Registration No. 33-11158

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

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                     POST-EFFECTIVE AMENDMENT NO.    17

                                       TO

                                    FORM S-6

                FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933

                     OF SECURITIES OF UNIT INVESTMENT TRUST

                            REGISTERED ON FORM N-8B-2



ALLIANZ LIFE VARIABLE ACCOUNT A

-------------------------------
(Exact Name of Trust)


ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

-----------------------------------------------
(Name of Depositor)


1750 Hennepin Avenue, Minneapolis, MN                55403-2195
-----------------------------------------------      ----------
(Address of Depositor's Principal Executive Offices) (Zip Code)


Name and Address of Agent for Service
-------------------------------------
Michael T. Westermeyer
Allianz Life Insurance Company of North America
1750 Hennepin Avenue
Minneapolis, MN  55403-2195

Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
P.O. Box 5108
Westport, CT 06881
(203) 226-7866


Title and amount of Securities being Registered:

    Individual Flexible Premium Variable Life Insurance Policies


It is proposed that this filing will become effective:

     ___  immediately  upon filing  pursuant to paragraph(b) of Rule 485
     _X_  on May 1, 2000 pursuant to paragraph (b) of Rule 485
     ___  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 box:

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




                    CROSS REFERENCE TO ITEMS REQUIRED

                            BY FORM N-8B-2
<TABLE>
<CAPTION>
N-8B-2 ITEM                           CAPTION ON PROSPECTUS
-----------                           ---------------------
<S>                                  <C>
1                                     The Company, The Separate Account
2                                     The Company
3                                     Not Applicable
4                                     Distributors
5                                     The Variable Account
6(a)                                  Not Applicable
 (b)                                  Not Applicable
9                                     Not Applicable
10                                    Purchases
11                                    Investment Choices
12                                    Investment Choices
13                                    Expenses
14                                    Purchases
15                                    The Separate Account
16                                    Investment Choices
17                                    Policy Account, Transfers
18                                    Purchases
19                                    Not Applicable
20                                    Not Applicable
21                                    Not Applicable
22                                    Not Applicable
23                                    Not Applicable
24                                    Not Applicable
25                                    The Company
26                                    The Company
27                                    The Company
28                                    The Company
29                                    The Company
30                                    The Company
31                                    Not Applicable
32                                    Not Applicable
33                                    Not Applicable
34                                    Not Applicable
35                                    The Company
37                                    Not Applicable
38                                    Distributors
39                                    Distributor
40                                    Not Applicable
41(a)                                 Distributor
42                                    Not Applicable
43                                    Not Applicable
44                                    Purchases
45                                    Not Applicable
46                                    Policy Account, Transfers
47                                    Not Applicable
48                                    Not Applicable
49                                    Not Applicable
50                                    Not Applicable
51                                    The Company
52                                    Investment Choices
53                                    Taxes, Federal Tax Status
54                                    Financial Statements
55                                    Not Applicable

</TABLE>


<PAGE>

                                    1  Flexible Premium Variable Life Prospectus



                 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
                                    ISSUED BY
                         ALLIANZ LIFE VARIABLE ACCOUNT A
                                       AND
                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
--------------------------------------------------------------------------------

This prospectus  describes the Allianz ValueLife  Flexible Premium Variable Life
Insurance  Policy  offered by Allianz Life  Insurance  Company of North  America
(Allianz Life). All references to "we," "us" and "our" refer to Allianz Life.

The policy is a variable benefit policy.  We have designed the policy for use in
estate and retirement planning and other insurance needs of individuals.

You, the policyowner,  have a number of investment choices in the policy.  These
investment  choices  include  a fixed  account  (which  is  part of our  general
account)  as well  as  variable  options.  Each  variable  option  invests  in a
portfolio of the corresponding  fund company listed below. When you buy a policy
and allocate funds to the variable  options you are subject to investment  risk.
This means that the value of your  Policy  Account  may  increase  and  decrease
depending upon the investment  performance of the variable option(s) you select.
Under some circumstances,  the death benefit and the duration of the policy will
also increase and decrease depending upon investment performance.

<TABLE>
<CAPTION>

The following portfolios are currently available with the policy:

AIM VARIABLE INSURANCE FUNDS:
AIM V.I. Growth Fund
THE ALGER AMERICAN FUND:
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS TRUST+:
Franklin  Aggressive  Growth  Securities  Fund
Franklin  Global  Communications Securities Fund*
Franklin Global Health Care Securities Fund
Franklin Growth and Income  Securities  Fund*
Franklin High Income Fund
Franklin  Income  Securities Fund
Franklin  Large Cap Growth  Securities  Fund*
Franklin  Money Market Fund
Franklin Natural  Resources  Securities Fund
Franklin Real Estate Fund*
Franklin Rising Dividends Securities Fund*
Franklin S&P 500 Index Fund
Franklin Small Cap Fund
Franklin Technology Securities Fund
Franklin U.S. Government Fund*
Franklin Value  Securities  Fund
Franklin  Zero  Coupon  Funds - 2005  and  2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Templeton Asset Strategy Fund*
Templeton  Developing  Markets  Securities  Fund*
Templeton  Global Income Securities  Fund
Templeton  Growth  Securities  Fund*
Templeton  International Securities  Fund*
Templeton  International  Smaller  Companies  Fund
Templeton Pacific Growth Securities Fund*

+ Effective May 1, 2000, the funds of Templeton  Variable  Products  Series Fund
  were  merged  into  similar  funds of Franklin  Templeton  Variable  Insurance
  Products Trust.

USALLIANZ VARIABLE INSURANCE
PRODUCTS TRUST:
USAllianz VIP Diversified Assets Fund
USAllianz VIP Fixed Income Fund
USAllianz VIP Growth Fund


 * The fund name changed since the last prospectus update as follows:

   Current Name                                      Previous Name
----------------------------------------------------------------------------------------------
<S>                                                  <C>
   Franklin Global Communications Securities Fund    Franklin Global Utilities Securities Fund
   Franklin Growth and Income Securities Fund        Franklin Growth and Income Fund
   Franklin Large Cap Growth Securities Fund         Franklin Capital Growth Fund
   Franklin Real Estate Fund                         Franklin Real Estate Securities Fund
   Franklin Rising Dividends Securities Fund         Franklin Rising Dividends Fund
   Franklin U.S. Government Fund                     Franklin U.S. Government Securities Fund
   Templeton Asset Strategy Fund                     Templeton Global Asset Allocation Fund
   Templeton Developing Markets Securities Fund      Templeton Developing Markets Equity Fund
   Templeton Growth Securities Fund                  Templeton Global Growth Fund
   Templeton International Securities Fund           Templeton International Equity Fund
   Templeton Pacific Growth Securities Fund          Templeton Pacific Growth Fund
</TABLE>


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

<PAGE>

                                    Flexible Premium Variable Life Prospectus  2


Please  read this  prospectus  before  investing  and keep it on file for future
reference.  It  contains  important  information  about  the  Allianz  ValueLife
Flexible  Premium  Variable Life Insurance  Policy.  The Securities and Exchange
Commission  (SEC)  maintains  a  Web  site  (http://www.sec.gov)  that  contains
information regarding companies that file electronically with the SEC.

THE POLICY:

O IS NOT A BANK DEPOSIT

O IS NOT FEDERALLY INSURED

O IS NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY

THE  POLICY  IS  SUBJECT  TO  INVESTMENT  RISK.  YOU 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  policies.  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.


Date: May 1, 2000


<PAGE>

                                    3  Flexible Premium Variable Life Prospectus

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

SPECIAL TERMS                                         4

SUMMARY                                               5

The Variable Life Insurance Policy                    5

Purchases                                             5
Investment Choices                                    5
Expenses                                              5
Death Benefit                                         6
Taxes                                                 6
Access to Your Money                                  7
Other Information                                     7
Inquiries                                             7

PART I
THE VARIABLE LIFE INSURANCE POLICY                    8
PURCHASES                                             8
Premiums                                              8
Application For a Policy                              8
Planned Periodic Premiums                             8
Unscheduled Premiums                                  8
Grace Period                                          8
Reinstatement                                         9
Allocation of Premium                                 9
Policy Account                                       10
Method of Determining your Policy Account
   Allocated to a Variable Option                    10
Your Cash Value, Net Cash Value                      10
Our Right to Reject or Return a Premium Payment      10

INVESTMENT CHOICES                                   10
Substitution and Limitations on Further Investments  12
Transfers                                            12
Dollar Cost Averaging                                13

EXPENSES                                             13
Mortality and Expense Risk Charge                    13
Administrative Charges                               13
Insurance Risk Charges                               14
Charges for Additional Benefit Riders                14
Surrender Charges                                    14
Partial Surrender Fee                                15
Premium Fee                                          15
Transfer Fee                                         15
Income Tax Charge                                    15
Fund Annual Expenses                                 16

DEATH BENEFIT                                        17
Change in Death Benefit                              17
Change in Face Amount of Insurance                   17
Guaranteed Death Benefit Rider                       18
Accelerated Death Benefit Rider                      18

TAXES                                                18
Life Insurance in General                            18
Taking Money Out of Your Policy                      19
Diversification                                      19

ACCESS TO YOUR MONEY                                 19
Policy Loans                                         19
Loan Interest Charged                                20
Loan Limit                                           20
Security                                             20
Restrictions on Making Loans                         20
Repaying Policy Debt                                 20
Partial Surrenders                                   20
Full Surrenders                                      21

OTHER INFORMATION                                    21
The Company                                          21
The Separate Account                                 21
Distributor                                          22
Suspension of Payments or Transfers                  22
Ownership                                            22

PART II
Executive Officers And Directors                     24
Voting                                               25
Disregard of Voting Instructions                     25
Legal Opinions                                       25
Our Right to Contest                                 25
Federal Tax Status                                   25
Reports to Owners                                    28
Legal Proceedings                                    28
Experts                                              28
Financial Statements                                 28
APPENDIX - Illustration of Policy Values            A-1

<PAGE>

                                    Flexible Premium Variable Life Prospectus  4


SPECIAL TERMS
--------------------------------------------------------------------------------

This  prospectus  is written in plain  English to make it as  understandable  as
possible.  However, by the very nature of the policy, certain technical words or
terms are unavoidable. We have identified some of these words or terms. For some
we have provided you with a definition.  For the remainder,  we believe that you
will find an adequate  discussion in the text. The page indicated below is where
we believe you will find the best  explanation for the word or term. These words
or terms are in italics on the indicated page.

ANNUAL GUARANTEED  COVERAGE PREMIUM.  Your Annual Guaranteed Coverage Premium is
equal to twelve times the Guaranteed Coverage Premium.

CASH VALUE. Your Policy Account minus the surrender charge.

FACE AMOUNT OF INSURANCE.  The amount of coverage  chosen by you. This amount is
used to  determine  the death  benefit.  The minimum Face Amount of Insurance is
$100,000.

GUARANTEED  COVERAGE  PREMIUM.  Your  Guaranteed  Coverage  Premium is a monthly
target  premium  amount which will vary by the issue age,  sex and  underwriting
classification of the insured as well as the amount and type of coverage.  There
is a distinct Guaranteed Coverage Premium for the base policy and for each rider
attached to the base policy.

INSURANCE  RISK AMOUNT.  The excess of the death  benefit over the value of your
Policy Account.

NET CASH VALUE. The Cash Value of your Policy minus any Policy Debt you may have
outstanding.

POLICY ACCOUNT.  The sum of any amounts you may have in the fixed account and in
the variable options you have selected.

POLICY DEBT.  The total of any  outstanding  loans you have made on your policy,
including interest paid in advance for the current policy year.

SURRENDER  CHARGE PREMIUM.  The Surrender  Charge Premium is equal to the Annual
Guaranteed Coverage Premium for a base policy death benefit coverage on a person
insured as a standard  risk.  The  Surrender  Charge  Premium will vary with the
issue age,  sex and  smoking  clarification  of the  insured as well as the face
amount of the base policy.

TOTAL GUARANTEED COVERAGE PREMIUM.  The Total Guaranteed Coverage Premium is the
sum of the  Guaranteed  Coverage  Premium of the base policy and the  Guaranteed
Coverage Premium of any riders attached to the base policy.  During the first 10
years after the policy is issued the Total  Guaranteed  Coverage Premium is used
in the Calculation of the Minimum  Required  Premium to keep the policy in force
regardless of fund performance.

                                                  Page
                                                  ----
beneficiary, contingent beneficiary                 22
business day                                        10
insured                                             17
issue date                                           9
maturity benefit                                    23
maturity date                                       23
monthly anniversary                                  9
owner                                               22
policy month                                         9
policy year, policy anniversary                      9
reallocation date                                    7


<PAGE>

                                    5  Flexible Premium Variable Life Prospectus

The Prospectus is divided into three sections:  the Summary, Part I and Part II.
The sections in the Summary  correspond to sections in Part I of this Prospectus
which  discuss the topics in more detail.  Part II contains  even more  detailed
information.

SUMMARY

1. THE VARIABLE LIFE
   INSURANCE POLICY
--------------------------------------------------------------------------------

The Allianz ValueLife  variable life insurance policy is a contract between you,
the owner, and us, an insurance company.  The policy provides for the payment of
a death benefit to your selected beneficiary upon the death of the insured. This
death benefit is distributed  free from federal income taxes.  The policy can be
used as part of your estate planning or used to save for retirement. The insured
is the person you chose to have his or her life insured  under the policy.  You,
the owner, can also be the insured, but you do not have to be.

The policy  described in this  prospectus  is a flexible  premium  variable life
insurance policy. The policy is "flexible" because:

o the frequency and amount of premium payments can vary;

o you can choose between death benefit options; and

o you can increase or decrease the amount of insurance coverage,  all within the
  same policy of insurance.

The policy is  "variable"  because the Policy  Account,  when  allocated  to the
variable options, may increase or decrease depending upon the investment results
of the selected variable options. Under certain circumstances, the death benefit
and the duration of your policy may also vary.

During the life of the insured,  you can surrender the policy for all or part of
its Net Cash Value.  You may also obtain a policy loan, using the Policy Account
as security.

We make  available a number of riders to meet a variety of your estate  planning
needs. See the "Death Benefit" section for a description of the guaranteed death
benefit rider and the accelerated benefit rider.


2. PURCHASES
--------------------------------------------------------------------------------

You  purchase  the  policy by  completing  the  proper  forms.  Your  registered
representative  can help you complete the forms. In some  circumstances,  we may
contact you for additional information regarding the insured. We may require the
insured to provide us with medical records, physicians' statements or a complete
paramedical examination.

The  minimum  initial  premium we accept is  computed  for you based on the face
amount  you  request.  The policy is  designed  for the  payment  of  subsequent
premiums.  You can establish planned periodic  premiums.  The minimum subsequent
premium that we accept is $25 ($50 in Maryland).


3. INVESTMENT CHOICES
--------------------------------------------------------------------------------

You can  put  your  money  in the  fixed  account  or in as many as 10  variable
options.  The variable  options  invest in portfolios of AIM Variable  Insurance
Funds, The Alger American Fund,  Franklin  Templeton Variable Insurance Products
Trust, and USAllianz Variable Insurance Products Trust. The portfolios available
under the  policy are  described  fully in Part I and in the  accompanying  fund
prospectuses.



4. EXPENSES
--------------------------------------------------------------------------------

We make certain deductions from your premiums,  your Policy Account and from the
variable  options.  These  deductions  are made for premium fees,  mortality and
expense  risks,  administrative  expenses,  sales charges and for providing life
insurance protection. There are also operating expenses of the portfolios. These
deductions are summarized as follows:

CHARGE FOR PREMIUM  FEES.  This charge is for state and local  premium taxes (in
states which charge a premium  tax).  It is also used to pay for other  expenses
associated  with premium  collection.  The charge is deducted  from each premium
payment.  The charge is equal to 2.5% of each premium  payment and  approximates
our average expenses associated with premium collection.


MORTALITY AND EXPENSE RISK CHARGE. This risk charge is guaranteed not to exceed,
on an annual  basis,  0.90% of your average  daily Policy  Account  value and is
deducted each business day. The current risk charge is 0.60%.


ADMINISTRATIVE CHARGES. These charges are equal to:
1) .15%,  on an  annual  basis,  of your  average  Policy  Account  value and is
   deducted each business day; plus

2) $20 per policy  month for the first  policy  year,  and $9 per  policy  month
   guaranteed thereafter. Currently, the charge is $5 per policy month after the
   first policy year. These amounts are deducted from your Policy Account on the
   monthly  anniversary  date.  This  part of the  charge  will be waived if the
   Policy  Account is equal to or greater  than 15% of the  initial  Face Amount
   plus the requested Face Amount increases.

<PAGE>
                                    Flexible Premium Variable Life Prospectus  6


CHARGES FOR ADDITIONAL  BENEFIT RIDERS.  The amount of the charge,  if any, each
policy month for additional  benefit riders is determined in accordance with the
rider and is shown on the coverage page of your policy.

INSURANCE  RISK CHARGE.  On each monthly  anniversary  date, we deduct from your
Policy  Account the cost of  insurance  for the next policy  month.  This charge
provides death benefit protection.


SURRENDER  CHARGES.  A surrender  charge may be deducted in the event you make a
full or partial surrender of your Policy Account. The surrender charges contain:
a deferred  administrative  expense  and a deferred  sales  load.  The  deferred
administrative  expense is $5.00 per $1,000 of Face Amount of Insurance  for the
first 3 policy  years,  then grades to zero over policy  years 4 through 13. The
deferred sales load is the lesser of 30% of the Surrender  Charge Premium,  plus
5% of all premiums over the Surrender  Charge  Premium  (SCP),  or the following
percentage of SCP:


             YEARS           % OF SCP
             ------------------------
               1-8              65%
                9               60%
               10               55%
               11               44%
               12               33%
               13               22%
               14               11%
               15               0%

The SCP is equal to the Annual  Guaranteed  Coverage Premium for the base policy
death  benefit for a life insured at standard  risk.  The SCP will vary with the
issue age, sex, and smoking  classification of the insured,  and the face amount
of the base policy.

PARTIAL  SURRENDER FEE. If you surrender only a portion of the Net Cash Value at
any time during the insured's lifetime, there is an administrative fee assessed.
The fee is currently  equal to the lesser of $25 or 2% of the partial  surrender
amount you take out of the policy.

You may make a partial  surrender once each policy year that does not exceed 10%
of the Net Cash  Value  without  incurring  a  surrender  charge or the  partial
surrender fee.


TRANSFER FEE. You may transfer values from one variable option to another, or to
or from the fixed account. The first 12 transfers in a policy year are free. The
fee for  each  additional  transfer  is the  lesser  of $25 or 2% of the  amount
transferred.  Prescheduled  automatic  dollar cost  averaging  transfers are not
currently counted.


OTHER EXPENSES. There are deductions from and operating expenses paid out of the
assets of the portfolios of the funds.


5. DEATH BENEFIT
--------------------------------------------------------------------------------

The amount of the death benefit depends on:

o the Face Amount of Insurance of your policy;

o the death benefit option in effect at the time of death; and

o under some circumstances, the value of your Policy Account.

There are two death  benefit  options:  Option A and Option B. If death  benefit
Option A is in  effect,  the death  benefit  is the  greater  of your total Face
Amount in effect or your Policy  Account  multiplied by the  applicable  factor.
Under this option, the amount of the death benefit is fixed,  except when we use
the factor to determine the benefit percentage.

If death benefit Option B is in effect, the death benefit is the greater of your
total Face Amount of Insurance  in effect plus the Policy  Account or the Policy
Account  multiplied by the applicable  factor.  Under this option, the amount of
the death benefit is variable.

Under certain  circumstances you can change death benefit options.  You can also
change the Face Amount of Insurance under certain circumstances.

At the time of  application  for a policy,  you  designate  a  beneficiary.  The
beneficiary  is the person or persons who will receive the death  proceeds.  You
can  change  your   beneficiary   unless  you  have  designated  an  irrevocable
beneficiary. The beneficiary does not have to be a natural person.


6. TAXES
--------------------------------------------------------------------------------

Your policy has been designed to comply with the definition of life insurance in
the Internal Revenue Code. As a result, the death proceeds paid under the policy
should be excludable from the gross income of your beneficiary.  Any earnings in
your policy are not taxed until you take them out. The tax treatment of the loan
proceeds and surrender  proceeds will depend on whether the policy is considered
a Modified Endowment Contract (MEC).  Proceeds taken out of a MEC are considered
to come from earnings  first and are  includible in taxable  income.  If you are
younger  than 591/2 when you take money out of a MEC, you may also be subject to
a 10% federal tax penalty on the earnings withdrawn.

<PAGE>

                                    7  Flexible Premium Variable Life Prospectus


7. ACCESS TO YOUR MONEY
--------------------------------------------------------------------------------

You can  terminate  your  policy  at any  time  and we will pay you the Net Cash
Value.  At any time  during  the  insured's  life and  before  your  policy  has
terminated,  you may  surrender  a part of your Net Cash  Value  subject  to the
requirements  of the policy.  When you  terminate  your policy or make a partial
surrender,  a surrender  charge may be assessed.  Also,  when you make a partial
surrender  we  assess  a  partial  surrender  fee of  $25  or 2% of the  partial
surrender amount,  whichever is less. Once each policy year, on a non-cumulative
basis,  you may make a free partial  surrender up to 10% of your unloaned Policy
Value.

You can also borrow some of your Policy Value.


8. OTHER INFORMATION
--------------------------------------------------------------------------------

FREE LOOK.  You can cancel  the policy  within 20 days after you  receive it (or
whatever  period is  required in your state) or the 45th day after you sign your
application.  We will refund all premiums paid less any Policy Debt.  During the
underwriting  process, we will allocate your initial net premium to the Franklin
Money Market Fund until the  reallocation  date,  which occurs 30 days after the
policy is released to an active status in our processing system.  After that, we
will  invest  your  Policy  Account  value and any  subsequent  premiums  as you
requested.

PURCHASING CONSIDERATIONS. The policy is designed for individuals and businesses
that  have a need for  death  protection  but who  also  desire  to  potentially
increase  the  values  in their  policies  through  investment  in the  variable
options.

The policy offers the following to individuals:

o create or conserve one's estate;

o supplement retirement income; and

o access to funds through loans and surrenders.

If you  currently  own a  variable  life  insurance  policy  on the  life of the
insured,  you should  consider  whether the purchase of the policy  described in
this prospectus is appropriate.

Also, you should carefully consider whether the policy should be used to replace
an existing policy on the life of the insured.

ADDITIONAL FEATURES. The following additional features are offered:

 o You can arrange to have a regular amount of money  automatically  transferred
   from the Franklin Money Market Fund or the Franklin U.S.  Government  Fund to
   selected  variable  options  each  month,  theoretically  giving  you a lower
   average cost per unit over time than a single one time purchase. We call this
   feature the dollar cost averaging option.

 o If the insured becomes terminally ill, we will pay you a portion of the death
   benefit. We call this feature the accelerated death benefit rider.

 o If you pay a certain required premium,  we guarantee that the policy will not
   lapse  even if your  Policy  Account  value is not  sufficient  to cover  the
   monthly deductions. We call this feature the guaranteed minimum death benefit
   rider.

 o We also offer a number of additional riders that are common to life insurance
   policies.

These  features  and  riders may not be  available  in your state and may not be
suitable for your particular situation.


9. INQUIRIES
--------------------------------------------------------------------------------

If you need more information about buying a policy, please contact us at:


   Allianz Life Insurance Company of North America
   1750 Hennepin Avenue
   Minneapolis, Minnesota 55403
   1-800-542-5427


If you need policyowner service (such as changes in policy information,  inquiry
into Policy Account values, or to make a loan), please contact us at our service
center:

   Allianz Life ValueLife Service Center
   300 Berwyn Park
   P.O.Box 3031
   Berwyn, Pennsylvania 19312-0031
   1-800-336-0320

<PAGE>

                                    Flexible Premium Variable Life Prospectus  8


PART I

1. THE VARIABLE LIFE
INSURANCE POLICY
--------------------------------------------------------------------------------

The Allianz ValueLife  variable life insurance policy is a contract between you,
the owner,  and us, an insurance  company.  This kind of policy is most commonly
used for retirement planning and/or estate planning.

The policy  provides for life insurance  coverage on the insured.  It has Policy
Account values,  a death benefit,  surrender  rights,  loan privileges and other
characteristics  associated  with  traditional  and  universal  life  insurance.
However, since the policy is a variable life insurance policy, the value of your
policy will increase or decrease depending upon the investment experience of the
variable  option(s) you choose.  The duration or amount of the death benefit may
also vary based on the investment performance of the underlying  portfolios.  To
the extent you select any of the variable options, you bear the investment risk.
If your Net Cash Value is insufficient to pay the monthly deductions, the policy
may terminate.  However,  if you have paid the Guaranteed  Coverage  Premium and
have not  taken out a loan,  your  policy  will not lapse  even if your Net Cash
Value is insufficient to pay the monthly deductions.

Because the policy is like traditional and universal life insurance, it provides
a death benefit which is paid to your named beneficiary.  When the insured dies,
the  death  proceeds  are paid to your  beneficiary.  These  proceeds  should be
excludable  from the gross income of the  beneficiary,  however estate taxes may
apply.  The tax-free  death  proceeds  makes this an excellent way to accumulate
money you do not think you will use in your lifetime. It is also a tax-efficient
way to provide for those you leave behind. If you need access to your money, you
can borrow from the policy or make a total or partial surrender.


2. PURCHASES
--------------------------------------------------------------------------------

PREMIUMS

We will issue you your policy only after you pay the initial premium.  Before we
send out the policy,  the application must be in good order as determined by our
administrative  rules and be approved for issue by  underwriting.  The policy is
not designed for professional market timing  organizations,  other entities,  or
persons using programmed, large, or frequent transfers.

APPLICATION FOR A POLICY

In order to  purchase  a  policy,  you must  submit  an  application  to us that
requests  information about the proposed insured. In some cases, we will ask for
additional information.  We may request that the insured provide us with medical
records, a physician's statement or possibly require other medical tests.

PLANNED PERIODIC PREMIUMS

The policy is designed to allow you to make subsequent premium payments. You can
elect to make planned periodic premium  payments.  Planned periodic premiums may
be paid annually,  semi-annually,  quarterly or monthly.  You select the planned
periodic premium and payment interval at the time of application. You may change
the amount and  frequency of premiums.  We have the right to limit the amount of
any increase.  Each premium after the initial  premium must be at least $25 ($50
in Maryland).  Except in Maryland,  we may increase this minimum  amount 90 days
after we send you a written notice to that effect.

UNSCHEDULED PREMIUMS

You can make  additional  unscheduled  premium  payments  at any time  while the
policy is in force.  However,  in order to preserve the  favorable tax status of
the policy,  we may limit the amount of the premiums and may return any premiums
that exceed the limits stated under the U.S. tax laws.

GRACE PERIOD

When a policy  is about to  terminate,  under  some  circumstances,  the  policy
provides  a grace  period in order for you to make a premium  payment  or a loan
repayment in order to keep your policy in force.

During the first 10 policy years (5 years in Massachusetts), a grace period will
begin on your monthly  anniversary date when:

o  your Net Cash Value is not large enough to cover the monthly  deduction  made
   on that date; and

o  your  adjusted  premium  payments are less than your  accumulated  Guaranteed
   Coverage Premiums.

Your adjusted premium payments as of the monthly anniversary date equal:

o  the total of your premium payments received by us; minus

o  any partial surrenders you have made to date; minus

o  any Policy Debt.

<PAGE>
                                     9 Flexible Premium Variable Life Prospectus


Your accumulated Guaranteed Coverage Premiums as of the monthly anniversary date
equal:

o  the total Guaranteed Coverage Premium; multiplied by

o  one plus the number of months the policy has been in force as of that monthly
   anniversary date.

If you have not had the same total  Guaranteed  Coverage Premium in effect every
month,  your  accumulated  Guaranteed  Coverage  Premiums  will be  based on the
different  premiums  that were in effect and the number of months for which each
applied.

During the first 10 policy years (5 years in Massachusetts), the premium payment
that you need to make to keep your  policy  from  terminating  at the end of the
grace period is the lesser of:

o  three monthly deductions; or

o  the accumulated Guaranteed Coverage Premiums for the monthly anniversary date
   when the grace period began minus adjusted premium payments as of that date.

After the first 10 policy years (5 years in Massachusetts),  a grace period will
begin on the  monthly  anniversary  date when  your Net Cash  Value is not large
enough to cover the monthly deductions to be made on that date.

After the first 10 policy years (5 years in Massachusetts), the premium required
to keep the Policy from  terminating  at the end of a grace period  equals three
monthly deductions.

When your policy is in a grace period,  we will continue the policy for 61 days.
If your  insured  dies during a grace  period,  we will deduct the premium  that
would have been required to keep your policy from terminating from the amount we
would otherwise pay out.

Your policy will terminate  without value at the end of a grace period unless we
receive a premium  payment  during the grace  period  large  enough to keep your
policy from terminating at the end of that grace period.

We will notify you in writing at least 31 days before a grace period ends.  This
notice will show how much must be paid to keep the policy from  terminating.  We
send notices to the last address you have given us.

Your first policy year starts on the day the  coverage is  effective  under your
policy.  We call that date the issue date. Future policy years start on the same
day and month in each subsequent  year. We call that date a policy  anniversary.
Your first policy month starts on the issue date.  Future policy months start on
the same day in each subsequent month. We call that date a monthly anniversary.

REINSTATEMENT

If your policy terminated at the end of a grace period,  you can request that we
reinstate it (restore your insurance  coverage) anytime within 5 years after its
termination. To reinstate your policy you must:

o submit an application for reinstatement;

o submit  proof  satisfactory  to us that the insured is still  insurable at the
  risk  classification  that  applies for the latest  Face  Amount of  Insurance
  portion then in effect;

o pay or agree to reinstatement of any Policy Debt; and

o pay the premium required to reinstate the policy.

The premium  required to reinstate  the policy equals the total of the following
amounts:

o the amounts that would have been  required for the policy to continue in force
  without  entering  into a grace period for each month during the grace period;
  and

o the amount that will be required  for the policy to continue in force  without
  entering a grace period for the next 3 months after the reinstatement date.

The reinstatement  date is the monthly  anniversary date on or following the day
we  approve  the  application  for  reinstatement.  The  Policy  Account  on the
reinstatement  date is equal to the Policy  Account on the  monthly  anniversary
date when the grace period ended. The surrender charge on the reinstatement date
is equal to the surrender charge on the monthly  anniversary date when the grace
period ended.

The policy may not be reinstated after:

o it has been surrendered for its Net Cash Value;

o the insured's death; or

o the maturity date.

ALLOCATION OF PREMIUM

Your premium is  allocated  to the fixed  account or one or more of the variable
options, as selected by you. Prior to the reallocation date, the initial premium
is allocated to the Franklin Money Market Fund.

On the  reallocation  date, the Policy Account is allocated to the fixed account
and/or the variable options in accordance with your selections.  This allocation
is not subject to the transfer fee provision (see "transfer fee").  However,  we
reserve  the  right to limit the  number of  investment  choices  (the  variable
options  and the  fixed  account)  that  you  may  invest  in at any  one  time.
Currently,  you may invest in a maximum of 10 investment  choices (which include
the

<PAGE>

                                   Flexible Premium Variable Life Prospectus  10

fixed account and any variable option you select) at any one time throughout the
life of the policy.

POLICY ACCOUNT

On the issue date, the value of your Policy Account is:

o your  initial  premium  less the charge for  premium  fees,  less the  initial
  insurance risk charge and less the initial  charge for any additional  benefit
  riders; minus

o the monthly deduction for the first policy month.

After the  reallocation  date the  Policy  Account  equals the sum of the policy
amounts in the fixed account and in the variable options you have selected.

METHOD OF DETERMINING YOUR POLICY ACCOUNT ALLOCATED TO A VARIABLE OPTION

The  value of your  policy  will go up or down  depending  upon  the  investment
performance of the variable  option(s) you choose and the charges and deductions
made  against your Policy  Account.  In order to keep track of the value of your
Policy Account,  we use a unit of measure we call a valuation unit. (A valuation
unit works like a share of a mutual fund.)

Every  business  day we  determine  the  value  of the  valuation  unit for each
variable  option by  multiplying  the  Accumulation  Unit Value for the previous
period by a factor for the current period. The factor is determined by:

o  dividing  the value of a portfolio  at the end of the  current  period by the
   value of a portfolio for the previous period; and

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

The value of a valuation unit may go up or down from day to day.

When you make a premium payment, we credit your policy with valuation units. The
number of  valuation  units  credited is  determined  by dividing  the amount of
premiums allocated to the variable option by the value of the valuation unit for
that variable option.

When we assess  any  charges  we do so by  deducting  valuation  units from your
policy. When you take a loan we reduce the number of the valuation units in your
policy and transfer the amount to the fixed account.

Our  business  day is each  day that the New  York  Stock  Exchange  is open for
business.  Our  business  day closes  when the New York Stock  Exchange  closes,
usually 4:00 p.m. Eastern Time.

Your Cash Value, Net Cash Value

YOUR CASH VALUE EQUALS:

o your Policy Account; minus

o the surrender charges.

Your Net Cash Value equals:

o the Cash Value; minus

o any Policy Debt you may have incurred.

During your insured's life, you may:

o take loans based on the Cash Value;

o make partial surrenders; or

o surrender the policy for its Net Cash Value.

OUR RIGHT TO REJECT OR RETURN A PREMIUM PAYMENT

In order to receive the tax  treatment  for life  insurance  under the  Internal
Revenue Code (Code), a policy must initially  qualify and continue to qualify as
life insurance under the Code. To maintain this qualification,  we have reserved
the right under the policy to return any premiums paid which we have  determined
will cause the policy to fail as life insurance.  We also have the right to make
changes in the policy or to make a distribution  to the extent we determine this
is  necessary  to  continue  to  qualify  the  policy  as life  insurance.  Such
distributions may have current income tax consequences to you.

If  subsequent  premiums  will cause your policy to become a Modified  Endowment
Contract  (MEC),  we will  contact  you prior to  applying  the  premium to your
policy.  If you  elect  to  have  the  premium  applied,  we  require  that  you
acknowledge in writing that you understand the tax  consequences of a MEC before
we will apply the premiums.


