SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[ X ] Annual Report  Pursuant to Section 13 or 15(d) of the Securities  Exchange
      Act of 1934

For the fiscal year ended December 31, 1999.

Commission file number 33-87272,  333-51353,  333-28765,  333-28681,  333-28743,
                       333-51949, 333-65009, 333-66745

                     GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                           41-0991508
------------------------------                    ------------------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification No.)

   1475 Dunwoody Drive
 West Chester, Pennsylvania                                  19380-1478
------------------------------                    ------------------------------
   (Address of principal                                     (Zip Code)
     executive offices)

Registrant's Telephone Number, including area code: (610) 425-3400
                                                    --------------

Securities Registered Pursuant to Section 12(b) of the Act:

     TITLE OF EACH CLASS           NAME OF EACH EXCHANGE ON WHICH REGISTERED
           N/A
--------------------------------------------------------------------------------

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ].

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X].

As of March 27, 2000,  250,000 shares of Common Stock, $10 Par Value, are issued
and outstanding.

NOTE:  WHEREAS GOLDEN  AMERICAN LIFE INSURANCE  COMPANY MEETS THE CONDITIONS SET
FORTH IN GENERAL  INSTRUCTION I (1)(a) AND (b) OF FORM 10-K,  THIS FORM IS BEING
FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION I (2).

DOCUMENTS INCORPORATED BY REFERENCE

See exhibit index - page 46.                                        Page 1 of 53

<PAGE>


PART I
ITEM 1. BUSINESS.

OVERVIEW

Golden  American Life  Insurance  Company  ("Golden  American"),  a wholly owned
subsidiary  of  Equitable  of Iowa  Companies,  Inc.  ("EIC"),  is a stock  life
insurance company  organized under the laws of the State of Delaware.  EIC is an
indirect wholly owned subsidiary of ING Groep N.V.  ("ING"),  a global financial
services  holding  company  based in The  Netherlands.  Golden  American  offers
variable  insurance products and is authorized to do business in the District of
Columbia and all states  except New York.  Golden  American's  wholly owned life
insurance  subsidiary,  First Golden American Life Insurance Company of New York
("First Golden," and collectively  with Golden American,  the  "Companies"),  is
licensed as a life  insurance  company  under the laws of the States of New York
and Delaware.  See Note 10 of the financial  statements for further  information
regarding related party transactions.

PRODUCTS

The Companies offer a portfolio of variable  insurance products designed to meet
customer needs for  tax-advantaged  saving for  retirement  and protection  from
death. The Companies believe longer life expectancies,  an aging population, and
growing  concern over the  stability  and  availability  of the Social  Security
system have made retirement  planning a priority for many Americans.  The target
market for all  products is consumers  and  corporations  throughout  the United
States.

Variable  insurance  products  currently  offered by the  Companies  include six
variable annuity products. In August 1999, Golden American discontinued offering
variable life products.  Variable  annuities are long-term  savings  vehicles in
which contractowner  premiums (purchase payments) are recorded and maintained in
a fixed account or variable  separate  accounts  established as registered  unit
investment  trusts.  At December  31, 1999,  funds on deposit in the  Companies'
variable  insurance product separate and fixed accounts totaled $7.6 billion and
$1.0 billion,  respectively.  Variable  insurance products provide the Companies
with fee based  revenues  including  charges for  mortality  and  expense  risk,
contract  administration,  and surrender  charges.  In addition,  some contracts
provide for a  distribution  fee collected  for a limited  number of years after
each premium deposit.

MARKETING AND DISTRIBUTION

The Companies continued to expand distribution systems during 1999.  Broad-based
distribution  networks  are key to  realizing  a  growing  share  of the  wealth
accumulation marketplace.  The principal distributors of the Companies' variable
insurance  products  include  national and regional  wirehouses,  life insurance
companies  with captive agency sales forces,  banks,  and  independent  National
Association of Securities Dealers,  Inc. ("NASD") firms with licensed registered
representatives.  The Companies plan to establish new relationships and increase
penetration  with key  distributors in existing  channels.  In addition,  growth
opportunities exist through utilizing the ING broker/dealer network.

BUSINESS ENVIRONMENT

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


                                       2
<PAGE>


REGULATION

The  Companies'  insurance  operations  are  conducted  in  a  highly  regulated
environment.  Both Golden American and First Golden are subject to the insurance
laws of the state in which they are organized and of the other  jurisdictions in
which they  transact  business.  The primary  regulator  of the Golden  American
insurance operations is the Commissioner of Insurance for the State of Delaware.
First Golden is subject to the regulation of the Superintendent of Insurance for
the State of New York.  The Companies are also  regulated by the  Securities and
Exchange  Commission  and the  NASD.  See Item 7,  Management's  Discussion  and
Analysis of Results of Operations.

ITEM 2. PROPERTIES.

During the first quarter of 1999, Golden  American's  operations were moved to a
new site in West Chester,  Pennsylvania.  During 1999,  Golden American occupied
105,000 square feet of leased space; its affiliate  occupies 20,000 square feet.
Previously,   Golden  American's  business  operations  were  housed  in  leased
facilities   located  in   Wilmington,   Delaware  and  leased   facilities   in
Pennsylvania.  First  Golden's  business  operations  are  housed  in  a  leased
facilities in New York,  New York.  Property and equipment  primarily  represent
leasehold  improvements,   office  furniture,   certain  other  equipment,   and
capitalized  computer  software and are not  considered to be significant to the
Companies' overall operations.  Property and equipment are reported at cost less
allowances for depreciation.

ITEM 3. LEGAL PROCEEDINGS.

The  Companies,  like  other  insurance  companies,  may be named  or  otherwise
involved in lawsuits, including class action lawsuits and arbitrations.  In some
class action and other actions involving insurers, substantial damages have been
sought  and/or  material  settlement  or award  payments  have  been  made.  The
Companies  currently believe no pending or threatened  lawsuits or actions exist
that are reasonably likely to have a material adverse impact on the Companies.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Information called for by this item is omitted pursuant to General Instruction I
(2) (c) of Form 10-K.

PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Registrant is a wholly owned subsidiary of Equitable of Iowa Companies, Inc.
("EIC" or the "Parent").  There is no public trading market for the Registrant's
common stock.

