1.30     5.95    7.59     8.26
12
Mutual Discovery Securities -      11/8/1996     -8.76    7.30     6.52     N/A     7.11   -1.66     8.82     7.06     N/A     7.21
Class 21,2
Mutual Shares Securities - Class   11/8/1996     -2.08    7.64     7.56     N/A     8.42    5.02     9.15     8.09     N/A     8.52
21,2
Templeton Developing Markets        3/4/1996    -16.92   -3.84    -9.28     N/A    -3.98   -9.82    -1.99    -8.29     N/A    -3.87
Securities - Class 21,2,3
Templeton Foreign Securities -      5/1/1992    -24.68   -3.58     0.84     N/A     5.36  -17.58    -1.73     1.50     N/A     5.43
Class 21,2,4
Templeton Growth Securities -      3/15/1994    -10.28    2.92     5.80     N/A     7.90   -3.18     4.56     6.36     N/A     7.98
Class 21,2
USAZ Templeton Developed Markets*  11/5/2001       N/A     N/A      N/A     N/A    -4.90     N/A      N/A      N/A     N/A     2.20
SP Jennison International Growth   12/15/2000   -44.24     N/A      N/A     N/A   -42.23  -37.14      N/A      N/A     N/A   -36.16
SP Strategic Partners Focused      12/15/2000   -24.42     N/A      N/A     N/A   -26.79  -17.32      N/A      N/A     N/A   -20.78
Growth
Oppenheimer Global Securities/VA   11/12/1990   -20.80   10.00    12.79   11.70    10.58  -13.70    11.43    13.23   11.76    10.65
Oppenheimer High Income/VA         4/30/1986     -7.06   -2.96     0.26    6.60     7.83    0.04    -1.12     0.94    6.66     7.89
Oppenheimer Main Street Growth &    7/5/1995    -18.96   -3.83     4.12     N/A    11.45  -11.86    -1.97     4.70     N/A    11.51
Income/VA
PIMCO VIT High Yield  - Admin.     4/30/1998     -6.68   -2.24      N/A     N/A    -1.44    0.42    -0.43      N/A     N/A    -0.21
Class
PIMCO VIT StocksPLUS Growth &      12/31/1997   -20.21   -5.10      N/A     N/A     2.75  -13.11    -3.19      N/A     N/A     3.74
Income - Admin. Class
PIMCO VIT Total Return  - Admin.   12/31/1997    -0.76    2.23      N/A     N/A     3.57    6.34     3.90      N/A     N/A     4.56
Class
USAZ PIMCO Growth and Income*      11/5/2001       N/A     N/A      N/A     N/A    -5.76     N/A      N/A      N/A     N/A     1.34
USAZ PIMCO Renaissance*            11/5/2001       N/A     N/A      N/A     N/A     2.78     N/A      N/A      N/A     N/A     9.88
USAZ PIMCO Value*                  11/5/2001       N/A     N/A      N/A     N/A     2.21     N/A      N/A      N/A     N/A     9.31
Seligman Small-Cap Value - Class 1  5/1/1998     14.08   26.93      N/A     N/A    15.08   21.18    28.03      N/A     N/A    15.92
USAZ Money Market                   2/1/2000     -5.78     N/A      N/A     N/A    -0.75    1.32      N/A      N/A     N/A     2.47
USAZ Van Kampen Aggressive Growth*  5/1/2001       N/A     N/A      N/A     N/A   -27.12     N/A      N/A      N/A     N/A   -20.02
USAZ Van Kampen Comstock*           5/1/2001       N/A     N/A      N/A     N/A   -13.92     N/A      N/A      N/A     N/A    -6.82
USAZ Van Kampen Emerging Growth*    5/1/2001       N/A     N/A      N/A     N/A   -15.57     N/A      N/A      N/A     N/A    -8.47
USAZ Van Kampen Growth and Income*  5/1/2001       N/A     N/A      N/A     N/A   -10.74     N/A      N/A      N/A     N/A    -3.64
USAZ Van Kampen Growth*             5/1/2001       N/A     N/A      N/A     N/A   -12.21     N/A      N/A      N/A     N/A    -5.11
------------------------------------------------------------------------------------------------------------------------------------

<FN>
* 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.
Chart E - Investment Option Performance (No Contract Charges)
</FN>
</TABLE>

<TABLE>
<CAPTION>

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

<FN>
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.
</FN>
</TABLE>


Illustrations

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%.
"Payin" and "payout" illustrations may have various features, as follows:

o    Payin  illustrations  assume an initial  lump sum  premium  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 premium 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
     premium payment into the specified  Investment  Options, as contrasted with
     dollar cost averaging into the Investment Options over some period.

o    Payout  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  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  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 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.  Contract  maintenance  charges may or may not be deducted
from  a  particular  illustration.  For  fixed  payin  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
charges shown in an illustration will vary, depending upon the Contract features
you select. For surrender 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.

More detailed information about customer illustrations is found in Appendix A to
this SAI.

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
Contracts  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  surrender  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

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. Contract Owners, participants and beneficiaries are responsible for
determining  that  contributions,  distributions  and  other  transactions  with
respect to the Contracts comply with applicable law.

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. 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 on 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 a 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 either 3%, 5% or 7%, based on the
Contract Owner's selection and any applicable state laws.