3. INVESTMENT CHOICES
--------------------------------------------------------------------------------

The policy  offers  variable  options which invest in portfolios of AIM Variable
Insurance Funds, The Alger American Fund,  Franklin Templeton Variable Insurance
Products Trust, and USAllianz Variable Insurance Products Trust. The policy also
offers a fixed account of Allianz Life.  Additional  portfolios may be available
in the future.

PURCHASERS  SHOULD READ THIS PROSPECTUS AND THE ACCOMPANYING  FUND  PROSPECTUSES
CAREFULLY BEFORE INVESTING.

<PAGE>

                                   11  Flexible Premium Variable Life Prospectus


AIM Variable  Insurance  Funds,  The Alger  American  Fund,  Franklin  Templeton
Variable  Insurance  Products Trust, and USAllianz  Variable  Insurance Products
Trust are the mutual funds  underlying  the policy.  Each  portfolio has its own
investment objective.


Franklin  Templeton  Variable  Insurance  Products  Trust  (formerly,   Franklin
Valuemark  Funds)  issues  two  classes  of shares  which are  described  in the
attached  prospectus for Franklin  Templeton  Variable Insurance Products Trust.
Only Class 1 shares are available  with your policy.  Effective May 1, 2000, the
funds of Templeton  Variable Products Series Fund were merged into similar funds
of Franklin Templeton Variable Insurance Products Trust.


Investment  advisers for each portfolio are listed in the table below and are as
follows: A I M Advisors,  Inc., Allianz of America, Inc., Fred Alger Management,
Inc., Franklin Advisers,  Inc., Franklin Advisory Services, LLC, Franklin Mutual
Advisers,  LLC,  Templeton  Asset  Management  Ltd.,  Templeton  Global Advisors
Limited, and Templeton  Investment Counsel,  Inc. Certain advisers have retained
one or more subadvisers to help them manage the portfolios.


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

A Portfolio'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 a Portfolio with a small asset base.
A Portfolio may not experience similar performance as its assets grow.


<TABLE>
<CAPTION>

The following is a list of the portfolios available under the policy:


AVAILABLE PORTFOLIOS                                             INVESTMENT ADVISERS
---------------------------------------------------------------------------------------------------

<S>                                                              <C>
AIM VARIABLE INSURANCE FUNDS:
AIM V.I. Growth Fund                                             AIM Advisors, Inc.

THE ALGER AMERICAN FUND:
Alger American Growth Portfolio                                  Fred Alger Management, Inc.
Alger American Leveraged AllCap Portfolio (seeks long-term
  capital appreciation)                                          Fred Alger Management, Inc.

FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST:
Franklin Aggressive Growth Securities Fund                       Franklin Advisers, Inc.
Franklin Global Communications Securities Fund*                  Franklin Advisers, Inc.
Franklin Global Health Care Securities Fund                      Franklin Advisers, Inc.
Franklin Growth and Income Securities Fund*                      Franklin Advisers, Inc.
Franklin High Income Fund                                        Franklin Advisers, Inc.
Franklin Income Securities Fund                                  Franklin Advisers, Inc.
Franklin Large Cap Growth Securities Fund*                       Franklin Advisers, Inc.
Franklin Money Market Fund                                       Franklin Advisers, Inc.
Franklin Natural Resources Securities Fund                       Franklin Advisers, Inc.
Franklin Real Estate Fund*                                       Franklin Advisers, Inc.
Franklin Rising Dividends Securities Fund*                       Franklin Advisory Services, Inc.
Franklin S&P 500 Index Fund                                      Franklin Advisers, Inc.
Franklin Small Cap Fund                                          Franklin Advisers, Inc.
Franklin Technology Securities Fund                              Franklin Advisers, Inc.
Franklin U.S. Government Fund*                                   Franklin Advisers, Inc.
Franklin Value Securities Fund                                   Franklin Advisory Services, Inc.

<PAGE>

                                                                    Flexible Premium Variable Life Prospectus  12


AVAILABLE PORTFOLIOS                                             INVESTMENT ADVISERS
---------------------------------------------------------------------------------------------------
Franklin Zero Coupon Funds - 2005 and 2010                       Franklin Advisers, Inc.
Mutual Discovery Securities Fund (capital appreciation)          Franklin Mutual Advisers, Inc.
Mutual Shares Securities Fund (capital appreciation with income
  as a secondary goal)                                           Franklin Mutual Advisers, Inc.
Templeton Asset Strategy Fund*                                   Templeton Investment Counsel, Inc.
Templeton Developing Markets Securities Fund*                    Templeton Asset Management Ltd.
Templeton Global Income Securities Fund                          Franklin Advisers, Inc.
Templeton Growth Securities Fund*                                Templeton Global Advisors Limited
Templeton International Securities Fund*                         Templeton Investment Counsel, Inc.
Templeton International Smaller Companies Fund                   Templeton Investment Counsel, Inc.
Templeton Pacific Growth Securities Fund*                        Franklin Advisers, Inc.


USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST:
USAllianz VIP Diversified Assets Fund                            Allianz of America, Inc.
USAllianz VIP Fixed Income Fund                                  Allianz of America, Inc.
USAllianz VIP Growth Fund                                        Allianz of America, Inc.

<FN>
* The fund name changed since the last prospectus update as of the effective date listed below:

   CURRENT NAME                                     PREVIOUS NAME                               EFFECTIVE DATE
--------------------------------------------------------------------------------------------------------------
   Franklin Global Communications Securities Fund   Franklin Global Utilities Securities Fund   11-15-1999
   Franklin Growth and Income Securities Fund       Franklin Growth and Income Fund             05-01-2000
   Franklin Large Cap Growth Securities Fund        Franklin Capital Growth Fund                12-15-1999
   Franklin Real Estate Fund                        Franklin Real Estate Securities Fund        11-15-1999
   Franklin Rising Dividends Securities Fund        Franklin Rising Dividends Fund              11-15-1999
   Franklin U.S. Government Fund                    Franklin U.S. Government Securities Fund    11-15-1999
   Templeton Asset Strategy Fund                    Templeton Global Asset Allocation Fund      05-01-2000
   Templeton Developing Markets Securities Fund     Templeton Developing Markets Equity Fund    05-01-2000
   Templeton Growth Securities Fund                 Templeton Global Growth Fund                05-01-2000
   Templeton International Securities Fund          Templeton International Equity Fund         05-01-2000
   Templeton Pacific Growth Securities Fund         Templeton Pacific Growth Fund               05-01-2000
</FN>
</TABLE>


Shares of the funds 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 funds may also be
sold directly to qualified  plans.  The funds believe that offering their shares
in this manner will not be disadvantageous to you.

Allianz Life may enter into certain  arrangement under which it is reimbursed by
the funds'  advisers,  distributors  and/or  affiliates  for the  administrative
services, which it provides to the portfolios.

SUBSTITUTION AND LIMITATIONS ON FURTHER INVESTMENTS

We may  substitute  one of the variable  options you have  selected with another
variable  option.  We  will  not do  this  without  the  prior  approval  of the
Securities and Exchange  Commission.  We may also limit further  investment in a
variable option. We will give you notice of our intention to do this.

TRANSFERS

At your  request,  we will  transfer  amounts  from your  Policy  Account in any
variable option to another variable option, or to the fixed account. The minimum
amount  that can be  transferred  is the lesser of the minimum  transfer  amount
(currently $500) or the total value in that variable option. You may transfer on
any policy anniversary an amount from the unloaned value in the fixed account to
one or more variable options.

However, transfers out of the fixed account can be made only if:

o we receive the request at least 30 days before that policy anniversary; and

o the amount requested is not more than the greater of 25% of the unloaned value
  in the fixed account on that anniversary or the minimum transfer amount.

We will not transfer more than the unloaned  value from the fixed  account.  The
minimum  amount  that we will  transfer  from the fixed  account  on any  policy
anniversary

<PAGE>

                                   13  Flexible Premium Variable Life Prospectus


is the lesser of the minimum  transfer  amount,  currently $500, or the unloaned
value in the fixed account on that date.

You can make 12  transfers  in a policy  year  without  charge.  We may charge a
transfer fee for additional transfers in a policy year. The current transfer fee
is the lesser of $25 or 2% of the amount  transferred.  You may tell us how much
of the transfer fee is to come from the unloaned  value in the fixed account and
from the values in each of the variable options.  If you do not tell us, we will
make a deduction proportionally based on the relation the unloaned values in the
fixed account and the value in the variable  options have to the total  unloaned
value in the Policy Account.

We have  not  designed  this  policy  or the  underlying  portfolios  for use by
professional  market  timing  organizations,  other  entities,  or persons using
programmed,  large, or frequent transfers.  Such activity may be disruptive to a
portfolio.

You may elect to make transfers by telephone.  To elect this option, you must do
so in writing. If there are joint owners, the instructions will be accepted from
either  one of the joint  owners  unless you  inform us  otherwise.  We will use
reasonable procedures to confirm that instructions communicated by telephone are
genuine.  If we do not, we may be liable for any losses due to  unauthorized  or
fraudulent instructions. We tape record all telephone instructions.

DOLLAR COST AVERAGING

Dollar Cost  Averaging  is a program  which  enables  you to transfer  specified
dollar  amounts each month or quarter from the Franklin Money Market Fund or the
Franklin  U.S.  Government  Fund to other  portfolios  (maximum of 8) at regular
intervals.  By  allocating  on a  regularly  scheduled  basis,  you  may be less
susceptible to the impact of market fluctuations.

Dollar  Cost  Averaging  may be  selected  for a period of 12 to 36 months.  The
minimum amount that can be transferred is $500 (monthly) or $1,500  (quarterly).
All dollar cost averaging transfers are made effective the 10th of the month (or
the next business day if the 10th of the month is not a business  day).  You can
elect to participate in this program at any time by:

o  properly completing the Dollar Cost Averaging election form;

o  returning  it to us by the first of the month (to be  effective  that month);
   and

o  insuring that sufficient value is in either the Franklin Money Market Fund or
   the Franklin U.S. Government Fund.

Dollar Cost Averaging will terminate when any of the following occurs:

1) the number of designated transfers has been completed;

2) you do not  have  enough  money  in the  Franklin  Money  Market  Fund or the
   Franklin  U.S.  Government  Fund to make  the  transfer  (if  less  money  is
   available,  that  amount will be dollar cost  averaged  and the program  will
   end);

3) you request  termination  in writing and the writing is received by the first
   of the month; or

4) your policy is terminated.

There is no current charge for Dollar Cost Averaging but we reserve the right to
charge for this program in the future.


4. EXPENSES
--------------------------------------------------------------------------------

There are charges and other expenses  associated with the policy that reduce the
return on your investment in the policy. The charges and expenses are:

MORTALITY AND EXPENSE RISK CHARGE


We deduct a mortality  and expense  risk charge from each  variable  option each
business day. This risk charge is guaranteed not to exceed,  on an annual basis,
0.90% of your average  daily Policy  Account  value.  The current risk charge is
equal to 0.60%.


This risk charge  compensates  us for assuming the  mortality  and expense risks
under the policy.  The mortality  risk assumed by us is that the insureds,  as a
group, may not live as long as expected.  The expense risk assumed by us is that
actual  expenses may be greater than those assumed.  We are  responsible for the
administration of the policy. We expect to profit from this charge.

ADMINISTRATIVE CHARGES


We deduct administrative charges from each variable option each business day and
from your Policy Account on each monthly  anniversary date. The charge is equal,
on an annual basis,  to 0.15% of your average daily Policy Account value.  There
is also a policy  charge  which is equal to $20 per  policy  month for the first
policy year.  Thereafter,  it is  guaranteed  to not exceed $9 per policy month.
Currently, the charge is $5 per policy month after the first


<PAGE>
                                   Flexible Premium Variable Life Prospectus  14


policy  year.  This part of the charge  will be waived if the Policy  Account is
equal to or greater than 15% of the initial face amount plus the requested  face
amount increases.

The charges  reimburse us for  expenses  incurred in the  administration  of the
policies.  Such expenses  include:  confirmations,  annual  account  statements,
maintenance  of  policy  records,   maintenance  of  variable  account  records,
administrative  personnel costs,  mailing costs,  data processing  costs,  legal
fees,  accounting fees,  filing fees, the costs of other services  necessary for
policy owner  servicing and all accounting,  valuation,  regulatory and updating
requirements.

INSURANCE RISK CHARGES


This charge  compensates  us for the insurance  coverage we provide in the month
following the charge. The insurance risk charge for each policy month equals the
total of the insurance risk charges for the policy month for each Face Amount of
Insurance  portion then in effect.  To determine the insurance risk charge for a
Face Amount of Insurance portion for a policy month, we multiply:


o  the Insurance  Risk Amount for the Face Amount of Insurance  portion for that
   month; by

o  the cost of  insurance  rate that  applies  to the Face  Amount of  Insurance
   portion for that month.

The  Insurance  Risk Amount for a Face Amount of Insurance  portion for a policy
month equals the excess of:

o  the death benefit associated with that Face Amount of Insurance portion; over

o  the value of the Policy Account at the beginning of the policy month,  before
   the monthly deduction for the month is subtracted.

The cost of insurance  rate for a Face Amount of Insurance  portion for a policy
month equals the sum of:

o  the  standard  cost of  insurance  rate for that  month from the table of our
   standard cost of insurance rates; and

o  an additional rate for any extra mortality risk  classification  that applies
   for the Face Amount of Insurance portion.

The additional  rate for an extra mortality risk  classification  for any policy
month  equals  the  amount  of extra  mortality  that  the  risk  classification
represents for that month.

The total cost of insurance rate for a policy month will be uniform for all Face
Amount of Insurance portions that:

o  are in the same Face Amount band, sex, and risk classification;

o  take effect when the insureds are the same age; and

o  have been in force the same length of time.

We may change our standard  cost of  insurance  rates from time to time based on
our  expectations  as to future  cost  elements  such as:  investment  earnings,
mortality, persistency, expenses and taxes. Any change we make will apply to all
Face Amount portions in the same risk classification.

The declared  standard cost of insurance rates for each policy month will not be
more than the amount shown in the table  contained in your policy.  The table is
based on the  insured's age at his or her last birthday at the beginning of each
year  (attained  age),  the  insured's  sex and  whether or not the  insured has
qualified  for the  non-smoker  classification.  For the initial  Face Amount of
Insurance,  the  insured's  attained age is  determined at the beginning of each
policy year.  For each Face Amount  increase,  attained age is determined at the
beginning of each policy year measured from the date the increase took effect.

Since the mortality  tables used with the policy  distinguish  between males and
females,  the cost of  insurance  and the benefits  payable will differ  between
males  and  females  of the same age.  Employers,  employee  plans and  employee
organizations should seek legal advice to determine whether the Civil Rights Act
of 1964,  Title VII, or other  applicable  law prohibits the use of sex distinct
mortality  tables.  We will offer the policy based upon unisex  mortality tables
where required.

CHARGES FOR ADDITIONAL BENEFIT RIDERS

The amount of the charge,  if any,  each  policy  month for  additional  benefit
riders is determined  in accordance  with the rider and is shown on the coverage
page of your policy.

SURRENDER CHARGES

A surrender charge may be deducted if you make a full or partial surrender.  The
surrender  charge consists of 2 parts: a deferred  administrative  expense and a
deferred  sales load.  The maximum  surrender  charge  varies by issue age, face
amount,  sex,  smoking  status,  and contract  duration.  This charge will never
exceed the sum of the deferred  administrative  expense and the  deferred  sales
load,  assuming the  Surrender  Charge  Premium  (SCP) is paid yearly during the
first 15 years.

<PAGE>

                                   15  Flexible Premium Variable Life Prospectus


The  deferred  administrative  expense  is $5.00 per  $1,000  of Face  Amount of
Insurance for the first 3 policy years. The charge then grades down to zero over
policy years 4 through 13.

The deferred  sales load is the lesser of 30% of the  Surrender  Charge  Premium
(SCP), plus 5% of all premiums over the SCP, or the following percentage of SCP.

             YEARS           % OF SCP
             ------------------------
               1-8              65%
                9               60%
               10               55%
               11               44%
               12               33%
               13               22%
               14               11%
               15               0%

The SCP is equal to the Annual  Guaranteed  Coverage Premium for the base policy
death benefit  coverage of a standard  mortality  risk.  The SCP varies with the
issue age,  sex, and smoking  classification  of the insured as well as the Face
Amount of the base  policy.  The SCP will not  exceed  the  amount  shown in the
following table.

            ISSUE AGE       PER $1,000
            --------------------------
               0-29           $  6
              30-39           $ 11
              40-49           $ 21
              50-59           $ 40
              60-69           $ 75
              70-80           $150


For some higher issue ages, the Standard  Non-Forfeiture  Law of the state where
the policy is delivered may limit  surrender  charges to amounts less than those
defined above.

The  surrender  charge may also be  deducted  in the event of a decrease in Face
Amount.

The  surrender  charge at any time  during  the first  policy  year  equals  the
surrender  charge  at the end of the  year.  The  surrender  charge  during  any
subsequent  policy year is calculated based on end of year surrender charges and
the portion of the year that has been completed.

When the policy  terminates,  your Policy Account may be less than the surrender
charge. If this happens, you will not have to pay the difference.  If the policy
is reinstated, the surrender charge will also be reinstated.

PARTIAL SURRENDER FEE

If you  surrender  only a portion of your Net Cash Value at any time  during the
insured's  lifetime,  there  is an  administrative  fee  assessed.  This  fee is
currently equal to the lesser of $25 or 2% of the partial surrender amount.  You
can make a partial  surrender  once each policy year that does not exceed 10% of
the Net Cash Value without incurring a surrender charge or the partial surrender
fee.

PREMIUM FEE

This fee is used to pay for  premium  taxes  charged  by some  states  and other
governmental  entities (e.g.,  municipalities).  Allianz Life is responsible for
the  payment  of these  taxes  and will make a  deduction  from the value of the
policy for them. This fee is also used to pay for other expenses associated with
premium collection. The charge is equal to 2.5% of each premium payment.

TRANSFER FEE


You may transfer values from one variable  option to another,  or to or from the
fixed  account.  The first 12 transfers  in a policy year are free.  The fee for
each  additional  transfer  is  currently  the lesser of $25 or 2% of the amount
transferred.  Prescheduled  automatic  dollar cost  averaging  transfers are not
currently  counted nor is the transfer of the initial  premium at the end of the
free look period counted when we determine transfer fees.


INCOME TAX CHARGE

We do not currently  assess any charge for income taxes. We reserve the right to
assess a charge for such  taxes  against  the  variable  options or your  Policy
Account if we determine that such taxes will be incurred.

<PAGE>
<TABLE>
<CAPTION>

                                                                 Flexible Premium Variable Life Prospectus 16



FUND ANNUAL EXPENSES
(as a  percentage  of the  Portfolios'  average  daily net  assets  for the most  recent  fiscal  year).  See the
accompanying fund prospectuses for more information.

                                                       MANAGEMENT
                                                      AND PORTFOLIO      12B-1          OTHER      TOTAL ANNUAL
                                                  ADMINISTRATION FEES1    FEES         EXPENSES      EXPENSES
---------------------------------------------------------------------------------------------------------------
<S>                                                       <C>             <C>            <C>           <C>
AIM V.I. Growth Fund                                      .63%             --            .10%          .73%
Alger American Growth Portfolio                           .75%             --            .04%          .79%
Alger American Leveraged AllCap Portfolio2                .85%             --            .08%          .93%
Franklin Aggressive Growth Securities Fund3               .50%             --             22%          .72%
Franklin Global Communications Securities Fund            .48%             --            .03%          .51%
Franklin Global Health Care Securities Fund               .60%             --            .22%          .82%
Franklin Growth and Income Securities Fund                .47%             --            .02%          .49%
Franklin High Income Fund                                 .51%             --            .03%          .54%
Franklin Income Securities Fund                           .48%             --            .02%          .50%
Franklin Large Cap Growth Securities Fund4                .75%             --            .02%          .77%
Franklin Money Market Fund                                .52%             --            .01%          .53%
Franklin Natural Resources Securities Fund                .62%             --            .04%          .66%
Franklin Real Estate Fund                                 .56%             --            .02%          .58%
Franklin Rising Dividends Securities Fund                 .73%             --            .02%          .75%
Franklin S&P 500 Index Fund5                              .15%             --            .38%          .53%
Franklin Small Cap Fund6                                  .55%             --            .27%          .82%
Franklin Technology Securities Fund3                      .55%             --            .38%          .93%
Franklin U.S. Government Fund                             .49%             --            .02%          .51%
Franklin Value Securities Fund                            .60%             --            .21%          .81%
Franklin Zero Coupon Fund - 2005                          .63%             --            .02%          .65%
Franklin Zero Coupon Fund - 2010                          .63%             --            .02%          .65%
Mutual Discovery Securities Fund                          .80%             --            .21%          1.01%
Mutual Shares Securities Fund4                            .60%             --            .19%          .79%
Templeton Asset Strategy Fund6                            .60%             --            .18%          .78%
Templeton Developing Markets Securities Fund6             1.25%            --            .31%          1.56%
Templeton Global Income Securities Fund4                  .60%             --            .05%          .65%
Templeton Growth Securities Fund4                         .83%             --            .05%          .88%
Templeton International Securities Fund6                  .69%             --            .19%          .88%
Templeton International Smaller Companies Fund            .85%             --            .26%          .88%
Templeton Pacific Growth Securities Fund                  1.00%            --            .08%          1.08%
USAllianz VIP Diversified Assets Fund5/7                  .55%            .25%           .20%          1.00%
USAllianz VIP Fixed Income Fund5/7                        .50%            .25%            --           .75%
USAllianz VIP Growth Fund5/7                              .65%            .25%            --           .90%

------
<FN>
1.The Portfolio  Administration  Fee is a direct expense for the Franklin Global Health Care Securities Fund,
   the Franklin Small Cap Fund, the Franklin Value Securities Fund, the Mutual Discovery Securities Fund, the
   Mutual Shares  Securities  Fund,  the Templeton  Asset Strategy  Fund,  the Templeton  Developing  Markets
   Securities  Fund, the Templeton  International  Securities Fund, and the Templeton  International  Smaller
   Companies Fund. Other portfolios of Franklin  Templeton  Variable Insurance Products Trust pay for similar
   services indirectly through the Management Fee. See "Management" in the accompanying fund prospectuses for
   further information regarding these fees.
2. Other Expenses for the Alger American Leveraged AllCap Portfolio include 0.01% of interest expense.
3.The Franklin  Aggressive  Growth  Securities  Fund and the Franklin  Technology  Securities  Fund commenced
   operations as of the date of this prospectus.  The expenses shown above for these portfolios are therefore
   estimated for the current fiscal year.
4.On 2/8/00, a merger and reorganization was approved that combined the fund with a similar fund of Templeton
   Variable Products Series Fund, effective 5/1/00. The table shows total expenses based on the fund's assets
   as of 12/31/99,  and not the assets of the combined fund. However, if the table reflected combined assets,
   the fund's  Management  Fees,  Other  Expenses,  and Total Fund  Operating  Expenses after 5/1/00 would be
   estimated as: 0.75%,  0.02%,  and 0.77%  respectively  for the Franklin Large Cap Growth  Securities Fund;
   0.60%,  0.19%, and 0.79%  respectively  for the Mutual Shares  Securities  Fund;  0.80%,  0.05%, and 0.85%
   respectively for the Templeton Growth Securities Fund; and .0.60%,  0.04%, and 0.64%  respectively for the
   Templeton Global Income Securities Fund.
5.The Franklin S&P 500 Index Fund, the USAllianz VIP Diversified  Assets Fund, the USAllianz VIP Fixed Income
   Fund,  and the USAllianz VIP Growth Fund  commenced  operations  November 12, 1999. The expenses shown for
   these Portfolios are therefore estimated for the funds' current fiscal year.
6. On 2/8/00,  shareholders  approved a merger and reorganization that combined the assets of the fund with a
   similar fund of the Templeton  Variable Products Series Fund,  effective  5/1/00.  The shareholders of the
   fund had approved new management fees, which apply to the combined fund effective 5/1/00.  The table shows
   restated total expenses based on the new fees and assets of the fund as of 12/31/99, and not the assets of
   the combined fund.  However,  if the table reflected both the new fees and the combined assets, the fund's
   Management  Fees,  Other Expenses,  and Total Fund Operating  Expenses after 5/1/00 would be estimated as:
   0.55%, 0.27%, and 0.82% respectively for the Franklin Small Cap Fund; 1.25%, 0.29%, and 1.54% respectively
   for the Templeton  Developing  Markets  Securities  Fund;  0.60%,  0.14%,  and 0.74%  respectively for the
   Templeton Asset Strategy Fund; and 0.65%,  0.20%, and 0.85%  respectively for the Templeton  International
   Securities Fund.
7.Certain  expenses of the USAllianz VIP Funds have been assumed by the Adviser.  Had those expenses not been
   assumed  total  return  would  have been  lower and total  fund  expenses  would  have been  3.80% for the
   Diversified Assets Fund, 3.77% for the Fixed Income Fund, and 3.90% for the Growth Fund.
</FN>
</TABLE>


<PAGE>

                                   17  Flexible Premium Variable Life Prospectus


5. DEATH BENEFIT
--------------------------------------------------------------------------------


The amount of the death  benefit  depends on the total Face Amount of Insurance,
your Policy  Account on the date of the  insured's  death and the death  benefit
option  (Option A or Option B) in effect at that time. The insured is the person
whose life is covered by the policy.  The insured is named on the coverage  page
of the policy.  The actual amount we pay the beneficiary  will be reduced by any
outstanding Policy Debt.


The total Face Amount is the sum of all of the Face Amount portions. The initial
Face  Amount  and each Face  Amount  increase  still in effect  are Face  Amount
portions.  The initial Face Amount and the death benefit option in effect on the
issue date (the date when the  insured's  life is covered  under the policy) are
shown on the coverage page of your policy.

OPTION A. The amount of the death benefit under Option A is the greater of:

o  the total Face  Amount at the  beginning  of the policy  month when the death
   occurs; or

o  the Policy Account on the date of death  multiplied by the applicable  factor
   from the Table of Death Benefit Factors contained in your policy.

OPTION B. The amount of the death benefit under Option B is the greater of:

o  the total Face  Amount at the  beginning  of the policy  month when the death
   occurs plus the Policy Account on the date of death; or

o  the Policy Account on the date of death  multiplied by the applicable  factor
   from the Table of Death Benefit Factors contained in your policy.

CHANGE IN DEATH BENEFIT

You may change the death benefit  option after your policy has been in force for
at least one year, subject to the following requirements:

o  you must request the change in writing;

o  once you have changed the death  benefit  option,  it cannot be changed again
   for the next 3 years;

o  if you want to change  death  benefit  Option A to Option B, you must  submit
   proof  satisfactory  to us that the  insured is still  insurable  at the risk
   classification that applies for the initial Face Amount. The Face Amount will
   not change; and

o  if you want to change  death  benefit  Option B to Option A, the Face  Amount
   will be increased by an amount equal to the Policy Account on the date of the
   change.  The risk  classification for the last Face Amount portion to go into
   effect which is still in force will apply to the Face Amount  increase.  This
   increase  will not result in any  increase in  premiums,  expense  charges or
   surrender charges.

Any change in a death benefit option will take effect on the monthly anniversary
date on or following the date we approve the request for the change.

CHANGE IN FACE AMOUNT OF INSURANCE

You may  change  the Face  Amount of  Insurance  of your  policy on any  monthly
anniversary date after your policy has been in force at least one year. Once the
Face Amount has been changed, it cannot be changed again for the next 12 months.

Face Amount Increases. To increase the Face Amount of Insurance you must:

o submit an application for the increase;

o submit proof satisfactory to us that the insured is an insurable risk; and

o pay any additional premium which is required.

The Face Amount of your policy can only be increased before your insured reaches
age 81. Each Face Amount  increase must be at least as large as the minimum Face
Amount increase (currently  $25,000). A Face Amount increase will take effect on
the monthly  anniversary date on or following the day we approve the application
for the increase.

The risk  classification  that  applies  for any  Face  Amount  increase  may be
different from the risk classification that applies for the initial Face Amount.

The following changes will be made to reflect the increase:

o  The Guaranteed Coverage Premium will be increased.

o  The monthly  administrative  charge will increase to $20 per month for the 12
   months following the increase.

o  Additional  surrender charges equal to the Face Amount increase (in $1,000's)
   multiplied by the surrender  charge factors will apply for 13 years following
   the increase.

We will furnish a revised coverage page of your policy that shows:

o  the risk classification and the amount of the increase; and

o  the values for the changes described above.

<PAGE>

                                   Flexible Premium Variable Life Prospectus  18


Face Amount  Decreases.  You must request in writing any decrease in Face Amount
of Insurance. The decrease will take effect on the
later of:

o  the monthly  anniversary date on or following the day we receive your request
   for the decrease; or

o  the monthly  anniversary date one year after the last change you made in Face
   Amount.

A Face Amount decrease will be used to reduce any previous Face Amount increases
which are then in effect starting with the latest increase and continuing in the
reverse order in which the  increases  were made. If any portion of the decrease
is left after all Face Amount  increases  have been reduced,  it will be used to
reduce the initial Face Amount.  We will not permit a Face Amount  decrease that
would reduce the initial  Face Amount  below the minimum Face Amount,  currently
$100,000.

The  Guaranteed  Coverage  Premium  will be reduced to reflect  the Face  Amount
decrease.  The new  Guaranteed  Coverage  Premium  will be  shown  on a  revised
coverage page of your policy.

We will  deduct a charge  from  the  Policy  Account  when  the Face  Amount  is
decreased.  The  maximum  charge we will  deduct  each  time the Face  Amount is
decreased is the lesser of:

o  the total of the current  surrender charge for the amount of each Face Amount
   portion reduced; or

o  the Policy Account when the decrease is made.

The charge will be deducted for each Face Amount portion reduced,  starting with
the charge for the first Face Amount portion reduced, and continuing in the same
order in which the reductions are made until the charge is completely deducted.

Future  surrender  charges  will be  reduced  proportionately  for  any  charges
deducted.  After the Face Amount is decreased,  the  surrender  charges for each
Face  Amount  portion  for  which a  charge  is  deducted  will be  equal to the
surrender  charges  shown for that Face Amount  portion on the coverage  page of
your policy, or in the revised coverage page, multiplied by the ratio of:

o  the amount of the surrender  charge in effect for the Face Amount  portion at
   the time the charge is deducted  minus the amount of the charge  deducted for
   the Face Amount portion; divided by

o  the amount of the surrender  charge in effect for the Face Amount  portion at
   the time the charge is deducted.

GUARANTEED DEATH BENEFIT RIDER

You can elect a Guaranteed  Death Benefit  Rider.  This rider  provides that the
policy  will  remain  in force to  attained  age 95 for death  benefit  Option A
policies and to attained age 80 for death benefit Option B policies,  regardless
of the performance of the underlying portfolios,  so long as you pay the minimum
required premium.  The premium required is significantly higher than the minimum
premium  required  to issue  the  policy  and to keep it in  force.  There is an
additional  charge for this benefit,  currently  $0.01 per $1,000 of Face Amount
per policy month. A policy cannot have both the  Guaranteed  Death Benefit Rider
and any of the following riders:

o Insured Term Rider

o Spouse Term Rider

ACCELERATED DEATH BENEFIT RIDER

You can elect the  Accelerated  Benefit Rider.  This rider provides that you may
elect to receive some of the death benefit proceeds of the policy if the insured
is suffering  from a terminal  illness,  as defined in the rider.  Receipt of an
accelerated  death  benefit  amount  may be  taxable.  You should  contact  your
personal tax or financial adviser for specific information.

Death benefits, Cash Values, if any, and loan values, if any, will be reduced if
a benefit is paid pursuant to this rider.

There is an  administrative  charge for this benefit which is guaranteed  not to
exceed the lesser of $1,000 or 2% of the benefit.  This limit may vary depending
on the state in which the  policy  was  purchased.  The  current  administrative
charge is $150.

The receipt of an  accelerated  death benefit  amount may  adversely  affect the
recipient's   eligibility   for  Medicaid  or  other   government   benefits  or
entitlements.


6. TAXES
--------------------------------------------------------------------------------

NOTE: We have prepared the following  information  on federal  income taxes as a
general  discussion of the subject.  It is not intended as tax advise to anyone.
You  should  consult  your tax  adviser  about your own  circumstances.  We have
included an additional discussion regarding taxes in Part II.

LIFE INSURANCE IN GENERAL

Life  insurance,  such as  this  policy,  is a  means  of  providing  for  death
protection and setting aside money for future

<PAGE>
                                   19  Flexible Premium Variable Life Prospectus


needs.  Congress recognized the importance of such planning and provided special
rules in the Internal Revenue Code (Code) for life insurance.

Simply stated, these rules provide that you will not be taxed on the earnings on
the  money  held in your life  insurance  policy  until you take the money  out.
Beneficiaries  generally are not taxed when they receive the death proceeds upon
the death of the insured. However, estate taxes may apply.

TAKING MONEY OUT OF YOUR POLICY

You, as the owner,  will not be taxed on  increases  in the value of your policy
until a  distribution  occurs either as a surrender or as a loan. If your policy
is a MEC,  any loans or  surrenders  from the  policy  will be  treated as first
coming from earnings and then from your investment in the policy.  Consequently,
these distributed earnings are included in taxable income.

The Code also provides that any amount  received from a MEC which is included in
income may be subject to a 10% penalty. The penalty will not apply if the income
received is:

1) paid on or after the taxpayer reaches age 591/2;

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

3) in  a  series  of  substantially   equal  payments  made  annually  (or  more
   frequently) for the life or life expectancy of the taxpayer.

If your policy is not a MEC, any  surrender  proceeds will be treated as first a
recovery of the investment in the policy and to that extent will not be included
in taxable income.  Furthermore  any loan will be treated as indebtedness  under
the policy and not as a taxable  distribution.  See "Federal Tax Status" in Part
II for more details including an explanation of whether your policy is a MEC.