Under the  provisions  of the insurance  laws of certain  states in which Golden
American is licensed to sell insurance products,  Golden American is required to
maintain a minimum  total  statutory-basis  capital  and  surplus of at least $5
million.  The  ability  of Golden  American  to pay  dividends  to the Parent is
restricted.  Prior approval of insurance regulatory  authorities is required for
payment of dividends to the  stockholder  which exceed an annual  limit.  During
2000,  Golden American cannot pay dividends to the Parent without prior approval
of statutory  authorities.  Golden  American did not pay common stock  dividends
during 1999, 1998, or 1997.

First Golden is required to maintain a minimum total statutory-basis capital and
surplus of no less than $6 million under the provisions of the insurance laws of
the  State  of New  York in which it is  presently  licensed  to sell  insurance
products.  Under the  provisions of the insurance laws of the State of New York,
First  Golden  cannot  distribute  any  dividends  to  its  stockholder,  Golden
American,  unless a notice of its intent to declare a dividend and the amount of
the  dividend  has been filed with the New York  Insurance  Department  at least
thirty days in advance of the proposed declaration. If the Superintendent of the
New York Insurance Department finds the financial condition of First Golden does
not warrant the distribution, the Superintendent may disapprove the distribution
by giving  written  notice to First Golden  within thirty days after the filing.
First Golden did not pay common stock dividends during 1999, 1998, or 1997.


                                       3
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA.

Information called for by this item is omitted pursuant to General Instruction I
(2) (a) of Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.

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

RESULTS OF OPERATIONS
---------------------

MERGER

On October 23, 1997,  Equitable of Iowa  Companies'  ("Equitable")  shareholders
approved an Agreement and Plan of Merger ("Merger Agreement") dated July 7, 1997
among Equitable,  PFHI Holdings,  Inc. ("PFHI"),  and ING Groep N.V. ("ING"). On
October 24, 1997, PFHI, a Delaware corporation,  acquired all of the outstanding
capital stock of Equitable  according to the Merger Agreement.  PFHI is a wholly
owned  subsidiary of ING, a global  financial  services holding company based in
The  Netherlands.  Equitable,  an  Iowa  corporation,  in  turn  owned  all  the
outstanding   capital  stock  of  Equitable  Life  Insurance   Company  of  Iowa
("Equitable Life") and Golden American and their wholly owned  subsidiaries.  In
addition,  Equitable  owned all the  outstanding  capital stock of Locust Street
Securities,  Inc., Equitable Investment Services, Inc. (subsequently dissolved),
Directed  Services,  Inc.  ("DSI"),  Equitable of Iowa Companies  Capital Trust,
Equitable of Iowa Companies  Capital Trust II, and Equitable of Iowa  Securities
Network, Inc.  (subsequently  renamed ING Funds Distributor,  Inc.). In exchange
for the outstanding capital stock of Equitable,  ING paid total consideration of
approximately  $2.1  billion in cash and stock and  assumed  approximately  $400
million in debt.  As a result of this  transaction,  Equitable  was merged  into
PFHI, which was simultaneously renamed Equitable of Iowa Companies,  Inc. ("EIC"
or "Parent"), a Delaware corporation.

For financial statement purposes, the change in control of the Companies through
the ING merger was accounted for as a purchase  effective October 25, 1997. This
merger resulted in a new basis of accounting reflecting estimated fair values of
assets and liabilities at the merger date. As a result, the Companies' financial
statements  for periods after October 24, 1997 are presented on the  Post-Merger
new basis of accounting.

The purchase price was allocated to EIC and its subsidiaries with $227.6 million
allocated to the  Companies.  Goodwill of $1.4 billion was  established  for the
excess of the merger cost over the fair value of the assets and  liabilities  of
EIC with $151.1 million attributed to the Companies. Goodwill resulting from the
merger is being amortized over 40 years on a straight-line  basis.  The carrying
value will be reviewed periodically for any indication of impairment in value.

CHANGE IN CONTROL - ACQUISITION

On August 13, 1996,  Equitable acquired all of the outstanding  capital stock of
BT Variable,  Inc. ("BT  Variable")  and its wholly owned  subsidiaries,  Golden
American and DSI. After the acquisition,  the BT Variable, Inc. name was changed
to EIC Variable,  Inc. On April 30, 1997, EIC Variable,  Inc. was liquidated and
its investments in Golden American and DSI were transferred to Equitable,  while
the remainder of its net assets were contributed to Golden American. On December
30, 1997, EIC Variable, Inc. was dissolved.

For  financial  statement  purposes,  the change in  control of Golden  American
through the acquisition of BT Variable was accounted for as a purchase effective
August  14,  1996.  This  acquisition  resulted  in a new  basis  of  accounting
reflecting  estimated fair values of assets and  liabilities at the  acquisition
date. As a result, the Companies'  financial  statements included for the period
January 1, 1997 through  October 24, 1997 are presented on the  Post-Acquisition
basis of accounting.


                                       4
<PAGE>


The purchase price was allocated to the three companies purchased - BT Variable,
DSI,  and  Golden  American.  The  allocation  of the  purchase  price to Golden
American  was  approximately  $139.9  million.  Goodwill  of $41.1  million  was
established  for the excess of the  acquisition  cost over the fair value of the
assets and  liabilities  and  attributed to Golden  American.  At June 30, 1997,
goodwill was increased by $1.8 million,  due to the adjustment of the value of a
receivable  existing at the acquisition  date.  Before the ING merger,  goodwill
resulting  from  the  acquisition  was  being  amortized  over  25  years  on  a
straight-line basis.

PREMIUMS
<TABLE>
<CAPTION>

                                                                               Percentage         Dollar
For the Year Ended December 31                                     1999          Change           Change          1998
-----------------------------------------------------------------------------------------------------------------------------
                                                                                   (DOLLARS IN MILLIONS)

<S>                                                               <C>               <C>            <C>            <C>
Variable annuity premiums:
   Separate account........................................       $2,511.7           71.9%         $1,050.5       $1,461.2
   Fixed account...........................................          770.7           30.9             182.0          588.7
                                                               --------------------------------------------------------------
Total variable annuity premiums............................        3,282.4           60.1           1,232.5        2,049.9
Variable life premiums.....................................            8.6          (37.8)             (5.2)          13.8
                                                               --------------------------------------------------------------
Total premiums.............................................       $3,291.0           59.5%         $1,227.3       $2,063.7
                                                               ==============================================================
</TABLE>

For the Companies'  variable  insurance  contracts,  premiums  collected are not
reported as  revenues,  but as deposits to insurance  liabilities.  Revenues for
these  products are  recognized  over time in the form of investment  spread and
product charges.