Mortality and Expense Risk Guarantee

The Insurance Company  guarantees that the dollar amount of each Annuity Payment
after the first Annuity  Payment will not be affected by variations in mortality
and expense experience.

Financial Statements

The audited consolidated financial statements of the Insurance Company as of and
for the year ended December 31, 2001,  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, 2001 are also included herein.


                         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  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  mortality  and expense  risk charge,
administration  charge 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  surrender  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  Alterity(TM),  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.

                                                           Page x of y
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                                       L30800
<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.


Costs and Expenses: The Contract has insurance features and investment features,
and there are costs related to each. These  illustrations  show the expenses for
New Contracts.  The expenses for Old Contracts,  if shown,  would be lower. 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 $100,000.

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  administration  charge.  This  charge,
together  with  the  contract  maintenance  charge,  is  for  all  the  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  1.35%    .15%   1.50%        1.55%    .15%    1.70%         2.05%   .15%  2.20%
Earnings Protection  Guaranteed Minimum Death
  Benefit                                     1.65%    .15%   1.80%        1.85%    .15%    2.00%         2.30%   .15%  2.45%
Enhanced Guaranteed Minimum Death Benefit     1.65%    .15%   1.80%        1.80%    .15%    1.95%         2.25%   .15%  2.40%
</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  Alterity(TM),  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.

                                                           Page x of y
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                                                L30800
<PAGE>

                                                                             A-3



The selection of the GMDB and GMIBs must be made at the time of initial Purchase
Payment.

Traditional  GMIB and GPWB values or GMDB  guarantees the greater of 1) contract
value or 2) total purchase payments adjusted for partial withdrawals.

Enhanced  GMIB and GPWB  values or GMDB  guarantees  the  greater of 1) contract
value, 2) total purchase payments adjusted for withdrawals accumulated at 3% per
year  prior  to age 81  (maximum  of  150% of  purchase  payments  adjusted  for
withdrawals);  or 3) highest  anniversary  value  adjusted for  withdrawals  and
Purchase  Payments prior to age 81. These are available  regardless of the value
in your  account  when you decide it is time to take  income.  You can always (2
years from issue) annuitize your contract value under fixed and variable annuity
options.

The GMIB guarantees that your Annuity  Payments will be equal to the greater of:
1) current  fixed payout rates applied to the current  Contract  Value (less any
applicable  premium  tax);  or 2)  guaranteed  fixed payout rates applied to the
Traditional  or  Enhanced  GMIB value.  The GMIB is subject to a 7-year  waiting
period and must be annuitized under a fixed annuity option,  if a period certain
annuity option is chosen, the period must be a minimum of 10 years.

The GPWB  guarantees an annual income equal to 10% of the GPWB value at the time
of  exercise  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.

Earnings  Protection  (EP) Death Benefit  guarantees  the greater of 1) purchase
payments adjusted for withdrawals, 2) contract value; or 3) contract value + 50%
(30% if issue  age >70) of the  lesser  of: a) three  times  the total  purchase
payments made in the first two contract  years, or b) contract value minus total
purchase payments.

If you take money out of the Contract,  Allianz Life may assess a CDSC. The CDSC
starts at 7% in the first  Contract year and declines to 0% 6 complete  Contract
years after we receive your  Purchase  Payment.  A different  charge  applies to
liquidations  from the variable Annuity Option 2, 4 or 6 during the payout phase
called a commutation fee.

There are also daily  Investment  Option charges which  currently  range,  on an
annual basis,  from x.xx% to x.xx% of the average daily value of the  Investment
Option, depending upon the Investment Option.

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  Surrender  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.


--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
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                                                                             A-4

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 presented 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  Alterity(TM),  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.

                                                           Page x of y
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                                               L30800

<PAGE>



                                                                             A-5

                                                       USAllianz Alterity(TM)


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  [12/31/2001],  a one-time  investment  of $1,000 if withdrawn  would have
generated the following  Standardized  Average Annual Return,  without regard to
taxes:
<TABLE>
<CAPTION>

                                                                               Since      Date of   Since         Date of
                                                      Portfolio Inception     Portfolio  Portfolio  Sub-Account Sub-Account
Investment Option                              1 Year   5 Year     10 Year    Inception  Inception  Inception     Inception
<S>                                           <C>       <C>         <C>        <C>                                <C>
USAZ Money Market Fund                           *         *         *           *                                 5/1/2001
Davis VA Financial Portfolio                     *         *         *           *                                 5/1/2001
Davis VA Value Portfolio                       x.xx%      x.xx%     x.xx%      x.xx%                              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.  Portfolio
returns prior to Sub-Account inception have been adjusted for contract expenses.



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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800
<PAGE>


                                                                             A-6

                                                       USAllianz Alterity(TM)


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

<TABLE>
<CAPTION>

--------------- -------- --------------------- ---------- --------------- ------------- ---------------- ------------ ---------
    End of        Age    Adjusted Historical   Purchase     Withdrawals      Contract    Cash Surrender      GMIB        GMDB
--------------              Average Annual     Payments                        Value           Value
     Year                       Return
--------------- -------- --------------------- ---------- --------------- ------------- ---------------- ------------ ---------

<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  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.