DIVERSIFICATION

The Code provides  that the  underlying  investments  for a variable life policy
must satisfy  certain  diversification  requirements in order to be treated as a
life insurance contract.  We believe that the portfolios are being managed so as
to comply with such requirements.

Under current federal tax law, it is unclear as to the circumstances under which
you,  because  of the  degree  of  control  you  exercise  over  the  underlying
investments,  and not us would be  considered  the  owner of the  shares  of the
portfolios.  If you are considered the owner of the investments,  it will result
in the loss of the favorable tax treatment for the policy. It is unknown to what
extent owners are permitted to select  portfolios,  to make transfers  among the
portfolios or the number and type of  portfolios  owners may select from without
being considered the owner of the shares.  If guidance from the Internal Revenue
Service is provided  which is  considered a new  position,  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 policy, could be treated as the owner of the portfolios. Due
to the uncertainty in this area, we reserve the right to modify the policy in an
attempt to maintain favorable tax treatment.


7. ACCESS TO YOUR MONEY
--------------------------------------------------------------------------------

POLICY LOANS

We will loan money to you at the loan interest rate we establish for each policy
year during  which the loan is  outstanding.  Your request for a loan must be in
writing.

The policy  loan will be  divided  into two parts,  the  preferred  loan and the
non-preferred  loan. A preferred  loan may be made not more than once per policy
year, beginning the later of:

o the tenth policy anniversary; or

o the anniversary following the insured's 60th birthday.

No more than 10% of the Cash Value of your policy at the time of the loan may be
made as a preferred  loan. Any portion of a loan that is not a preferred loan is
a non-preferred loan.

The policy  loan will be  allocated  to the fixed  account.  If the policy  loan
requested exceeds the loan limit, you may also request a transfer of values from
the variable  options to the fixed  account.  These values will be determined at
the time you request the transfer. If you do not indicate the proportions of the
variable  options to be  transferred,  we will make the  transfers  based on the
proportions  that your Policy Account in the variable  options bear to the total
unloaned  value  in the  Policy  Account.  Policy  loans  may have  federal  tax
consequences (see "Federal Tax Status").

<PAGE>

                                   Flexible Premium Variable Life Prospectus  20


LOAN INTEREST CHARGED

There may be a lower  declared  loan  interest  rate each year for the preferred
loan than for the non-preferred  loan. We will determine the loan interest rates
for a policy year at least 60 days before the policy  year  begins.  The maximum
annual loan interest rates we will use for preferred and non-preferred loans for
a policy (the maximum allowable rate) are the greater of:

o the guaranteed  interest rate for the fixed account shown on the coverage page
  of your policy for a policy year  (currently  3.5% for all policy  years) plus
  1%; or

o Moody's Corporate Bond Yield Average,  Monthly Average Corporates as published
  by Moody's Investors  Service,  Inc., for the calendar month ending two months
  before the date on which the loan interest rate is determined.

If Moody's Corporate Bond Yield Average, Monthly Average Corporates is no longer
published  on a  timely  basis,  we will  use a  substantially  similar  average
approved  by the  insurance  department  in the  state  where  your  policy  was
delivered to determine the maximum allowable rate.

If the maximum  allowable rate for a policy is at least 1/2% lower than the loan
interest rate in effect for the previous  policy year, we will decrease the loan
interest  rate to not more  than the  maximum  allowable  rate.  If the  maximum
allowable  rate for a policy  year is at least  1/2%  higher  than  either  loan
interest  rate in effect for the previous  policy year,  we may increase  either
loan interest rate to not more than the maximum  allowable rate. We will not use
a loan interest rate for any policy year that exceeds 15%.

We will notify you as to the  preferred  loan and  non-preferred  loan  interest
rates  that  apply at the time a new  loan is made or when  any  Policy  Debt is
reinstated. If either loan interest rate that applies to an existing policy loan
is increased, we will notify you in writing at least 30 days before the new rate
takes effect.

When a loan is made,  interest  for the rest of the current  policy year must be
paid in  advance.  If  interest  is not paid when  due,  it will be added to the
Policy Debt and allocated to the fixed account.  The  accumulation  of preferred
loans,  together  with  interest  on such  loans,  is the  preferred  debt.  The
accumulation of  non-preferred  loans,  together with interest on such loans, is
the non-preferred debt.

Total Policy Debt is the sum of the preferred debt and the  non-preferred  debt,
and equals the total  outstanding  loan with interest.  If the total Policy Debt
(including  interest in advance)  exceeds the fixed  account,  we will  transfer
values  from the  variable  options  to the fixed  account  if such  values  are
available, based on the proportions that the values in the variable options bear
to the total value of the variable  options.  The unpaid  interest  will then be
treated as part of the Policy Debt and will bear interest at the loan rates.

LOAN LIMIT

A loan may be for any amount which does not exceed the loan limit.

The loan limit equals:

o the Cash Value on the date the loan is made; minus

o interest for the rest of the current policy year; minus

o any existing Policy Debt.

SECURITY

The policy will be the only security for the loan.

RESTRICTIONS ON MAKING LOANS

Loans will not be available during a grace period or after the insured dies.

REPAYING POLICY DEBT

The Policy Debt, or any part, may be repaid at any time as long as the policy is
in force.  We have the right to not accept  partial loan  repayments for amounts
less than $50. Any Policy Debt  outstanding  will be deducted before any benefit
proceeds are paid or applied under a payment option.

Repayments  will be applied  first to the  non-preferred  debt,  and then to the
preferred debt, unless you specify differently.

Repayments  will be allocated to the fixed  account and to the variable  options
based on the  premium  allocation  schedule  then in effect,  unless a different
allocation is requested.

When there is Policy Debt  outstanding,  any payments  received  will be applied
first as repayment  of debt,  rather than as premium,  unless we are  instructed
otherwise.  If total  Policy  Debt  equals or  exceeds  the Cash  Value,  we can
terminate the policy. A notice of termination will be mailed to the last address
we have on file 61 days prior to termination.

PARTIAL SURRENDERS

You may make a partial  surrender from the Net Cash Value at any time during the
insured's life and before the

<PAGE>

                                   21  Flexible Premium Variable Life Prospectus


policy has terminated.  The minimum partial  surrender amount is currently $500.
The partial surrender may not exceed the Net Cash Value, less $300.

We will assess a partial  surrender  fee when a partial  surrender is made.  The
maximum  partial  surrender fee we will charge is $50 and the current  charge is
the  lesser  of 2% of the  partial  surrender  amount  or $25.  In  addition,  a
surrender  charge may be  assessed  on the amount  surrendered.  See  "Surrender
Charges" above. You may make a partial surrender once each policy year that does
not exceed 10% of the Net Cash Value without incurring a surrender charge or the
partial surrender fee.

When a partial  surrender  is made,  the amount of the  partial  surrender,  the
partial  surrender fee and the surrender  charge,  if any, will be deducted from
the  Policy  Account.  You elect  how much of each  partial  surrender,  partial
surrender  fee and  surrender  charge is to come from the unloaned  value in the
fixed account and from values in each of the variable options.  If you do not so
elect,  or if we cannot make the surrender on the basis of the your direction or
those allocation percentages,  we will make it based on the proportions that the
unloaned value in the fixed account and unloaned values in the variable  options
bear to the total unloaned value in the Policy Account.

The Face  Amount will be reduced if death  benefit  Option A is in effect when a
partial  surrender is made.  Such a reduction will be equal to the amount of the
partial surrender minus the excess, if any, of:

o the death benefit at the time the partial surrender is made; over

o the Face Amount at the time the partial surrender is made.

However,  if the amount of the  partial  surrender  is less than or equal to the
excess described above, the Face Amount will not be reduced.

Any Face Amount reduction will be used first to reduce any Face Amount increases
then in effect  starting with the latest  increase and continuing in the reverse
order in which the  increases  were made.  If any of the reduction is left after
all Face  Amount  increases  have been  reduced,  it will be used to reduce  the
initial Face Amount.

We will not permit a partial  surrender  that would reduce the Face Amount below
the minimum Face Amount (currently $100,000). We may limit the number of partial
surrenders you can make in a policy year, but you will always be allowed to make
at least one partial surrender if the surrender meets these requirements.

FULL SURRENDERS

You may completely  surrender your policy and receive the Net Cash Value anytime
during the insured's life and before the policy has terminated.

The full surrender will take effect on the later of:

o the date we receive your written request for the
  surrender; or

o the date you request, in writing, for the surrender to take effect.

The  policy  and all  coverage  under it will  terminate  at 12:01  a.m.  at our
ValueLife Service Center on the date the surrender takes effect.

Partial and full surrenders may have federal tax consequences  (see "Federal Tax
Status").


8. OTHER INFORMATION
--------------------------------------------------------------------------------

THE COMPANY

Allianz Life  Insurance  Company of North  America is a life  insurance  company
organized under the laws of the state of Minnesota in 1896.

We  are  a   wholly-owned   subsidiary  of  Allianz   Versicherungs-AG   Holding
("Allianz").  Allianz is headquartered in Munich,  Germany, and has subsidiaries
throughout the world.  We offer fixed and variable life insurance and annuities,
and group life, accident and health insurance.

Administration for the policy is provided at our service center:

     Allianz Life ValueLife Service Center
     300 Berwyn Park
     P.O. Box 3031
     Berwyn, Pennsylvania 19312-0031
     1-800-336-0320


THE SEPARATE ACCOUNT

We  established a separate  account,  Allianz Life Separate  Account A (Separate
Account), to hold the assets that underlie the policies.

The  assets  of the  Separate  Account  are  held in our name on  behalf  of the
Separate  Account and legally belong to us. However,  those assets that underlie
the  policies,  are not  chargeable  with  liabilities  arising out of any other
business we may conduct. All the income, gains and losses

<PAGE>

                                   Flexible Premium Variable Life Prospectus  22


(realized or unrealized)  resulting from those assets are credited to or against
the  policies  and not against any other  policies  we may issue.  The  Separate
Account is divided into variable options.  (The variable options are referred to
as sub-accounts in the policy.)

DISTRIBUTOR

The  policy  is sold by  licensed  insurance  agents,  where the  policy  may be
lawfully sold, who are registered  representatives  of broker-dealers  which are
registered  under the  Securities  Exchange  Act of 1934 and are  members of the
National Association of Securities Dealers, Inc.

The policy is distributed through the principal underwriter,  USAllianz Investor
Services,  LLC (formerly NALAC  Financial  Plans,  LLC),  1750 Hennepin  Avenue,
Minneapolis,  MN, 55403, a wholly-owned  subsidiary of ours.  USAllianz Investor
Services,  LLC  provides  marketing  services,  and is  reimbursed  for expenses
incurred in the distribution of the policies.

Commissions will be paid to broker-dealers who sell the policies. Broker-dealers
will be paid  commissions  and expense  reimbursements  up to an amount equal to
100% of the first  Guaranteed  Coverage  Premium;  4% of the next six Guaranteed
Coverage Premiums;  and 2% of all premiums paid thereafter.  Similar commissions
are paid on premiums received after any increase in Face Amount, or the addition
of  a  rider.   In  addition,   broker-dealers   may  also  receive   additional
compensation, based on meeting certain production standards.

SUSPENSION OF PAYMENTS OR TRANSFERS

We may be required  to suspend or postpone  any  payments 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 shares of the portfolios
   is not reasonably practicable or we cannot reasonably value the shares of the
   portfolios;

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

We may defer the portion of any transfer, amount payable or surrender, or Policy
Loan from the fixed account for not more than 6 months.

OWNERSHIP

OWNER. You, as the owner of the policy,  have all of the rights under the policy
subject to:

o the rights of any assignee; and

o the rights of any irrevocable beneficiary.

The owner can also be the insured. If you die while the policy is still in force
and the insured is living,  ownership  passes to your successor  owner or if you
have not designated a successor owner, then your estate becomes the owner.

JOINT  OWNER.  The policy can be owned by joint  owners.  Authorization  of both
joint owners is required for all policy changes except for telephone transfers.

BENEFICIARY. The beneficiary is the person(s) or entity(ies) you name to receive
any death  proceeds.  The  beneficiary is named at the time the policy is issued
unless changed at a later date. You can name a contingent  beneficiary  prior to
the death of the insured.  Unless an irrevocable beneficiary has been named, you
can change the  beneficiary  at any time before the insured dies. If there is an
irrevocable  beneficiary,  all policy  changes except  premium  allocations  and
transfers require the consent of the beneficiary.

Primary and contingent beneficiaries are as named in the application, unless you
make a change. To change a beneficiary,  you must send us a written request.  We
may require the policy to record the change.  The request  will take effect when
signed, subject to any action we may take before receiving it.

One or more irrevocable beneficiaries may be named.

If a beneficiary is a minor,  we will make payment to the guardian of his or her
estate. We may require proof of age of any beneficiary.

Proceeds payable to a beneficiary will be free from the claims of creditors,  to
the extent allowed by law.

ASSIGNMENT.  You can  assign  (transfer  ownership)  the  policy.  A copy of any
assignment  must  be  filed  with  the  ValueLife  Service  Center.  We are  not
responsible for the validity of any assignment.  If you assign the policy,  your
rights  and  those  of  any  revocably-named  person  will  be  subject  to  the
assignment. An assignment will not affect any payments we may make or actions we
may take before such  assignment  has been  recorded  at our  ValueLife  Service
Center.  This may be a taxable  event.  You should  consult a tax adviser if you
wish to assign the policy.

<PAGE>

                                   23  Flexible Premium Variable Life Prospectus


MATURITY  BENEFIT.  This is an  amount  equal  to the  Policy  Account  less any
outstanding  Policy  Debt  on your  policy.  This  amount  is paid to you on the
maturity date.

MATURITY  DATE.  The policy  provides that we will pay the Policy Account value,
less any  Policy  Debt,  to you on the  maturity  date if the policy is still in
force. We will not accept any premiums after the maturity date.

<PAGE>
<TABLE>
<CAPTION>
                                                                    Flexible Premium Variable Life Prospectus  24


PART II

EXECUTIVE OFFICERS AND DIRECTORS
----------------------------------------------------------------------------------------------------------------------


As of May 1, 2000,  the  directors  and  executive  officers of Allianz Life  Insurance  Company of North America
(Allianz Life) and their principal occupations for the past 5 years are as follows:


NAME                                          PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------
<S>                                           <C>
Robert W. MacDonald                           Chief Executive Officer and Director since October 1999.
                                              Previously Chief Executive Officer of LifeUSA.
----------------------------------------------------------------------------------------------------------------------
Margery G. Hughes                             President and Chief Administrative Officer since October 1999.
                                              Previously President and Chief Administrative Officer of LifeUSA.
----------------------------------------------------------------------------------------------------------------------
Mark A. Zesbaugh                              Senior Vice President and Chief Financial Officer since October
                                              1999. Previously Chief Financial Officer of LifeUSA.
----------------------------------------------------------------------------------------------------------------------
Lowell C. Anderson                            Chairman of the Board.
                                              Previously President and Chief Executive Officer of Allianz Life since
                                              October 1988.
----------------------------------------------------------------------------------------------------------------------
Herbert F. Hansmeyer                          Chairman of the Board of Allianz of America Corp. Member of the
                                              Board of Management of Allianz-AG, Munich, Germany, since 1986.
----------------------------------------------------------------------------------------------------------------------
Dr. Gerhard G. Rupprecht                      Chairman of the Board of Management - Allianz Lebensversicherungs,
                                              since 1979.
----------------------------------------------------------------------------------------------------------------------
Michael P. Sullivan                           President, Chief Executive Officer and Director of International
                                              Dairy Queen, Inc. since 1987.
----------------------------------------------------------------------------------------------------------------------
Michael T. Westermeyer                        Vice President-Corporate Legal Officer and Secretary of Allianz Life
                                              since April 1997. Formerly Second Vice President, Senior Counsel and
                                              Assistant Secretary of Allianz Life.
----------------------------------------------------------------------------------------------------------------------
Paul M. Howman                                Vice President - Underwriting of Allianz Life since 1995.
----------------------------------------------------------------------------------------------------------------------
Robert S. James                               President - Individual Insurance Division of Allianz Life since
                                              March 31, 1995. Previously President of Financial Markets Division.
----------------------------------------------------------------------------------------------------------------------
Edward J. Bonach                              President - Special Markets Division of Allianz Life since October 1999.
                                              Previously Executive Vice President-Chief Financial Officer and
                                              Treasurer of Allianz Life, since 1993.
----------------------------------------------------------------------------------------------------------------------
Rev. Dennis J. Dease                          President, University of St. Thomas, St. Paul since July 1991.
----------------------------------------------------------------------------------------------------------------------
James R. Campbell                             Chairman and Chief Executive Officer of Norwest Bank MN, N.A.
                                              since 1998. Previously Executive Vice President since February 1988.
----------------------------------------------------------------------------------------------------------------------
Robert M. Kimmitt                             Partner in the law firm of Wilmer, Cutler & Pickering.
----------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

                                   25  Flexible Premium Variable Life Prospectus


VOTING


Pursuant to our view of present  applicable  law, we will vote the shares of the
portfolios at special  meetings of shareholders in accordance with  instructions
received from all owners having a voting interest. We will vote shares for which
we have  not  received  instructions.  We  will  vote  all  shares  in the  same
proportion as the shares for which we have received  instructions.  We will vote
our shares in the same manner.


If the Investment Company Act of 1940 or any regulation thereunder is amended or
if the present  interpretation of the Act changes so as to permit us to vote the
shares in our own right, we may elect to do so.

Your voting interest in the portfolios is determined as follows:

o  You may cast one vote for each $100 of Account  Value which is allocated to a
   variable option on the record date. Fractional votes are counted.

o  The  number of shares  which you can vote will be  determined  as of the date
   chosen by us.

o  You will receive  periodic  reports  relating to the  portfolios in which you
   have an interest, as well as any proxy material and a form with which to give
   us such voting instructions.

DISREGARD OF VOTING INSTRUCTIONS

We may, when required to do so by state  insurance  authorities,  vote shares of
the portfolios  without regard to instructions  from owners.  We will do this if
such  instructions  would require the shares to be voted to cause a portfolio to
make, or refrain from making,  investments  which would result in changes in the
sub-classification  or  investment  objectives  of the  portfolio.  We may  also
disapprove   changes  in  the   investment   policy   initiated   by  owners  or
trustees/directors of the portfolios, if such disapproval:

o  is  reasonable  and is based  on a good  faith  determination  by us that the
   change would violate state or federal law;

o  the change would not be  consistent  with the  investment  objectives  of the
   portfolios; or

o  which  varies  from  the  general  quality  and  nature  of  investments  and
   investment  techniques  used by  other  portfolios  with  similar  investment
   objectives  underlying  other  variable  contracts  offered  by  us  or of an
   affiliated company.

In the event we do disregard voting  instructions,  a summary of this action and
the reasons for such action will be included in the next  semi-annual  report to
owners.

LEGAL OPINIONS

Blazzard, Grodd & Hasenauer, P.C., Westport,  Connecticut has provided advice on
certain  matters  relating  to the  federal  securities  and  income tax laws in
connection with the policies.

OUR RIGHT TO CONTEST

We cannot  contest the validity of the policy  except in the case of fraud after
it has been in effect during the insured's lifetime for two years. If the policy
is reinstated,  the two-year period is measured from the date of  reinstatement.
In addition,  if the insured  commits  suicide in the two-year  period,  or such
period as  specified  in state  law,  the  benefit  payable  will be  limited to
premiums paid less Policy Debt and less any  surrenders.  We also have the right
to adjust  any  benefits  under the  policy if the  answers  in the  application
regarding the use of tobacco are not correct.

FEDERAL TAX STATUS

NOTE:  The  following  description  is based upon our  understanding  of current
federal  income tax law  applicable  to life  insurance  in  general.  We 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. Section 7702 of the Internal Revenue Code of 1986, as amended ("Code"),
defines the term "life insurance  contract" for purposes of the Code. We believe
that the policies to be issued will qualify as "life insurance  contracts" under
section 7702.  We do not  guarantee  the tax status of the policies.  Purchasers
bear the complete risk that the policies may not be treated as "life  insurance"
under federal income tax laws. Purchasers should consult their own tax advisers.
It should be further understood that the following  discussion is not exhaustive
and that special  rules not  described in this  prospectus  may be applicable in
certain situations.

INTRODUCTION.  The discussion  contained  herein is general in nature and is not
intended as tax advice.  Each person  concerned  should  consult a competent tax
adviser.  No attempt is made to consider any applicable state or other tax laws.
Moreover,  the  discussion  herein is based  upon our  understanding  of current
federal income tax laws as they are currently interpreted.  No representation is
made regarding the likelihood of  continuation  of those current  federal income
tax laws or of the current interpretations by the Internal Revenue Service.

<PAGE>

                                    Flexible Premium Variable Life Prospectus 26


We are taxed as a life insurance  company under the Code. For federal income tax
purposes,  the  Separate  Account  is not a  separate  entity  from  us and  its
operations form a part of us.

DIVERSIFICATION.  Section  817(h) of the Code  imposes  certain  diversification
standards on the underlying assets of variable life insurance policies. The Code
provides  that a  variable  life  insurance  policy  will not be treated as life
insurance for any period (and any subsequent  period) for which the  investments
are not, in accordance with regulations prescribed by the United States Treasury
Department ("Treasury Department"), adequately diversified.  Disqualification of
the policy as a life  insurance  contract  would result in imposition of federal
income tax to the owner with  respect to earnings  allocable to the policy prior
to the receipt of payments  under the  policy.  The Code  contains a safe harbor
provision which provides that life insurance  policies,  such as these policies,
will meet the diversification  requirements if, as of the close of each quarter,
the  underlying  assets  meet  the  diversification  standards  for a  regulated
investment company and no more than fifty-five (55%) percent of the total assets
consist of cash, cash items, U.S. Government  securities and securities of other
regulated investment  companies.  There is an exception for securities issued by
the U.S. Treasury in connection with variable life insurance policies.

On March 2, 1989,  the  Treasury  Department  issued  regulations  (Treas.  Reg.
Section  1.817-5),  which  established  diversification   requirements  for  the
investment  portfolios  underlying variable contracts such as the policies.  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  portfolio will be deemed
adequately diversified if: (i) no more than 55% of the value of the total assets
of the portfolio is represented by any one investment;  (ii) no more than 70% of
the  value of the  total  assets  of the  portfolio  is  represented  by any two
investments;  (iii) no more  than 80% of the  value of the  total  assets of the
portfolio is represented by any three investments;  and (iv) no more than 90% of
the  value of the total  assets  of the  portfolio  is  represented  by any four
investments.  For  purposes of these  regulations,  all  securities  of the same
issuer are treated as a single investment.  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."

We intend that each  portfolio  underlying  the policies  will be managed by the
investment  advisers  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 owner control of the
investments  of the  separate  account will cause the 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 policy.  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 owner control which may be exercised under the policy 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 policyowner was not
the owner of the assets of the separate  account.  It is unknown  whether  these
differences, such as the owner's ability to transfer among investment choices or
the number and type of investment choices available, would cause the owner to be
considered the owner of the assets of the separate account.

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  was not  considered  to set forth a new
position, it may be applied  retroactively  resulting in you being retroactively
determined to be the owner of the assets of the separate account.

Due to the  uncertainty  in this area, we reserve the right to modify the policy
in an attempt to maintain favorable tax treatment.


TAX  TREATMENT  OF THE POLICY.  The policy has been  designed to comply with the
definition  of life  insurance  contained in Section 7702 of the Code.  Although
some interim  guidance has been  provided  and  proposed  regulations  have been
issued,  final  regulations  have not  been  adopted.  Section  7702 of the Code
requires that the amount of mortality and other expense  charges be  reasonable.
In establishing  these charges,  we have relied on the interim guidance provided
in IRS Notice 88-128 and proposed regulations issued on July 5, 1991. Currently,
there is even less guidance as to a policy  issued on a  substandard  risk basis
and thus it is even less clear  whether a policy issued on such basis would meet
the requirements of Section 7702 of the Code.


While we have  attempted  to comply with Section  7702,  the law in this area is
very complex and unclear. There is a

<PAGE>

                                   27  Flexible Premium Variable Life Prospectus


risk,  therefore,  that the  Internal  Revenue  Service will not concur with our
interpretations  of Section[7702  that were made in determining such compliance.
In the event the policy is determined not to so comply, it would not qualify for
the favorable tax treatment usually accorded life insurance policies. You should
consult your own tax advisers with respect to the tax consequences of purchasing
the policy.

POLICY  PROCEEDS.  The tax treatment  accorded to loan proceeds and/or surrender
payments from the policies will depend on whether the policy is considered to be
a MEC. (See "Tax Treatment of Loans and Surrenders.") Otherwise, we believe that
the policy  should  receive the same federal  income tax  treatment as any other
type of life insurance. As such, the death benefit thereunder is excludable from
the gross income of the beneficiary  under Section 101(a) of the Code. Also, you
are not deemed to be in  constructive  receipt of the Net Cash Value,  including
increments  thereon,  under a  policy  until  there  is a  distribution  of such
amounts.

Federal,  state and local  estate,  inheritance  and other tax  consequences  of
ownership,  or receipt of policy proceeds,  depend on the  circumstances of each
owner or beneficiary.

TAX TREATMENT OF LOANS AND SURRENDERS.  Section 7702A of the Code sets forth the
rules for determining when a life insurance policy will be deemed to be a MEC. A
MEC is a contract  which is entered into or materially  changed on or after June
21, 1988 and fails to meet the 7-pay test. A policy fails to meet the 7-pay test
when the cumulative  amount paid under the policy at any time during the first 7
policy  years  exceeds the sum of the net level  premiums  which would have been
paid on or before such time if the policy  provided for paid-up future  benefits
after the payment of seven (7) level annual  premiums.  A material  change would
include any increase in the future benefits or addition of qualified  additional
benefits provided under a policy unless the increase is attributable to: (1) the
payment of premiums  necessary  to fund the lowest death  benefit and  qualified
additional  benefits  payable  in the  first  seven  policy  years;  or (2)  the
crediting of interest or other earnings (including  policyholder dividends) with
respect to such premiums.

Furthermore,  any policy  received in exchange for a policy  classified as a MEC
will be treated as a MEC regardless of whether it meets the 7-pay test. However,
an exchange  under Section 1035 of the Code of a life  insurance  policy entered
into before June 21, 1988 for the policy will not cause the policy to be treated
as a MEC if no additional premiums are paid.

Due to the flexible premium nature of the policy,  the  determination of whether
it qualifies for treatment as a MEC depends on the individual  circumstances  of
each policy.

If the policy is classified as a MEC, then  surrenders  and/or loan proceeds are
taxable to the extent of income in the policy.  Such distributions are deemed to
be on a last-in,  first-out basis, which means the taxable income is distributed
first.  Loan proceeds and/or surrender  payments  including those resulting from
the lapse of the policy, may also be subject to an additional 10% federal income
tax  penalty  applied to the income  portion of such  distribution.  The penalty
shall not apply, however, to any distributions: (1) made on or after the date on
which the taxpayer reaches age 59 1/2; (2) which is attributable to the taxpayer
becoming  disabled  (within the meaning of Section 72(m)(7) of the Code); or (3)
which is part of a series of substantially equal periodic payments made not less
frequently  than annually for the life (or life  expectancy)  of the taxpayer or
the  joint  lives  (or  joint  life  expectancies)  of  such  taxpayer  and  his
beneficiary.

If a policy is not  classified  as a MEC, then any  surrenders  shall be treated
first as a recovery of the  investment in the policy which would not be received
as taxable  income.  However,  if a distribution is the result of a reduction in
benefits  under the policy  within the first  fifteen  years after the policy is
issued in order to comply with Section 7702, such distribution will, under rules
set forth in Section 7702,  be taxed as ordinary  income to the extent of income
in the policy.

Any loans from a policy  which is not  classified  as a MEC,  will be treated as
indebtedness  of the owner and not a  distribution.  Upon complete  surrender or
lapse of the policy, if the amount received plus loan  indebtedness  exceeds the
total premiums paid that are not treated as previously surrendered by the policy
owner, the excess generally will be treated as ordinary income.

Personal  interest  payable on a loan under a policy owned by an  individual  is
generally not deductible. Furthermore, no deduction will be allowed for interest
on loans  under  policies  covering  the life of any  employee or officer of the
taxpayer or any person financially  interested in the business carried on by the
taxpayer  to  the  extent  the  indebtedness  for  such  employee,   officer  or
financially  interested  person exceeds $50,000.  The  deductibility of interest
payable on policy loans may be subject to further  rules and  limitations  under
Sections 163 and 264 of the Code.

<PAGE>

                                   Flexible Premium Variable Life Prospectus  28


Policy owners should seek competent tax advice on the tax consequences of taking
loans, distributions, exchanging or surrendering any policy.

MULTIPLE POLICIES.  The Code further provides that multiple MEC which are issued
within a calendar year period to the same owner by one company or its affiliates
are treated as one MEC for purposes of  determining  the taxable  portion of any
loans or  distributions.  Such treatment may result in adverse tax  consequences
including  more rapid  taxation of the loans or  distributed  amounts  from such
combination  of contracts.  You should consult a tax adviser prior to purchasing
more than one MEC in any calendar year period.

TAX  TREATMENT  OF  ASSIGNMENTS.  An  assignment  of a policy  or the  change of
ownership of a policy may be a taxable  event.  You should  therefore  consult a
competent  tax  adviser  should  you wish to assign or change  the owner of your
policy.

QUALIFIED PLANS. The policies may be used in conjunction with certain  Qualified
Plans.  Because the rules  governing such use are complex,  you should not do so
until you have consulted a competent Qualified Plans consultant.

INCOME TAX  WITHHOLDING.  All  distributions  or the  portion  thereof  which is
includible in gross income of the policy owner are subject to federal income tax
withholding.  However,  in most cases you may elect not to have taxes  withheld.
You  may be  required  to pay  penalties  under  the  estimated  tax  rules,  if
withholding and estimated tax payments are insufficient.

REPORTS TO OWNERS

We will,  at a  minimum,  send  you an  annual  and  semi-annual  report  of the
portfolios.  Within 30 days after each policy  anniversary,  we will send you an
annual statement. We may elect to send these more often. The statement will show
the current amount of death benefit payable under the policy, the current Policy
Account value, the current Net Cash Value, current Policy Debt and will show all
transactions  previously  confirmed.  The statement will also show premiums paid
and all charges deducted during the policy year.

We will mail you confirmations  within seven days of any transaction  regarding:
(a) the receipt of premium;  (b) any transfer between variable options;  (c) any
loan, interest repayment, or loan repayment;  (d) any surrender; (e) exercise of
the free look privilege; and (f) payment of the death benefit under the policy.

LEGAL PROCEEDINGS

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

EXPERTS


The financial statements of Allianz Life Variable Account A and our consolidated
financial  statements as of and for the year ended December 31, 1999 included in
this  prospectus  have  been  audited  by KPMG  LLP,  independent  auditors,  as
indicated in their reports included in this prospectus, and are included herein,
in reliance  upon such reports and upon the authority of said firm as experts in
accounting and auditing.


FINANCIAL STATEMENTS

The consolidated  financial  statements of the Company included herein should be
considered  only as  bearing  upon  the  ability  of the  Company  to  meet  its
obligations under the policies.

<PAGE>







                         ALLIANZ LIFE VARIABLE ACCOUNT A
                                       OF

                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

                              Financial Statements

                                December 31, 1999

<PAGE>

Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Independent Auditors' Report


The Board of Directors of Allianz Life  Insurance  Company of North  America and
Policyholders of Allianz Life Variable Account A:

We have audited the  accompanying  statements of assets and  liabilities  of the
sub-accounts of Allianz Life Variable Account A as of December 31, 1999, and the
related statements of operations and changes in net assets for each of the years
in the  three-year  period  then  ended.  These  financial  statements  are  the
responsibility of the Variable  Account's  management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial  statements.  Investment securities
held in custody for the benefit of the Variable  Account were confirmed to us by
AIM Variable Insurance Funds, Inc., The Alger American Fund,  Franklin Templeton
Variable  Insurance  Products Trust, and USAllianz  Variable  Insurance Products
Trust.  An audit also includes  assessing  the  accounting  principles  used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the assets and liabilities of the sub-accounts of Allianz
Life  Variable  Account  A at  December  31,  1999,  and the  results  of  their
operations  and the  changes  in their net  assets  for each of the years in the
three-year period then ended, in conformity with generally  accepted  accounting
principles.

                                                              KPMG LLP





Minneapolis, Minnesota
February 4, 2000

<PAGE>

<TABLE>
<CAPTION>

Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements

Statements of Assets and Liabilities
December 31, 1999
                                                                                     Franklin

                                                              Alger  Alger American   Global        Franklin    Franklin
                                                     AIM    American   Leveraged  Communications Global Health Growth and  Franklin
                                                  VI Growth  Growth      AllCap     Securities  Care Securities  Income  High Income
                                                    Fund      Fund        Fund         Fund           Fund        Fund       Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>          <C>       <C>               <C>       <C>       <C>
Investments at net asset value:

  AIM VI Growth Fund

   3,244 shares, cost $102,904                  $104,606          -          -             -              -           -           -
  Alger American Growth Fund

   1,738 shares, cost $108,939                         -    111,878          -             -              -           -           -
  Alger American Leveraged AllCap Fund

   120 shares, cost $6,610                             -          -      6,966             -              -           -           -
  Franklin Global Communications Securities Fund

   95,296 shares, cost $1,735,057                      -          -          -     2,369,062              -           -           -
  Franklin Global Health Care Securities Fund

   4,931 shares, cost $48,559                          -          -          -             -         48,427           -           -
  Franklin Growth and Income Fund

   174,023 shares, cost $3,069,403                     -          -          -             -              -   3,094,134           -
  Franklin High Income Fund

   141,855 shares, cost $1,726,809                     -          -          -             -              -           -   1,398,695
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                     104,606    111,878      6,966     2,369,062         48,427   1,094,134   1,398,695
------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
 Accrued mortality and expense risk charges           15         68         50         5,392            248      15,667       2,358
 Accrued administrative charges                        3         17         13         1,280             62       3,917         589
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                     18         85         63         6,672            310      19,584       2,947
------------------------------------------------------------------------------------------------------------------------------------
Net assets                                      $104,588    111,793      6,903     2,362,390         48,117   3,074,550   1,395,748
------------------------------------------------------------------------------------------------------------------------------------
Policy owners' equity (note 4)                  $104,588    111,793      6,903     2,362,390         48,117   3,074,550   1,395,748
------------------------------------------------------------------------------------------------------------------------------------



<FN>
                                            See accompanying  notes to financial
statements.