Variable annuity  separate  account premiums  increased 71.9% in 1999. The fixed
account portion of the Companies'  variable annuity premiums  increased 30.9% in
1999. These increases resulted from increased sales of the Premium Plus variable
annuity product.

Variable life premiums  decreased 37.8% in 1999. In August 1999, Golden American
discontinued offering variable life products.

Premiums,  net of  reinsurance,  for  variable  products  from  two  significant
broker/dealers  each  having at least ten  percent  of total  sales for the year
ended December 31, 1999 totaled $918.4 million,  or 28% of premiums  compared to
$528.9 million,  or 26%, from two significant  broker/dealers for the year ended
December 31, 1998.

REVENUES
<TABLE>
<CAPTION>

                                                                               Percentage          Dollar
For the Year Ended December 31                                       1999        Change            Change           1998
------------------------------------------------------------------------------------------------------------------------------
                                                                                   (DOLLARS IN MILLIONS)

<S>                                                                 <C>             <C>               <C>           <C>
Annuity and interest sensitive life product charges........          $82.9          112.0%            $43.8         $39.1
Management fee revenue.....................................           10.1          112.5               5.3           4.8
Net investment income......................................           59.2           39.3              16.7          42.5
Realized gains (losses) on investments.....................           (2.9)          96.1              (1.4)         (1.5)
Other income...............................................           10.8           94.4               5.2           5.6
                                                               ---------------------------------------------------------------
                                                                    $160.1           77.0%            $69.6         $90.5
                                                               ===============================================================
</TABLE>

Total revenues  increased  77.0%,  or $69.6 million,  to $160.1 million in 1999.
Annuity and interest  sensitive life product charges  increased 112.0%, or $43.8
million, to $82.9 million in 1999,  primarily due to additional fees earned from
the increasing block of business in the separate accounts.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid to  Golden  American  for  these  services,  which is  calculated  as a
percentage  of  average  assets in the  variable  separate  accounts,  was $10.1
million for 1999 and $4.8 million for 1998.


                                       5
<PAGE>


Net investment  income  increased  39.3%, or $16.7 million,  to $59.2 million in
1999 from $42.5 million in 1998, due to growth in invested  assets from December
31, 1998, increasing interest rates, and a relative increase in below investment
grade investments.

During 1999, the Company had net realized losses on investments of $2.9 million,
which  includes a $1.6  million  write down of two  impaired  fixed  maturities,
compared to net  realized  losses on  investments  of $1.5 million in 1998 which
included a $1.0 million write down of two impaired fixed maturities.

Other income  increased  $5.2 million to $10.8 million in 1999, due primarily to
income  received under a modified  coinsurance  agreement  with an  unaffiliated
reinsurer.

EXPENSES
<TABLE>
<CAPTION>

                                                                               Percentage         Dollar
For the Year Ended December 31                                      1999         Change           Change            1998
-------------------------------------------------------------------------------------------------------------------------------
                                                                                   (DOLLARS IN MILLIONS)

<S>                                                                 <C>             <C>              <C>           <C>
Insurance benefits and expenses:
   Annuity and interest sensitive life benefits:
     Interest credited to account balances................          $175.9           85.4%            $81.0         $94.9
     Benefit claims incurred in excess of account
       balances...........................................             6.3          200.2               4.2           2.1
   Underwriting, acquisition, and insurance expenses:
     Commissions..........................................           188.4           55.5              67.2         121.2
     General expenses.....................................            60.2           60.2              22.6          37.6
     Insurance taxes, state licenses, and fees............             4.0           (4.0)             (0.1)          4.1
     Policy acquisition costs deferred....................          (346.4)          75.1            (148.6)       (197.8)
     Amortization:
       Deferred policy acquisition costs..................            33.1          543.3              28.0           5.1
       Value of purchased insurance in force..............             6.2           32.0               1.5           4.7
       Goodwill...........................................             3.8           --                --             3.8
                                                               ----------------------------------------------------------------
                                                                    $131.5           73.7%            $55.8         $75.7
                                                               ================================================================
</TABLE>

Total insurance benefits and expenses increased 73.7%, or $55.8 million, in 1999
from $75.7  million in 1998.  Interest  credited to account  balances  increased
85.4%, or $81.0 million,  in 1999 from $94.9 million in 1998. The premium credit
on the Premium Plus variable  annuity product  increased $69.3 million to $123.8
million at December 31, 1999. The bonus interest on the fixed account  increased
$3.0 million to $10.9 million at December 31, 1999.  The  remaining  increase in
interest  credited  relates  to  higher  account  balances  associated  with the
Companies' fixed account options within the variable products.

Commissions  increased  55.5%, or $67.2 million,  in 1999 from $121.2 million in
1998. Insurance taxes, state licenses, and fees decreased 4.0%, or $0.1 million,
in 1999 from $4.1 million in 1998.  Changes in commissions and insurance  taxes,
state  licenses,  and fees are  generally  related  to  changes in the level and
composition of variable product sales. Insurance taxes, state licenses, and fees
are impacted by several other  factors,  which include an increase in FICA taxes
primarily  due to bonuses and expenses for the  triennial  insurance  department
examination  of Golden  American,  which were  offset by a  decrease  in 1999 of
guaranty fund assessments  paid. Most costs incurred as the result of sales have
been deferred, thus having very little impact on current earnings.

General expenses  increased 60.2%, or $22.6 million,  in 1999 from $37.6 million
in 1998.  Management expects general expenses to continue to increase in 2000 as
a result of the  emphasis on  expanding  the  salaried  wholesaler  distribution
network and the growth in sales.  The Companies use a network of  wholesalers to
distribute products, and the salaries and sales bonuses of these wholesalers are
included in general expenses. The portion of these salaries and related expenses
that varies  directly  with  production  levels is deferred  thus having  little
impact on current  earnings.  The  increase in general  expenses  was  partially
offset by  reimbursements  received from DSI,  Equitable  Life, ING Mutual Funds
Management Co., LLC, an affiliate, Security Life of Denver Insurance Company, an
affiliate,  Southland Life Insurance  Company,  an affiliate,  and United Life &
Annuity Insurance Company,  an affiliate,  for certain advisory,  computer,  and
other resources and services provided by Golden American.