--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800
<PAGE>


                                                                             A-7

                                                       USAllianz Alterity(TM)

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):
                                      Annuity Option:
                                              Survivor Percentage:
Investment Options and Allocations:           Period Certain:


____ Portfolio (___%)
____ Portfolio (___%)

                    Guaranteed Minimum Income Benefit Report


<TABLE>
<CAPTION>

   Accumulation Phase                                                                         Payout Phase


 ---------------- ------ ------------ -------------- ------------ --------- --------- ----------- -----------
   Anniversary     Age    Adjusted    Net Purchase    Contract      GMIB               Monthly      Annual
      Year               Historical   -------------     Value
                           Average      Payments*
                           Annual
                           Return
 ---------------- ------ ------------ -------------- ------------ --------- --------- ----------- -----------

<S>                  <C>                      <C>           <C>          <C>                 <C>          <C>
    Mm/dd/yyyy       45       xx.xx%      $xxx.00    $x,xxxx.00    $x,xxx.00           $x,xxx.00    $x,xxx.00


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

*The Net Purchase Payment column represents  purchase payments minus withdrawals
in the accumulation phase.
</TABLE>



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.


--------------------------------------------------------------------------------
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  Alterity(TM),  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.


                                                           Page x of y
ALT-045 (09/01)
                                               L30800


<PAGE>


                                                                             A-8

                             USAllianz Alterity(TM)

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):

<TABLE>
<CAPTION>
                    ADJUSTED HISTORICAL DOLLAR COST AVERAGING

                                                                                                                  Period
               Initial               Monthly                    Initial                 Ending                    Ending
              Purchase               Transfer                 Transfer                  Transfer                  Value
             Payment                  Periods                   Date                      Date                     Date
           $50,000.00                    20                   05/01/1993               12/01/1994               03/31/2002


Without
                                                                                                       Dollar Cost       Dollar
Cost
                                                     Allocation      Allocation        Monthly         Averaging
Averaging
          Investment Options                         Percentage       Amount           Transfer      Ending Value       Ending
Value
From    :
USAZ Money Market Fund                                   100% (Initial)                                   x,xxx

To   :

<S>                                                        <C>         <C>                 <C>           <C>                <C>
Davis VA Financial Portfolio                               10%         5,000               250           xx,xxx             xx,xxx
Davis VA Value Portfolio                                   10%         5,000               250           xx,xxx             xx,xxx
Mutual Shares Securities Fund                              20%        10,000               500           xx,xxx             xx,xxx
Templeton Growth Securities Fund                           10%         5,000               250           xx,xxx             xx,xxx
Franklin Small Cap Fund                                    30%        15,000               750           xx,xxx             xx,xxx
Oppenheimer High Income Fund                               20%        10,000               500           xx,xxx             xx,xxx

  Total                                                   100%        50,000             2,500          xxx,xxx            xxx,xxx
</TABLE>

Dollar Cost Averaging involves  continuous  investing  regardless of fluctuating
prices.  The investor should  consider his or her financial  ability to continue
purchases  through  periods of low price levels.  Dollar Cost Averaging does not
ensure a profit.

This  report  is based off your  initial  lump-sum  purchase  payment  only,  as
illustrated above. Future purchase payments are not taken into consideration.


--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800


<PAGE>

                                                                             A-9

                             USAllianz Alterity(TM)

Average annual returns for 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.

The investment  options  illustrated are based upon adjusted  historical returns
during the period indicated.  Any fixed rate returns  illustrated are based upon
current returns.  However,  these returns are not indicative of future results .
This  illustration  is not intended to serve as a projection  or  prediction  of
future returns.








--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800

<PAGE>




                                                                            A-10

                              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.  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.


Costs and Expenses: The Contract has insurance features and investment features,
and there are costs related to each. These  illustrations  show the expenses for
New Contracts.  The expenses for Old Contracts,  if shown,  would be lower. Each
year, Allianz Life deducts a $40 contract maintenance charge from your Contract.
Allianz Life  currently  waives this charge if your  Contract  value is at least
$100,000.

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  administration  charge.  This
charge,  together with the contract  maintenance charge, is for all the expenses
associated with the administration of the Contract. 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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800
<PAGE>


                                                                            A-11

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  1.35%    .15%   1.50%        1.55%    .15%    1.70%         2.05%   .15%  2.20%
Earnings Protection  Guaranteed Minimum Death
  Benefit                                     1.65%    .15%   1.80%        1.85%    .15%    2.00%         2.30%   .15%  2.45%
Enhanced Guaranteed Minimum Death Benefit     1.65%    .15%   1.80%        1.80%    .15%    1.95%         2.25%   .15%  2.40%
</TABLE>

The  selection  of the  GMIBs  and  GMDBs  must be made at the  time of  initial
Purchase Payment.

Traditional  GMIB and GPWB values or GMDB  guarantees the greater of 1) contract
value or 2) total purchase payments adjusted for partial withdrawals.

Enhanced  GMIB and GPWB  values or GMDB  guarantees  the  greater of 1) contract
value, 2) total purchase payments adjusted for withdrawals accumulated at 3% per
year  prior  to age  81(maximum  of  150%  of  purchase  payments  adjusted  for
withdrawals;  or 3) highest  anniversary  value  adjusted  for  withdrawals  and
Purchase  Payments prior to age 81. These are available  regardless of the value
in your  account  when you decide it is time to take  income.  You can always (2
years from issue) annuitize your contract value under fixed and variable annuity
options.