                                                                               3

</FN>
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Assets and Liabilities (cont.)
December 31, 1999
                                                  Franklin  Franklin  Franklin   Franklin                     Franklin     Franklin
                                                   Income   Large Cap  Money   Natural Resources Franklin  Rising Dividends  S&P 500
                                                Securities Growth Sec  Market    Securities    RealEstate    Securities      Index
                                                    Fund      Fund     Fund       Fund           Fund          Fund          Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>      <C>        <C>          <C>           <C>             <C>
Investments at net asset value:

  Franklin Income Securities Fund

   82,616 shares, cost $1,259,130             $1,213,628           -         -         -            -             -               -
  Franklin Large Cap Growth Securities Fund

   43,610 shares, cost $699,773                        -     919,304         -         -            -             -               -
  Franklin Money Market Fund

   1,283,666 shares, cost $1,283,666                   -          -  1,283,666         -            -             -               -
  Franklin Natural Resources Securities Fund

   30,276 shares, cost $329,522                        -          -          -   330,922            -             -               -
  Franklin Real Estate Fund

   41,159 shares, cost $614,176                        -          -          -         -      614,093             -               -
  Franklin Rising Dividends Securities Fund

   77,852 shares, cost $1,136,415                      -          -          -         -            -      1,059,568              -
  Franklin S&P 500 Index Fund

   12,767 shares, cost $133,279                        -          -          -         -            -             -         134,823
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                   1,213,628    919,304  1,283,666   330,922      614,093      1,059,568        134,823
------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
 Accrued mortality and expense risk charges        5,771        643      2,003     1,647        3,187          6,279             26
 Accrued administrative charges                    1,443        161        501       411          797          1,570              6
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                  7,214        804      2,504     2,058        3,984          7,849             32
------------------------------------------------------------------------------------------------------------------------------------
Net assets                                    $1,206,414    918,500  1,281,162   328,864      610,109      1,051,719        134,791
------------------------------------------------------------------------------------------------------------------------------------
Policy owners' equity (note 4)                $1,206,414    918,500  1,281,162   328,864      610,109      1,051,719        134,791
------------------------------------------------------------------------------------------------------------------------------------
<FN>
                                            See accompanying  notes to financial
statements.

                                                                               4

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Assets and Liabilities (cont.)
December 31, 1999

                                                                      Franklin                                          Mutual
                                              Franklin  Franklin U.S.  Value    Franklin     Franklin     Franklin     Discovery
                                              Small Cap  Government  Securities Zero Coupon  Zero Coupon  Zero Coupon  Securities
                                                Fund      Fund          Fund    Fund - 2000  Fund - 2005  Fund - 2010    Fund
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>             <C>      <C>         <C>        <C>          <C>
Investments at net asset value:

    Franklin Small Cap Fund

   63,497 shares, cost $1,255,963             $1,706,161          -           -          -           -          -            -
  Franklin U.S. Government Fund
   85,501 shares, cost $1,070,843                      -  1,007,202           -          -           -          -            -
  Franklin Value Securities Fund

   741 shares, cost $6,343                             -          -       5,851          -           -          -            -
  Franklin Zero Coupon Fund - 2000
   27,996 shares, cost $329,745                        -          -           -    351,905           -          -            -
   Franklin Zero Coupon Fund - 2005
   24,919 shares, cost $308,806                        -          -           -          -     361,577          -            -
  Franklin Zero Coupon Fund - 2010
   27,701 shares, cost $440,816                        -          -           -          -          -     391,966            -
  Mutual Discovery Securities Fund

   40,352 shares, cost $482,859                        -          -           -          -          -           -      547,583
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                   1,706,161  1,007,202       5,851    351,905    361,577     391,966      547,583
------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
 Accrued mortality and expense risk charges        8,345      2,243          32        518        532         483          516
 Accrued administrative charges                    2,086        561           8        130        133         120          129
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                 10,431      2,804          40        648        665         603          645
------------------------------------------------------------------------------------------------------------------------------------
Net assets                                    $1,695,730  1,004,398       5,811    351,257    360,912     391,363      546,938
------------------------------------------------------------------------------------------------------------------------------------
Policy owners' equity (note 4)                $1,695,730  1,004,398       5,811    351,257    360,912     391,363      546,938
------------------------------------------------------------------------------------------------------------------------------------
<FN>
                                            See accompanying  notes to financial
statements.

                                                                               5

</FN>
</TABLE>


<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America

Financial Statements (continued)
Statements of Assets and Liabilities (cont.)
December 31, 1999

                                                                                                                         Templeton

                                              Mutual   Templeton      Templeton               Templeton      Templeton International
                                              Shares   Developing   Global Asset Templeton   Global Income International  Smaller
                                           Securities Markets Equity Allocation Global Growth  Securities     Equity     Companies
                                              Fund        Fund          Fund        Fund         Fund          Fund        Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>       <C>         <C>          <C>         <C>              <C>
Investments at net asset value:

    Mutual Shares Securities Fund

   82,769 shares, cost $1,018,876           $1,095,030         -          -            -          -              -            -
  Templeton Developing Markets Equity Fund

   84,075 shares, cost $819,895                      -   881,952          -            -          -              -            -
  Templeton Global Asset Allocation Fund

   21,344 shares, cost $247,176                      -         -    252,077            -          -              -            -
  Templeton Global Growth Fund

   177,586 shares, cost $2,620,038                   -         -          -    2,775,663          -              -            -
  Templeton Global Income Securities Fund

   16,528 shares, cost $191,447                      -         -          -            -    182,965              -            -
  Templeton International Equity Fund

   124,044 shares, cost $2,077,368                   -         -          -            -          -      2,226,583            -
  Templeton International Smaller Companies Fund

   3,532 shares, cost $40,082                        -         -          -            -          -              -       39,103
------------------------------------------------------------------------------------------------------------------------------------
Total assets                                 1,095,030   881,952    252,077    2,775,663    182,965      2,226,583       39,103
------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
 Accrued mortality and expense risk charges      3,970     7,300        588       19,669      2,038         14,793          335
 Accrued administrative charges                    993     1,825        147        4,917        509          3,698           84
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities                                4,963     9,125        735       24,586      2,547         18,491          419
------------------------------------------------------------------------------------------------------------------------------------
Net assets                                  $1,090,067   872,827    251,342    2,751,077    180,418      2,208,092       38,684
------------------------------------------------------------------------------------------------------------------------------------
Policy owners' equity (note 4)              $1,090,067   872,827    251,342    2,751,077    180,418      2,208,092       38,684
------------------------------------------------------------------------------------------------------------------------------------
<FN>
                                            See accompanying  notes to financial
statements.

                                                                               6

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Assets and Liabilities (cont.)
December 31, 1999

                                                                     Templeton   USAllianz      USAllianz
                                                                      Pacific  VIP Diversified  VIP Fixed    USAllianz    Total
                                                                       Growth     Assets          Income    VIP Growth     All
                                                                        Fund       Fund            Fund         Fund      Funds
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>             <C>            <C>          <C>    <C>
Investments at net asset value:

    Templeton Pacific Growth Fund

  43,781 shares, cost $448,304                                       $446,123         -             -            -
    USAllianz VIP Diversified Assets Fund

   0 shares, cost $0                                                        -         -             -            -
   USAllianz VIP Fixed Income Fund

    0 shares, cost $0                                                       -         -             -            -
    USAllianz VIP Growth Fund

    0 shares, cost $0                                                       -         -             -            -
------------------------------------------------------------------------------------------------------------------------------------
      Total assets                                                    446,123         -             -            -      24,961,513
------------------------------------------------------------------------------------------------------------------------------------

Liabilities:
  Accrued mortality and expense risk charges                            3,685         -             -            -         108,401
  Accrued administrative charges                                          921         -             -            -          27,031
------------------------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                 4,606         -             -            -         135,432
------------------------------------------------------------------------------------------------------------------------------------
      Net assets                                                     $441,517         -             -            -      24,826,081
------------------------------------------------------------------------------------------------------------------------------------

Policy owners' equity (note 4)                                       $441,517         -             -            -      24,826,081
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                               7

</FN>
</TABLE>


<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations

For the years ended December 31, 1999, 1998 and 1997

                                                                                                       Alger American

                                                   AIM VI Growth Fund   Alger American Growth Fund  Leveraged AllCap Fund
------------------------------------------------------------------------------------------------------------------------------------
                                                   1999   1998    1997       1999   1998    1997    1999   1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>          <C>    <C>    <C>        <C>    <C>     <C>     <C>      <C>
Investment income:
 Dividends reinvested in fund shares            $     -      -      -          -       -      -        -      -       -
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges                  14      -      -         68       -      -       50      -       -
 Administrative charges                               3      -      -         17       -      -       13      -       -
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                                       17      -      -         85       -      -       63      -       -
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net                       (17)     -      -        (85)      -      -      (63)     -       -
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
 Realized capital gain distributions on mutual funds  -      -      -          -       -      -        -      -       -
 Realized gains (losses) on sales of investments, net 1      -      -          -       -      -        1      -       -
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net           1      -      -          -       -      -        1      -       -
  Net change in unrealized appreciation
   (depreciation) on investments                  1,702      -      -      2,939       -      -      356      -       -
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealize
appreciation (depreciation) on investments, net   1,703      -      -      2,939       -      -      357      -       -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
 operations                                     $ 1,686      -      -      2,854       -      -      294      -       -
------------------------------------------------------------------------------------------------------------------------------------
<FN>
                                            See accompanying  notes to financial
statements.

                                                                               8

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)
Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                               Franklin Global            Franklin Global
                                        Communications Securities Fund  Health Care Securities Fund  Franklin Growth and Income Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997         1999    1998    1997           1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>       <C>     <C>          <C>      <C>       <C>       <C>       <C>      <C>
Investment income:
 Dividends reinvested in fund shares      $ 68,883  63,845  66,211         75       -       -          122,075  86,614   61,679
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges         13,853  10,459   9,862        242       54      -           21,089  16,628   14,386
 Administrative charges                      3,463   2,615   2,466         60       13      -            5,272   4,157    3,597
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                              17,316  13,074  12,328        302       67      -           26,361  20,785   17,983
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net               51,567  50,771  53,883       (227)     (67)     -           95,714  65,829   43,696
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
 Realized capital gain distributions
  on mutual funds                          166,820  93,096  91,611          -        -      -          340,300 203,765   59,819
 Realized gains (losses) on sales of
  investments, net                         268,795  56,812  59,135       (162)       2      -           23,652  27,735   75,044
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses)
 on investments, net                       435,615 149,908  150,746      (162)       2      -          363,952 231,500  134,863
 Net change in unrealized appreciation
  (depreciation) on investments            183,386 (40,828) 116,553    (1,826)   1,694      -        (453,957)(118,668) 283,057
------------------------------------------------------------------------------------------------------------------------------------
  Total realized gains (losses) and
  unrealized appreciation (depreciation
  on investments, net                      619,001 109,080  267,299    (1,988)   1,696      -         (90,005  112,832  417,920
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $670,568 159,851  321,182    (2,215)   1,629      -           5,709  178,661  461,616
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                               9

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                                              Franklin                Franklin Large
                                          Franklin High Income Fund   Income Securities Fund    Cap Growth Securities Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999     1998    1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>      <C>      <C>      <C>      <C>       <C>    <C>        <C>
Investment income:
 Dividends reinvested in fund shares      $379,407  160,598  153,512  127,089  111,419  71,443    2,787     833       7
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges         10,123   10,568   12,094    7,825    8,671   7,189     4,139  1,287      96
 Administrative charges                      2,531    2,642    3,023    1,956    2,168   1,797     1,035    322      24
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                              12,654   13,210   15,117    9,781   10,839   8,986     5,174  1,609     120
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net              366,753  147,388  138,395  117,308  100,580  62,457    (2,387)  (776)   (113)
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
 Realized capital gain distributions
 on mutual funds                            55,544    9,531    5,036   45,538   26,313  15,347         -      -       -
 Realized gains (losses) on sales
   of investments, net                     (44,053)  29,193   43,795 (115,178)   3,544   7,042     2,133    989     (11)
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses)
 on investments, net                        11,491   38,724   48,831  (69,640)  29,857  22,389     2,133    989     (11)
 Net change in unrealized appreciation
(depreciation) on investments             (391,353)(177,480)   4,999  (78,033)(115,794) 68,874   185,307 34,912    (548)
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net       (379,862)(138,756)  53,830 (147,673) (85,937) 91,263   187,440 35,901  (559)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $(13,109)  8,632   192,225  (30,365)  14,643 153,720   185,053 35,125   (672)
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              10

</FN>
</TABLE>

PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                                         Franklin Natural

                                          Franklin Money Market Fund  Resources Securities Fund  Franklin Real Estate Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999     1998    1997      1999    1998    1997      1999      1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>      <C>     <C>        <C>      <C>     <C>      <C>      <C>      <C>
Investment income:
 Dividends reinvested in fund shares       $71,180  62,012  35,286     2,670    2,271   1,844    48,690    26,119  12,965
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges          9,461   7,539   4,368     1,368      461     416     2,727     3,282   3,466
 Administrative charges                      2,365   1,885   1,092       342      115     104       682       821     867
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                              11,826   9,424   5,460     1,710      576     520     3,409     4,103   4,333
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net               59,354  52,588  29,826       960    1,695   1,324    45,281    22,016   8,632
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                                -       -       -         -        -       -     67,468    16,168   6,191
  Realized gains (losses) on sales
 of investments, net                            -       -       -    (11,396)  (8,058) (1,936) (179,615    15,172  17,125
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                               -       -       -    (11,396)  (8,058) (1,936) (112,147)   31,340  23,316
 Net change in unrealized appreciation
(depreciation) on investments                   -       -       -     57,915  (35,420) (25,118)  31,946  (179,557) 57,737
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net             -       -       -     46,519  (43,478) (27,054) (80,201) (148,217) 81,053
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $59,354  52,588  29,826     47,479  (41,783) (25,730) (34,920) (126,201) 89,685
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              11

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                                 Franklin Rising

                                          Dividends Securities Fund  Franklin S&P 500 Index Fund  Franklin Small Cap Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999     1998    1997      1999    1998    1997       1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>          <C>     <C>       <C>        <C>      <C>  <C>     <C>      <C>
Investment income:
 Dividends reinvested in fund shares    $   17,581    9,265   5,990        -       -       -      4,439     386     384
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges          7,013    5,177   3,657       26       -       -     11,584   3,458   1,277
 Administrative charges                      1,753    1,294     914        6       -       -      2,896     865     319
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                               8,766    6,471   4,571       32       -       -     14,480   4,323   1,596
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net                8,815    2,794   1,419      (32)      -       -    (10,041) (3,937) (1,212)
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                           176,138  113,543  10,229        -       -       -        620  49,628   4,546
  Realized gains (losses) on sales
   of investments, net                    (157,350)   6,199  18,073        -       -       -    346,621  (1,660)  2,723
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                           18,788  119,742  28,302        -       -       -    347,241  47,968   7,269
 Net change in unrealized appreciation
(depreciation) on investments             (153,361) (77,635) 93,007    1,544       -       -    472,910 (48,794)  22,458
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net       (134,573) 42,107  121,309    1,544       -       -    820,151    (826)  29,727
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                  $(125,758) 44,901  122,728    1,512       -       -    810,110  (4,763)  28,515
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              12

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                  Franklin                  Franklin                   Franklin
                                             U.S. Government Fund     Value Securities Fund     Zero Coupon Fund - 2000
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998    1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>        <C>     <C>        <C>       <C>      <C>   <C>      <C>     <C>
Investment income:
 Dividends reinvested in fund shares      $152,061   64,457  52,576      15        -       -     57,505   27,976  24,296
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges          6,209    5,484   5,796      15        -       -      2,164    2,236   2,223
 Administrative charges                      1,552    1,371   1,449       4        -       -        541      559     556
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                               7,761    6,855   7,245      19        -       -      2,705    2,795   2,779
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net              144,300   57,602  45,331      (4)       -       -     54,800   25,181  21,517
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                                -       -       -         -        -       -      7,930    4,476     550
  Realized gains (losses) on sales
   of investments, net                       6,118   17,179  27,003      (5)      (3)      -      1,819    4,953   5,922
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                            6,118   17,179  27,003      (5)      (3)      -      9,749    9,429   6,472
 Net change in unrealized appreciation
(depreciation) on investments             (167,882) (18,101)    136    (203)    (289)      -    (56,550) (11,643) (6,554)
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net       (161,764)   (922)  27,139    (208)    (292)      -    (46,801)  (2,214)    (82)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $(17,464) 56,680   72,470    (212)    (292)      -      7,999   22,967  21,435
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              13

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                  Franklin                  Franklin                   Mutual
                                           Zero Coupon Fund-2005      Zero Coupon Fund-2010    Discovery Securities Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998    1997       1999      1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>     <C>       <C>      <C>     <C>       <C>       <C>     <C>
Investment income:
 Dividends reinvested in fund shares     $  47,477  22,733  25,018    70,880   25,369  22,065    13,135    5,534      40
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges          2,161   2,431   2,373     3,057    2,862   2,535     3,044    2,229   1,140
 Administrative charges                        540     608     593       764      716     634       761      557     285
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                               2,701   3,039   2,966     3,821    3,578   3,169     3,805    2,786   1,425
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net               44,776  19,694  22,052    67,059   21,791  18,896     9,330    2,748  (1,385)
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                             2,291   5,259      87    20,609    3,510     176        -     5,149       -
  Realized gains (losses) on sales
   of investments, net                       1,717   2,463  11,706   (15,611)   2,415   1,074     1,014    5,744     166
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                            4,008   7,722  11,793     4,998    5,925   1,250     1,014   10,893     166
 Net change in unrealized appreciation
(depreciation) on investments              (74,447) 13,788   1,480  (146,933)  27,536  35,571    87,371  (49,861) 26,719
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net        (70,439) 21,510  13,273  (141,935)  33,461  36,821    88,385  (38,968) 26,885
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $(25,663) 41,204  35,325   (74,876)  55,252  55,717    97,715  (36,220) 25,500
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              14

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                                         Templeton Developing         Templeton Global
                                          Mutual Shares Securities Fund  Markets Equity Fund       Asset Allocation Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999     1998     1997     1999     1998     1997      1999     1998      1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>       <C>      <C>     <C>       <C>      <C>        <C>      <C>       <C>
Investment income:
 Dividends reinvested in fund shares       $31,535   11,623      72   12,690    19,038    10,159    17,439   10,932    7,863
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges          8,110    6,003   2,067    7,442     2,862     3,802     1,526    1,629    2,512
 Administrative charges                      2,027    1,501     517    1,860       715       950       381      407      628
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                              10,137    7,504   2,584    9,302     3,577     4,752     1,907    2,036    3,140
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net               21,398    4,119  (2,512)   3,388    15,461     5,407    15,532    8,896    4,723
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                                -    10,153      -         -    61,907    16,114    16,486   13,002    2,268
  Realized gains (losses) on sales
   of investments, net                      57,630   10,137   2,034  (36,364)  (23,346)    1,960       393   11,507   23,197
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                           57,630   20,290   2,034  (36,364)   38,561    18,074    16,879   24,509   25,465
 Net change in unrealized appreciation
(depreciation) on investments               58,050  (35,219) 51,689  329,456  (198,108) (127,265)  (16,541) (31,637)  11,716
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net        115,680  (14,929) 53,723  293,092  (159,547) (109,191)      338   (7,128)  37,181
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $137,078  (10,810) 51,211  296,480  (144,086) (103,784)   15,870    1,768   41,904
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              15

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                  Templeton            Templeton Global                Templeton
                                             Global Growth Fund      Income Securities Fund    International Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999      1998    1997      1999    1998    1997      1999      1998     1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>       <C>      <C>     <C>      <C>      <C>      <C>      <C>
Investment income:
 Dividends reinvested in fund shares      $ 48,676   39,344   15,984   17,513   12,826  10,037   118,404   55,115   33,230
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges         22,604    9,684    7,051    1,140    1,127     903    16,444   10,176    8,366
 Administrative charges                      5,651    2,421    1,763      285      282     226     4,111    2,544    2,092
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                              28,255   12,105    8,814    1,425    1,409   1,129    20,555   12,720   10,458
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net               20,421   27,239    7,170   16,088   11,417   8,908    97,849   42,395   22,772
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                           235,493  143,312    5,328        -        -       -    57,531  110,714   50,952
  Realized gains (losses) on sales
   of investments, net                     135,515   13,548   15,707  (19,414)    (315)    668   210,059    9,119   13,328
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                          371,008  156,860   21,035  (19,414)    (315)    668   267,590  119,833   64,280
 Net change in unrealized appreciation
(depreciation) on investments               30,632  (70,051)  80,562   (9,989)    (521) (6,915)   89,659  (97,026)  25,384
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net        401,640   86,809  101,597  (29,403)    (836) (6,247)  357,249   22,807   89,664
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                   $422,061  114,048  108,767  (13,315)  10,581   2,661   455,098   65,202  112,436
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              16

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                           Templeton International           Templeton                 USAllianz
                                            Smaller Companies Fund      Pacific Growth Fund    VIP Diversified Assets Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998      1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>       <C>      <C>    <C>     <C>        <C>          <C>    <C>    <C>
Investment income:
 Dividends reinvested in fund shares       $  736     488      17     4,339   10,966     8,455        -      -      -
------------------------------------------------------------------------------------------------------------------------------------
 Mortality and expense risk charges           204      99      29     3,239    1,388       214        -      -      -
 Administrative charges                        51      25       7       810      347        53        -      -      -
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                                255     124      36     4,049    1,735       267        -      -      -
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net                 481     364     (19)      290    9,231     8,188        -      -      -
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                                -     565       -         -    3,337         -        -      -      -
  Realized gains (losses) on sales
   of investments, net                        (73)   (121)     (2)  (38,203) (38,525)      907        -      -      -
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                             (73)    444      (2)  (38,203) (35,188)      907        -      -      -
 Net change in unrealized appreciation
(depreciation) on investments               4,391  (4,295) (1,075)  140,678   (7,500) (164,185)       -      -      -
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net         4,318  (3,851) (1,077)  102,475  (42,688) (163,278)       -      -      -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                    $4,799  (3,487) (1,096)  102,765  (33,457) (155,090)       -      -      -
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              17

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Operations (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                   USAllianz                 USAllianz
                                            VIP Fixed Income Fund         VIP Growth Fund           Total All Funds
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998    1997      1999        1998        1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>    <C>       <C>       <C>    <C> <C>          <C>      <C>
Investment income:
 Dividends reinvested in fund shares        $   -       -       -         -        -       -  1,437,281     829,763    619,133
------------------------------------------------------------------------------------------------------------------------------------
Expenses:
 Mortality and expense risk charges             -       -       -         -        -       -    166,941     115,794     95,822
 Administrative charges                         -       -       -         -        -       -     41,732      28,950     23,956
------------------------------------------------------------------------------------------------------------------------------------
Total expenses                                  -       -       -         -        -       -    208,673     144,744    119,778
------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net                   -       -       -         -        -       -  1,228,608     685,019    499,355
Realized gains (losses) and unrealized
 appreciation (depreciation) on investments:
  Realized capital gain distributions
 on mutual funds                                -       -       -         -        -       -  1,192,768     873,428    268,254
  Realized gains (losses) on sales
   of investments, net                          -       -       -         -        -       -    438,044     144,683    324,660
------------------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on
 investments, net                               -       -       -         -        -       -  1,630,812   1,018,111    592,914
 Net change in unrealized appreciation
(depreciation) on investments                   -       -       -         -        -       -    127,167  (1,240,497)   548,282
------------------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses)
 and unrealized appreciation
 (depreciation) on investments, net             -       -       -         -        -       -  1,757,979     222,386) 1,141,196
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations                     $   -       -       -         -        -       -  2,986,587     462,633  1,640,551
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              18

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets For the years ended December 31, 1999,  1998
and 1997

                                                  AIM                          Alger                Alger American
                                               VI Growth Fund          American Growth Fund     Leveraged AllCap Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998    1997     1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>    <C>    <C>         <C>  <C>     <C>        <C>       <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net            $   (17)     -       -       (85)       -    -        (63)      -        -
  Realized gains (losses) on investments, net    1      -       -         -        -    -          1       -        -
  Net change in unrealized appreciation
   (depreciation) on investments             1,702      -       -      2,939       -    -        356       -        -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                             1,686      -       -      2,854       -    -        294       -        -
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                             60      -       -        290       -    -        290       -        -
  Transfers between funds                  102,862      -       -    108,720       -    -      6,349       -        -
  Surrenders and terminations                    -      -       -         -        -    -          -       -        -
  Policy loan transactions                       3      -       -          3       -    -          -       -        -
  Other transactions (note 2)                  (23)     -       -        (74)      -    -        (30)      -        -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions        102,902      -       -    108,939       -    -      6,609       -        -
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets          104,588      -       -    111,793       -    -      6,903       -        -
Net assets at beginning of year                 -       -       -         -        -    -          -       -        -
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year                 $104,588      -       -    111,793       -    -      6,903       -       -
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              19

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                Franklin Global           Franklin Global            Franklin
                                      Communications Securities Fund  Health Care Securities  Fund Growth and Income Fund
------------------------------------------------------------------------------------------------------------------------------------
                                           1999     1998    1997       1999    1998    1997      1999     1998       1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>        <C>        <C>     <C>        <C>     <C>   <C>     <C>          <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net        $ 51,567    50,771     53,883    (227)     (67)   -      95,714   65,829      43,696
  Realized gains (losses) on investments
, net                                   435,615   149,908    150,746    (162)       2    -     363,952  231,500     134,863
  Net change in unrealized appreciation
   (depreciation) on investments        183,386   (40,828)   116,553  (1,826)   1,694    -    (453,957)(118,668)    283,057
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                        670,568   159,851    321,182  (2,215)   1,629    -       5,709   178,661    461,616
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                      91,957   104,584    116,828       -        -    -     426,492   427,399    387,084
  Transfers between funds                78,700   (38,007)   (67,788)  3,673    6,656    -     160,733   282,965    194,269
  Surrenders and terminations           (92,132)  (46,228)    (8,311)      -        -    -    (172,737)  (66,385)  (271,440)
  Policy loan transactions              (58,830)   32,511    (60,609)      -        -    -     (33,949)  (31,446)     3,110
  Other transactions (note 2)           (69,624)  (65,057)   (60,143) (1,606)     (20)   -    (217,639) (202,446)  (163,700)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions     (49,929)  (12,197)   (80,023) 42,067    6,636    -     162,900   410,087    149,323
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets       620,639   147,654    241,159  39,852    8,265    -     168,609   588,748    610,939
Net assets at beginning of year       1,741,751 1,594,097  1,352,938   8,265        -    -   2,905,941 2,317,193  1,706,254
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year            $2,362,390 1,741,751  1,594,097  48,117    8,265    -   3,074,550 2,905,941  2,317,193
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              20

</FN>
</TABLE>





<TABLE>
<CAPTION>
<PAGE>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                   Franklin                       Franklin                 Franklin Large
                                               High Income Fund              Income Securities        FundCap Growth Securities Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999      1998     1997       1999     1998       1997      1999      1998      1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>       <C>        <C>        <C>       <C>        <C>      <C>      <C>        <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net         $ 366,753   147,388   138,395    117,308   100,580    62,457   (2,387)    (776)    (113)
  Realized gains (losses) on
investments, net                           11,491    38,724    48,831    (69,640)   29,857    22,389    2,133      989      (11)
  Net change in unrealized appreciation
   (depreciation) on investments         (391,353) (177,480)    4,999    (78,033) (115,794)   68,874  185,307   34,912     (548)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                          (13,109)    8,632   192,225    (30,365)   14,643   153,720  185,053   35,125     (672)
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                        41,715    55,984    50,642    184,826   219,675   255,347    2,228        -        -
  Transfers between funds                (340,702)  (12,125) (140,178)  (229,489)  295,129    46,671  415,799  194,912   94,715
  Surrenders and terminations             (19,154)  (21,000)  (67,891)  (146,257)  (50,336)  (11,918)       -        -        -
  Policy loan transactions                111,630  (168,452)  (33,557)   (33,988)  (12,262)  (25,240)       -        -        -
  Other transactions (note 2)             (38,583)  (43,702)  (41,580)   (95,328) (101,921)  (96,044)  (9,373)  (3,276)    (429)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions      (245,094) (189,295) (232,564)  (320,236)  350,285   168,816  408,654  191,636   94,286
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets        (258,203) (180,663)  (40,339)   350,601)  364,928   322,536  593,707  226,761   93,614
Net assets at beginning of year         1,653,951 1,834,614 1,874,953  1,557,015 1,192,087   869,551  324,793   98,032    4,418
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year              $1,395,748 1,653,951 1,834,614  1,206,414 1,557,015 1,192,087  918,500  324,793   98,032
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              21

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                                               Franklin Natural

                                              Franklin Money Market Fund   Resources Securities Fund  Franklin Real Estate Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999       1998       1997    1999    1998     1997      1999      1998      1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>          <C>        <C>        <C>      <C>     <C>     <C>        <C>       <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net           $ 59,354     52,588     29,826      960   1,695    1,324    45,281    22,016    8,632
  Realized gains (losses) on
investments, net                                 -          -          -  (11,396) (8,058)  (1,936) (112,147)   31,340   23,316
  Net change in unrealized appreciation
   (depreciation) on investments                 -          -          -   57,915 (35,420) (25,118)   31,946  (179,557)  57,737
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                            59,354     52,588     29,826   47,479 (41,783) (25,730)  (34,920) (126,201)  89,685
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                      1,449,209  3,668,991  1,996,782   11,095  13,268   15,837    95,970   115,546   92,480
  Transfers between funds               (1,876,143)(2,423,871)(2,136,510) 158,751  59,479   (5,829)   29,166    37,909  176,166
  Surrenders and terminations               (5,222)   (25,503)   (52,158)  (4,568) (5,593)     (52)  (27,988)  (10,028)  (2,795)
  Rescissions                                    -    (29,369)         -        -       -        -         -        -         -
  Policy loan transactions                (212,772)    (9,864)   (25,633)  (1,372)    789      172    (4,008)   (4,950) (15,416)
  Other transactions (note 2)              (37,400)   (39,778)   168,886   (7,584) (6,590)  (6,922)  (50,794)  (55,881) (43,348)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions       (682,328) 1,140,606    (48,633) 156,322  61,353    3,206    42,346    82,596  207,087
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets         (622,974) 1,193,194    (18,807) 203,801  19,570  (22,524)    7,426   (43,605) 296,772
Net assets at beginning of year          1,904,136    710,942    729,749  125,063 105,493  128,017   602,683   646,288  349,516
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year               $1,281,162  1,904,136    710,942  328,864 125,063  105,493   610,109   602,683  646,288
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              22

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                Franklin Rising               Franklin
                                           Dividends Securities Fund     S&P 500 Index Fund      Franklin Small Cap Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997       1999    1998    1997    1999      1998      1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>       <C>         <C>      <C>      <C>     <C>  <C>       <C>        <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net          $  8,815     2,794    1,419      (32)     -     -    (10,041)    3,937)   (1,212)
  Realized gains (losses) on
investments, net                           18,788   119,742   28,302        -      -     -    347,241    47,968     7,269
  Net change in unrealized appreciation
   (depreciation) on investments         (153,361)  (77,635)  93,007    1,544      -     -    472,910   (48,794)   22,458
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                         (125,758)   44,901  122,728    1,512      -     -    810,110    (4,763)   28,515
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                       154,974   161,902  108,408      188      -     -    110,923   113,167    44,998
  Transfers between funds                 163,115   244,722  193,808  133,170      -     -     56,814   400,975   248,658
  Surrenders and terminations             (55,133)  (14,872) (17,668)       -      -     -    (18,608)   (9,697)     (965)
  Policy loan transactions                 (7,676)   (4,345)  (5,874)       4      -     -     (7,020)     (575)        -
  Other transactions (note 2)             (86,406)  (78,620) (51,398)     (83)     -     -    (66,249)  (47,188)  (19,801)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions       168,874   308,787  227,276  133,279      -     -     75,860   456,682   272,890
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets          43,116   353,688  350,004  134,791      -     -    885,970   451,919   301,405
Net assets at beginning of year         1,008,603   654,915  304,911        -      -     -    809,760   357,841    56,436
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year              $1,051,719 1,008,603  654,915  134,791      -     -  1,695,730   809,760   357,841
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              23