                                       6
<PAGE>


The Companies'  previous balances of deferred policy acquisition costs ("DPAC"),
value of purchased  insurance in force  ("VPIF"),  and unearned  revenue reserve
were  eliminated  and a  new  asset  of  $44.3  million  representing  VPIF  was
established for all policies in force at the merger date.  During 1999, VPIF was
adjusted  to increase  amortization  by $0.7  million to reflect  changes in the
assumptions related to the timing of estimated gross profits.  During 1998, VPIF
decreased  $2.7 million to adjust the value of other  receivables  and increased
$0.2 million as a result of an adjustment to the merger costs. During 1998, VPIF
was adjusted to reduce  amortization  by $0.2 million to reflect  changes in the
assumptions related to the timing of future gross profits.  Amortization of DPAC
increased $28.0 million,  or 543.3%, in 1999. This increase resulted from growth
in policy acquisition costs deferred from $197.8 million at December 31, 1998 to
$346.4 million at December 31, 1999, which was generated by expenses  associated
with the large sales  volume  experienced  since  December  31,  1998.  Based on
current conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF as
of December 31, 1999 is $4.0 million in 2000, $3.6 million in 2001, $3.3 million
in 2002, $2.8 million in 2003, and $2.3 million in 2004. Actual amortization may
vary based upon changes in assumptions and experience.

Interest expense increased 102.6%, or $4.5 million, in 1999 from $4.4 million in
1998.  Interest  expense on a $25 million  surplus note issued December 1996 and
expiring  December  2026 was $2.1 million for the year ended  December 31, 1999,
unchanged  from the same  period  of 1998.  Interest  expense  on a $60  million
surplus note issued in December 1998 and expiring December 2028 was $4.3 million
for the year ended December 31, 1999.  Interest expense on a $75 million surplus
note, issued September 30, 1999 and expiring September 29, 2029 was $1.5 million
for the year ended December 31, 1999.  Golden American also paid $0.8 million in
1999 and $1.8  million in 1998 to ING America  Insurance  Holdings,  Inc.  ("ING
AIH") for  interest  on a  reciprocal  loan  agreement.  Interest  expense  on a
revolving  note payable with  SunTrust  Bank,  Atlanta was $0.2 million and $0.3
million  for the  years  ended  December  31,  1999 and 1998,  respectively.  In
addition, Golden American incurred interest expense of $0.2 million in 1998 on a
line of credit with Equitable.

INCOME

Net income for 1999 was $11.2  million,  an increase of $6.1  million  from $5.1
million for 1998.

Comprehensive  income for 1999 was $3.0 million, a decrease of $0.9 million from
comprehensive income of $3.9 million for 1998.

FINANCIAL CONDITION
-------------------

RATINGS

Currently,  the Companies'  ratings are A+ by A. M. Best Company,  AAA by Duff &
Phelps  Credit  Rating  Company,  and AA+ by Standard & Poor's  Rating  Services
("Standard & Poor's").

INVESTMENTS

The  financial  statement  carrying  value  and  amortized  cost  basis  of  the
Companies' total investments grew 15.5% and 17.5%, respectively, in 1999. All of
the  Companies'  investments,  other than  mortgage  loans on real  estate,  are
carried at fair value in the Companies' financial statements.  Therefore, growth
in the carrying value of the Companies'  investment portfolio was due to changes
in  unrealized  appreciation  and  depreciation  of fixed  maturities as well as
growth in the cost  basis of these  securities.  Growth in the cost basis of the
Companies'  investment  portfolio  resulted from the investment of premiums from
the sale of the  Companies'  fixed account  options.  The  Companies  manage the
growth of insurance  operations in order to maintain adequate capital ratios. To
support the fixed account options of the Companies' variable insurance products,
cash flow was invested primarily in fixed maturities and short-term investments.

At  December  31,  1999,  the  Companies  investments  had a yield of 6.6%.  The
Companies estimate the total investment portfolio, excluding policy loans, had a
fair value  approximately equal to 97.6% of amortized cost value at December 31,
1999.


                                       7
<PAGE>


FIXED MATURITIES:  At December 31, 1999, the Companies had fixed maturities with
an  amortized  cost of $858.1  million  and an  estimated  fair  value of $835.3
million.  The Companies  classify 100% of securities as available for sale.  Net
unrealized  depreciation  of fixed  maturities of $22.8 million was comprised of
gross appreciation of $0.9 million and gross depreciation of $23.7 million.  Net
unrealized holding losses on these securities, net of adjustments to VPIF, DPAC,
and deferred income taxes of $7.0 million were included in stockholder's  equity
at December 31, 1999.

The  individual  securities in the  Companies'  fixed  maturities  portfolio (at
amortized cost) include  investment grade securities,  which include  securities
issued by the U.S. government,  its agencies, and corporations that are rated at
least A- by Standard & Poor's ($558.0 million or 65.0%),  that are rated BBB+ to
BBB- by Standard & Poor's ($123.5 million or 14.4%),  and below investment grade
securities, which are securities issued by corporations that are rated BB+ to B-
by Standard & Poor's ($64.6 million or 7.5%). Securities not rated by Standard &
Poor's had a National Association of Insurance  Commissioners ("NAIC") rating of
1, 2, 3, 4, or 5 ($112.0  million  or  13.1%).  The  Companies'  fixed  maturity
investment  portfolio had a combined yield at amortized cost of 6.6% at December
31, 1999.

Fixed  maturities rated BBB+ to BBB- may have  speculative  characteristics  and
changes in economic conditions or other circumstances are more likely to lead to
a weakened  capacity of the issuer to make principal and interest  payments than
is the case with higher rated fixed maturities.

At  December  31,  1999,  the  amortized  cost  value  of the  Companies'  total
investment  in below  investment  grade  securities,  excluding  mortgage-backed
securities,  was $72.3 million, or 6.9%, of the Companies' investment portfolio.
The Companies intend to purchase  additional below investment grade  securities,
but do not expect the percentage of the portfolio invested in such securities to
exceed 10% of the  investment  portfolio.  At December  31,  1999,  the yield at
amortized  cost on the  Companies'  below  investment  grade  portfolio was 7.8%
compared to 6.5% for the Companies'  investment  grade corporate bond portfolio.
The Companies  estimate the fair value of the below  investment  grade portfolio
was $69.1 million, or 95.5% of amortized cost value, at December 31, 1999.

Below investment grade securities have different characteristics than investment
grade  corporate debt  securities.  Risk of loss upon default by the borrower is
significantly  greater with respect to below  investment  grade  securities than
with other corporate debt  securities.  Below  investment  grade  securities are
generally unsecured and are often subordinated to other creditors of the issuer.
Also, issuers of below investment grade securities usually have higher levels of
debt and are more sensitive to adverse economic conditions,  such as a recession
or increasing  interest rates, than are investment grade issuers.  The Companies
attempt to reduce the overall risk in the below investment  grade portfolio,  as
in all investments,  through careful credit analysis,  strict  investment policy
guidelines, and diversification by company and by industry.