The GMIB guarantees that your Annuity  Payments will be equal to the greater of:
1) current  fixed payout rates applied to the current  Contract  Value (less any
applicable  premium  tax);  or 2)  guaranteed  fixed payout rates applied to the
Traditional  or  Enhanced  GMIB value.  The GMIB is subject to a 7-year  waiting
period and must be annuitized under a fixed annuity option,  if a period certain
annuity option is chosen, the period must be a minimum of 10 years.

The GPWB  guarantees an annual income equal to 10% of the GPWB value at the time
of  exercise  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.

Earnings  Protection  (EP) Death Benefit  guarantees  the greater of 1) purchase
payments adjusted for withdrawals, 2) contract value; or 3) contract value + 50%
(30% if issue  age >70) of the  lesser  of: a) three  times  the total  purchase
payments made in the first two contract  years, or b) contract value minus total
purchase payments.

If you take money out of the  Contract,  Allianz  Life may  assess a  contingent
deferred sales charge  (CDSC).  The CDSC starts at 7% in the first Contract year
and  declines  to 0%  after  Contract  year 6. A  different  charge  applies  to
liquidations from the Period Certain Only annuity option during the payout phase
called a commutation fee.


--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
ALT-045 (09/01)
                                               L30800
<PAGE>


                                                                            A-12

There are also daily  investment  charges which  currently  range,  on an annual
basis,  from  x.xx% to  x.xx%  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.

The "Cash  Surrender  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  presented  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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>



                                                                            A-13

                             USAllianz Alterity(TM)

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):
<TABLE>
<CAPTION>

                 Hypothetical Fixed Rate of Return Illustration
                           Gross Rate of Return x.xx%


        ---------- --------- ------------------- --------------- ---------------- ------------- ------------- --------- ------------
                                                                                                                  GMIB
        End of       Age       Gross Rate of        Purchase       Withdrawals      Contract        Cash                      GMDB
          Year                     Return           Payments                         Value       Surrender
                                                                                      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, net rate of return, which takes
into consideration the applicable M&E charge,  administration charge and average
portfolio fee of .xxxx%.

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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>


                                                                            A-14
USAllianz Alterity(TM)
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%
<TABLE>
<CAPTION>


---------- ----------- ------------------- ---------------- --------------- --------------- ------------------ ---------- ----------
                                                                                                                GMIB
End of        Age         Hypothetical        Purchase       Withdrawals    Contract Value   Cash Surrender                  GMDB
  Year                   Gross Rate of        Payments                                            Value
                             Return
---------- ----------- ------------------- ---------------- --------------- --------------- ------------------ ---------- ----------

<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, net rate of return, which takes
into  consideration  the  applicable  M & E charge,  administration  charge  and
average portfolio fee of .xxxx%.


     [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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>


                                                                            A-15

                             USAllianz Alterity(TM)

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):
                                      Annuity Option:
                                            Survivor Percentage:
                                            Period Certain:


                 Hypothetical Fixed Rate of Return Illustration

                    Guaranteed Minimum Income Benefit Report
<TABLE>
<CAPTION>



   Accumulation Phase                                                                            Payout Phase


 ---------------- ------ -------------- ------------- ------------ ----------- -------------- ----------- -----------
   Anniversary     Age   Hypothetical   Net Purchase   Contract      GMIB               Monthly      Annual
      Year                Gross Rate     Payments*       Value
                           of Return
                            (not to
                          exceed 12%)

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

<S>                  <C>    <C>          <C>          <C>            <C>               <C>         <C>
    Mm/dd/yyyy       45    xx.xx%        $xxx.00      $x,xxxx.00     $x,xxx.00         $x,xxx.00   $x,xxx.00

 ---------------- ------ ------------- -------------- ----------- ------------- ------------- ----------- -----------
</TABLE>

*The Net Purchase Payment column represents  purchase payments minus withdrawals
in the accumulation phase.

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, net rate of return, which takes
into  consideration  the  applicable  M & E charge,  administration  charge  and
average portfolio fee of .xxxx%. .

An  illustration  showing a hypothetical 0% gross rate of return is contained on
the following page.  This  illustration is not intended to serve as a projection
or prediction of future returns.





--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>


                                                                            A-16

                             USAllianz Alterity(TM)

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):
                                      Annuity Option:
                                            Survivor Percentage:
                                            Period Certain:


                 Hypothetical Fixed Rate of Return Illustration

                    Guaranteed Minimum Income Benefit Report


<TABLE>
<CAPTION>

   Accumulation Phase                                                                Payout Phase


 ---------------- ------ -------------- ------------- ------------ ---------- -------- ----------- -----------
   Anniversary     Age   Hypothetical   Net Purchase   Contract      GMIB               Monthly      Annual
      Year                Gross Rate     Payments*       Value
                           of Return
                            (0.00%)
 ---------------- ------ -------------- ------------- ------------ ---------- -------- ----------- -----------

<S>                  <C>      <C>           <C>       <C>         <C>                   <C>         <C>
    Mm/dd/yyyy       45       xx.xx%        $xxx.00   $x,xxxx.00   $x,xxx.00            $x,xxx.00   $x,xxx.00

 -------------------------------------------------------------------------------------------------------------
</TABLE>

*The Net Purchase Payment column represents  purchase payments minus withdrawals
in the accumulation phase.