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                  Franklin                 Franklin                    Franklin
                                            U.S. Government Fund      Value Securities Fund      Zero Coupon Fund - 2000
------------------------------------------------------------------------------------------------------------------------------------
                                            1999     1998    1997      1999    1998    1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>      <C>       <C>      <C>       <C>   <C>      <C>      <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net           $144,300   57,602    45,331      (4)      -      -     54,800   25,181   21,517
  Realized gains (losses) on
 investments, net                            6,118   17,179    27,003      (5)     (3)     -      9,749    9,429    6,472
  Net change in unrealized appreciation
   (depreciation) on investments          (167,882) (18,101)      136    (203)   (289)     -    (56,550) (11,643)  (6,554)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                           (17,464)  56,680    72,470    (212)   (292)     -      7,999   22,967   21,435
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                         35,686   36,225    40,913       -       -      -          -        -        -
  Transfers between funds                  118,949    2,433  (108,226)  2,985   3,405      -          -        -  (17,434)
  Surrenders and terminations               (4,133) (28,787)  (20,318)      -       -      -          -   (9,045)       -
  Policy loan transactions                  (5,749)  (7,674)   (7,823)      -       -      -     (5,480)  (7,106)     (73)
  Other transactions (note 2)              (31,127) (28,339)  (27,460)    (60)    (15)     -     (3,818)  (4,490)  (4,421)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions        113,626  (26,142) (122,914)  2,925   3,390      -     (9,298) (20,641) (21,928)
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets           96,162   30,538   (50,444)  2,713   3,098      -     (1,299)   2,326     (493)
Net assets at beginning of year            908,236  877,698   928,142   3,098       -      -    352,556  350,230  350,723
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year               $1,004,398  908,236   877,698   5,811   3,098      -    351,257  352,556  350,230
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                    Franklin                 Franklin                   Mutual
                                            Zero Coupon Fund-2005     Zero Coupon Fund-2010   Discovery Securities Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999     1998     1997      1999    1998    1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>      <C>      <C>      <C>      <C>      <C>     <C>       <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net           $ 44,776   19,694   22,052   67,059   21,791   18,896    9,330    2,748   (1,385)
  Realized gains (losses) on
investments, net                             4,008    7,722   11,793    4,998    5,925    1,250    1,014   10,893      166
  Net change in unrealized appreciation
   (depreciation) on investments           (74,447)  13,788    1,480 (146,933)  27,536   35,571   87,371  (49,861)  26,719
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                           (25,663)  41,204   35,325  (74,876)  55,252   55,717   97,715  (36,220)  25,500
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                              -        -        -        -        -        -        -        -        -
  Transfers between funds                        -        -  (61,213)  17,617        -    3,652   47,820  155,186  281,309
  Surrenders and terminations                    -        -        -        -        -        -        -        -        -
  Policy loan transactions                       -        -        -     (211)  (1,739)    (183)    (184) (56,263)       -
  Other transactions (note 2)               (4,393)  (4,873)  (4,798)  (7,354)  (6,849)  (5,717)  (8,537)  (7,963)  (1,893)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions         (4,393)  (4,873) (66,011)  10,052   (8,588)  (2,248)  39,099   90,960  279,416
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets          (30,056)  36,331  (30,686) (64,824)  46,664   53,469  136,814   54,740  304,916
Net assets at beginning of year            390,968  354,637  385,323  456,187  409,523  356,054  410,124  355,384   50,468
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year                 $360,912  390,968  354,637  391,363  456,187  409,523  546,938  410,124  355,384
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              25

</FN>
</TABLE>
<PAGE>





<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                    Mutual                   Templeton                    Templeton
                                           Shares Securities Fund  Developing Markets Equity Fund  Global Asset Allocation Fund
------------------------------------------------------------------------------------------------------------------------------------
                                             1999      1998     1997      1999    1998    1997      1999      1998     1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>      <C>       <C>      <C>      <C>      <C>      <C>        <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net           $ 21,398     4,119   (2,512)   3,388   15,461     5,407   15,532    8,896     4,723
  Realized gains (losses) on
 investments, net                           57,630    20,290    2,034  (36,364)  38,561    18,074   16,879   24,509    25,465
  Net change in unrealized appreciation
   (depreciation) on investments            58,050   (35,219)  51,689  329,456 (198,108) (127,265) (16,541) (31,637)   11,716
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                           137,078   (10,810)  51,211  296,480 (144,086) (103,784)  15,870    1,768    41,904
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                         85,752    74,363   16,585  121,799  159,440   191,340    1,388    1,438       430
  Transfers between funds                  (66,613)  214,033  776,453   12,846    5,954     2,200        -    5,929  (108,898)
  Surrenders and terminations              (53,521)   (3,707)       -  (58,096) (19,910)  (24,839)       -        -      (108)
  Policy loan transactions                     639  (111,671)  (1,956)  (5,057) (16,461)  (20,884)    (249) (77,494)        -
  Other transactions (note 2)              (51,904)  (41,817)  (9,654) (58,605) (56,866)  (77,790)  (4,265)  (4,852)   (5,240)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions        (85,647)  131,201  781,428   12,887   72,157    70,027   (3,126) (74,979) (113,816)
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets           51,431   120,391  832,639  309,367  (71,929)  (33,757)  12,744  (73,211)  (71,912)
Net assets at beginning of year          1,038,636   918,245   85,606  563,460  635,389   669,146  238,598  311,809   383,721
Net assets at end of year               $1,090,067 1,038,636  918,245  872,827  563,460   635,389  251,342  238,598   311,809
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              26

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                     Templeton                     Templeton                   Templeton
                                                Global Growth Fund       Global Income Securities Fund  International Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
                                            1999       1998       1997       1999     1998     1997      1999      1998     1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>        <C>       <C>       <C>       <C>      <C>        <C>       <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net           $ 20,421     27,239      7,170   16,088   11,417    8,908     97,849     42,395    22,772
  Realized gains (losses) on
investments, net                           371,008    156,860     21,035  (19,414)    (315)     668    267,590    119,833    64,280
  Net change in unrealized appreciation
   (depreciation) on investments            30,632    (70,051     80,562   (9,989)    (521)  (6,915)    89,659    (97,026)   25,384
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                           422,061    114,048    108,767  (13,315)  10,581    2,661    455,098     65,202   112,436
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                        303,315    318,275    317,636   40,576   43,650   42,795    311,731    343,054   359,829
  Transfers between funds                  521,326    262,188    272,672   (6,299)   8,645   (1,929)   (29,725)   214,070   170,913
  Surrenders and terminations              (97,718)   (42,480)   (35,910)  (6,067)  (2,203)  (1,422)  (170,512)   (77,537)  (30,410)
    Policy loan transactions               (20,511)   (11,353)   (19,640)  (5,426)  (4,262)  (2,728)   (30,248)   (14,359)  (37,789)
  Other transactions (note 2)             (160,767)  (144,669)  (131,055) (18,386) (18,506) (17,463)  (155,117)  (150,458  (138,095)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions        545,645    381,961    403,703    4,398   27,324   19,253    (73,871)   314,770   324,448
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets          967,706    496,009    512,470   (8,917)  37,905   21,914    381,227    379,972   436,884
Net assets at beginning of year          1,783,371  1,287,362    774,892  189,335  151,430  129,516  1,826,865  1,446,893 1,010,009
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year               $2,751,077  1,783,371  1,287,362  180,418  189,335  151,430  2,208,092  1,826,865 1,446,893
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              27

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                            Templeton International          Templeton                  USAllianz
                                            Smaller Companies Fund      Pacific Growth Fund    VIP Diversified Assets Fund
------------------------------------------------------------------------------------------------------------------------------------
                                              1999     1998    1997      1999    1998    1997      1999     1998    1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>      <C>     <C>      <C>       <C>          <C>     <C>     <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net            $   481     364      (19)     290    9,231     8,188       -      -       -
  Realized gains (losses) on
 investments, net                              (73)    444      (2)  (38,203) (35,188)      907       -      -       -
  Net change in unrealized appreciation
   (depreciation) on investments             4,391  (4,295) (1,075)  140,678   (7,500) (164,185)      -      -       -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                             4,799  (3,487) (1,096)  102,765  (33,457) (155,090)      -      -       -
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                              -       -       -    73,542   91,236   134,478       -      -       -
  Transfers between funds                   16,263   9,480  13,608    38,598  (25,732)  (41,449)      -      -       -
  Surrenders and terminations                    -       -       -    (7,288) (15,757)  (10,217)      -      -       -
  Policy loan transactions                       -       -       -    (1,853)  (2,091)  (13,651)      -      -       -
  Other transactions (note 2)                 (481)   (360)    (42)  (38,569) (29,702)  (52,839)      -      -       -
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions         15,782   9,120  13,566    64,430   17,954    16,322       -      -       -
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets           20,581   5,633  12,470   167,195  (15,503) (138,768)      -      -       -
Net assets at beginning of year             18,103  12,470      -    274,322  289,825   428,593       -      -       -
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year               $   38,684  18,103  12,470   441,517  274,322   289,825       -      -       -
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                            See accompanying  notes to financial
statements.

                                                                              28

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Financial Statements (continued)

Statements of Changes in Net Assets (cont.)
For the years ended December 31, 1999, 1998 and 1997

                                                      USAllianz              USAllianz
                                               VIP Fixed Income Fund       VIP Growth Fund            Total All Funds
------------------------------------------------------------------------------------------------------------------------------------
                                              1999     1998    1997      1999   1998   1997    1999        1998         1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>     <C>      <C>      <C>    <C> <C>        <C>         <C>
Increase (decrease) in net assets:
 Operations:
  Investment income (loss), net             $   -       -       -         -        -     -   1,228,608     685,019     499,355
  Realized gains (losses) on investments, net   -       -       -         -        -     -   1,630,812   1,018,111     592,914
  Net change in unrealized appreciation
   (depreciation) on investments                -       -       -         -        -     -     127,167  (1,240,497)    548,282
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 from operations                                -       -       -         -        -     -   2,986,587     462,633   1,640,551
------------------------------------------------------------------------------------------------------------------------------------
 Policy transactions (note 4):

  Purchase payments                             -       -       -         -        -     -   3,544,006   5,948,197   4,172,412
  Transfers between funds                       -       -       -         -        -     -    (314,715)    (95,665)   (214,360)
   Surrenders and terminations                  -       -       -         -        -     -    (939,134)   (449,068)   (556,422)
  Rescissions                                   -       -       -         -        -     -           -     (29,369)          -
    Policy loan transactions                    -       -       -         -        -     -    (322,304)   (509,067)   (267,774)
  Other transactions (note 2)                   -       -       -         -        -     -  (1,224,179) (1,144,238)   (790,946)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
 resulting from policy transactions             -       -       -         -        -     -     743,674   3,720,790   2,342,910
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets               -       -       -         -        -     -   3,730,261   4,183,423   3,983,461
Net assets at beginning of year             $   -       -       -         -        -     -  21,095,820  16,912,397  12,928,936
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year                   $   -       -       -         -        -     -  24,826,081  21,095,820  16,912,397
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                           See  accompanying  notes to financial
statements.

                                                                              29

</FN>
</TABLE>
<PAGE>




Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements
December 31, 1999


1. Organization

Allianz Life Variable  Account A (Variable  Account) is a segregated  investment
account of  Allianz  Life  Insurance  Company of North  America  (Allianz  Life)
registered  with the  Securities  and Exchange  Commission as a unit  investment
trust  pursuant  to the  provisions  of the  Investment  Company Act of 1940 (as
amended).  The Variable  Account was  established  on May 31, 1985 and commenced
operations  September 8, 1987.  Accordingly,  it is an accounting entity wherein
all segregated account transactions are reflected.

The Variable  Account's assets are the property of Allianz Life and are held for
the benefit of the owners and other persons  entitled to payments under variable
life policies  issued through the Variable  Account and  underwritten by Allianz
Life.  The  assets of the  Variable  Account,  equal to the  reserves  and other
liabilities of the Variable  Account,  are not chargeable with  liabilities that
arise from any other business which Allianz Life may conduct.

The Variable  Account's  sub-accounts may invest, at net asset values, in one or
more of select  portfolios  of AIM Variable  Insurance  Funds,  Inc.,  The Alger
American Fund,  Franklin  Templeton Variable Insurance Products Trust (formerly,
Franklin  Valuemark Funds),  and USAllianz Variable Insurance Products Trust, in
accordance  with the selection made by the policy owner.  Not all portfolios are
available as  investment  options for the products  which  comprise the Variable
Account.  The investment advisers for each portfolio are listed in the following
table.

<TABLE>
<CAPTION>

Portfolio                                                Investment Adviser
<S>                                                      <C>
AIM VI Growth Fund                                       AIM Advisors, Inc.
Alger American Growth Fund                               Fred Alger Management, Inc.
Alger American Leveraged AllCap Fund                     Fred Alger Management, Inc.
Franklin Global Communications Securities Fund           Franklin Advisers, Inc.
Franklin Global Health Care Securities Fund              Franklin Advisers, Inc.
Franklin Growth and Income Fund                          Franklin Advisers, Inc.
Franklin High Income Fund                                Franklin Advisers, Inc.
Franklin Income Securities Fund                          Franklin Advisers, Inc.
Franklin Large Cap Growth Securities Fund                Franklin Advisers, Inc.
Franklin Money Market Fund                               Franklin Advisers, Inc.
Franklin Natural Resources Securities Fund               Franklin Advisers, Inc.
Franklin Real Estate Fund                                Franklin Advisers, Inc.
Franklin Rising Dividends Securities Fund                Franklin Advisory Services, LLCS&P 500 Index Fund        Franklin Advisers,
Inc.
Franklin Small Cap Fund                                  Franklin Advisers, Inc.
Franklin U.S. Government Fund                            Franklin Advisers, Inc.
Franklin Value Securities Fund                           Franklin Advisory Services, LLC
Franklin Zero Coupon - 2000 Fund                         Franklin Advisers, Inc.
Franklin Zero Coupon - 2005 Fund                         Franklin Advisers, Inc.
Franklin Zero Coupon - 2010 Fund                         Franklin Advisers, Inc.
Mutual Discovery Securities Fund                         Franklin Mutual Advisers, LLC
Mutual Shares Securities Fund                            Franklin Mutual Advisers, LLC
Templeton Developing Markets Equity Fund                 Templeton Asset Management Ltd.
Templeton Global Asset Allocation Fund                   Templeton Global Advisors Limited
Templeton Global Growth Fund                             Templeton Global Advisors Limited
Templeton Global Income Securities Fund                  Franklin Advisers, Inc.
Templeton International Equity Fund                      Franklin Advisers, Inc.
Templeton International Smaller Companies Fund           Templeton Investment Counsel, Inc.
Templeton Pacific Growth Fund                            Franklin Advisers, Inc.
USAllianz VIP Diversified Assets Fund                    Allianz of America, Inc.
USAllianz VIP Fixed Income Fund                          Allianz of America, Inc.
USAllianz VIP Growth Fund                                Allianz of America, Inc.

                                                                              30

</TABLE>
<PAGE>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

2. Significant Accounting Policies

Use of Estimates

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

Investments

Investments  of the Variable  Account are valued daily at market value using net
asset values provided by AIM Variable  Insurance Funds, Inc., The Alger American
Fund,  Franklin  Templeton  Variable Insurance Products Trust, and the USAllianz
Variable Insurance Products Trust.

Realized investment gains include realized gain distributions  received from the
respective portfolios and gains on the sale of portfolio shares as determined by
the average cost method.  Realized  gain  distributions  are  reinvested  in the
respective  portfolios.  Dividend distributions received from the portfolios are
reinvested in additional  shares of the portfolios and are recorded as income to
the Variable Account on the ex-dividend date.

A Fixed Account investment option is available to variable universal life policy
owners.  This account is comprised of equity and fixed income  investments which
are part of the general  assets of Allianz Life.  The  liabilities  of the Fixed
Account are part of the general obligations of Allianz Life and are not included
in the  Variable  Account.  The  guaranteed  minimum rate of return on the Fixed
Account is 3%.

The Franklin Global Health Care  Securities  Fund and Franklin Value  Securities
Fund were added as available  investment options on May 1, 1998. On November 12,
1999,  the AIM VI Growth  Fund,  Alger  American  Growth  Fund,  Alger  American
Leveraged  AllCap Fund,  Franklin S&P 500 Index Fund,  USAllianz VIP Diversified
Assets Fund, USAllianz VIP Fixed Income Fund, and USAllianz VIP Growth Fund were
added as available investment options.

During the year ended December 31, 1999,  several portfolios changed their names
as summarized, with the effective date of the change, in the following table.

<TABLE>
<CAPTION>

Current Portfolio                                    Prior Portfolio Name                      Effective Date
<S>                                                  <C>                                       <C>
Franklin Global Communications Securities Fund       Franklin Global Utilities Securities Fund November 15, 1999
Franklin Real Estate Fund                            Franklin Real Estate Securities Fund      November 15, 1999
Franklin Rising Dividends Securities Fund            Franklin Rising Dividends Fund            November 15, 1999
Franklin U.S. Government Fund                        Franklin U.S. Government Securities Fund  November 15, 1999
Franklin Large Cap Growth Securities Fund            Franklin Capital Growth Fund              December 15, 1999

</TABLE>
Expenses

Asset Based Expenses

A mortality and expense risk charge is deducted  from the Variable  Account on a
daily basis equal,  on an annual basis,  to 0.60% of the daily net assets of the
Variable Account.

An administrative  charge is deducted from the Variable Account on a daily basis
equal,  on an annual  basis,  to 0.15% of the daily net  assets of the  Variable
Account.

                                                                              31

<PAGE>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

2. Significant Accounting Policies (Continued)

Contract Based Expenses

A cost of insurance charge is deducted against each policy by liquidating units.
The amount of the charge is based  upon age,  sex,  rate class and net amount at
risk (death  benefit less total cash surrender  value).  Total cost of insurance
charges paid by the policy  owners for the years ended  December 31, 1999,  1998
and 1997 were $1,024,902, $939,693 and $832,417, respectively.

A deferred  issue  charge is deducted  annually,  at the end of the policy year,
from each single premium  variable life policy for the first ten policy years by
liquidating  units.  The  amount  of  the  charge  is 7% of the  single  premium
consisting  of 2.5% for premium  taxes,  4% for sales  charge and .5% for policy
issue charge (in the State of California,  2.35%, 4.15% and .5%,  respectively).
If  the  policy  is  surrendered  before  the  full  amount  is  collected,  the
uncollected  portion of this charge is deducted  from the account  value.  Total
deferred  issue charges paid by the policy  owners for years ended  December 31,
1999, 1998 and 1997 were $42,540, $40,600, and $37,629, respectively.

A policy charge is deducted on each monthly  anniversary date from each variable
universal life policy by liquidating units. The amount of the charge is equal to
2.5% of each premium  payment for premium taxes plus $20 per month for the first
policy year and $9 per month guaranteed thereafter.  Currently, Allianz Life has
agreed to  voluntarily  limit the charge to $5 per month after the first  policy
year.  Total  policy  charges  paid by the  policy  owners  for the years  ended
December  31,  1999,  1998 and  1997  were  $167,757,  $213,159,  and  $211,485,
respectively.

Twelve free transfers are permitted each contract year.  Thereafter,  the fee is
the lesser of $25 or 2% of the amount transferred. No transfer charges were paid
by the policy  owners  during  years ended  December  31,  1999,  1998 and 1997,
respectively. Net transfers to the Fixed Account during years ended December 31,
1999, 1998 and 1997 were $314,715, $95,665, and $214,360, respectively.

The cost of  insurance,  deferred  issue,  policy and transfer  charges paid are
reflected in the Statements of Changes in Net Assets as Other transactions.

3. Federal Income Taxes

Operations  of the  Variable  Account  form a  part  of,  and  are  taxed  with,
operations of Allianz Life, which is taxed as a life insurance company under the
Internal Revenue Code.

Allianz Life does not expect to incur any federal  income taxes in the operation
of the Variable  Account.  If, in the future,  Allianz Life  determines that the
Variable  Account may incur federal  income  taxes,  it may then assess a charge
against the Variable Account for such taxes.

                                                                              32

<PAGE>
<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

4. Policy Transactions - Unit Activity

Transactions  in units for each fund for the years ended December 31, 1999, 1998
and 1997, were as follows:

                                                           Alger     Franklin     Franklin                               Franklin
                                                  Alger  American     Global      Global      Franklin Franklin Franklin Large Cap
                                           AIM  American Leveraged Communications Health Care Growth &  High    Income    Growth
                                        VI Growth Growth   AllCap   Securities  Securities    Income   Income Securities Securities
                                          Fund     Fund     Fund       Fund        Fund        Fund     Fund     Fund     Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>    <C>        <C>        <C>         <C>          <C>      <C>      <C>        <C>
Units outstanding at December 31, 1996     -        -       -        54,519         -         54,351   84,503   39,98        391
Policy transactions:
 Purchase payments                         -        -       -         4,451         -         10,974   2,141    11,090         -
 Transfers between funds                   -        -       -        (2,894)        -          5,516  (5,679)    1,881     7,029
 Surrenders and terminations               -        -       -          (304)        -         (7,932) (3,022)     (513)        -
 Policy loan transactions                  -        -       -        (2,428)        -            (68) (1,471)   (1,113)        -
 Other transactions                        -        -       -        (2,288)        -         (4,624) (1,789)   (4,161)      (34)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions        -        -       -        (3,463)        -          3,866  (9,820)    7,184     6,995
------------------------------------------------------------------------------------------------------------------------------------

Units outstanding at December 31, 1997     -        -       -        51,056         -         58,217   74,683   47,169     7,386
------------------------------------------------------------------------------------------------------------------------------------

Policy transactions:
 Purchase payments                         -        -       -         3,254         -         10,356   2,263     8,710         -
 Transfers between funds                   -        -       -        (1,327)      778          6,612    (511)   11,713    13,340
 Surrenders and terminations               -        -       -        (1,451)        -         (1,628)   (852)   (1,996)        -
 Policy loan transactions                  -        -       -         1,042         -           (754) (6,603)     (481)        -
 Other transactions                        -        -       -        (2,025)       (2)        (4,902) (1,762)   (4,044)      (230)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions        -        -       -          (507)      776          9,684  (7,465)   13,902     13,110
------------------------------------------------------------------------------------------------------------------------------------

Units outstanding at December 31, 1998     -        -       -        50,549       776         67,901   67,218   61,071     20,496
====================================================================================================================================
Policy transactions:
 Purchase payments                         6       27      24         2,513         -          9,794   1,690     7,313        121
 Transfers between funds               9,424   10,207     546         2,372     4,350          3,569 (13,852)   (9,019)    24,283
 Surrenders and terminations               -        -       -        (2,487)        -         (3,906)   (778)   (5,700)         -
 Policy loan transactions                  -        -       -        (1,632)        -           (776)  4,472    (1,326)         -
 Other transactions                       (2)      (7)     (3)       (1,783)     (176)        (4,992) (1,561)   (3,782)       (541)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions    9,428   10,227     567        (1,017)    4,174          3,689 (10,029)  (12,514)     23,863
------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at

 December 31, 1999                     9,428   10,227     567        49,532     4,950         71,590  57,189    48,557      44,359
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                                                              33

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

4. Policy Transactions - Unit Activity (continued)
                                                  Franklin               Franklin                                          Franklin
                                        Franklin  Natural                 Rising   Franklin  Franklin  Franklin Franklin    Zero
                                         Money   Resources   Franklin    Dividends  S&P 500    Small     U.S.     Value     Coupon
                                         Market  Securities Real Estate Securities   Index     Cap   Government Securities  -2000
                                          Fund      Fund       Fund         Fund     Fund      Fund     Fund      Fund       Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>        <C>       <C>          <C>        <C>     <C>      <C>           <C>      <C>
Units outstanding at December 31, 1996   46,930    8,152     12,678       19,304       -      4,338    45,204        -       14,687
Policy transactions:
 Purchase payments                      125,344    1,090      3,106        5,847       -      3,088     1,925        -            -
 Transfers between funds               (120,861)    (400)     5,867       10,275       -     17,595    (5,101)       -         (707)
 Surrenders and terminations             (3,267)      (6)       (93)        (909)      -        (74)     (952)       -            -
 Policy loan transactions                (1,621)      (7)      (534)        (334)      -          -      (382)       -           (3)
 Other transactions                      (2,758)    (475)    (1,455)      (2,780)      -     (1,348)   (1,294)       -         (181)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions      (3,163)     202      6,891       12,099       -     19,261    (5,804)       -         (891)
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1997   43,767    8,354     19,569       31,403       -     23,599    39,400        -       13,796
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                      216,819    1,227      3,889        7,667       -      7,774     1,572        -            -
 Transfers between funds               (142,026)   4,888      1,042       11,079       -     26,906        45      401            -
 Surrenders and terminations             (1,535)    (544)      (354)        (668)      -       (631)   (1,237)       -         (346)
 Rescissions                             (1,784)       -          -        -           -          -         -        -            -
 Policy loan transactions                  (599)      57       (163)        (199)      -        (47)     (332)       -         (263)
 Other transactions                      (2,394)    (609)    (1,880)      (3,711)      -     (3,266)   (1,215)      (2)        (171)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions      68,481    5,019      2,534       14,168       -     30,736    (1,167)     399         (780)
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1998  112,248   13,373     22,103       45,571       -     54,335    38,233      399       13,016
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                       63,552      994      3,616        7,371      18      6,412     1,517        -            -
 Transfers between funds                (88,436)  13,577      1,406        7,234  12,857      2,514     5,003      351            -
 Surrenders and terminations               (303)    (385)    (1,034)      (2,659)      -     (1,091)     (178)       -            -
 Policy loan transactions               (12,282)    (121)      (148)        (360)      -       (330)     (245)       -         (200)
 Other transactions                      (2,142)    (648)    (1,924)      (4,136)     (8)    (3,631)   (1,327)      (8)        (140)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions     (39,611)  13,417      1,916        7,450  12,867      3,874     4,770      343         (340)
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1999   72,637   26,790     24,019       53,021  12,867     58,209    43,003      742       12,676
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                                                              34

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

4. Policy Transactions - Unit Activity (continued)
                                       Franklin Franklin                     Templeton  Templeton           Templeton
                                         Zero     Zero   Mutual     Mutual   Developing  Global    Templeton Global      Templeton
                                        Coupon   Coupon Discovery   Shares     Markets    Asset    Global     Income   International
                                        -2005    -2010 Securities  Securities  Equity  Allocation  Growth    Securities   Equity
                                         Fund     Fund     Fund      Fund        Fund      Fund     Fund       Fund         Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>     <C>      <C>      <C>         <C>       <C>       <C>         <C>         <C>
Units outstanding at December 31, 1996  14,331   11,896   4,953     8,280      59,260    30,332    58,157      7,756       60,849
Policy transactions:
 Purchase payments                           -        -       -     1,460      15,655        31    21,703      2,567       19,816
 Transfers between funds                (2,226)     119  24,650    67,284      (2,887)   (7,728)   18,498       (108)       9,327
 Surrenders and terminations                 -        -       -         -      (1,900)       (9)   (2,308)       (85)      (1,686)
 Policy loan transactions                    -       (6)      -      (184)     (1,728)        -    (1,348)      (164)      (2,099)
 Other transactions                       (173)    (183)   (164)     (841)     (6,291)     (396)   (8,935)    (1,050)      (7,573)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions     (2,399)     (70) 24,486    67,719       2,849    (8,102)   27,610      1,160        17,785
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1997  11,932   11,826  29,439    75,999      62,109    22,230    85,767      8,916        78,634
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                          -         -       -     6,140      18,632       102    20,228      2,504        17,692
 Transfers between funds                    -         -  11,424    16,707         714       445    16,458        502        10,775
 Surrenders and terminations                -         -       -      (307)     (2,188)        -    (2,700)      (129)      (3,966)
 Policy loan transactions                   -       (45) (4,187)   (8,559)     (1,902)   (5,298)     (677)      (244)        (733)
 Other transactions                      (154)     (184)   (647)   (3,446)     (6,572)     (335)   (9,229)    (1,062)      (7,641)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions      (154)     (229)  6,590    10,535       8,684    (5,086)   24,080      1,571        16,127
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1998 11,778    11,597  36,029    86,534      70,793    17,144   109,847     10,487        94,761
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                          -         -      -     6,655       12,797        97    17,440      2,351        15,075
 Transfers between funds                    -        36  3,795    (4,569)        (292)        -    29,397       (416)       (1,898)
 Surrenders and terminations                -         -      -    (3,954)      (5,532)        -    (5,394)      (354)       (8,060)
 Policy loan transactions                   -        (6)   (15)       44         (539)      (17)   (1,166)      (312)       (1,465)
 Other transactions                      (139)     (205)  (694)   (4,023)      (5,779)     (302)   (9,072)    (1,070)       (7,285)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions      (139)     (175) 3,086    (5,847)         655      (222)   31,205        199        (3,633)
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1999 11,639    11,422 39,115    80,687       71,448    16,922   141,052     10,686        91,128
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                                                              35

</FN>
</TABLE>
<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

4. Policy Transactions - Unit Activity (continued)
                                                                   Templeton             USAllianz
                                                                 International Templeton    VIP      USAllianz  USAllianz
                                                                    Smaller    Pacific  Diversified  VIP Fixed     VIP     Total
                                                                   Companies   Growth     Assets     Income      Growth     All
                                                                     Fund       Fund       Fund       Fund        Fund     Funds
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>    <C>            <C>         <C>         <C>   <C>
Units outstanding at December 31, 1996                                    -   27,810        -           -           -       668,666
Policy transactions:
 Purchase payments                                                        -    9,779        -           -           -       240,067
 Transfers between funds                                              1,143   (2,629)       -           -           -        17,964
 Surrenders and terminations                                              -     (759)       -           -           -       (23,819)
 Policy loan transactions                                                 -     (884)       -           -           -       (14,374)
 Other transactions                                                      (4)  (3,737)       -           -           -       (52,534)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions                                   1,139    1,770        -           -           -       167,304
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1997                                1,139   29,580        -           -           -       835,970
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                                                        -   11,546        -           -           -       340,375
 Transfers between funds                                                795   (2,703)       -           -           -       (11,943)
 Surrenders and terminations                                              -   (2,018)       -           -           -       (22,550)
 Rescissions                                                              -        -        -           -           -        (1,784)
 Policy loan transactions                                                 -     (247)       -           -           -       (30,234)
 Other transactions                                                     (35)  (3,684)       -           -           -       (59,202)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions                                     760    2,894        -           -           -       214,662
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1998                                1,899   32,474        -           -           -     1,050,632
------------------------------------------------------------------------------------------------------------------------------------


Policy transactions:
 Purchase payments                                                        -    7,406        -           -           -       166,789
 Transfers between funds                                              1,448    2,890        -           -           -        16,777
 Surrenders and terminations                                              -     (672)       -           -           -       (42,487)
 Policy loan transactions                                                 -     (168)       -           -           -       (16,592)
 Other transactions                                                     (46)  (3,497)       -           -           -       (58,923)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
 resulting from policy transactions                                   1,402    5,959        -           -           -        65,564
------------------------------------------------------------------------------------------------------------------------------------


Units outstanding at December 31, 1999                                3,301   38,433        -           -           -     1,116,196
------------------------------------------------------------------------------------------------------------------------------------

<FN>
                                                                              36

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

5. Unit Values

A summary of unit values and units  outstanding  for variable life contracts and
the expense ratios,  including expenses of the underlying funds, for each of the
five years in the period ended December 31, 1999 follows:

                                                                                                               Ratio of
                                                                                                               Expenses

                                                                             Units                            to Average
                                                                          Outstanding Unit Value  Net Assets  Net Assets*
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                       <C>          <C>         <C>          <C>
AIM VI Growth Fund
December 31,
 1999(1)                                                                    9,428      $11.094     $104,588     1.48+%


Alger American Growth Fund
December 31,
 1999(1)                                                                   10,227       10.932      111,793     1.54+


Alger American Leveraged AllCap Fund
December 31,
 1999(1)                                                                      567       12.171        6,903     1.68+


Franklin Global Communications Securities Fund
December 31,
 1999                                                                      49,532       47.679    2,362,390     1.26
 1998                                                                      50,549       34.456    1,741,751     1.25
 1997                                                                      51,056       31.223    1,594,097     1.25
 1996                                                                      54,519       24.816    1,352,938     1.25
 1995                                                                      66,198       23.353    1,545,922     1.25


Franklin Global Health Care Securities Fund
December 31,
 1999                                                                       4,950        9.720       48,117     1.57
 1998(2)                                                                      776       10.656        8,265     1.59+


Franklin Growth and Income Fund
December 31,
 1999                                                                      71,590       42.947    3,074,550     1.24
 1998                                                                      67,901       42.797    2,905,941     1.24
 1997                                                                      58,217       39.803    2,317,193     1.24
 1996                                                                      54,351       31.393    1,706,254     1.25
 1995                                                                      38,021       27.700    1,053,166     1.27


Franklin High Income Fund
December 31,
 1999                                                                      57,189       24.406    1,395,748     1.29
 1998                                                                      67,218       24.606    1,653,951     1.28
 1997                                                                      74,683       24.565    1,834,614     1.28
 1996                                                                      84,503       22.188    1,874,953     1.29
 1995                                                                      65,333       19.628    1,282,342     1.31

<FN>
                                                                              37

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

5. Unit Values (continued)
                                                                                                               Ratio of
                                                                                                               Expenses

                                                                            Units                            to Average
                                                                        Outstanding  Unit Value  Net Assets  Net Assets*
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                       <C>          <C>       <C>            <C>
Franklin Income Securities Fund
December 31,
 1999                                                                      48,557      $24.846   $1,206,414     1.25%
 1998                                                                      61,071       25.496    1,557,015     1.24
 1997                                                                      47,169       25.273    1,192,087     1.25
 1996                                                                      39,985       21.747      869,551     1.25
 1995                                                                      26,614       19.691      524,066     1.26


Franklin Large Cap Growth Securities Fund
December 31,
 1999                                                                      44,359       20.706      918,500     1.52
 1998                                                                      20,496       15.847      324,793     1.52
 1997                                                                       7,386       13.273       98,032     1.52
 1996(3)                                                                      391       11.303        4,418     1.52+


Franklin Money Market Fund
December 31,
 1999                                                                      72,637       17.638    1,281,162     1.28
 1998                                                                     112,248       16.964    1,904,136     1.20
 1997                                                                      43,767       16.244      710,942     1.20
 1996                                                                      46,930       15.550      729,749     1.18
 1995                                                                      45,768       14.898      681,852     1.15


Franklin Natural Resources Securities Fund
December 31,
 1999                                                                      26,790       12.277      328,864     1.41
 1998                                                                      13,373        9.353      125,063     1.39
 1997                                                                       8,354       12.629      105,493     1.44
 1996                                                                       8,152       15.704      128,017     1.40
 1995                                                                      10,831       15.214      164,784     1.41


Franklin Real Estate Fund
December 31,
 1999                                                                      24,019       25.401      610,109     1.33
 1998                                                                      22,103       27.267      602,683     1.29
 1997                                                                      19,569       33.025      646,288     1.29
 1996                                                                      12,678       27.568      349,516     1.32
 1995                                                                       7,628       20.913      159,525     1.34


Franklin Rising Dividends Securities Fund
December 31,
 1999                                                                      53,021       19.835    1,051,719     1.50
 1998                                                                      45,571       22.132    1,008,603     1.47
 1997                                                                      31,403       20.855      654,915     1.49
 1996                                                                      19,304       15.795      304,911     1.51
 1995                                                                      10,700       12.816      137,129     1.53