The Companies analyze the investment portfolio, including below investment grade
securities,  at least quarterly in order to determine if the Companies'  ability
to realize the carrying value on any investment has been impaired.  For debt and
equity  securities,  if  impairment  in value  is  determined  to be other  than
temporary  (i.e. if it is probable the  Companies  will be unable to collect all
amounts due according to the contractual terms of the security),  the cost basis
of the impaired  security is written down to fair value,  which  becomes the new
cost basis.  The amount of the  write-down is included in earnings as a realized
loss.  Future  events may occur,  or additional  or updated  information  may be
received,  which  may  necessitate  future  write-downs  of  securities  in  the
Companies'  portfolio.   Significant   write-downs  in  the  carrying  value  of
investments  could  materially  adversely  affect the  Companies'  net income in
future periods.

In 1999,  fixed  maturities  designated  as  available  for sale with a combined
amortized cost of $221.8 million were sold,  called, or repaid by their issuers.
In total,  net  pre-tax  losses  from  sales,  calls,  and  repayments  of fixed
maturities amounted to $1.3 million in 1999,  excluding the $1.6 million pre-tax
loss on the write-down of two bonds in 1999.

During the fourth quarter of 1998, Golden American  determined that the carrying
value of two bonds exceeded their  estimated net realizable  value. As a result,
at December  31,  1998,  Golden  American  recognized  a total  pre-tax  loss of
approximately  $1.0 million to reduce the  carrying  value of the bonds to their
combined net  realizable  value of $2.9  million.  During the second  quarter of
1999, further information was received regarding these bonds and Golden American


                                       8
<PAGE>


determined that the carrying value of the two bonds exceeded their estimated net
realizable value. As a result,  at June 30, 1999,  Golden American  recognized a
total pre-tax loss of approximately  $1.6 million to further reduce the carrying
value of the bonds to their combined net realizable value of $1.1 million.

EQUITY SECURITIES: Equity securities represent 1.4% of the Companies' investment
portfolio.  At December 31, 1999, the Companies  owned equity  securities with a
cost of  $15.0  million  and an  estimated  fair  value of  $17.3  million.  Net
unrealized  appreciation  of equity  securities was comprised  entirely of gross
appreciation  of $2.3 million.  Equity  securities  are  primarily  comprised of
investments in shares of the mutual funds  underlying the Companies'  registered
separate accounts.

MORTGAGE LOANS ON REAL ESTATE:  Mortgage loans on real estate  represent 9.5% of
the Companies'  investment  portfolio.  Mortgages  outstanding at amortized cost
were $100.1  million at December 31, 1999 with an estimated  fair value of $95.5
million.  The  Companies'  mortgage  loan  portfolio  includes  58 loans with an
average size of $1.7  million and average  seasoning of 0.7 years if weighted by
the number of loans. The Companies'  mortgage loans on real estate are typically
secured  by  occupied  buildings  in  major   metropolitan   locations  and  not
speculative  developments and are diversified by type of property and geographic
location.  Mortgage  loans on real  estate have been  analyzed  by  geographical
location with  concentrations by state identified as California (12% in 1999 and
1998),  Utah (10% in 1999, 11% in 1998),  and Georgia (9% in 1999, 10% in 1998).
There are no other  concentrations of mortgage loans on real estate in any state
exceeding  ten percent at December  31,  1999 and 1998.  Mortgage  loans on real
estate  have  also  been   analyzed   by   collateral   type  with   significant
concentrations  identified  in  office  buildings  (34% in 1999,  36% in  1998),
industrial buildings (33% in 1999, 32% in 1998), retail facilities (19% in 1999,
20% in 1998),  and  multi-family  apartments  (10% in 1999 and 8% in  1998).  At
December 31, 1999, the yield on the Companies' mortgage loan portfolio was 7.3%.

At December 31, 1999, no mortgage loan on real estate was  delinquent by 90 days
or more. The Companies' loan  investment  strategy is consistent with other life
insurance  subsidiaries of ING in the United States. The insurance  subsidiaries
of EIC have  experienced a historically  low default rate in their mortgage loan
portfolios.

OTHER ASSETS

Accrued investment income increased $1.6 million during 1999, due to an increase
in the overall size of the portfolio  resulting  from the investment of premiums
allocated to the fixed  account  options of the  Companies'  variable  insurance
products.

DPAC  represents  certain  deferred  costs of acquiring new insurance  business,
principally  first year commissions and interest  bonuses,  premium credit,  and
other expenses  related to the production of new business after the merger.  The
Companies'  previous  balances of DPAC and VPIF were eliminated as of the merger
date, and an asset  representing  VPIF was established for all policies in force
at the merger date.  VPIF is amortized into income in proportion to the expected
gross  profits  of in  force  acquired  business  in a  manner  similar  to DPAC
amortization.  Any expenses which vary directly with the sales of the Companies'
products are deferred and  amortized.  At December 31, 1999,  the  Companies had
DPAC and VPIF balances of $529.0 million and $31.7 million, respectively. During
1998,  VPIF decreased $2.7 million to adjust the value of other  receivables and
increased $0.2 million as a result of an adjustment to the merger costs.

Property and equipment  increased  $6.5 million,  or 89.0%,  during 1999, due to
leasehold improvements, the purchase of furniture and other equipment for Golden
American's  new  offices  in  West  Chester,  Pennsylvania,  and  growth  in the
business.

Goodwill  totaling  $151.1 million,  representing  the excess of the acquisition
cost over the fair value of net assets  acquired,  was established at the merger
date.  Accumulated  amortization  of goodwill  as of December  31, 1999 was $8.2
million.

Other  assets  increased  $1.8  million  during  1999,  due  to  increases  in a
receivable from the separate account and accounts receivable.


                                       9
<PAGE>


At December 31, 1999, the Companies had $7.6 billion of separate  account assets
compared to $3.4 billion at December 31, 1998. The increase in separate  account
assets  resulted from market  appreciation,  increased  transfer  activity,  and
growth in sales of the Companies' variable annuity products, net of redemptions.

At December 31, 1999,  the Companies  had total assets of $9.4 billion,  a 97.6%
increase from December 31, 1998.