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, net rate of return, which takes
into  consideration  the  applicable  M & E charge,  administration  charge  and
average portfolio fee of .xxxx% .

This  illustration  is not intended to serve as a projection  or  prediction  of
future returns.  [This page must accompany any fixed return illustration showing
a gross rate of return in excess of 0.00%.]



--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800

                                                                            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 2nd Contract anniversary.  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 2 years
after the contract issue date. For this reason,  illustrations  that you receive
will be based  upon an  annuity  start  date that is at least 2 years  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.

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.

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.

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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>


                                                                            A-18

The AIR was  selected by your  investment  representative.  The 3% AIR  payments
start at a lower level than the 5% or 7% AIR,  with the potential for more rapid
increase in payments during later years.  Conversely if a 7% AIR is chosen there
is a potential for a more rapid decrease in payments during the later years. The
7% AIR is not available in the states of Oregon, Texas and New Jersey.

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  contingent  deferred  sales  charge  (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.


Costs and Expenses: The Contract has insurance features and investment features,
and there are costs related to each. . These illustrations show the expenses for
New Contracts.  The expenses for Old Contracts,  if shown,  would be lower. Each
year, Allianz Life deducts a $40 contract maintenance charge from your Contract.
Allianz  Life  currently  waives this charge if the  Contract  value is at least
$100,000.

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 on a New Contract,  a Guaranteed
Partial Withdrawal Benefit (GPWB) will automatically be included in the Contract
with no  additional  charge.  The GPWB is not  available  with an Old  Contract.
Allianz Life also deducts an administration  charge. This charge,  together with
the contract  maintenance  charge,  is for all the 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.




--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>



                                                                            A-19
<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  1.35%    .15%   1.50%        1.55%    .15%    1.70%         2.05%   .15%  2.20%
Earnings Protection  Guaranteed Minimum Death
  Benefit                                     1.65%    .15%   1.80%        1.85%    .15%    2.00%         2.30%   .15%  2.45%
Enhanced Guaranteed Minimum Death Benefit     1.65%    .15%   1.80%        1.80%    .15%    1.95%         2.25%   .15%  2.40%
</TABLE>

The  selection  of the  GMIBs  and  GMDBs  must be made at the  time of  initial
Purchase Payment.

Traditional  GMIB and GPWB values or GMDB  guarantees the greater of 1) contract
value or 2) total purchase payments adjusted for partial withdrawals.

Enhanced  GMIB and GPWB  values or GMDB  guarantees  the  greater of 1) contract
value, 2) total purchase payments adjusted for withdrawals accumulated at 3% per
year  prior  to age 81  (maximum  of  150% of  purchase  payments  adjusted  for
withdrawals;  or 3) highest  anniversary  value  adjusted  for  withdrawals  and
Purchase  Payments prior to age 81. These are available  regardless of the value
in your  account  when you decide it is time to take  income.  You can always (2
years from issue) annuitize your contract value under fixed and variable annuity
options.

The GMIB guarantees that your Annuity  Payments will be equal to the greater of:
1) current  fixed payout rates applied to the current  Contract  Value (less any
applicable  premium  tax);  or 2)  guaranteed  fixed payout rates applied to the
Traditional  or  Enhanced  GMIB value.  The GMIB is subject to a 7-year  waiting
period and must be annuitized under a fixed annuity option,  if a period certain
annuity option is chosen, the period must be a minimum of 10 years.

The GPWB  guarantees an annual income equal to 10% of the GPWB value at the time
of  exercise  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.

Earnings  Protection  (EP) Death Benefit  guarantees  the greater of 1) purchase
payments adjusted for withdrawals, 2) contract value; or 3) contract value + 50%
(30% if issue  age >70) of the  lesser  of: a) three  times  the total  purchase
payments made in the first two contract  years, or b) contract value minus total
purchase payments.

If you take money out of the Contract,  Allianz Life may assess a CDSC. The CDSC
starts at 7% in the first  Contract year and declines to 0% 6 complete  Contract
years after we receive your  Purchase  Payment.  A different  charge  applies to
liquidations  from the variable  Annuity Option during the payout phase called a
commutation fee.

There are also daily  investment  charges which  currently  range,  on an annual
basis, from x.xx% to x.xx% of the average daily value of the Investment  Option,
depending upon the Investment Option.

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 presented 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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>



                                                                            A-20

                       Standardized Average Annual Return
                          And Adjusted Portfolio Return

As of  [12/31/2001],  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:

<TABLE>
<CAPTION>

                                                              Since     Date of       Since          Date of
                                                            Portfolio  Portfolio
                                   Portfolio Inception                               Sub-Account   Sub-Account
Investment Option              1 Year    5 Year   10 Years  Inception  Inception      Inception     Inception

<S>                            <C>       <C>         <C>      <C>
Davis VA Financial Portfolio     *         *          *        *
1/22/2001
Davis VA Value Portfolio      xx.xx%     xx.xx%       *        xx.xx%
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.  Portfolio
returns prior to Sub-Account inception have been adjusted for contract expenses.