<FN>
                                                                              38

</FN>
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

5. Unit Values (continued)
                                                                                                               Ratio of
                                                                                                               Expenses

                                                                             Units                            to Average
                                                                          Outstanding Unit Value  Net Assets  Net Assets*
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                       <C>          <C>        <C>           <C>
Franklin S&P 500 Index Fund
December 31,
 1999(1)                                                                   12,867      $10.476     $134,791     1.30+%


Franklin Small Cap Fund
December 31,
 1999                                                                      58,209       29.131    1,695,730     1.52
 1998                                                                      54,335       14.903      809,760     1.52
 1997                                                                      23,599       15.164      357,841     1.52
 1996                                                                       4,338       13.011       56,436     1.52
 1995(5)                                                                        -       10.157            -     1.65+


Franklin U.S. Government Fund
December 31,
 1999                                                                      43,003       23.356    1,004,398     1.26
 1998                                                                      38,233       23.755      908,236     1.25
 1997                                                                      39,400       22.276      877,698     1.25
 1996                                                                      45,204       20.532      928,142     1.26
 1995                                                                      32,402       19.966      646,949     1.27


Franklin Value Securities Fund
December 31,
 1999                                                                         742        7.820        5,811     1.56
 1998(2)                                                                      399        7.751        3,098     1.87+


Franklin Zero Coupon Fund - 2000
December 31,
 1999                                                                      12,676       27.709      351,257     1.40
 1998                                                                      13,016       27.086      352,556     1.15
 1997                                                                      13,796       25.386      350,230     1.15
 1996                                                                      14,687       23.880      350,723     1.15
 1995                                                                      14,874       23.491      349,422     1.15


Franklin Zero Coupon Fund - 2005
December 31,
 1999                                                                      11,639       31.011      360,912     1.40
 1998                                                                      11,778       33.196      390,968     1.15
 1997                                                                      11,932       29.722      354,637     1.15
 1996                                                                      14,331       26.888      385,323     1.15
 1995                                                                      12,382       27.229      337,160     1.15

<FN>
                                                                              39

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

5. Unit Values (continued)
                                                                                                               Ratio of
                                                                                                               Expenses

                                                                             Units                            to Average
                                                                          Outstanding Unit Value  Net Assets  Net Assets*
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                        <C>         <C>         <C>          <C>
Franklin Zero Coupon Fund - 2010
December 31,
 1999                                                                      11,422      $34.265     $391,363     1.40%
 1998                                                                      11,597       39.336      456,187     1.15
 1997                                                                      11,826       34.629      409,523     1.15
 1996                                                                      11,896       29.931      356,054     1.15
 1995                                                                       3,735       30.991      115,736     1.15


Mutual Discovery Securities Fund
December 31,
 1999                                                                      39,115       13.983      546,938     1.76
 1998                                                                      36,029       11.383      410,124     1.75
 1997                                                                      29,439       12.072      355,384     1.81
 1996(4)                                                                    4,953       10.190       50,468     2.12+


Mutual Shares Securities Fund
December 31,
 1999                                                                      80,687       13.509    1,090,067     1.54
 1998                                                                      86,534       12.002    1,038,636     1.52
 1997                                                                      75,999       12.082      918,245     1.55
 1996(4)                                                                    8,280       10.339       85,606     1.75+


Templeton Developing Markets Equity Fund
December 31,
 1999                                                                      71,448       12.217      872,827     2.14
 1998                                                                      70,793        7.959      563,460     2.16
 1997                                                                      62,109       10.230      635,389     2.17
 1996                                                                      59,260       11.292      669,146     2.24
 1995                                                                      22,210        9.357      207,819     2.16


Templeton Global Asset Allocation Fund
December 31,
 1999                                                                      16,922       14.852      251,342     1.57
 1998                                                                      17,144       13.917      238,598     1.59
 1997                                                                      22,230       14.027      311,809     1.69
 1996                                                                      30,332       12.651      383,721     1.61
 1995(6)                                                                       21       10.637          220     1.65+


Templeton Global Growth Fund
December 31,
 1999                                                                     141,052       19.504    2,751,077     1.63
 1998                                                                     109,847       16.235    1,783,371     1.63
 1997                                                                      85,767       15.010    1,287,362     1.63
 1996                                                                      58,157       13.324      774,892     1.68
 1995                                                                      31,471       11.069      348,359     1.72

<FN>
                                                                              40

</FN>
</TABLE>

<PAGE>




<TABLE>
<CAPTION>
Allianz Life Variable Account A
of Allianz Life Insurance Company of North America
Notes to Financial Statements (continued)
December 31, 1999

5. Unit Values (continued)
                                                                                                               Ratio of
                                                                                                               Expenses

                                                                             Units                            to Average
                                                                          Outstanding Unit Value  Net Assets  Net Assets*
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                        <C>         <C>         <C>          <C>
Templeton Global Income Securities Fund
December 31,
 1999                                                                      10,686      $16.881     $180,418     1.40%
 1998                                                                      10,487       18.052      189,335     1.38
 1997                                                                       8,916       16.985      151,430     1.37
 1996                                                                       7,756       16.700      129,516     1.36
 1995                                                                       5,801       15.347       89,028     1.39


Templeton International Equity Fund
December 31,
 1999                                                                      91,128       24.230    2,208,092     1.65
 1998                                                                      94,761       19.278    1,826,865     1.63
 1997                                                                      78,634       18.400    1,446,893     1.64
 1996                                                                      60,849       16.598    1,010,009     1.64
 1995                                                                      40,830       13.600      555,276     1.67


Templeton International Smaller Companies Fund
December 31,
 1999                                                                       3,301       11.717       38,684     1.86
 1998                                                                       1,899        9.528       18,103     1.85
 1997                                                                       1,139       10.943       12,470     1.81
 1996(3)                                                                        -       11.194            -     1.53+


Templeton Pacific Growth Fund
December 31,
 1999                                                                      38,433       11.488      441,517     1.83
 1998                                                                      32,474        8.447      274,322     1.85
 1997                                                                      29,580        9.798      289,825     1.78
 1996                                                                      27,810       15.412      428,593     1.74
 1995                                                                      21,322       13.977      298,014     1.76


USAllianz VIP Diversified Assets Fund
December 31,
 1999(1)                                                                        -            -            -     1.75+


USAllianz VIP Fixed Income Fund
December 31,

 1999(1)                                                                        -            -            -     1.50+


USAllianz VIP Growth Fund
December 31,
 1999(1)                                                                        -            -            -     1.65+

* For the year ended  December 31,  including  the effect of the expenses of the
underlying  funds.  +  Annualized.   1  Period  from  November  12,  1999  (fund
commencement)   to  December   31,  1999.  2  Period  from  May  1,  1998  (fund
commencement)   to  December   31,  1998.  3  Period  from  May  1,  1996  (fund
commencement)  to  December  31,  1996.  4 Period  from  November  8, 1996 (fund
commencement)  to  December  31,  1996.  5 Period  from  November  1, 1995 (fund
commencement)   to  December   31,  1995.  6  Period  from  May  1,  1995  (fund
commencement) to December 31, 1995.

<FN>
                                                                              41

</FN>
</TABLE>








                             ALLIANZ LIFE INSURANCE
                            COMPANY OF NORTH AMERICA
                                AND SUBSIDIARIES
                        Consolidated Financial Statements
                           December 31, 1999 and 1998

Allianz Life Insurance Company of North America
And Subsidiaries
Independent Auditors' Report

The Board of Directors

Allianz Life Insurance Company of North America and subsidiaries:
We have audited the  accompanying  consolidated  balance  sheets of Allianz Life
Insurance  Company of North America and subsidiaries as of December 31, 1999 and
1998,  and the related  consolidated  statements  of  operations,  comprehensive
(loss) income,  stockholder's equity and cash flows for each of the years in the
three-year  period  ended  December  31,  1999.  These  consolidated   financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Allianz
Life Insurance Company of North America and subsidiaries as of December 31, 1999
and 1998,  and the  results of their  operations  and cash flows for each of the
years in the  three-year  period ended  December 31, 1999,  in  conformity  with
generally accepted accounting principles.

As discussed in note 1 to the  consolidated  financial  statements,  the Company
changed its method of calculating  deferred acquisition costs and future benefit
reserves for two-tiered annuities.

                                                                       KPMG LLP



February 7, 2000


<PAGE>

<TABLE>
<CAPTION>



Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Balance Sheets

December 31, 1999 and 1998 (in thousands)

  Assets                                                                                    1999              1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                <C>              <C>
Investments:
   Fixed maturities, at fair value                                                     $ 4,582,350        2,538,291
   Equity securities, at fair value                                                       675,541           512,404
   Mortgage loans on real estate                                                          528,933           457,128
   Certificates of deposit and short-term securities                                      139,571           166,366
   Policy loans                                                                            46,573             7,118
   Real estate                                                                            154,063            80,637
   Options                                                                                 68,217            15,109
   Investment in equity investments                                                         3,045            80,928
------------------------------------------------------------------------------------------------------------------------------------
     Total investments                                                                  6,198,293         3,857,981
Cash                                                                                       58,110            67,195
Accrued investment income                                                                  73,774            36,649
Receivables (net of allowance for uncollectible accounts of
 $3,395 in 1999 and $3,254 in 1998)                                                       310,866           323,971
Reinsurance recoverable:
   Funds held on deposit                                                                1,151,941         1,170,170
   Recoverable on future policy benefit reserves                                        3,330,612         1,191,098
   Recoverable on unpaid claims                                                           405,086           293,179
   Receivable on paid claims                                                               74,483            24,986
Goodwill (net of accumulated amortization of $3,847 in 1999)                              304,561                 0
Value of business acquired                                                                210,363                 0
Deferred acquisition costs                                                                801,763           930,059
Other assets                                                                               55,811            35,755
Federal income tax recoverable                                                             10,484             4,060
------------------------------------------------------------------------------------------------------------------------------------
   Assets, exclusive of separate account assets                                        12,986,147         7,935,103
Separate account assets                                                                 8,488,404         9,915,150
------------------------------------------------------------------------------------------------------------------------------------
   Total assets                                                                        $21,474,551        17,850,253
------------------------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Balance Sheets (continued)

December 31, 1999 and 1998 (in thousands)

                                                                                            1999              1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                 <C>
Liabilities Future benefit reserves:

      Life                                                                            $ 1,874,904         1,445,844
      Annuity                                                                           7,796,583         3,588,491
   Policy and contract claims                                                             927,915           770,846
   Unearned premiums                                                                       49,013            53,778
   Reinsurance payable                                                                    212,239           129,397
   Deferred income on reinsurance                                                         186,888           106,065
   Deferred income taxes                                                                   51,356           257,903
   Accrued expenses                                                                       108,232            91,631
   Commissions due and accrued                                                             55,904            41,000
   Other policyholder funds                                                                77,782            20,586
   Other liabilities                                                                       98,251            89,038
------------------------------------------------------------------------------------------------------------------------------------
        Liabilities, exclusive of separate account liabilities                         11,439,067         6,594,579
   Separate account liabilities                                                         8,488,404         9,915,150
------------------------------------------------------------------------------------------------------------------------------------
        Total liabilities                                                              19,927,471        16,509,729
------------------------------------------------------------------------------------------------------------------------------------
Stockholder's equity:
   Common stock, $1 par value, 20 million shares authorized, issued and outstanding        20,000            20,000
   Additional paid-in capital                                                             830,274           407,088
   Retained earnings                                                                      632,320           673,857
   Accumulated other comprehensive income                                                  64,486           239,579
------------------------------------------------------------------------------------------------------------------------------------
        Total stockholder's equity                                                      1,547,080         1,340,524
Commitments and contingencies (notes 7 and 12)
------------------------------------------------------------------------------------------------------------------------------------
        Total liabilities and stockholder's equity                                     $21,474,551        17,850,253
------------------------------------------------------------------------------------------------------------------------------------


<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Operations

Years ended December 31, 1999, 1998 and 1997 (in thousands)


                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>               <C>
Revenue:
   Life insurance premiums                                            $  447,026          416,199           339,841
   Other life policy considerations                                       31,786           52,668            83,816
   Annuity considerations                                                239,070          222,632           219,262
   Accident and health premiums                                          843,906          773,570           747,718
------------------------------------------------------------------------------------------------------------------------------------
     Total premiums and considerations                                 1,561,788        1,465,069         1,390,637
   Premiums and annuity considerations ceded                             478,239          411,316           438,018
------------------------------------------------------------------------------------------------------------------------------------
        Net premiums and considerations                                1,083,549        1,053,753           952,619
   Investment income, net                                                274,860          217,066           162,350
   Realized investment gains                                             112,253           89,226            61,488
   Other                                                                  72,301           78,174            53,760
------------------------------------------------------------------------------------------------------------------------------------
     Total revenue                                                     1,542,963        1,438,219         1,230,217
------------------------------------------------------------------------------------------------------------------------------------
Benefits and expenses:
   Life insurance benefits                                               382,464          461,891           336,090
   Annuity benefits                                                      243,398          251,463           206,189
   Accident and health insurance benefits                                765,257          623,640           566,746
------------------------------------------------------------------------------------------------------------------------------------
     Total benefits                                                    1,391,119        1,336,994         1,109,025
   Benefit recoveries                                                    443,441          501,719           426,607
------------------------------------------------------------------------------------------------------------------------------------
        Net benefits                                                     947,678          835,275           682,418
   Commissions and other agent compensation                              304,816          322,697           310,665
   General and administrative expenses                                   162,798          116,007           106,744
   Taxes, licenses and fees                                               26,292           15,848            20,605
   Amortization of goodwill                                                3,847                0                 0
   Amortization of value of business acquired, net of interest credited    4,161                0                 0
   Change in deferred acquisition costs, net                             129,142           (2,979)          (63,742)
------------------------------------------------------------------------------------------------------------------------------------
     Total benefits and expenses                                       1,578,734        1,286,848         1,056,690
------------------------------------------------------------------------------------------------------------------------------------
     (Loss) income from operations before income taxes                   (35,771)         151,371           173,527
------------------------------------------------------------------------------------------------------------------------------------
Income tax (benefit) expense:   Current                                   63,371           48,410            31,571
   Deferred                                                              (73,727)           2,822            28,283
------------------------------------------------------------------------------------------------------------------------------------
     Total income tax (benefit) expense                                  (10,356)          51,232            59,854
------------------------------------------------------------------------------------------------------------------------------------
     (Loss) income before cumulative effect of change in accounting      (25,415)         100,139           113,673
Cumulative effect of change in accounting, net of tax benefit of $8,682  (16,122)               0                 0
------------------------------------------------------------------------------------------------------------------------------------
     Net (loss) income                                                $  (41,537)         100,139           113,673
------------------------------------------------------------------------------------------------------------------------------------


<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Comprehensive (Loss) Income

Years ended December 31, 1999, 1998 and 1997 (in thousands)

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>              <C>
Net (loss) income                                                     $  (41,537)          100,139          113,673
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive (loss) gain:

   Foreign currency translation adjustments, net of tax                    1,461            (1,761)            (975)
------------------------------------------------------------------------------------------------------------------------------------
Unrealized (losses) gains on fixed maturities and equity securities:  Unrealized
holding (losses) gains arising during the period net of tax (benefit) expense of
$(55,781), $57,703 and $71,594 in 1999, 1998,

and 1997, respectively                                                  (103,590)          107,162          132,961
Reclassification adjustment for gains included in net income, net of tax
 expense of $39,289, $30,627, and $21,588 in 1999, 1998, and 1997,
 respectively                                                             72,964           56,879            40,093
------------------------------------------------------------------------------------------------------------------------------------
        Total unrealized holding (losses) gains                         (176,554)          50,283            92,868
------------------------------------------------------------------------------------------------------------------------------------

        Total other comprehensive (loss) income                         (175,093)          48,522            91,893
------------------------------------------------------------------------------------------------------------------------------------

        Total comprehensive (loss) income                             $ (216,630)         148,661            205,566
------------------------------------------------------------------------------------------------------------------------------------

<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Stockholder's Equity

Years ended December 31, 1999, 1998 and 1997 (in thousands)

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>               <C>
   Balance at beginning and end of year                               $   20,000           20,000            20,000
------------------------------------------------------------------------------------------------------------------------------------
Preferred stock:
   Balance at beginning of year                                                0           25,000            25,000
   Redemption of stock during the year                                         0           (25,000)               0
------------------------------------------------------------------------------------------------------------------------------------
     Balance at end of year                                                    0                0            25,000
------------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital:   Balance at beginning of year               407,088          407,088           407,088
   Capital contribution                                                  423,186                0                 0
------------------------------------------------------------------------------------------------------------------------------------
     Balance at end of year                                              830,274          407,088           407,088
------------------------------------------------------------------------------------------------------------------------------------
Retained earnings:
   Balance at beginning of year                                          673,857          574,447           462,925
   Net income                                                             41,537)         100,139           113,673
   Cash dividend to stockholder                                                0             (729)          (2,151)
------------------------------------------------------------------------------------------------------------------------------------
     Balance at end of year                                              632,320          673,857           574,447
------------------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income: Accumulated unrealized holding gain:

     Balance at beginning of year                                        245,788          195,505           102,637
     Net unrealized gain (loss) on investments
        during the year, net of deferred federal income taxes           (176,554)          50,283            92,868
------------------------------------------------------------------------------------------------------------------------------------
     Balance at end of year                                               69,234          245,788           195,505
Accumulated unrealized foreign currency (loss):
   Balance at beginning of year                                           (6,209)          (4,448)           (3,473)
   Net unrealized gain (loss) on foreign currency
     translation during the year, net of deferred federal income taxes     1,461           (1,761)             (975)
------------------------------------------------------------------------------------------------------------------------------------
     Balance at end of year                                               (4,748)          (6,209)           (4,448)
------------------------------------------------------------------------------------------------------------------------------------
   Total accumulated other comprehensive income                           64,486          239,579           191,057
------------------------------------------------------------------------------------------------------------------------------------
     Total stockholder's equity                                       $1,547,080        1,340,524         1,217,592
------------------------------------------------------------------------------------------------------------------------------------

<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Cash Flows

December 31, 1999, 1998 and 1997 (in thousands)


                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                <C>               <C>            <C>
Cash flows provided by (used in) operating activities:
   Net (loss) income                                                  $   (41,537)        100,139           113,673
------------------------------------------------------------------------------------------------------------------------------------
   Adjustments to reconcile  net (loss) income to net cash (used in) provided by
     operating activities:

        Realized investment gains                                        (112,253)         (89,226)          (61,488)
        Deferred federal income tax expense                               (82,409)           2,822            28,283
        Charges to policy account balances                                (66,945)        (104,681)         (148,159)
        Interest credited to policy account balances                      251,303          262,956           251,182
        Change in:
          Accrued investment income                                        (1,921)           1,696            (2,215)
          Receivables                                                      17,873          (61,295)         (107,398)
          Reinsurance recoverable                                        (435,498)        (162,959)       (1,205,410)
          Deferred acquisition costs                                      128,296           (2,979)          (63,742)
          Future benefit reserves                                        (136,722)          25,183           138,370
          Policy and contract claims and other policyholder funds         184,939          154,213            92,230
          Unearned premiums                                                (4,765)           3,610            17,992
          Reinsurance payable                                              13,820           17,713            68,725
          Current tax recoverable                                          (6,424)          16,701            (8,306)
          Accrued expenses and other liabilities                          (31,349)          14,797            12,113
          Commissions due and accrued                                       5,627            1,483             2,414
        Depreciation and amortization                                      (5,917)         (12,711)          (13,312)
        Equity in earnings of equity investments                             (690)          (2,207)                0
        Other, net                                                         (1,151)              94                18
------------------------------------------------------------------------------------------------------------------------------------
        Total adjustments                                                (284,186)          65,210          (998,703)
------------------------------------------------------------------------------------------------------------------------------------
        Net cash (used in) provided by operating activities              (325,723)         165,349          (885,030)
------------------------------------------------------------------------------------------------------------------------------------


<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Cash Flows (continued)

Years ended December 31, 1999, 1998 and 1997 (in thousands)


                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>              <C>           <C>
Cash flows (used in) provided by operating activities                 $  (325,723)         165,349          (885,030)
Cash flows (used in) provided by investing activities:
   Purchase of fixed maturities                                        (1,171,682)      (1,256,653)       (1,748,950)
   Purchase of equity securities                                         (404,985)      (1,518,096)       (1,699,847)
   Purchase of real estate                                                (66,502)         (36,367)           (8,398)
   Purchase of options                                                    (32,617)         (11,503)           (3,482)
   Funding of mortgage loans                                             (114,840)        (168,870)         (103,626)
   Sale of fixed maturities                                             1,123,115        1,460,969         1,921,534
   Matured fixed maturities                                                21,280           28,152             1,150
   Sale of equity securities                                              385,559        1,560,695         1,691,789
   Sale of real estate                                                          0            7,103               551
   Repayment of mortgage loans                                             41,355           29,105            29,520
   Net change in certificates of deposit and short-term securities         38,121          (49,242)           87,848
   Purchase of Life USA, net of cash acquired                            (370,881)         (79,091)                0
   Other                                                                   (5,438)          (5,489)           94,126
------------------------------------------------------------------------------------------------------------------------------------
   Net cash (used in) provided by investing activities                   (557,515)         (39,287)          262,215
------------------------------------------------------------------------------------------------------------------------------------
Cash flows provided by (used in) financing activities:

   Policyholders' deposits to account balances                         1,033,877          864,446           748,430
   Policyholders' withdrawals from account balances                      (663,733)        (562,667)         (524,579)
   Change in assets held under reinsurance agreements                      80,823            7,876           150,526
   Funds (repaid) borrowed on dollar reverse repurchase agreements, net         0         (369,664)          239,468
   Capital contribution                                                   423,186                0                 0
   Redemption of preferred stock                                                0          (25,000)                0
   Cash dividends paid                                                          0             (729)           (2,151)
------------------------------------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities                    874,153          (85,738)          611,694
------------------------------------------------------------------------------------------------------------------------------------
        Net change in cash                                                 (9,085)          40,324           (11,121)
Cash at beginning of year                                                  67,195           26,871            37,992
------------------------------------------------------------------------------------------------------------------------------------
Cash at end of year                                                   $   58,110           67,195             26,871
------------------------------------------------------------------------------------------------------------------------------------

<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Consolidated Statements of Cash Flows (continued)

Years ended December 31, 1999, 1998 and 1997 (in thousands)

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                        <C>               <C>
Supplemental disclosures of noncash transactions:
   Fair value of assets acquired in acquisition of LifeUSA:

     Fixed maturities                                                 $ 2,283,214                0                 0
     Equity securities                                                    21,358                 0                 0
     Certificates of deposit and short-term securities                    11,285                 0                 0
     Policy loans                                                         37,618                 0                 0
     Options                                                              20,491                 0                 0
     Cash                                                                 62,767                 0                 0
     Accrued investment income                                            35,204                 0                 0
     Receivables (net of allowance for uncollectible accounts of $145)     4,768                 0                 0
     Recoverable on future policy benefit reserves - annuity           3,023,377                 0                 0
     Deferred tax asset                                                   29,825                 0                 0
     Other assets                                                         21,291                 0                 0

   Liabilities assumed in acquisition of LifeUSA:

     Future policy benefit reserves - annuity                          5,395,155                 0                 0
     Reinsurance payable                                                  69,022                 0                 0
     Accrued expenses                                                     14,611                 0                 0
     Commissions due and accrued                                           9,277                 0                 0
     Other policyholder funds                                             29,729                 0                 0
     Other liabilities                                                    42,552                 0                 0

<FN>

See accompanying notes to consolidated financial statements.

</FN>
</TABLE>

 <PAGE>




Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(1) Summary of Significant Accounting Policies

Allianz Life Insurance  Company of North America (the Company) is a wholly owned
subsidiary  of Allianz of America,  Inc.  (AZOA),  a wholly owned  subsidiary of
Allianz  Aktiengesellschaft  Holding (Allianz AG), a Federal Republic of Germany
company.

The  Company is a life  insurance  company  that is  licensed  to sell group and
individual life,  annuity and accident and health policies in the United States,
Canada  and  several   U.S.   territories.   Based  on  1999  net  revenues  and
considerations,  36%, 18% and 46% of the Company's business is life, annuity and
accident and health,  respectively.  The Company's primary distribution channels
are through  strategic  alliances with other  insurance  companies,  third party
marketing   organizations  and  with  independent  agents.  The  Company  has  a
significant relationship with The Franklin Templeton Group and its broker/dealer
network related to sales of its variable life and variable annuity products.

Following is a summary of the significant  accounting  policies reflected in the
accompanying consolidated financial statements.

Basis of Presentation

The  consolidated  financial  statements  have been prepared in accordance  with
generally accepted  accounting  principles (GAAP) which vary in certain respects
from  accounting  rules  prescribed or permitted by state  insurance  regulatory
authorities. The accounts of the Company's major subsidiaries, Life USA Holding,
Inc. (Life USA) and Preferred Life Insurance Company of New York, and other less
significant  subsidiaries  have been  consolidated.  The consolidated  financial
statements  only  include the  results of Life USA's  operations  subsequent  to
October 1, 1999,  the date of its  acquisition  by the Company (see note 2). All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management to make certain estimates and assumptions that affect reported assets
and  liabilities  including  reporting or disclosure  of  contingent  assets and
liabilities  as of the balance  sheet date and the reported  amounts of revenues
and  expenses   during  the  reporting   period.   Actual   results  could  vary
significantly from management's estimates.

Traditional Life, Group Life and Group Accident and Health Insurance
Traditional life products include products with guaranteed premiums and benefits
and  consist  principally  of whole life and term  insurance  policies,  limited
payment contracts and certain annuity products with life contingencies.

Premiums on  traditional  life and group life products are  recognized as income
when due. Group  accident and health  premiums are recognized as earned on a pro
rata basis over the risk coverage periods. Benefits and expenses for traditional
and group  products  are  matched  with  earned  premiums  so that  profits  are
recognized  over the premium paying  periods of the contracts.  This matching is
accomplished  by  establishing  provisions for future policy benefits and policy
and contract  claims,  and deferring and amortizing  related policy  acquisition
costs.

Nontraditional and Variable Life and Annuity Business

Nontraditional and variable life insurance and interest sensitive contracts that
have  significant  mortality or morbidity  risk are  accounted for in accordance
with the retrospective deposit method.  Interest sensitive contracts that do not
have  significant  mortality or  morbidity  risk are  accounted  for in a manner
consistent  with  interest  bearing  financial  instruments.  For both  types of
contracts,  premium  receipts are  reported as deposits to the  contractholder's
account  while  revenues  consist of amounts  assessed  against  contractholders
including surrender charges and earned administrative service fees. Mortality or
morbidity  charges  are  also  accounted  for  as  revenue  on  those  contracts
containing mortality or morbidity risk. Benefits consist of interest credited to
contractholder's  accounts  and  claims or  benefits  incurred  in excess of the
contractholder's balance.

<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(1) Summary of Significant Accounting Policies (Continued)


Value of Business Acquired and Goodwill

The value of insurance  in force  purchased is recorded as the value of business
acquired  (VOBA).  The initial value was determined by an actuarial  study using
the present value of future  profits in  calculating  the value of the insurance
purchased.  An accrual of interest is added to the unamortized balance using the
rates  credited  to the  policyholder  accounts.  The  balance is  amortized  in
relation  to the  present  value of expected  future  gross  profits in the same
manner as deferred  acquisition costs. The amortization period is expected to be
approximately 20 years from the date the business was acquired.  The activity in
the VOBA balance for 1999 is summarized below.

Balance, beginning of year$  0
Additions              214,524
Interest                 1,975
Amortization           (6,136)
                        ------
Balance, end of year   210,363
                        ------

The  amortization  of the VOBA in each of the next five years is expected to be:
2000 - $21,491;  2001 -  $20,123;  2002 -  $18,329;  2003 - $18,105;  and 2004 -
$16,958.

Goodwill  is the  excess of the amount  paid to acquire a company  over the fair
value  of its net  assets  and  VOBA,  reduced  by  amortization  and  valuation
adjustments,  if any.  Goodwill is  amortized on a  straight-line  basis over 20
years.  The value of VOBA and goodwill will be monitored at least annually based
on  estimates  of  future  earnings.  For  VOBA,  those  earnings  relate to the
insurance  in  force  purchased.  For  goodwill,  estimates  will  be  based  on
production  subsequent to the purchase.  If estimated  future  earnings are less
than the carrying  amount of the related asset,  the carrying value of the asset
may not be recoverable.  If impairment is indicated,  the carrying value will be
reduced to its fair value with a corresponding charge to earnings.

Deferred Acquisition Costs

Acquisition costs,  consisting of commissions and other costs that vary with and
are  primarily  related  to  production  of  new  business,  are  deferred.  For
traditional  life and group life  products,  such costs are  amortized  over the
revenue-producing  period  of the  related  policies  using  the same  actuarial
assumptions used in computing future policy benefit reserves.  Acquisition costs
for accident and health  insurance  policies are deferred and amortized over the
lives of the  policies in the same manner as premiums  are earned.  For interest
sensitive  products,  acquisition costs are amortized in relation to the present
value of expected  future gross profits from  investment  margins and mortality,
morbidity and expense charges. Deferred acquisition costs amortized during 1999,
1998 and 1997 were $312,036, $202,644, and $219,266, respectively.

Future Policy Benefit Reserves

Future policy benefit  reserves on traditional life products are computed by the
net level premium method based upon estimated future investment yield, mortality
and withdrawal assumptions, commensurate with the Company's experience, modified
as necessary  to reflect  anticipated  trends,  including  possible  unfavorable
deviations. Most life reserve interest assumptions range from 6% to 3.5%.

Future policy  benefit  reserves for interest  sensitive  products are generally
carried at  accumulated  contract  values.  Reserves  on some  deferred  annuity
contracts  are  computed  based  on  contractholder  cash  value  accumulations,
adjusted for mortality, withdrawal and interest margin assumptions.

Fair values of investment contracts,  which include deferred annuities and other
annuities without significant mortality risk, were determined by testing amounts
payable  on  demand   against   discounted   cash  flows  using  interest  rates
commensurate  with the risks  involved.  Fair  values  are  based on the  amount
payable on demand at December 31.

Policy and Contract Claims

Policy and contract claims  represent an estimate of claims and claim adjustment
expenses  that  have been  reported  but not yet paid and  incurred  but not yet
reported as of December 31.

<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(1) Summary of Significant Accounting Policies (Continued)


Reinsurance

Insurance  liabilities are reported  before the effects of reinsurance.  Amounts
paid or deemed to have been paid for claims covered by reinsurance contracts are
recorded as reinsurance receivable.  Reinsurance receivables are recognized in a
manner  consistent  with the  liabilities  related to the  underlying  reinsured
contracts.

Investments

The Company has  classified  all of its fixed  maturity and equity  portfolio as
"available-for-sale" and, accordingly, the securities are carried at fair value.
Short-term  investments are carried at amortized cost, which approximates market
value. Policy loans are reflected at their unpaid principal  balances.  Mortgage
loans are  reflected  at unpaid  principal  balances  adjusted  for  premium and
discount amortization and an allowance for uncollectible  balances.  The Company
analyzes loan impairment at least once a year when assessing the adequacy of the
allowance for possible  credit losses.  The Company does not accrue  interest on
impaired loans and accounts for interest income on such loans on a cash basis.

Realized  gains and losses are  computed  based on the  specific  identification
method.

As of December 31, 1999 and 1998,  investments with a carrying value of $164,045
and  $116,197,  respectively,  were  held  on  deposit  with  various  insurance
departments and in other trusts as required by statutory regulations.

The fair values of invested assets,  excluding  investments in real estate,  are
deemed by management to approximate  their  estimated  market  values.  The fair
value of mortgage loans has been calculated  using  discounted cash flows and is
based on pertinent  information  available to management as of year-end.  Policy
loan balances which are supported by the  underlying  cash value of the policies
approximate fair value. Changes in market conditions  subsequent to year-end may
cause estimates of fair values to differ from the amounts presented herein.

Accounting for Option Contracts

Certain annuity products provide additional benefits to the policy annuitization
value based on the growth in the Standard & Poor's (S&P) 500 Index.  The Company
has analyzed the  characteristics  of these  benefits and has  purchased  option
contracts tied to the S&P 500 Index with similar  characteristics to hedge these
risks.  Management monitors  correlation of in force amounts and option contract
values to ensure proper  matching.  If persistency  assumptions  were to deviate
significantly from anticipated  rates,  management would purchase or sell option
contracts as deemed appropriate.  As of December 31, 1999, management believes a
proper hedge exists.

The option  contracts  are  reported at fair value on the  consolidated  balance
sheet.  The fair value of the options is deemed by management to approximate the
estimated market values. Unrealized gains and losses on the option contracts are
recorded in annuity  benefits on the  consolidated  statement of  operations  to
offset increases in the future policy benefits  liability recorded for the index
benefit.

The Company purchases  "over-the-counter"  European-Asian  call option contracts
based upon the S&P 500  Index.  Two types of options  are  purchased:  five- and
seven-year options with daily averaging of the index during the last year of the
contract and five-year  cliquet options which use monthly averaging of the index
during each year and resets at each anniversary date of the contract. The strike
price depends on the product,  index period,  cap and credited rate. The Company
only purchases option contracts from counterparties  rated AA- or better and the
option contracts are not used for trading purposes.

Income Taxes

Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in income in the
period that includes the enactment date.

<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(1) Summary of Significant Accounting Policies (Continued)


Separate Accounts

Separate  accounts  represent funds for which  investment  income and investment
gains and losses accrue directly to the policyholders and contractholders.  Each
account has specific  investment  objectives  and the assets are carried at fair
value. The assets of each account are legally  segregated and are not subject to
claims that arise out of any other business of the Company.

Fair values of separate account assets were determined using the market value of
the underlying  investments  held in segregated  fund  accounts.  Fair values of
separate account  liabilities were determined using the cash surrender values of
the policyholder's and contractholder's account.