LIABILITIES

Future  policy  benefits  for  annuity  and  interest  sensitive  life  products
increased $152.6 million, or 17.3%, to $1.0 billion reflecting premium growth in
the Companies' fixed account options of the variable products,  net of transfers
to the separate accounts. Market appreciation,  increased transfer activity, and
premiums,  net of  redemptions,  accounted  for the  $4.2  billion,  or  122.7%,
increase in separate account liabilities to $7.6 billion at December 31, 1999.

On December 30, 1999, Golden American issued a $50 million,  8.179% surplus note
to Equitable Life, which matures on December 29, 2029.

On December 8, 1999,  Golden American issued a $35 million,  7.979% surplus note
to First  Columbine  Life  Insurance  Company,  an  affiliate,  which matures on
December 7, 2029.

On September 30, 1999, Golden American issued a $75 million,  7.75% surplus note
to ING AIH,  which matures on September 29, 2029. On December 30, 1999,  ING AIH
assigned the surplus note to Equitable Life.

On December 30, 1998,  Golden American issued a $60 million,  7.25% surplus note
to Equitable Life, which matures on December 29, 2028.

On December 17, 1996,  Golden American issued a $25 million,  8.25% surplus note
to Equitable, which matures on December 17, 2026. As a result of the merger, the
surplus note is now payable to EIC.

Other  liabilities  increased  $21.7  million from $34.7 million at December 31,
1998,  due  primarily  to increases in  remittances  to be applied,  outstanding
checks, accrued interest payable, and pension liability.

In conjunction  with the volume of variable  annuity sales, the Companies' total
liabilities  increased  $4.5  billion,  or 102.6%,  during 1999 and totaled $8.9
billion at December 31, 1999.

The  effects  of  inflation  and  changing  prices on the  Companies'  financial
position  are not  material  since  insurance  assets and  liabilities  are both
primarily monetary and remain in balance. An effect of inflation, which has been
low in recent years, is a decline in  stockholder's  equity when monetary assets
exceed monetary liabilities.

STOCKHOLDER'S EQUITY

Additional paid-in capital increased $121.0 million, or 34.8%, from December 31,
1998 to $468.6 million at December 31, 1999, due to capital  contributions  from
the Parent.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Liquidity is the ability of the Companies to generate  sufficient  cash flows to
meet the cash requirements of operating,  investing,  and financing  activities.
The  Companies'  principal  sources of cash are  variable  annuity  premiums and
product charges,  investment income,  maturing  investments,  proceeds from debt
issuance,  and capital  contributions made by the Parent.  Primary uses of these
funds are payments of commissions and operating  expenses,  interest and premium
credits,  investment  purchases,  repayment of debt, as well as withdrawals  and
surrenders.

Net cash used in  operating  activities  was $73.4  million in 1999  compared to
$63.9 million in 1998. The Companies have  predominantly had negative cash flows
from  operating  activities  since  Golden  American  started  issuing  variable
insurance products in 1989. These negative operating cash flows result primarily
from the funding of commissions  and other  deferrable  expenses  related to the
continued growth in the variable annuity products.


                                       10
<PAGE>


Net cash used in investing activities was $177.5 million during 1999 as compared
to $390.0  million in 1998.  This  decrease  is  primarily  due to  greater  net
purchases of fixed  maturities,  equity  securities,  and mortgage loans on real
estate  during 1998 than in 1999.  Net  purchases  of fixed  maturities  reached
$124.0  million in 1999 versus $331.3 million in 1998. Net purchases of mortgage
loans on real estate  declined to $3.1 million  from $12.6  million in the prior
year.

Net cash  provided by financing  activities  was $258.6  million  during 1999 as
compared to $439.5  million during the prior year. In 1999, net cash provided by
financing  activities was positively  impacted by net fixed account  deposits of
$626.5 million compared to $520.8 million in 1998 and by a $6.7 million increase
in net  borrowings  in 1999  compared to 1998.  This  increase was offset by net
reallocations  to the Companies'  separate  accounts,  which increased to $650.3
million from $239.7  million during the prior year. In 1999,  another  important
source of cash provided by financing  activities  was $121.0  million in capital
contributions from the Parent compared to $103.8 million in 1998. Another source
of cash  provided by  financing  activities  during  1999 was $160.0  million in
proceeds from surplus notes compared to $60.0 million in 1998.

The Companies'  liquidity position is managed by maintaining  adequate levels of
liquid assets,  such as cash or cash  equivalents  and  short-term  investments.
Additional sources of liquidity include borrowing  facilities to meet short-term
cash  requirements.  Golden American  maintains a $65.0 million  reciprocal loan
agreement  with ING AIH,  which expires on December 31, 2007.  In addition,  the
Companies  have  established  an $85.0  million  revolving  note  facility  with
SunTrust  Bank,  Atlanta,  which expires on July 31, 2000.  Management  believes
these sources of liquidity are adequate to meet the Companies'  short-term  cash
obligations.

Based on current  trends,  the  Companies  expect to continue to use net cash in
operating activities,  given the continued growth of the variable annuity sales.
It is anticipated that a continuation of capital  contributions from the Parent,
the issuance of additional surplus notes, and/or modified coinsurance agreements
will cover these net cash outflows. ING AIH is committed to the sustained growth
of  Golden  American.  During  2000,  ING AIH will  maintain  Golden  American's
statutory  capital and surplus at the end of each  quarter at a level such that:
1) the ratio of Total  Adjusted  Capital  divided by Company  Action  Level Risk
Based Capital  exceeds 300%; 2) the ratio of Total Adjusted  Capital  (excluding
surplus notes) divided by Company Action Level Risk Based Capital  exceeds 200%;
and 3) Golden  American's  statutory  capital and surplus  exceeds the  "Amounts
Accrued for Expense  Allowances  Recognized in Reserves" as disclosed on page 3,
Line 13A of Golden American's statutory statement.

During the first quarter of 1999, Golden  American's  operations were moved to a
new site in West Chester,  Pennsylvania.  During 1999,  Golden American occupied
105,000 square feet of leased space; its affiliate  occupies 20,000 square feet.
Previously,  Golden  American's  home  office  operations  were housed in leased
locations  in  Wilmington,  Delaware  and  locations  in  Pennsylvania.   Golden
American's New York  subsidiary is housed in leased space in New York, New York.
The Companies  intend to spend  approximately  $2.4 million on capital needs for
2000.

The ability of Golden  American to pay  dividends  to its Parent is  restricted.
Prior  approval of insurance  regulatory  authorities is required for payment of
dividends to the stockholder  which exceed an annual limit.  During 2000, Golden
American  cannot pay dividends to its Parent without prior approval of statutory
authorities.