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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800

                                                                            A-21

                             USAllianz Alterity(TM)

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 VARIABLE PAYOUT ILLUSTRATION
                     BASED UPON ADJUSTED HISTORICAL RETURNS

<TABLE>
<CAPTION>
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

  Investment Option                                  Allocation    Investment Option                                  Allocation
  Alger American Growth Fund                                90%     USAllianz Strategic Growth Fund                          10%



   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- --------------
<S>                            <C>                 <C>                    <C>                       <C>                 <C>
    Period Ending Date         Payout Age           Monthly Payout        Exclusion Amount         Taxable Amount        Cumulative
                                                                                                                          Payout
   -------------------- ----------------------- ---------------------- ---------------------- ----------------------- --------------
</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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
<PAGE>

                                                                            A-22

                             USAllianz Alterity(TM)

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 Payout Annuitization


<TABLE>
<CAPTION>

Annuity Option:

Annuitization Age:   65, Male                                                                  Annuity Value:         520,097.92
Federal Tax Rate:
Annuitization Date:                                                                               Cost Basis:         500,000.00



                                Monthly           Exclusion           Taxable
                                 Payout           Amount               Amount
<S>                             <C>              <C>                 <C>
                                xxxxx.xx         xxxxx.xx            xxxxx.xx
</TABLE>





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.








--------------------------------------------------------------------------------
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  Alterity(TM),  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.

                                                           Page x of y
 ALT-045 (09/01)
                                                L30800
TO BE UPDATED UPON AMENDMENT

APPENDIX B- 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 are
found in this Statement of Additional Information.

Accumulation  Unit Value  (AUV)  information  corresponding  to the  highest and
lowest  combination  of charges is reflected in the Appendix to the  Prospectus.
AUV  information  reflecting  the  additional  combination  of charges is listed
below.

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

<TABLE>
<CAPTION>

(Number of units in thousands)           Period or Year Ended December 31, 2001          Inception (02/01/2000) to December 31, 2000