Receivables

Receivable  balances  approximate  estimated  fair  values.  This  is  based  on
pertinent  information  available to  management  as of year-end  including  the
financial  condition  and  credit  worthiness  of  the  parties  underlying  the
receivables.  Changes in market  conditions  subsequent  to  year-end  may cause
estimates of fair values to differ from the amounts presented herein.

Accounting Changes

Effective  January 1, 1999, the Company  changed its methodology for calculating
deferred  acquisition  costs and future benefit reserves for two tiered deferred
annuities.  The revised calculation better reflects the income streams from this
product. Under the previous method of accounting,  a disproportionate  amount of
gains were recognized when contract  annuitization or surrenders  occurred.  The
new  methodology  provides  for profit  emergence  over the life of the block of
annuities.  The cumulative effect of the change in accounting  principle for the
years prior to 1999 in the amount of $16,122,  net of taxes,  is recorded in the
accompanying  consolidated statement of operations.  The effect of the change in
methodology does not have a significant  impact on the financial  statements for
prior years, therefore no proforma retroactive information is included.

In 1999, the Company  adopted  Statement of Position (SOP) 97-3,  Accounting for
Insurance and Other Enterprises for Insurance-Related  Assessment, and SOP 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for Internal
Use. No material adjustments were made to the consolidated  financial statements
upon adoption of these statements.

     In 1998, the Company  adopted  Statement of Financial  Accounting  Standard
(SFAS) No. 125,  Accounting for Transfers and Servicing of Financial  Assets and
Extinguishments of Liabilities,  and SFAS No. 132,  Employers  Disclosures about
Pensions and Other  Postretirement  Benefits.  No  adjustments  were made to the
consolidated financial statements upon adoption of these pronouncements.


Accounting Pronouncements to be Adopted

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting  for Derivative  Instruments  and Hedging  Activities.  The statement
establishes   accounting  and  reporting  standards  for  derivative   financial
instruments and other similar financial  instruments and for hedging activities.
In June 1999,  SFAS No. 137,  Accounting for Derivative  Instruments and Hedging
Activities - Deferral of Effective  Date of FASB  Statement  No. 133 was issued.
This statement  defers the effective date to fiscal years  beginning  after June
15, 2000. The Company will adopt these statements on January 1, 2001. The impact
of  adoption  of SFAS No. 133 on the  financial  position of the Company has not
been determined.


Reclassifications

Certain  prior year balances  have been  reclassified  to conform to the current
year presentation.

<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(2) Business Combination

On October 1, 1999, the Company  acquired all of the  outstanding  capital stock
(including all outstanding  options) of Life USA that it did not already own for
approximately  $423 million in cash. The  acquisition  was financed by a capital
contribution from AZOA.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the consolidated  financial statements include only the results of
Life  USA's  operations  from the date of  acquisition.  The  value of  business
acquired was  approximately  $215 million and is being  amortized in relation to
the present value of future gross profits, which will be approximately 20 years.
The  remaining  excess  of the  purchase  price  over the fair  value of  assets
acquired  in the amount of $308  million has been  recorded  as goodwill  and is
being amortized on a straight-line basis over 20 years.

During 1999,  expenses of  approximately $7 million were recorded related to the
acquisition  of Life USA and its  integration  with the Company.  These expenses
resulted  primarily from the costs of the  integration of the Company's and Life
USA's  strategies,  policies and practices.  These charges  include filing fees,
legal fees and other consulting fees related to the acquisition.

Following  are the  Company's  unaudited  pro forma  results for the years ended
December 31, 1999 and 1998 assuming the acquisition occurred on January 1, 1998.

                                          Unaudited
                                   1999              1998
------------------------------------------------------------------------------
Total revenue                 $ 1,766,792         1,654,531
Net (loss) income                 (44,624)          103,236
------------------------------------------------------------------------------

These  unaudited pro forma results have been prepared for  comparative  purposes
only and include  additional  amortization  expenses as a result of goodwill and
certain other  adjustments.  They do not purport to be indicative of the results
of operations that actually would have resulted had the combination  occurred on
January 1, 1998 or that may result in the future.

In 1998,  the Company  accounted for its investment in Life USA under the equity
method of accounting and carried its investment at cost,  adjusted for its share
of Life USA's  earnings,  amortization of goodwill and dividends  received.  The
difference  between the cost of the investment  and underlying  equity was to be
amortized on a straight-line  basis over ten years. As of December 31, 1998, the
company  held  21.41%  of the  outstanding  common  stock  of Life  USA  with an
approximate  market  value  of  $68,290.  The  carrying  value  of the  Life USA
investment  at year-end  1998 was  $80,928,  which was  $20,983  higher than the
equity in net assets of $59,945.

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(3) Investments

Investments at December 31, 1999 consist of:

                                                                                                             Amount
                                                                                                            shown on

                                                                         Amortized        Estimated       consolidated
                                                                           cost             fair             balance
                                                                          or cost           value             sheet
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>               <C>
Fixed maturities:
   U.S. government                                                    $  294,587          291,996           291,996
   States and political subdivisions                                      57,378           52,452            52,452
   Foreign government                                                    172,877          169,686           169,686
   Public utilities                                                      227,934          220,602           220,602
   Corporate securities                                                2,981,913        2,873,327         2,873,327
   Mortgage backed securities                                            345,794          347,235           347,235
   Collateralized mortgage obligations                                   634,680          627,052           627,052
------------------------------------------------------------------------------------------------------------------------------------
     Total fixed maturities                                           $4,715,163        4,582,350         4,582,350
------------------------------------------------------------------------------------------------------------------------------------
Equity securities:
   Common stocks:
     Banks, trusts and insurance companies                                22,935           23,831            23,831
     Industrial and miscellaneous                                        413,279          651,710           651,710
------------------------------------------------------------------------------------------------------------------------------------
     Total equity securities                                          $  436,214          675,541           675,541
------------------------------------------------------------------------------------------------------------------------------------
Other investments:
   Mortgage loans on real estate                                         528,933            XXXXXX          528,933
   Certificates of deposit and short-term securities                     139,571            XXXXXX          139,571
   Policy loans                                                           46,573            XXXXXX           46,573
   Real estate                                                           154,063            XXXXXX          154,063
   Options                                                                51,131            XXXXXX           68,217
   Investment in equity investments                                        3,045            XXXXXX            3,045
------------------------------------------------------------------------------------------------------------------------------------
     Total other investments                                          $  923,316            XXXXXX          940,402
------------------------------------------------------------------------------------------------------------------------------------
     Total investments                                                $6,074,693            XXXXXX        6,198,293
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(3) Investments (CONTINUED)

At December 31, 1999 and 1998, the amortized cost, gross unrealized gains,  gross unrealized losses and estimated fair values
of securities are as follows:

                                                          Amortized        Gross            Gross           Estimated
                                                            cost        unrealized       unrealized           fair
                                                           or cost         gains           losses             value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                 <C>              <C>             <C>
1999:

   U.S. Government                                     $  294,587          3,340            5,931           291,996
   States and political subdivisions                       57,378              0            4,926            52,452
   Foreign government                                     172,877            334            3,525           169,686
   Public utilities                                       227,934             20            7,352           220,602
   Corporate securities                                 2,981,913          3,902          112,488         2,873,327
   Mortgage backed securities                             345,794          5,026            3,585           347,235
   Collateralized mortgage obligations                    634,680          2,126            9,754           627,052
------------------------------------------------------------------------------------------------------------------------------------
     Total fixed maturities                             4,715,163         14,748          147,561         4,582,350
   Equity securities                                      436,214        289,441           50,114           675,541
------------------------------------------------------------------------------------------------------------------------------------
     Total                                             $5,151,377        304,189          197,675         5,257,891
------------------------------------------------------------------------------------------------------------------------------------
1998:

   U.S. Government                                     $  274,813         36,717              234           311,296
   States and political subdivisions                       94,640          6,481                0           101,121
   Foreign government                                      34,652          2,079                0            36,731
   Public utilities                                        66,236          5,948              202            71,982
   Corporate securities                                 1,441,359         67,234            9,891         1,498,702
   Mortgage backed securities                             401,505         26,799                0           428,304
   Collateralized mortgage obligations                     80,599         10,141              585            90,155
------------------------------------------------------------------------------------------------------------------------------------
     Total fixed maturities                             2,393,804        155,399           10,912         2,538,291
   Equity securities                                      278,753        245,913           12,262           512,404
------------------------------------------------------------------------------------------------------------------------------------
     Total                                             $2,672,557        401,312           23,174         3,050,695
------------------------------------------------------------------------------------------------------------------------------------
<FN>

The changes in unrealized (losses) gains on fixed maturity securities were $(277,300),  $22,170,  and $58,422 in each of the years
ended December 31, 1999, 1998 and 1997, respectively.

The changes in unrealized gains in equity investments, which include common stocks and nonredeemable preferred stocks were $5,676,
$55,188, and $84,718 for the years ended December 31, 1999, 1998 and 1997, respectively.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(3) Investments (CONTINUED)

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

                                                                                          Amortized         Estimated
                                                                                            cost           fair value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>                  <C>
   Due in one year or less                                                             $  102,823           102,554
   Due after one year through five years                                                1,055,901         1,037,031
   Due after five years through ten years                                               1,279,988         1,243,845
   Due after ten years                                                                  1,295,977         1,224,633
   Mortgage backed securities and collateralized mortgage obligations                     980,474           974,287
------------------------------------------------------------------------------------------------------------------------------------
     Totals                                                                            $4,715,163         4,582,350
------------------------------------------------------------------------------------------------------------------------------------

Gross gains of $151,920,  $105,723,  and $70,335 and gross losses of $39,717,  $18,217,  and $8,654 were realized on sales of
securities in 1999, 1998 and 1997, respectively.

Net realized investment gains (losses) for the respective years ended December 31 are summarized as follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
Fixed maturities, at market                                           $    (4,474)         30,299            40,268
Equity securities                                                         116,677          57,207            21,413
Mortgage loans                                                             (1,680)           ,320)             (982)
Real estate                                                                   331           3,133               635
Other                                                                        (601)            93)               154
------------------------------------------------------------------------------------------------------------------------------------
     Net gains before taxes                                               112,253          89,226            61,488
Tax expense on net realized gains                                          39,257          31,229            21,521
------------------------------------------------------------------------------------------------------------------------------------
     Net gains after taxes                                            $    72,996           7,997            39,967
------------------------------------------------------------------------------------------------------------------------------------

     The valuation allowances on mortgage loans at December 31, 1999, 1998 and 1997 and the changes in the allowance for the years
then ended are summarized as follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
Beginning of Year                                                     $    9,599             8,279              7,279
   Charged to operations                                                   1,680             1,320             1,000
   Recoveries                                                                  0                0                  0
------------------------------------------------------------------------------------------------------------------------------------
End of Year                                                           $   11,279             9,599             8,279
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(3) Investments (CONTINUED)

Major categories of net investment income for the respective years ended December 31 are:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>               <C>
Interest:
   Fixed maturities                                                   $  212,992          155,397           211,335
   Mortgage loans                                                         40,011           34,449            25,232
   Policy loans                                                              737              497             6,526
   Short-term investments                                                  1,823           15,022            12,804
Dividends:
   Preferred stock                                                           212              668               748
   Common stock                                                            5,259            5,190             4,603
Interest on assets held by reinsurers                                      8,097            8,272             8,858
Rental income on real estate                                              13,356            7,505             5,657
Other invested assets                                                      6,405            1,132             3,781
------------------------------------------------------------------------------------------------------------------------------------
     Total investment income                                             288,892          228,132           279,544

Investment expenses related to coinsurance agreements (note 8)             2,660            2,689            98,417
Investment expenses                                                       11,372            8,377            18,777
------------------------------------------------------------------------------------------------------------------------------------
     Net investment income                                            $  274,860          217,066           162,350
------------------------------------------------------------------------------------------------------------------------------------
<FN>

During the first two months of 1998,  the Company  entered into mortgage  backed  security  reverse  repurchase  transactions
("dollar rolls") with certain  securities  dealers.  Under this program,  the Company sold certain  securities for delivery in the
current  month and  simultaneously  contracted  with the same dealer to repurchase  similar,  but not  identical,  securities on a
specified future date. The Company gave up the right to receive  principal and interest on the securities sold. As of December 31,
1999 and 1998 there were no outstanding  amounts under the Company's  dollar roll program.  Average  balances  outstanding for the
first two months of 1998 were $120,525 and weighted average interest rates were 6.5%. The maximum balance  outstanding during 1998
was $120,525. No dollar rolls were transacted in 1999.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(4) Summary Table of Fair Value Disclosures

                                                                   1999                               1998
------------------------------------------------------------------------------------------------------------------------------------
                                                          Carrying         Fair           Carrying            Fair
                                                           Amount          Value           Amount             Value
                                                           -------         -----           -------            -----
Financial assets

------------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>               <C>              <C>               <C>
   Fixed maturities, at market:
     U.S. Government                                   $  291,996        291,996          311,296           311,296
     States and political subdivisions                     52,452         52,452          101,121           101,121
     Foreign governments                                  169,686        169,686           36,731            36,731
     Public utilities                                     220,602        220,602           71,982            71,982
     Corporate securities                               2,873,327      2,873,327        1,546,342         1,546,342
     Mortgage backed securities                           347,235        347,235          380,664           380,664
     Collateralized mortgage obligations                  627,052        627,052           90,155            90,155
   Equity securities                                      675,541        675,541          512,404           512,404
   Mortgage loans                                         528,933        530,033          457,128           495,202
   Short term investments                                 139,571        139,571          166,366           166,366
   Policy loans                                            46,573         46,573            7,118             7,118
   Options                                                 68,217         68,217           15,109            15,109
   Investment in equity investments                         3,045          4,286           80,928            68,290
   Receivables                                            310,866        310,866          323,971           323,971
   Separate accounts assets                             8,488,404      8,488,404        9,915,150         9,915,150

Financial liabilities

------------------------------------------------------------------------------------------------------------------------------------
   Investment contracts                                 7,609,726      7,208,876        3,645,657         3,035,787
   Separate account liabilities                         8,488,404      8,361,112        9,915,150         9,765,791
------------------------------------------------------------------------------------------------------------------------------------

     See Note 1 "Summary of Significant  Accounting  Policies" for description of the methods and significant  assumptions used to
estimate fair values.

(5) Receivables

Receivables at December 31 consist of the following:

                                                                                            1999              1998
------------------------------------------------------------------------------------------------------------------------------------
Premiums due                                                                           $  264,685           270,657
Agents balances                                                                             4,809            10,088
Related party receivables                                                                   2,230             3,852
Reinsurance commission receivable                                                           9,304             8,022
Scholarship enrollment fees                                                                14,125            12,010
Due from administrators                                                                     4,550            13,271
Other                                                                                      11,163             6,071
------------------------------------------------------------------------------------------------------------------------------------
        Total receivables                                                              $  310,866            323,971
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(6) Accident and Health Claims Reserves

Accident and health claims reserves are based on estimates that are subject to uncertainty. Uncertainty regarding reserves of
a given  accident year is gradually  reduced as new  information  emerges each  succeeding  year,  thereby  allowing more reliable
re-evaluations of such reserves.  While management  believes that reserves as of December 31, 1999 are adequate,  uncertainties in
the  reserving  process  could cause such  reserves to develop  favorably  or  unfavorably  in the near term as new or  additional
information  emerges.  Any  adjustments to reserves are reflected in the operating  results of the periods in which they are made.
Movements in reserves,  which are small  relative to the amount of such  reserves,  could  significantly  impact  future  reported
earnings of the Company.

Activity in the accident and health claims  reserves,  exclusive of long term care,  hospital  indemnity and AIDS reserves of
$19,542, $9,918, and $12,479 in 1999, 1998 and 1997, respectively, is summarized as follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>               <C>
Balance at January 1, net of reinsurance
   recoverables of $128,764, $141,033, and $124,320                   $  366,425          312,886           273,813
Adjustment primarily related to commutation of block of business         (53,585)               0                 0
Incurred related to:
   Current year                                                          431,279          417,042           346,901
   Prior years                                                             3,264           (12,217)          (12,087)
------------------------------------------------------------------------------------------------------------------------------------
Total incurred                                                           434,543          404,825           334,814
------------------------------------------------------------------------------------------------------------------------------------
Paid related to:
   Current year                                                          193,341          204,100           150,942
   Prior years                                                           185,696          147,186           144,798
------------------------------------------------------------------------------------------------------------------------------------
 Total paid                                                              379,037          351,286           295,740
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, net of reinsurance
   recoverables of $175,142, $128,764, and $141,033                   $  368,346          366,425            312,887
------------------------------------------------------------------------------------------------------------------------------------
<FN>

The Company incurred  additional losses in 1999 on prior year incurred claims primarily on its reinsurance  assumed (non-HMO)
business.  Due to lower than anticipated  losses related to prior years,  the provision for claims and claim  adjustment  expenses
decreased in 1998 and 1997.

</FN>
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(7) Reinsurance

In the normal  course of business,  the Company  seeks to limit its  exposure to loss on any single  insured and to recover a
portion of benefits paid by ceding risks under excess  coverage and  coinsurance  contracts.  The Company  retains a maximum of $1
million  coverage per individual  life.  Reinsurance  contracts do not relieve the Company from its obligations to  policyholders.
Failure of  reinsurers  to honor their  obligations  could result in losses to the Company.  The Company  evaluates  the financial
condition of its  reinsurers  and monitors  concentrations  of credit risk to minimize  its  exposure to  significant  losses from
reinsurer insolvencies.

Life insurance, annuities and accident and health business assumed from and ceded to other companies is as follows:

                                                                                                           Percentage

                                                           Assumed         Ceded                            of amount
                                            Direct       from other      to other            Net             assumed
Year ended                                  amount        companies      companies         amount            to net
------------------------------------------------------------------------------------------------------------------------------------
December 31, 1999:
<S>                                    <C>            <C>             <C>             <C>                      <C>
Life insurance in force                $36,994,161    129,809,733     24,174,006      142,629,888              91.0%
------------------------------------------------------------------------------------------------------------------------------------
Premiums:
   Life                                   205,208         273,604         67,069          411,743              66.5%
   Annuities                              199,341          39,729         95,232          143,838              27.6%
   Accident and health                    541,847         302,059        315,938          527,968              57.2%
------------------------------------------------------------------------------------------------------------------------------------
     Total premiums                    $  946,396         615,392        478,239        1,083,549              56.8%
------------------------------------------------------------------------------------------------------------------------------------
December 31, 1998:
Life insurance in force                $34,118,554     98,832,792     19,483,581      113,467,765              87.1%
------------------------------------------------------------------------------------------------------------------------------------
Premiums:
   Life                                   244,416         224,451         93,812          375,055              59.8%
   Annuities                              220,812           1,820         50,385          172,247               1.1%
   Accident and health                    479,237         294,333        267,119          506,451              58.1%
------------------------------------------------------------------------------------------------------------------------------------
     Total premiums                    $  944,465         520,604        411,316        1,053,753              49.4%
------------------------------------------------------------------------------------------------------------------------------------
December 31, 1997:
Life insurance in force                $32,234,241     72,682,842     19,873,094       85,043,989              85.5%
------------------------------------------------------------------------------------------------------------------------------------
Premiums:
   Life                                   252,859         170,798        110,579          313,078              54.6%
   Annuities                              217,353           1,910         30,789          188,474               1.0%
   Accident and health                    436,105         311,612        296,650          451,067              69.1%
------------------------------------------------------------------------------------------------------------------------------------
     Total premiums                    $  906,317         484,320        438,018          952,619              50.8%
------------------------------------------------------------------------------------------------------------------------------------
<FN>

Included in reinsurance receivables at December 31, 1999 are $2,095,817 and $849,279 recoverable from two insurers who, as of
December 31, 1999, were both rated A+ by A.M.  Best's  Insurance  Reports.  A contingent  liability  exists to the extent that the
Company's reinsurers are unable to meet their contractual obligations.  Management is of the opinion that no liability will accrue
to the Company with respect to this contingency.

Of the amounts ceded to others, the Company ceded life insurance inforce of $3,387,592,  $2,067,664,  and $1,163,533 in 1999,
1998 and  1997,  respectively,  and life  insurance  premiums  earned  of  $6,008,  $4,165,  and  $2,538  in 1999,  1998 and 1997,
respectively,  to its ultimate  parent  Allianz AG. The Company also ceded  accident and health  premiums  earned to Allianz AG of
$3,131, $2,817, and $2,467 in 1999, 1998 and 1997.

</FN>
</TABLE>


<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(7) Reinsurance (Continued)

Effective January 1, 1999, the Company entered into a 100% coinsurance agreement
with an  unrelated  insurance  company to  coinsure a block of preneed  life and
annuity  business  with  1999  premium  of  $10,300.  In  connection  with  this
agreement,  the Company  recognized a recoverable on future benefit  reserves of
$95,000, received a ceding commission of $2,600 and transferred cash of $91,700.
The  unearned  ceding  commission  represents  deferred  revenue  that  will  be
amortized over the  revenue-producing  period of the related reinsured policies.
During  1999,  $1,200  was  amortized  and  included  in  other  revenue  in the
consolidated  statements of operations.  The servicing of the coinsured business
was also transferred to a third party administrator.

Effective  December  31,  1999,  the  Company  entered  into a 100%  coinsurance
agreement with an unrelated insurance company to coinsure the remaining block of
preneed life and annuity  business  with 1999 premium of $97,100.  In connection
with this  agreement,  the Company  recognized a recoverable  on future  benefit
reserves of $245,000,  received a ceding  commission of $73,900 and  transferred
cash of $154,000.  The unearned ceding  commission  represents  deferred revenue
that  will  be  amortized  over  the  revenue-producing  period  of the  related
reinsured policies. The servicing of the coinsured business was also transferred
to a third party administrator. Because the agreement was effective December 31,
1999, no revenue was recognized on this transaction in 1999.

Effective January 1, 1997, the Company entered into a 100% coinsurance agreement
with an unrelated  insurance  company to coinsure a block of business  with life
insurance  inforce of  $13,200,000  and 1997 premium of $90,000.  The  coinsured
block included certain  universal life and traditional  life insurance  policies
and annuity contracts. In connection with this agreement, the Company recognized
a  recoverable  on future  benefit  reserves  of  $1,102,000,  received a ceding
commission  of $138,500 and  transferred  assets of $881,000,  which support the
business.  The unearned ceding commission  represents deferred revenue that will
be  amortized  over  the  revenue-producing  period  of  the  related  reinsured
policies. During 1999, 1998 and 1997 $14,996, $15,965 and $22,647, respectively,
was amortized and included in other  revenue in the  consolidated  statements of
operations.  The servicing of the coinsured  business was also  transferred to a
third party  insurer who is also the  retrocessionaire  of the block.  Effective
January 1, 1998, the coinsurance  agreement was amended to include another block
of business  with future  benefit  reserves  of  $66,000,  capitalized  deferred
acquisition costs of $1,935 and deferred income of $750.

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(8) Income Taxes

Income Tax (Benefit) Expense

     Total income tax expense (benefit) for the years ended December 31 are as follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
Income tax expense attributable to operations:

<S>                                                                   <C>                  <C>               <C>
   Current tax expense                                                $   63,371           48,410            31,571
   Deferred tax (benefit) expense                                         (73,727)          2,822            28,283
------------------------------------------------------------------------------------------------------------------------------------
Total income tax (benefit) expense attributable to operations             (10,356)         51,232            59,854
Tax benefit due to cumulative effect of change in accounting               (8,682)              0                 0
------------------------------------------------------------------------------------------------------------------------------------
Total income tax (benefit) expense attributable to net income             (19,038)         51,232            59,854
Income tax effect on equity:
   Income tax allocated to stockholder's equity:

     Attributable to unrealized gains and losses for the year             (94,283)         26,127            49,748
------------------------------------------------------------------------------------------------------------------------------------

Total income tax effect on equity                                     $  (113,321)         77,359           109,602
------------------------------------------------------------------------------------------------------------------------------------


Components of Income Tax (Benefit) Expense

Income tax expense computed at the statutory rate of 35% varies from tax expense  reported in the consolidated  statements of
operations for the respective years ended December 31 as follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
Income tax (benefit) expense computed at the statutory rate           $   (12,520)         52,980            60,735
Dividends received deductions and tax-exempt interest                      (2,605)         (3,294)           (2,792)
Foreign tax                                                                (1,014)           (133)              916
Interest on tax deficiency                                                    800             900             1,100
Goodwill amortization                                                       1,365               0                 0
Other                                                                       3,618             779              (105)
------------------------------------------------------------------------------------------------------------------------------------
        Income tax (benefit) expense as reported                      $  (10,356)          51,232             59,854
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(8) Income Taxes (Continued)


Components of Deferred Tax Assets and  Liabilities on the Balance Sheet Tax effects of temporary  differences  giving rise to
the significant components of the net deferred tax liability at December 31 are as follows:

                                                                                            1999              1998
------------------------------------------------------------------------------------------------------------------------------------
Deferred tax assets:
<S>                                                                                    <C>                    <C>
   Provision for post retirement benefits                                              $    2,286             2,223
   Allowance for uncollectible accounts                                                       929               929
   Policy reserves                                                                        282,573           173,414
------------------------------------------------------------------------------------------------------------------------------------
     Total deferred tax assets                                                            285,788           176,566
------------------------------------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
   Deferred acquisition costs                                                             219,869           272,815
   Net unrealized gain                                                                     25,701           128,883
   Value of business acquired                                                              73,627                 0
   Other                                                                                   17,947            32,771
------------------------------------------------------------------------------------------------------------------------------------
     Total deferred tax liabilities                                                       337,144           434,469
------------------------------------------------------------------------------------------------------------------------------------
Net deferred tax liability                                                             $   51,356            257,903
------------------------------------------------------------------------------------------------------------------------------------
<FN>

Although  realization  is not assured,  the Company  believes it is not necessary to establish a valuation  allowance for the
deferred tax asset as it is more likely than not the deferred tax asset will be realized  principally  through future reversals of
existing taxable  temporary  differences and future taxable income.  The amount of the deferred tax asset  considered  realizable,
however,  could be reduced in the near term if estimates of future reversals of existing taxable temporary  differences and future
taxable income are reduced.

The Company and its subsidiaries,  with the exception of Life USA Insurance Company,  files a consolidated federal income tax
return with AZOA and all of its wholly owned subsidiaries.  The consolidated tax allocation agreement stipulates that each company
participating in the return will bear its share of the tax liability  pursuant to United States Treasury  Department  regulations.
The Company and each of its insurance  subsidiaries  generally will be paid for the tax benefit on their losses, and any other tax
attributes, to the extent they could have obtained a benefit against their post-1990 separate return taxable income or tax. Income
taxes paid by the Company were $57,121,  $30,808, and $39,914 in 1999, 1998 and 1997, respectively.  At December 31, 1999 and 1998
the Company had a tax recoverable from AZOA of $3,251 and $3,030, respectively.

At December 31, 1999 and 1998,  the Company had a tax  recoverable  separate  from the  agreement  with AZOA in the amount of
$7,233 and $1,030,  respectively.  These amounts are for foreign taxes and Life USA taxes recoverable prior to the purchase by the
Company.

</FN>
</TABLE>

<PAGE>

24

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)



(9) Related Party Transactions

In  conjunction  with the  purchase  of LifeUSA on October 1, 1999,  the Company
received a capital contribution from AZOA in the amount of $423,186.

The Company  reimbursed AZOA $3,582,  $2,495, and $2,519 in 1999, 1998 and 1997,
respectively,  for certain  administrative  and investment  management  services
performed.  The Company's  liability to AZOA for such services was $581 and $490
at December 31, 1999 and 1998, respectively.

The Company  shares a data center with and receives  other  system  support from
affiliated insurance  companies.  Usage and other system support charges paid by
the Company were $902,  $1,291 and $2,826 in 1999, 1998 and 1997,  respectively.
The  Company's  liability for data center and other system  support  charges was
$157 and $345 at December 31, 1999 and 1998, respectively.

The Company  has 200 million  authorized  shares of  preferred  stock with a par
value of $1 per share.  This  preferred  stock is  issuable  in series  with the
number of shares, redemption rights and dividend rate designated by the Board of
Directors  for each series.  Dividends are  cumulative  at a rate  reflective of
prevailing  market  conditions  at time of issue and are  payable  semiannually.
Dividend  payments are restricted by provisions in State of Minnesota  statutes.
The Company had 25 million shares of Series A preferred stock  outstanding until
March 1998, which was held by AZOA with a dividend rate of 6.4% and a book value
of $25,000.  In March 1998,  the Company  redeemed  and  canceled the 25 million
shares of Series A preferred stock.

 (10) Employee Benefit Plans

The  Company  participates  in the  Allianz  Primary  Retirement  Plan  (Primary
Retirement Plan), a defined  contribution plan. The Company makes  contributions
to a money  purchase  pension  plan on  behalf  of  eligible  participants.  All
employees,  excluding  agents,  are  eligible  to  participate  in  the  Primary
Retirement  Plan after two years of service.  The  contributions  are based on a
percentage of the participant's  salary with the participants  being 100% vested
upon eligibility.  It is the Company's policy to fund the plan costs as accrued.
Total pension  contributions were $2,025, $756, and $810 in 1999, 1998 and 1997,
respectively.

The Company  participates in the Allianz Asset Accumulation Plan (Allianz Plan),
a  defined   contribution  plan  sponsored  by  AZOA.  Under  the  Allianz  Plan
provisions,  the Company will match 75% of eligible employees'  contributions up
to a maximum of 6% of a participant's compensation.  The plan can also declare a
profit  sharing  allocation of up to 5.0% of base pay at year-end based upon the
profitability of AZOA. All employees are eligible to participate  after one year
of service and are fully vested in the  Company's  matching  contribution  after
three years of service.  The Allianz  Plan will accept  participants'  pretax or
after tax contributions up to 15% of the participant's  compensation.  It is the
Company's  policy to fund the  Allianz  Plan costs as  accrued.  The Company has
accrued $980,  $868,  and $1,057 in 1999,  1998 and 1997,  respectively,  toward
planned contributions.

Employees of Life USA also  participated in a defined  contribution  plan, which
will be merged with the Allianz Plan  effective  January 1, 2000.  Total Company
contributions made subsequent to October 1, 1999 were $329.

The Company provides certain postretirement benefits to employees who retired on
or before  December 31, 1988 or who were hired before  December 31, 1988 and who
have at least ten years of service  when they reach age 55. The  Company's  plan
obligation  at December  31, 1999 and 1998 was $6,532 and $6,352,  respectively.
This liability is included in "Other  liabilities" in the  accompanying  balance
sheet.

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(11) Statutory Financial Data and Dividend Restrictions

Statutory accounting is directed toward insurer solvency and protection of policyholders. Accordingly, certain items recorded
in financial statements prepared under GAAP are excluded or vary in determining statutory policyholders' surplus and net gain from
operations.  Currently, these items include, among others, deferred acquisition costs, furniture and fixtures, accident and health
premiums receivable which are more than 90 days past due, deferred taxes and undeclared dividends to policyholders.  Additionally,
future life and annuity benefit reserves calculated for statutory  accounting do not include provisions for withdrawals.  The NAIC
has completed a project to codify  statutory  accounting  practices,  the result of which will  constitute  the primary  source of
"prescribed"  statutory accounting practices.  Accordingly,  that project, which is currently in the process of state adoption and
expected to be effective  January 1, 2001,  will change the definition of what comprises  prescribed  versus  permitted  statutory
accounting  practices,  and may result in changes to existing  accounting  policies  insurance  enterprises  use to prepare  their
statutory  financial  statements.  The Company has not quantified the effects of adopting the NAIC codification on their statutory
financial statements.

The differences between  stockholder's  equity and net income reported in accordance with statutory  accounting practices and
the accompanying consolidated financial statements as of and for the year ended December 31 are as follows:

                                          Stockholder's equity                           Net income
------------------------------------------------------------------------------------------------------------------------------------
                                             1999           1998           1999             1998              1997
                                             -----          -----          -----            -----             -----
<S>                                    <C>                 <C>             <C>              <C>               <C>
Statutory basis                        $   873,617         654,371         97,768           35,188            72,343
Adjustments:
   Change in reserve basis                (289,261)       (226,145)       (80,952)           2,036           (99,981)
   Deferred acquisition costs              801,763         930,059       (128,296)           2,979            63,742
   Difference in accounting for
   purchase of Life USA                    340,675               0         (6,373)               0                 0
   Net deferred taxes                      (51,356)       (257,903)        82,409           (2,822)          (28,283)
   Statutory asset valuation reserve       236,210         178,011              0                0                 0
   Statutory interest maintenance reserve   43,786          48,697         (4,912)          14,361              7,994
   Modified coinsurance reinsurance              0          (2,358)             0           29,595             81,790
   Unrealized (losses) gains
   on investments                         (136,719)        158,391              0                0                 0
   Nonadmitted assets                        7,411          14,946              0                0                 0
   Deferred income on reinsurance         (186,888)       (106,065)             0                0                 0
   Other liabilities related
   to reinsurance                          (32,998)        (52,337)             0                0                 0
   Valuation allowance on mortgage loans   (11,279)         (9,599)        (1,680)          (1,320)           (1,000)
   Loss from non-insurance subsidiaries          0               0        (11,714)            (618)           (1,260)
   Other                                   (47,881)         10,456         11,613           20,740            18,327
------------------------------------------------------------------------------------------------------------------------------------
      As reported in the accompanying
      consolidated financial statements $1,547,080       1,340,524        (42,137)         100,139           113,672
------------------------------------------------------------------------------------------------------------------------------------
<FN>

The Company is required to meet minimum  statutory  capital and surplus  requirements.  The Company's  statutory  capital and
surplus as of December 31, 1999 and 1998 were in compliance with these  requirements.  The maximum amount of dividends that can be
paid by Minnesota  insurance  companies to  stockholders  without  prior  approval of the  Commissioner  of Commerce is subject to
restrictions relating to statutory earned surplus,  also known as unassigned funds.  Unassigned funds are determined in accordance
with the accounting procedures and practices governing preparation of the statutory annual statement,  minus 25% of earned surplus
attributable to unrealized capital gains. In accordance with Minnesota Statutes, the Company may declare and pay from its surplus,
cash  dividends of not more than the greater of 10% of its  beginning of the year  statutory  surplus in any year, or the net gain
from operations of the insurer,  not including  realized gains,  for the 12-month period ending the 31st day of the next preceding
year. In 1998, the Company paid AZOA dividends on preferred  stock in the amount $729. A common stock dividend of $551 was paid in
1997. Dividends of $49,391 could be paid in 2000 without prior approval of the Commissioner of Commerce.