Under the  provisions  of the  insurance  laws of the  State of New York,  First
Golden cannot  distribute  any dividends to its  stockholder,  Golden  American,
unless a notice  of its  intent  to  declare a  dividend  and the  amount of the
dividend has been filed with the New York  Insurance  Department at least thirty
days in advance of the proposed  declaration.  If the  Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution,  the Superintendent may disapprove the distribution by
giving written  notice to First Golden within thirty days after the filing.  The
management  of First  Golden  does not  anticipate  paying  dividends  to Golden
American during 2000.

The NAIC's  risk-based  capital  requirements  require  insurance  companies  to
calculate  and report  information  under a risk-based  capital  formula.  These
requirements  are  intended  to  allow  insurance   regulators  to  monitor  the
capitalization  of insurance  companies based upon the type and mixture of risks
inherent in a company's  operations.  The formula includes  components for asset
risk,  liability risk, interest rate exposure,  and other factors. The Companies
have complied with the NAIC's risk-based capital reporting requirements. Amounts
reported  indicate that the Companies have total adjusted capital well above all
required capital levels.


                                       11
<PAGE>


REINSURANCE: At December 31, 1999, Golden American had reinsurance treaties with
four unaffiliated reinsurers and one affiliated reinsurer covering a significant
portion of the mortality  risks under its variable  contracts.  Golden  American
remains liable to the extent its reinsurers do not meet their  obligations under
the reinsurance agreements.

The reinsurance  treaties that covered the nonstandard  minimum guaranteed death
benefits  for new  business  have been  terminated  for  business  issued  after
December 31, 1999. The Companies are currently pursuing alternative  reinsurance
arrangements  for new business  issued after December 31, 1999.  There can be no
such  alternative  arrangements  will be  available.  The  reinsurance  covering
business in force at December 31, 1999 will continue to apply in the future.

IMPACT OF YEAR 2000:  In prior years,  the  Companies  discussed  the nature and
progress  of plans to become  Year  2000  ready.  In late  1999,  the  Companies
completed  remediation and testing of systems. As a result of those planning and
implementation  efforts, the Companies experienced no significant disruptions in
mission critical information  technology and non-information  technology systems
and believe those systems  successfully  responded to the Year 2000 date change.
Golden American expensed  approximately  $264,000 during 1999 in connection with
remediating  systems.  The  Companies  are not  aware of any  material  problems
resulting from Year 2000 issues, either with products,  internal systems, or the
products and services of third  parties.  The Companies will continue to monitor
mission  critical  computer  applications  and those of  suppliers  and  vendors
throughout  the Year 2000 to ensure that any latent Year 2000  matters  that may
arise are addressed promptly.

MARKET RISK AND RISK MANAGEMENT
-------------------------------

Asset/liability  management  is integrated  into many aspects of the  Companies'
operations,  including investment decisions,  product development, and crediting
rates determination.  As part of the risk management process, different economic
scenarios  are  modeled,  including  cash flow testing  required  for  insurance
regulatory  purposes,  to determine  that  existing  assets are adequate to meet
projected  liability cash flows. Key variables include  contractholder  behavior
and the variable separate accounts' performance.

Contractholders  bear  the  majority  of the  investment  risks  related  to the
variable  insurance   products.   Therefore,   the  risks  associated  with  the
investments   supporting   the  variable   separate   accounts  are  assumed  by
contractholders,  not by the Companies (subject to, among other things,  certain
minimum guarantees).  The Companies' products also provide certain minimum death
benefits  that depend on the  performance  of the  variable  separate  accounts.
Currently, the majority of death benefit risks are reinsured, which protects the
Companies  from  adverse  mortality  experience  and  prolonged  capital  market
decline.

A surrender,  partial withdrawal,  transfer,  or annuitization made prior to the
end of a  guarantee  period  from the fixed  account  may be subject to a market
value  adjustment.  As the majority of the  liabilities in the fixed account are
subject to market value adjustment,  the Companies do not face a material amount
of market risk  volatility.  The fixed  account  liabilities  are supported by a
portfolio  principally  composed  of fixed rate  investments  that can  generate
predictable,  steady rates of return. The portfolio  management strategy for the
fixed  account  considers  the  assets  available  for sale.  This  enables  the
Companies to respond to changes in market interest rates,  changes in prepayment
risk, changes in relative values of asset sectors and individual  securities and
loans,  changes in credit  quality  outlook,  and other  relevant  factors.  The
objective of portfolio  management is to maximize  returns,  taking into account
interest  rate  and  credit  risks,  as  well as  other  risks.  The  Companies'
asset/liability  management  discipline includes strategies to minimize exposure
to loss as interest rates and economic and market conditions change.

On the  basis of  these  analyses,  management  believes  there  is no  material
solvency risk to the Companies. With respect to a 10% drop in equity values from
year end 1999 levels,  variable  separate account funds,  which represent 88% of
the in force, pass the risk in underlying fund performance to the contractholder
(except for certain minimum guarantees). With respect to interest rate movements
up or down 100 basis points from year end 1999 levels,  the remaining 12% of the
in force are fixed  account  funds and  almost all of these  have  market  value
adjustments  which provide  significant  protection  against changes in interest
rates.


                                       12
<PAGE>


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
---------------------------------------------------------

Any  forward-looking  statement contained herein or in any other oral or written
statement by the Companies or any of their officers,  directors, or employees is
qualified by the fact that actual results of the Companies may differ materially
from such  statement,  among  other  risks  and  uncertainties  inherent  in the
Companies' business, due to the following important factors:

1.   Prevailing  interest  rate levels and stock market  performance,  which may
     affect the  ability of the  Companies  to sell their  products,  the market
     value and liquidity of the  Companies'  investments,  fee revenue,  and the
     lapse  rate of the  Companies'  policies,  notwithstanding  product  design
     features intended to enhance persistency of the Companies' products.

2.   Changes in the federal  income tax laws and  regulations,  which may affect
     the tax status of the Companies' products.

3.   Changes in the regulation of financial  services,  including bank sales and
     underwriting  of  insurance  products,  which may  affect  the  competitive
     environment for the Companies' products.

4.   Increasing competition in the sale of the Companies' products.

5.   Other  factors  that  could  affect  the   performance  of  the  Companies,
     including, but not limited to, market conduct claims, litigation, insurance
     industry  insolvencies,  availability  of  competitive  reinsurance  on new
     business,  investment  performance  of  the  underlying  portfolios  of the
     variable products, variable product design, and sales volume by significant
     sellers of the Companies' variable products.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The matters set forth under the caption  "Market  Risk and Risk  Management"  in
Management's  Discussion  and Analysis of Results of Operations  (Item 7 of this
report) are incorporated herein by reference.