                                  Earnings Protection  Enhanced GMDB    Traditional GMDB                     Enhanced GMDB
                                       GMDB and              and     OR        and                                or
Investment Options:                Traditional GMIB  Traditional GMIB     Enhanced GMIB                      Enhanced GMIB
---------------------------------------------------------------------------------------------------------------------------------
                                         1.60%                       1.70%                                       1.70%
---------------------------------------------------------------------------------------------------------------------------------
USAZ Alliance Capital Growth and Income
<S>                                       <C>                     <C>                                          <C>
Unit value at beginning of period              NA                      NA                                           NA
Unit value at end of period               $10.440                 $10.438                                           NA
Number of units outstanding at end of period    0                       8                                           NA
USAZ Alliance Capital Large Cap Growth
Unit value at beginning of period              NA                      NA                                           NA
Unit value at end of period               $10.523                 $10.521                                           NA
Number of units outstanding at end of period    0                      21                                           NA
USAZ Alliance Capital Technology
Unit value at beginning of period              NA                      NA                                           NA
Unit value at end of period               $10.742                 $10.740                                           NA
Number of units outstanding at end of period    0                       3                                           NA
Davis VA Financial
Unit value at beginning of period              NA                 $13.283                                           NA
Unit value at end of period               $11.725                 $11.703                                      $13.283
Number of units outstanding at end of period    0                      97                                           11
Davis VA Value
Unit value at beginning of period              NA                 $10.889                                           NA
Unit value at end of period                $9.611                  $9.592                                      $10.889
Number of units outstanding at end of period    0                     377                                           74
Franklin Global Communications Securities
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $17.404                  $17.184                                          NA
Number of units outstanding at end of period    0                        1                                          NA
Franklin Growth and Income Securities
Unit value at beginning of period              NA                  $29.337                                          NA
Unit value at end of period               $28.455                  $28.184                                     $29.337
Number of units outstanding at end of period    0                       81                                          13
Franklin High Income
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $17.870                  $17.643                                          NA
Number of units outstanding at end of period    0                        1                                          NA
Franklin Income Securities
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $27.671                  $27.320                                          NA
Number of units outstanding at end of period    0                        0                                          NA
Franklin Large Cap Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $18.096                  $17.994                                          NA
Number of units outstanding at end of period    0                        2                                          NA
Franklin Real Estate
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $28.710                  $28.345                                          NA
Number of units outstanding at end of period    0                        5                                          NA
Franklin Rising Dividends Securities
Unit value at beginning of period              NA                 $21.860                                           NA
Unit value at end of period               $24.548                 $24.405                                      $21.860
Number of units outstanding at end of period    0                      73                                            1
Franklin Small Cap
Unit value at beginning of period              NA                  23.470                                           NA
Unit value at end of period               $19.613                 $19.554                                      $23.470
Number of units outstanding at end of period    0                      94                                           20
Franklin Small Cap Value Securities
Unit value at beginning of period              NA                      NA                                           NA
Unit value at end of period               $10.595                  $10.556                                          NA
Number of units outstanding at end of period    0                        2                                          NA
Franklin U.S. Government
Unit value at beginning of period              NA                  $19.717                                          NA
Unit value at end of period               $21.021                  $20.811                                     $19.717
Number of units outstanding at end of period    0                       87                                          16
Franklin Zero Coupon 2005
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $26.969                  $26.627                                          NA
Number of units outstanding at end of period    0                        0                                          NA
Franklin Zero Coupon 2010
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $28.719                  $28.354                                          NA
Number of units outstanding at end of period    0                        0                                          NA
Mutual Discovery Securities
Unit value at beginning of period              NA                  $14.714                                          NA
Unit value at end of period               $14.535                  $14.499                                     $14.714
Number of units outstanding at end of period    5                       94                                           5
Mutual Shares Securities
Unit value at beginning of period              NA                  $14.607                                          NA
Unit value at end of period               $15.467                  $15.371                                     $14.607
Number of units outstanding at end of period    0                      214                                           9
Templeton Developing Markets Securities
Unit value at beginning of period              NA                   $8.288                                          NA
Unit value at end of period                $7.521                   $7.489                                      $8.288
Number of units outstanding at end of period    0                       28                                          13
Templeton Foreign Securities
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $17.414                  $17.243                                          NA
Number of units outstanding at end of period    0                        3                                          NA
Templeton Growth Securities
Unit value at beginning of period              NA                  $19.084                                          NA
Unit value at end of period               $18.630                  $18.515                                     $19.084
Number of units outstanding at end of period    0                       64                                           9
USAZ Templeton Developed Markets
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $10.224                  $10.222                                          NA
Number of units outstanding at end of period    0                        0                                          NA
SP Jennison International Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $5.350                   $5.344                                          NA
Number of units outstanding at end of period    0                       16                                          NA
SP Strategic Partners Focused Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $6.592                   $6.585                                          NA
Number of units outstanding at end of period    0                        7                                          NA
Oppenheimer Global Securities
Unit value at beginning of period              NA                  $10.350                                          NA
Unit value at end of period                $8.967                   $8.950                                     $10.350
Number of units outstanding at end of period    0                      460                                          65
Oppenheimer High Income
Unit value at beginning of period              NA                   $9.504                                          NA
Unit value at end of period                $9.546                   $9.527                                      $9.504
Number of units outstanding at end of period    0                       75                                           0
Oppenheimer Main Street Growth & Income
Unit value at beginning of period              NA                   $9.394                                          NA
Unit value at end of period                $8.312                   $8.297                                      $9.394
Number of units outstanding at end of period    0                      364                                          37
PIMCO VIT High Yield
Unit value at beginning of period              NA                   $9.455                                          NA
Unit value at end of period                $9.903                   $9.525                                      $9.455
Number of units outstanding at end of period    0                       84                                          30
PIMCO VIT StocksPLUS Growth and Income
Unit value at beginning of period              NA                   $8.805                                          NA
Unit value at end of period                $8.235                   $8.219                                      $8.805
Number of units outstanding at end of period    0                       97                                          10
PIMCO VIT Total Return
Unit value at beginning of period              NA                  $10.647                                          NA
Unit value at end of period               $11.675                  $11.347                                     $10.647
Number of units outstanding at end of period    0                      296                                          21
USAZ PIMCO Growth and Income
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $10.137                  $10.135                                          NA
Number of units outstanding at end of period    0                        6                                          NA
USAZ PIMCO Renaissance
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $10.992                  $10.990                                          NA
Number of units outstanding at end of period    5                       12                                          NA
USAZ PIMCO Value Fund
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period               $10.934                  $10.933                                          NA
Number of units outstanding at end of period    0                        1                                          NA
Seligman Small-Cap Value
Unit value at beginning of period              NA                  $13.635                                          NA
Unit value at end of period               $16.588                  $16.557                                     $13.635
Number of units outstanding at end of period    2                      108                                          13
USAZ Money Market
Unit value at beginning of period              NA                  $10.345                                          NA
Unit value at end of period               $10.539                  $10.519                                     $10.345
Number of units outstanding at end of period    0                      386                                          57
USAZ Van Kampen Aggressive Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $8.013                   $8.008                                          NA
Number of units outstanding at end of period    0                       28                                          NA
USAZ Van Kampen Comstock
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $9.318                   $9.311                                          NA
Number of units outstanding at end of period   10                      153                                          NA
USAZ Van Kampen Emerging Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $9.122                   $9.115                                          NA
Number of units outstanding at end of period    8                      102                                          NA
USAZ Van Kampen Growth and Income
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $9.654                   $9.648                                          NA
Number of units outstanding at end of period    0                      179                                          NA
USAZ Van Kampen Growth
Unit value at beginning of period              NA                       NA                                          NA
Unit value at end of period                $9.507                   $9.501                                          NA
Number of units outstanding at end of period    0                       60                                          NA