</FN>
</TABLE>

<PAGE>



Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(11) Statutory Financial Data and Dividend Restrictions (Continued)


Regulatory Risk Based Capital

An insurance  enterprise's  state of domicile imposes minimum risk-based capital
requirements  that were  developed  by the  National  Association  of  Insurance
Commissioners  (NAIC).  The formulas for  determining  the amount of  risk-based
capital specify various weighting factors that are applied to financial balances
or various levels of activity based on the perceived degree of risk.  Regulatory
compliance is determined by a ratio of an enterprise's regulatory total adjusted
capital to its authorized  control level risk-based  capital,  as defined by the
NAIC.  Enterprises below specific  triggerpoints or ratios are classified within
certain levels,  each of which requires specified  corrective action. The levels
and ratios are as follows:

                           Ratio of total adjusted capital to
                           authorized control level risk-based
      Regulatory Event       capital (less than or equal to)
        -------------             ---------------------

    Company action level     2 (or 2.5 with negative trends)
   Regulatory action level                 1.5
  Authorized control level                  1
   Mandatory control level                 0.7

The Company's  adjusted  capital is in excess of the Company  action level as of
December 31, 1999 and 1998.

Permitted Statutory Accounting Practices

The  Company is required to file annual  statements  with  insurance  regulatory
authorities,  which are prepared on an accounting  basis prescribed or permitted
by  such  authorities.  Currently,  prescribed  statutory  accounting  practices
include state laws, regulations,  and general administrative rules, as well as a
variety of publications of the NAIC.  Permitted statutory  accounting  practices
encompass all  accounting  practices  that are not  prescribed;  such  practices
differ from state to state,  may differ from company to company  within a state,
and may change in the  future.  The Company  does not  currently  use  permitted
statutory  accounting  practices that have a significant impact on its statutory
financial statements.

(12) Commitments and Contingencies

The Company and its  subsidiaries  are involved in various pending or threatened
legal proceedings arising from the conduct of their business.  In the opinion of
management,  the ultimate resolution of such litigation will not have a material
effect on the consolidated financial position of the Company.

The  Company  is  contingently  liable for  possible  future  assessments  under
regulatory   requirements   pertaining  to   insolvencies   and  impairments  of
unaffiliated  insurance  companies.  Provision  has been  made  for  assessments
currently received and assessments anticipated for known insolvencies.

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(13) Foreign Currency Translation

The net assets of the Company's  foreign  operations are translated into U.S.  dollars using exchange rates in effect at each
year-end. Translation adjustments arising from differences in exchange rates from period to period are included in the accumulated
foreign currency translation  adjustment reported as a separate component of comprehensive income. An analysis of this account for
the respective years ended December 31 follows:

                                                                           1999             1998              1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                   <C>               <C>
Beginning amount of cumulative translation adjustments                $    (6,209)          (4,448)           (3,473)
------------------------------------------------------------------------------------------------------------------------------------
Aggregate adjustment for the period resulting from
translation adjustments                                                     2,248           (2,710)           (1,500)
Amount of income tax (expense) benefit for period
related to aggregate adjustment                                              (787)             949               525
------------------------------------------------------------------------------------------------------------------------------------
   Net aggregate translation included in equity                             1,461           (1,761)             (975)
------------------------------------------------------------------------------------------------------------------------------------
Ending amount of cumulative translation adjustments                   $    (4,748)          (6,209)           (4,448)
------------------------------------------------------------------------------------------------------------------------------------
Canadian foreign exchange rate at end of year                              0.6924           0.6535            0.6992
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>



<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(14) Supplementary Insurance Information

     The following table summarizes certain financial information by line of business for 1999, 1998 and 1997:

                                                                             As of December 31
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Future policy                          Other
                                                          Deferred       benefits,                           policy
                                                           policy         losses,                          claims and
                                                         acquisition    claims and        Unearned          benefits
                                                            costs      loss expense       premiums           payable
------------------------------------------------------------------------------------------------------------------------------------
1999:

<S>                                                    <C>             <C>                  <C>             <C>
Life                                                   $  231,927      1,874,904            3,049           116,569
Annuities                                                 561,966      7,728,072                0             1,771
Accident and health                                         7,870              0           45,964           809,575
------------------------------------------------------------------------------------------------------------------------------------
                                                       $  801,763      9,602,976           49,013           927,915
------------------------------------------------------------------------------------------------------------------------------------

1998:

Life                                                   $  217,262      1,445,844            3,859            97,647
Annuities                                                 694,388      3,588,491                0             1,727
Accident and health                                        18,409              0           49,919           671,472
------------------------------------------------------------------------------------------------------------------------------------
                                                       $  930,059      5,034,335           53,778           770,846
------------------------------------------------------------------------------------------------------------------------------------

1997:

Life                                                   $  189,971      1,297,269            5,215            63,572
Annuities                                                 717,721      3,251,829                0             1,881
Accident and health                                        19,388              0           44,953           487,660
------------------------------------------------------------------------------------------------------------------------------------
                                                       $  927,080      4,549,098           50,168           553,113
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Allianz Life Insurance Company of North America
And Subsidiaries
Notes to Consolidated Financial Statements (continued)

December 31, 1999, 1998 and 1997 (in thousands, except share data)


(14) Supplementary Insurance Information (Continued)

                                                              For the year ended December 31
------------------------------------------------------------------------------------------------------------------------------------
                                            Premium                      Benefits,       Net change
                                            revenue                       claims             in
                                           and other         Net        losses, and        policy             Other
                                           contract      investment     settlement       acquisition        operating
                                        considerations     income        expenses         costs (a)         expenses
------------------------------------------------------------------------------------------------------------------------------------
1999:

<S>                                    <C>                 <C>           <C>               <C>              <C>
Life                                   $  411,743          36,171        319,210           (14,665)         153,281
Annuities                                 143,838         211,432        163,329           133,268          166,715
Accident and health                       527,968          27,257        465,139            10,539          173,910
------------------------------------------------------------------------------------------------------------------------------------
                                       $1,083,549         274,860        947,678           129,142          493,906
------------------------------------------------------------------------------------------------------------------------------------
1998:

Life                                   $  375,055          34,731        306,318           (27,291)         141,705
Annuities                                 172,247         158,458        135,356           23,333           151,719
Accident and health                       506,451          23,877        393,601              979           161,128
------------------------------------------------------------------------------------------------------------------------------------
                                       $1,053,753         217,066        835,275            (2,979)         454,552
------------------------------------------------------------------------------------------------------------------------------------
1997:

Life                                   $  313,078          24,352        230,357           (14,363)          99,913
Annuities                                 188,474         118,028        124,535           (44,924)         186,789
Accident and health                       451,067          19,970        327,526            (4,455)         151,312
------------------------------------------------------------------------------------------------------------------------------------
                                       $  952,619         162,350        682,418           (63,742)         438,014
------------------------------------------------------------------------------------------------------------------------------------
(a)    See note 1 for total gross amortization.

</TABLE>




<PAGE>

                                  Flexible Premium Variable Life Prospectus  A-1



APPENDIX
--------------------------------------------------------------------------------

ILLUSTRATION OF POLICY VALUES

The following tables  illustrate how Policy Account values,  Net Cash Values and
death  benefits of a policy  change based on the  investment  experience  of the
variable  options.  The  illustrations  are  hypothetical and may not be used to
project or predict  investment  results.  The Policy  Account  values,  Net Cash
Values and death  benefits  in the tables  take into  account  all  charges  and
deductions  against the policy.  These tables  assume that the cost of insurance
rates for the policy are based on the current and guaranteed  rates  appropriate
to the class  shown.  These  tables also assume that a level  annual  premium of
$1,200 was paid.  These tables assume that the insured is in the most  favorable
male risk status, i.e., non-smoker. For insureds who are classified as smoker or
less favorable risk status, the cost of insurance will be greater and the policy
values will be less given the same assumed  hypothetical gross annual investment
rates of return.  The cost of insurance  will be less and the policy values will
be greater for female  insureds of comparable  risk status.  Some states require
that the policies contain tables based upon unisex rates.

Gross investment returns of 0%, 6% and 12% are assumed to be level for all years
shown.  The values would be different if the rates of return averaged 0%, 6% and
12% over the  period of years but  fluctuated  above  and below  those  averages
during individual years.


The values shown reflect the fact that the net investment return of the variable
options is lower  than the gross  investment  return on the  assets  held in the
portfolios  because of the charges assessed on amounts in the variable  options.
The daily investment  advisory fee for the portfolios are assumed to be equal to
an  annual  rate of 0.665% of the net  assets  of the  portfolios  (which is the
average of the  investment  advisory  fees  assessed  in 1999).  The values also
assume that each  portfolio  will incur  operating  expenses  annually which are
assumed to be 0.117% of the  average  net assets of the  portfolio.  This is the
average in 1999. The variable options will be assessed for mortality and expense
risks at a guaranteed  annual rate not to exceed 0.90% (the current  annual rate
is 0.60%)  of the  average  daily net  assets  of the  variable  option  and for
administrative  expenses  at an annual  rate of 0.15% of the  average  daily net
assets of the variable  option.  After  taking  these  expenses and charges into
consideration,  the illustrated  gross annual investment rates of 0%, 6% and 12%
are equivalent to net rates of -1.52%, 4.39% and 10.30%.


We deduct an insurance  risk premium for a policy month from the Policy  Account
values.  The insurance risk premium rate is based on the sex (where permitted by
state law), attained age and rate class of the insured.

Upon request, we will provide a comparable  illustration based upon the attained
age, sex (where  permitted by state law) and rate class of the proposed  insured
and for the Face Amount or premium requested.

<PAGE>
<TABLE>
<CAPTION>

                                                                   A-2  Flexible Premium Variable Life Prospectus



                                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                                             VARIABLE UNIVERSAL LIFE

PREPARED FOR: CLIENT                                                              INITIAL DEATH BENEFIT: $100,000
ISSUE AGE: 35, NON-SMOKER                                                         ANNUAL PREMIUM: $1,200.00
SEX: MALE                                                                         INITIAL DEATH BENEFIT OPTION: A


                                                                CURRENT VALUES
                                ----------------------------------------------------------------------------------
                                    VALUES PROJECTED AT       VALUES PROJECTED AT           VALUES PROJECTED AT
                                           0.00%                     6.00%                        12.00%
                                ----------------------------------------------------------------------------------
 END                    ACCUM              NET      NET               NET       NET                 NET      NET
 OF          ANNUAL    @ 5.00%  POLICY    CASH     DEATH   POLICY    CASH      DEATH    POLICY     CASH     DEATH
 YR.   AGE   PREMIUM   PREMIUM  ACCOUNT   VALUE   BENEFIT  ACCOUNT   VALUE    BENEFIT   ACCOUNT    VALUE   BENEFIT
------------------------------------------------------------------------------------------------------------------
<S>    <C>    <C>      <C>     <C>      <C>       <C>     <C>       <C>       <C>      <C>      <C>        <C>
  1    35     1,200     1,260     756       35    100,000    813        91    100,000      869      148    100,000
  2    36     1,200     2,583   1,673      891    100,000  1,838     1,057    100,000    2,011    1,229    100,000
  3    37     1,200     3,972   2,570    1,728    100,000  2,904     2,062    100,000    3,265    2,424    100,000
  4    38     1,200     5,431   3,448    2,596    100,000  4,011     3,159    100,000    4,644    3,792    100,000
  5    39     1,200     6,962   4,307    3,487    100,000  5,162     4,341    100,000    6,160    5,340    100,000

  6    40     1,200     8,570   5,144    4,374    100,000  6,354     5,583    100,000    7,824    7,053    100,000
  7    41     1,200    10,259   5,969    5,248    100,000  7,599     6,879    100,000    9,662    8,941    100,000
  8    42     1,200    12,032   6,773    6,102    100,000  8,892     8,222    100,000   11,682   11,012    100,000
  9    43     1,200    13,893   7,559    6,971    100,000 10,238     9,650    100,000   13,910   13,322    100,000
 10    44     1,200    15,848   8,330    7,825    100,000 11,641    11,135    100,000   16,430   15,924    100,000

 15    49     1,200    27,189  11,849   11,849    100,000 19,690    19,690    100,000   33,437   33,437    100,000
 20    54     1,200    41,633  14,565   14,565    100,000 29,339    29,339    100,000   61,086   61,086    100,000
 25    59     1,200    60,136  16,346   16,346    100,000 40,619    40,619    100,000  106,168  106,168    141,141
 30    64     1,200    83,713  16,275   16,275    100,000 53,802    53,802    100,000  178,713  178,713    216,311
 35    69     1,200   113,804  12,991   12,991    100,000 69,461    69,461    100,000  294,783  294,783    339,268


CURRENT VALUES ARE BASED ON PROJECTED  INTEREST RATES AND CURRENT  EXPENSES AND COST OF INSURANCE  CHARGES NOW IN
EFFECT, WHICH ARE SUBJECT TO CHANGE. THE CURRENT MONTHLY EXPENSE CHARGES ARE $20.00 PER MONTH IN YEAR 1 AND $5.00
PER MONTH THEREAFTER.

IT IS EMPHASIZED THAT THE  HYPOTHETICAL  INVESTMENT  RATES OF RETURN SHOWN IN THIS  ILLUSTRATION ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A  REPRESENTATION  OF PAST OR FUTURE  INVESTMENT  RATES OF RETURN.  ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,  INCLUDING  THE  INVESTMENT
ALLOCATIONS MADE BY THE OWNER,  PREVAILING INTEREST RATES AND RATES OF INFLATION.  THE DEATH BENEFIT AND NET CASH
VALUE FOR A POLICY WOULD BE DIFFERENT THAN THOSE SHOWN IF THE ACTUAL  INVESTMENT  RATES OF RETURN AVERAGED 0%, 6%
AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS  CAN BE MADE BY THE COMPANY OR THE FUNDS THAT THESE  HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER A PERIOD OF TIME.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                                                   Flexible Premium Variable Life Prospectus  A-3



                                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                                             VARIABLE UNIVERSAL LIFE

PREPARED FOR: CLIENT                                                              INITIAL DEATH BENEFIT: $100,000
ISSUE AGE: 35, NON-SMOKER                                                         ANNUAL PREMIUM: $1,200.00
SEX: MALE                                                                         INITIAL DEATH BENEFIT OPTION: A


                                                               GUARANTEED VALUES
                                ----------------------------------------------------------------------------------
                                    VALUES PROJECTED AT       VALUES PROJECTED AT           VALUES PROJECTED AT
                                           0.00%                     6.00%                        12.00%
                                ----------------------------------------------------------------------------------
 END                    ACCUM               NET     NET               NET       NET                 NET      NET
 OF          ANNUAL    @ 5.00%  POLICY     CASH    DEATH   POLICY    CASH      DEATH    POLICY     CASH     DEATH
 YR.   AGE   PREMIUM   PREMIUM  ACCOUNT    VALUE  BENEFIT  ACCOUNT   VALUE    BENEFIT   ACCOUNT    VALUE   BENEFIT
------------------------------------------------------------------------------------------------------------------
<S>    <C>    <C>     <C>      <C>       <C>      <C>     <C>       <C>       <C>      <C>      <C>        <C>
  1    35     1,200     1,260     746        25   100,000     802       81    100,000      859       137   100,000
  2    36     1,200     2,583   1,600       818   100,000   1,762      980    100,000    1,931     1,150   100,000
  3    37     1,200     3,972   2,427     1,585   100,000   2,750    1,909    100,000    3,101     2,259   100,000
  4    38     1,200     5,431   3,230     2,378   100,000   3,769    2,918    100,000    4,377     3,525   100,000
  5    39     1,200     6,962   4,008     3,188   100,000   4,820    4,000    100,000    5,772     4,951   100,000

  6    40     1,200     8,570   4,752     3,981   100,000   5,893    5,123    100,000    7,285     6,514   100,000
  7    41     1,200    10,259   5,472     4,751   100,000   7,002    6,281    100,000    8,941     8,221   100,000
  8    42     1,200    12,032   6,159     5,488   100,000   8,135    7,465    100,000   10,745    10,074   100,000
  9    43     1,200    13,893   6,813     6,225   100,000   9,296    8,708    100,000   12,711    12,123   100,000
 10    44     1,200    15,848   7,435     6,929   100,000  10,486    9,980    100,000   14,859    14,353   100,000

 15    49     1,200    27,189  10,051    10,051   100,000  16,895   16,895    100,000   29,040    29,040   100,000
 20    54     1,200    41,633  11,552    11,552   100,000  23,928   23,928    100,000   51,483    51,483   100,000
 25    59     1,200    60,136  11,315    11,315   100,000  31,239   31,239    100,000   87,732    87,732   116,673
 30    64     1,200    83,713   8,220     8,220   100,000  38,260   38,260    100,000  145,167   145,167   175,772
 35    69     1,200   113,804       0         0   100,000  43,851   43,851    100,000  234,776   234,776   270,313


GUARANTEED VALUES ARE BASED ON PROJECTED  INTEREST RATES AND GUARANTEED  EXPENSES AND COST OF INSURANCE  CHARGES.
THE GUARANTEED MONTHLY EXPENSE CHARGES ARE $20.00 PER MONTH IN YEAR 1 AND $9.00 PER MONTH THEREAFTER.

IT IS EMPHASIZED THAT THE  HYPOTHETICAL  INVESTMENT  RATES OF RETURN SHOWN IN THIS  ILLUSTRATION ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A  REPRESENTATION  OF PAST OR FUTURE  INVESTMENT  RATES OF RETURN.  ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,  INCLUDING  THE  INVESTMENT
ALLOCATIONS MADE BY THE OWNER,  PREVAILING INTEREST RATES AND RATES OF INFLATION.  THE DEATH BENEFIT AND NET CASH
VALUE FOR A POLICY WOULD BE DIFFERENT THAN THOSE SHOWN IF THE ACTUAL  INVESTMENT  RATES OF RETURN AVERAGED 0%, 6%
AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS  CAN BE MADE BY THE COMPANY OR THE FUNDS THAT THESE  HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER A PERIOD OF TIME.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                                                   A-4  Flexible Premium Variable Life Prospectus



                                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                                             VARIABLE UNIVERSAL LIFE

PREPARED FOR: CLIENT                                                              INITIAL DEATH BENEFIT: $100,000
ISSUE AGE: 35, NON-SMOKER                                                         ANNUAL PREMIUM: $1,200.00
SEX: MALE                                                                         INITIAL DEATH BENEFIT OPTION: B


                                                                CURRENT VALUES
                                ----------------------------------------------------------------------------------
                                    VALUES PROJECTED AT       VALUES PROJECTED AT           VALUES PROJECTED AT
                                           0.00%                     6.00%                        12.00%
                                ----------------------------------------------------------------------------------
 END                    ACCUM              NET      NET               NET       NET                 NET      NET
 OF          ANNUAL    @ 5.00%  POLICY    CASH     DEATH   POLICY    CASH      DEATH    POLICY     CASH     DEATH
 YR.   AGE   PREMIUM   PREMIUM  ACCOUNT   VALUE   BENEFIT  ACCOUNT   VALUE    BENEFIT   ACCOUNT    VALUE   BENEFIT
------------------------------------------------------------------------------------------------------------------
<S>    <C>    <C>     <C>       <C>     <C>       <C>      <C>      <C>       <C>      <C>      <C>        <C>
  1    35     1,200     1,260      755      33    100,755     811       89    100,811      868      146    100,868
  2    36     1,200     2,583    1,668     886    101,668   1,833    1,052    101,833    2,006    1,224    102,006
  3    37     1,200     3,972    2,561   1,719    102,561   2,893    2,052    102,893    3,253    2,412    103,253
  4    38     1,200     5,431    3,432   2,581    103,432   3,992    3,140    103,992    4,622    3,770    104,622
  5    39     1,200     6,962    4,284   3,463    104,284   5,132    4,312    105,132    6,124    5,303    106,124

  6    40     1,200     8,570    5,110   4,340    105,110   6,310    5,539    106,310    7,768    6,997    107,768
  7    41     1,200    10,259    5,923   5,202    105,923   7,538    6,817    107,538    9,580    8,859    109,580
  8    42     1,200    12,032    6,712   6,042    106,712   8,809    8,138    108,809   11,567   10,896    111,567
  9    43     1,200    13,893    7,483   6,895    107,483  10,128    9,540    110,128   13,751   13,163    113,751
 10    44     1,200    15,848    8,236   7,730    108,236  11,499   10,993    111,499   16,211   15,705    116,211

 15    49     1,200    27,189   11,619  11,619    111,619  19,270   19,270    119,270   32,654   32,654    132,654
 20    54     1,200    41,633   14,045  14,045    114,045  28,235   28,235    128,235   58,572   58,572    158,572
 25    59     1,200    60,136   15,282  15,282    115,282  37,916   37,916    137,916   99,237   99,237    199,237
 30    64     1,200    83,713   14,343  14,343    114,343  47,497   47,497    147,497  162,851  162,851    262,851
 35    69     1,200   113,804    9,619   9,619    109,619  55,226   55,226    155,226  261,937  261,937    361,937


CURRENT VALUES ARE BASED ON PROJECTED  INTEREST RATES AND CURRENT  EXPENSES AND COST OF INSURANCE  CHARGES NOW IN
EFFECT, WHICH ARE SUBJECT TO CHANGE. THE CURRENT MONTHLY EXPENSE CHARGES ARE $20.00 PER MONTH IN YEAR 1 AND $5.00
PER MONTH THEREAFTER.

IT IS EMPHASIZED THAT THE  HYPOTHETICAL  INVESTMENT  RATES OF RETURN SHOWN IN THIS  ILLUSTRATION ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A  REPRESENTATION  OF PAST OR FUTURE  INVESTMENT  RATES OF RETURN.  ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,  INCLUDING  THE  INVESTMENT
ALLOCATIONS MADE BY THE OWNER,  PREVAILING INTEREST RATES AND RATES OF INFLATION.  THE DEATH BENEFIT AND NET CASH
VALUE FOR A POLICY WOULD BE DIFFERENT THAN THOSE SHOWN IF THE ACTUAL  INVESTMENT  RATES OF RETURN AVERAGED 0%, 6%
AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS  CAN BE MADE BY THE COMPANY OR THE FUNDS THAT THESE  HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER A PERIOD OF TIME.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                                                   Flexible Premium Variable Life Prospectus  A-5



                                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                                             VARIABLE UNIVERSAL LIFE

PREPARED FOR: CLIENT                                                              INITIAL DEATH BENEFIT: $100,000
ISSUE AGE: 35, NON-SMOKER                                                         ANNUAL PREMIUM: $1,200.00
SEX: MALE                                                                         INITIAL DEATH BENEFIT OPTION: B


                                                               GUARANTEED VALUES
                                ----------------------------------------------------------------------------------
                                    VALUES PROJECTED AT       VALUES PROJECTED AT           VALUES PROJECTED AT
                                           0.00%                     6.00%                        12.00%
                                ----------------------------------------------------------------------------------
 END                    ACCUM              NET      NET               NET       NET                 NET      NET
 OF          ANNUAL    @ 5.00%  POLICY    CASH     DEATH   POLICY    CASH      DEATH    POLICY     CASH     DEATH
 YR.   AGE   PREMIUM   PREMIUM  ACCOUNT   VALUE   BENEFIT  ACCOUNT   VALUE    BENEFIT   ACCOUNT    VALUE   BENEFIT
------------------------------------------------------------------------------------------------------------------
<S>    <C>    <C>     <C>      <C>       <C>     <C>       <C>      <C>       <C>      <C>      <C>        <C>
  1    35     1,200     1,260     745        23  100,745      801     79      100,801      857      135    100,857
  2    36     1,200     2,583   1,595       813  101,595    1,757     975     101,757    1,926    1,144    101,926
  3    37     1,200     3,972   2,418     1,576  102,418    2,739    1,898    102,739    3,088    2,246    103,088
  4    38     1,200     5,431   3,214     2,362  103,214    3,750    2,898    103,750    4,354    3,502    104,354
  5    39     1,200     6,962   3,983     3,163  103,983    4,789    3,969    104,789    5,733    4,913    105,733

  6    40     1,200     8,570   4,715     3,945  104,715    5,847    5,076    105,847    7,225    6,454    107,225
  7    41     1,200    10,259   5,422     4,701  105,422    6,935    6,214    106,935    8,852    8,132    108,852
  8    42     1,200    12,032   6,092     5,421  106,092    8,043    7,372    108,043   10,617    9,946    110,617
  9    43     1,200    13,893   6,726     6,138  106,726    9,171    8,583    109,171   12,532   11,944    112,532
 10    44     1,200    15,848   7,325     6,819  107,325   10,321    9,815    110,321   14,613   14,107    114,613

 15    49     1,200    27,189   9,766     9,766  109,766   16,375   16,375    116,375   28,085   28,085    128,085
 20    54     1,200    41,633  10,945    10,945  110,945   22,568   22,568    122,568   48,379   48,379    148,379
 25    59     1,200    60,136  10,170    10,170  110,170   28,006   28,006    128,006   78,577   78,577    178,577
 30    64     1,200    83,713   6,333     6,333  106,333   31,061   31,061    131,061  123,036  123,036    223,036
 35    69     1,200   113,804      0          0        0   28,650   28,650    128,650  187,484  187,484    287,484


GUARANTEED VALUES ARE BASED ON PROJECTED  INTEREST RATES AND GUARANTEED  EXPENSES AND COST OF INSURANCE  CHARGES.
THE GUARANTEED MONTHLY EXPENSE CHARGES ARE $20.00 PER MONTH IN YEAR 1 AND $9.00 PER MONTH THEREAFTER.

IT IS EMPHASIZED THAT THE  HYPOTHETICAL  INVESTMENT  RATES OF RETURN SHOWN IN THIS  ILLUSTRATION ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A  REPRESENTATION  OF PAST OR FUTURE  INVESTMENT  RATES OF RETURN.  ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,  INCLUDING  THE  INVESTMENT
ALLOCATIONS MADE BY THE OWNER,  PREVAILING INTEREST RATES AND RATES OF INFLATION.  THE DEATH BENEFIT AND NET CASH
VALUE FOR A POLICY WOULD BE DIFFERENT THAN THOSE SHOWN IF THE ACTUAL  INVESTMENT  RATES OF RETURN AVERAGED 0%, 6%
AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS  CAN BE MADE BY THE COMPANY OR THE FUNDS THAT THESE  HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER A PERIOD OF TIME.
</TABLE>


<PAGE>

                                     PART II

                          UNDERTAKINGS TO FILE REPORTS

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


                                 REPRESENTATION

Allianz Life Insurance  Company of North America  ("Company")  hereby represents
that the fees and charges deducted under the Policy 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.


                                 INDEMNIFICATION

The Bylaws of the 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 therin.

Insofar as  indemnification  for liability  arising under the  Securities Act of
1933 may be permitted for directors and officers or  controlling  persons of the
Company  pursuant to the foregoing,  or otherwise,  the 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 Company of expenses incurred or paid
by a director,  officer or  controlling  person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or  controlling  person in connection  with the Policies  issued by the Variable
Account,  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.

                       CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet

The Prospectus consisting of __ pages

Undertakings to File Reports

The signatures

Written  consents  of  the  following  persons:  Counsel,  Actuary,  Independent
Auditors

The following exhibits:


A.  Copies of all  exhibits  required by  paragraph A of  instructions  for
    Exhibits in Form N-8B-2.

     1.  Resolution of the Board of Directors of the Company (4)
     2.  Not Applicable
     3.  a.  Principal Underwriter Agreement (5)
     3.  b.  Selling Agreement
     4.  Not Applicable
     5.  Individual Variable Life Insurance Policy (3)
         i.  Individual Variable Life Insurance Policy Endorsements (4)
     6.  a. Copy of Articles of  Incorporation of the Company (4)
     6.  b. Copy of the Bylaws of the  Company (4)
     7.  Not Applicable
     8.  Not Applicable
     9.  a. Administrative  Agreement  (filed  confidentially) (2)
     9.  b. (i)    Form  of  Fund  Participation  Agreement between AIM Variable
                   Insurance Funds, Inc.,Allianz Life Insurance Company of North
                   America and NALAC Financial Plans LLC(6)
            (ii)   Form of Fund Participation  Agreement between  Alger American
                   Fund,  Allianz  Life Insurance Company of  North  America and
                   Fred Alger and Company(6)
            (iii)  Form  of   Fund  Participation  Agreement  between  USAllianz
                   Variable  Insurance  Products  Trust,  Allianz Life Insurance
                   Company of  North  America and  BISYS  Fund  Services Limited
                   Partnership(6)
    10.  Application for Individual Variable Life Insurance Policy (3)
    12.  Memorandum of Exchange Rights (1)
    13.  Powers of Attorney(6)
    27.  Not Applicable

B.  Opinion and Consent of Counsel

C.  Consent of Actuary

D.  Independent Auditors' Consent


(1) Incorporated by reference to Registrant's Form N-8 B-2.
(2) Incorporated by reference to Registrant's Pre-Effective Amendment No. 1
(3) Incorporated by reference to Registrant's Post-Effective Amendment No. 9 to
    Form S-6, File Nos. 33-11158 and 811-4965 as electronically filed on
    April 24, 1996.
(4) Incorporated by reference to Registrant's Post-Effective Amendment No. 11 to
    Form S-6, File Nos. 33-11158 and 811-4965 as electronically filed on
    April 30, 1997.
(5) Incorporated by reference to Registrant's Post-Effective Amendment No. 12 to
    Form S-6, File Nos. 33-11158 and 811-4965 as electronically filed on
    April 29, 1998.
(6) Incorporated by reference to Registrant's Post-Effective Amendment No. 16 to
    Form S-6, File Nos. 33-11158 and 811-4965 as electronically filed on
    November 12, 1999.




                                 REPRESENTATIONS


     1.  Registrant  represents that Section  (b)(13)(iii)(F) of Rule 6e-3(T) is
         being relied on.

     2.  Registrant  represents  that the level of the risk charge is within the
         range of industry practice for comparable flexible contracts.

     3.  Registrant  represents that it has analyzed the risk charge taking into
         consideration  such facts as current charge levels,  potential  adverse
         mortality,  the manner in which  charges  are  imposed,  the markets in
         which the Policy will be offered and anticipated sales and lapse rates.

         Registrant  also  represents  that a  memorandum  has been  prepared in
         connection  with the  analysis of the risk  charge as set forth  above.
         Registrant  undertakes to keep and make  available to the Commission on
         request a copy of the memorandum.

     4.  Registrant  represents  that the Company has concluded  that there is a
         reasonable likelihood that the distribution  financing  arrangements of
         the  Variable   Account   will   benefit  the   Variable   Account  and
         policyholders  and will keep and make  available to the  Commission  on
         request a memorandum setting forth the basis for this representation.

     5.  Registrant  represents  that the  Variable  Account will invest only in
         management  investment  companies which have undertaken to have a Board
         of  Directors,  a majority  of whom are not  interested  persons of the
         Company,  formulate  and  approve  any plan under Rule 12b_1 to finance
         distribution expenses.

<PAGE>

                                   SIGNATURES

As required by the  Securities  Act of 1933,  the  Registrant  certifies that it
meets all of the requirements for effectiveness of this  Registration  Statement
pursuant to Rule 485(b) under the  Securities Act of 1933 and it has duly caused
this  Registration  Statement  to be  signed on its  behalf  by the  undersigned
thereunto duly authorized in the City of Minneapolis and State of Minnesota,  on
this 17th day of April, 2000.


                                          ALLIANZ LIFE
                                          VARIABLE ACCOUNT A
                                          (Registrant)



                                     By:  ALLIANZ LIFE INSURANCE COMPANY
                                          OF NORTH AMERICA
                                          (Depositor)




                                     By:  /S/ MICHAEL T. WESTERMEYER
                                          ---------------------------
                                          Michael T. Westermeyer



Attest:/S/ STEVEN A. FRIEDMAN
       ------------------------





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.
<TABLE>
<CAPTION>

Signature and Title
<S>                        <C>                                     <C>
Lowell C. Anderson*        Chairman of the Board                   04/17/2000
Lowell C. Anderson                                                     Date

Robert W. MacDonald*       Director and                            04/17/2000
Robert W. MacDonald        Chief Executive Officer                     Date

Margery G. Hughes*         President and                           04/17/2000
Margery G. Hughes          Chief Administrative Officer                Date

Mark A. Zesbaugh*          Senior Vice President and               04/17/2000
Mark A. Zesbaugh           Chief Financial Officer                     Date

Herbert F. Hansmeyer*      Director                                04/17/2000
Herbert F. Hansmeyer                                                   Date

Michael P. Sullivan*       Director                                04/17/2000
Michael P. Sullivan                                                    Date

Dr. Gerhard G. Rupprecht*  Director                                04/17/2000
Dr. Gerhard G. Rupprecht                                               Date

Rev. Dennis J. Dease*      Director                                04/17/2000
Rev. Dennis J. Dease                                                   Date

James R. Campbell*         Director                                04/17/2000
James R. Campbell                                                      Date

Robert M. Kimmitt*         Director                                04/17/2000
Robert M. Kimmitt                                                      Date

</TABLE>
                              *By Power of Attorney


                               By:/S/ MICHAEL T. WESTERMEYER
                                  --------------------------------
                                      Michael T. Westermeyer
                                        Attorney-in-Fact







<PAGE>

                                    EXHIBITS

                                       TO

                     POST-EFFECTIVE AMENDMENT NO.    17

                                       TO

                                    FORM S-6

                         ALLIANZ LIFE VARIABLE ACCOUNT A

                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA






                                INDEX TO EXHIBITS



Exhibit                                                              Page
-------                                                              ----

EX-99.A3.b.     Selling Agreement

EX-99.B         Opinion and Consent of Counsel

EX-99.C         Consent of Actuary

EX-99.D         Independent Auditors' Consent