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.
</TABLE>


<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. General Agency Agreement(6)
      4.   Individual  Variable  Annuity  Contract(5)
      4.a. Waiver  of  Contingent  Deferred  Sales  Charge  Endorsement(3)
      4.b. Traditional Death  Benefit  Endorsement(5)
      4.c. Enhanced Death Benefit Endorsement(5)
      4.d. Traditional Guaranteed Minimum Income Benefit Endorsement(5)
      4.e. Enhanced Guaranteed Minimum Income Benefit Endorsement(5)
      4.f. Charitable Remainder Trust Endorsement(3)
      4.g. Individual Retirement Annuity Endorsement(5)
      4.h. Unisex Endorsement(5)
      4.i. Pension Plan and Profit Sharing Plan Endorsement(5)
      4.j. Group Pension Plan Death Benefit Endorsement(3)
      4.k. 403(b) Annuity Endorsement(5)
      5.   Application  for  Individual  Variable  Annuity  Contract(3)
      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(4)
        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(4)
        c. Form of Fund Participation Agreement between Davis Variable
           Account Fund, Inc., Davis Distributors, LLC and Allianz Life
           Insurance Company of North America(5)
        d. Form of Fund Participation Agreement between Oppenheimer Variable
           Account Funds, Oppenheimer Funds Inc. and Allianz Life Insurance
           Company of North America(5)
        e. Form of Fund Participation Agreement between Allianz Life Insurance
           Company of North America, PIMCO Variable Insurance Trust, and PIMCO
           Fund Distributors, LLC(5)
        f. Form of Fund Participation Agreement between Seligman Portfolios,
           Inc. and Allianz Life Insurance Company of North America(5)
        g. Form of Fund Participation Agreement between The Prudential Series
           Fund, Inc., The Prudential Insurance Company of America, and
           Prudential Investment Management Services LLC(7)
        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 (8)
        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 (9)
        j. Form of Fund Participation Agreement between Van Kampen
           Funds, Inc., and USAllianz Investor Services, LLC (9)
        k. Portfolio Management Agreement between USAllianz
           Advisers, LLC, USAllianz Variable Insurance Products Trust,
           and Van Kampen Asset Management, Inc. (9)
        l. Portfolio Management Agreement between USAllianz
           Advisers, LLC,USAllianz Variable Insurance Products Trust,
           and Van Kampen Investment Advisory Corporation. (9)
        m. Portfolio Management Agreement between USAllianz
           Advisers, LLC,USAllianz Variable Insurance Products Trust
           and Van Kampen Asset Management, Inc. (9)
        n. Portfolio Management Agreement between USAllianz
           Advisers, LLC, USAllianz Variable Insurance Products Trust,
           and Alliance Capital Management L.P. (9)
        o. Portfolio Management Agreement between USAllianz
           Advisers, LLC, USAllianz Variable Insurance Products Trust,
           and PIMCO Advisers L.P. (9)
        p. Portfolio Management Agreement between USAllianz
           Advisers, LLC,USAllianz Variable Insurance Products Trust
           and Templeton Investment Counsel,LLC. (9)
        q. Form of Fund Participation Agreement between Dreyfus Investment
           Portfolios and Allianz Life Insurance Company of North America (10)

       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 (10)
      14.   Company Organizational Chart(6)
      15.   Powers of Attorney (11)


(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. 333-82329 and
     811-05618) electronically filed on July 6, 1999.
(4)  Incorporated by reference to Registrant's Form N-4 (File Nos. 333-06709 and
     811-05618) electronically filed on November 12, 1999.
(5)  Incorporated by reference to Registrant's Form N-4 (File Nos. 333-82329 and
     811-05618) electronically filed on December 29, 1999.
(6)  Incorporated by reference to Post-Effective Amendment No. 1 to Registrant's
     Form N-4 (File Nos. 333-82329 and 811-05618) electronically filed on
     April 27, 2000.
(7)  Incorporated by reference to Post-Effective Amendment No. 2 to Registrant's
     Form N-4 (File Nos. 333-82329 and 811-05618) electronically filed on
     December 15, 2000.
(8)  Incorporated by reference to Post-Effective Amendment No. 3 to Registrant's
     Form N-4 (File Nos. 333-82329 and 811-05618) electronically filed on
     April 26, 2001.
(9)  Incorporated by reference to Post-Effective Amendment No. 4 to Registrant's
     Form N-4 (File Nos. 333-82329 and 811-05618) electronically filed on
     October 29, 2001.
(10) Incorporated by reference to Post-Effective Amendment No. 5 to Registrant's
     Form N-4 (File Nos. 333-82329 and 811-05618) electronically filed on
     April 23, 2002.
(11) Incorporated by reference to Post-Effective Amendment No. 5 to Registrant's
     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 14,170  qualified  Contract  Owners and 8,497
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 5th 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                     02/05/2003
Robert W. MacDonald

Mark A. Zesbaugh*          Director and Chief Executive Officer      02/05/2003
Mark A. Zesbaugh

Michael P. Sullivan*       Director                                  02/05/2003
Michael P. Sullivan

Dr. Gerhard Rupprecht*     Director                                  02/05/2003
Dr. Gerhard Rupprecht

Rev. Dennis J. Dease*      Director                                  02/05/2003
Rev. Dennis J. Dease

James R. Campbell*         Director                                  02/05/2003
James R. Campbell

Robert M. Kimmitt*         Director                                  02/05/2003
Robert M. Kimmitt

Michael Diekmann*          Director                                  02/05/2003
Michael Diekmann

Paul M Saffert*            Director                                  02/05/2003
Paul M Saffert

Gabby Matzdorff*           Sr. Vice President and                    02/05/2003
Gabby Matzdorff            Chief Financial Officer

Charles Kavitsky*          President and                             02/05/2003
Charles Kavitsky           Chief Marketing Officer

Denise Blizil*             Sr. Vice President and                    02/05/2003
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. 6

                                       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)