                                       13
<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------

The Board of Directors and Stockholder
Golden American Life Insurance Company

We have audited the accompanying  consolidated balance sheets of Golden American
Life  Insurance  Company  as of  December  31,  1999 and 1998,  and the  related
consolidated statements of operations, changes in stockholder's equity, and cash
flows for the years ended  December  31, 1999 and 1998 and for the periods  from
October 25, 1997 through  December 31, 1997, and January 1, 1997 through October
24, 1997. Our audits also included the financial  statement  schedules listed in
the Index at Item  14(a).  These  financial  statements  and  schedules  are the
responsibility of the Companies' management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Golden American
Life  Insurance  Company at  December  31, 1999 and 1998,  and the  consolidated
results of its  operations  and its cash flows for the years ended  December 31,
1999 and 1998 and for the periods  from  October 25, 1997  through  December 31,
1997 and January 1, 1997 through October 24, 1997, in conformity with accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement schedules,  when considered in relation to the basic
financial  statements taken as a whole,  present fairly in all material respects
the information set forth therein.

                                          s/Ernst & Young LLP

Des Moines, Iowa
February 4, 2000


                                       14
<PAGE>

<TABLE>
<CAPTION>

                                                     CONSOLIDATED BALANCE SHEETS
                                            (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                                                      POST-MERGER
                                                                                     -----------------------------------------------
                                                                                      December 31, 1999       December 31, 1998
                                                                                     -----------------------------------------------
<S>                                                                                          <C>                    <C>
    ASSETS

     Investments:
       Fixed maturities, available for sale, at fair value
         (Cost: 1999 - $858,052; 1998 - $739,772)...............................               $835,321               $741,985
       Equity securities, at fair value (cost: 1999 - $14,952;
         1998 - $14,437)........................................................                 17,330                 11,514
       Mortgage loans on real estate............................................                100,087                 97,322
       Policy loans.............................................................                 14,157                 11,772
       Short-term investments...................................................                 80,191                 41,152
                                                                                     -----------------------------------------------
    Total investments...........................................................              1,047,086                903,745

    Cash and cash equivalents...................................................                 14,380                  6,679

    Reinsurance recoverable.....................................................                 14,834                  7,586

    Due from affiliates.........................................................                    637                  2,983

    Accrued investment income...................................................                 11,198                  9,645

    Deferred policy acquisition costs...........................................                528,957                204,979

    Value of purchased insurance in force.......................................                 31,727                 35,977

    Current income taxes recoverable............................................                     35                    628

    Deferred income tax asset...................................................                 21,943                 31,477

    Property and equipment, less allowances for depreciation
       of $3,229 in 1999 and $801 in 1998.......................................                 13,888                  7,348

    Goodwill, less accumulated amortization of $8,186 in 1999
       and $4,408 in 1998.......................................................                142,941                146,719

    Other assets................................................................                  2,514                    743

    Separate account assets.....................................................              7,562,717              3,396,114
                                                                                     -----------------------------------------------
    Total assets................................................................             $9,392,857             $4,754,623
                                                                                     ===============================================
</TABLE>




See accompanying notes.


                                                                 15
<PAGE>

<TABLE>
<CAPTION>

                                               CONSOLIDATED BALANCE SHEETS - CONTINUED
                                            (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                                                    POST-MERGER
                                                                                  ------------------------------------------------
                                                                                    December 31, 1999        December 31, 1998
                                                                                  ------------------------------------------------

<S>                                                                                        <C>                    <C>
LIABILITIES AND STOCKHOLDER'S EQUITY

Policy liabilities and accruals:
   Future policy benefits:
      Annuity and interest sensitive life products.........................                $1,033,701               $881,112
      Unearned revenue reserve.............................................                     6,300                  3,840
   Other policy claims and benefits........................................                         8                     --
                                                                                  ------------------------------------------------
                                                                                            1,040,009                884,952

 Surplus notes.............................................................                   245,000                 85,000
 Revolving note payable....................................................                     1,400                     --
 Due to affiliates.........................................................                     9,547                     --
 Other liabilities.........................................................                    56,335                 34,663
 Separate account liabilities..............................................                 7,562,717              3,396,114
                                                                                  ------------------------------------------------
                                                                                            8,915,008              4,400,729

 Commitments and contingencies

 Stockholder's equity:
   Common stock, par value $10 per share, authorized,
      issued, and outstanding 250,000 shares...............................                     2,500                  2,500
   Additional paid-in capital..............................................                   468,640                347,640
   Accumulated other comprehensive loss....................................                    (9,154)                  (895)
   Retained earnings.......................................................                    15,863                  4,649
                                                                                  ------------------------------------------------
 Total stockholder's equity................................................                   477,849                353,894
                                                                                  ------------------------------------------------
 Total liabilities and stockholder's equity................................                $9,392,857             $4,754,623
                                                                                  ================================================
</TABLE>














See accompanying notes.



                                                                 16
<PAGE>

<TABLE>
<CAPTION>

                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                                       (DOLLARS IN THOUSANDS)

                                                                                                                   POST-
                                                                         POST-MERGER                            ACQUISITION
                                                   --------------------------------------------------------|-------------------
                                                                                            For the period |    For the period
                                                                                               October 25, |        January 1,
                                                      For the year       For the year                 1997 |              1997
                                                             ended              ended              through |           through
                                                      December 31,       December 31,         December 31, |       October 24,
                                                              1999               1998                 1997 |              1997
                                                   --------------------------------------------------------|-------------------
<S>                                                        <C>               <C>                  <C>                 <C>
Revenues                                                                                                   |
   Annuity and interest sensitive                                                                          |
      life product charges....................              $82,935           $39,119              $3,834  |          $18,288
   Management fee revenue.....................               10,136             4,771                 508  |            2,262
   Net investment income......................               59,169            42,485               5,127  |           21,656
   Realized gains (losses) on investments.....               (2,923)           (1,491)                 15  |              151
   Other income...............................               10,827             5,569                 236  |              426
                                                   --------------------------------------------------------|-------------------
                                                            160,144            90,453               9,720  |           42,783
                                                                                                           |
Insurance benefits and expenses:                                                                           |
   Annuity and interest sensitive                                                                          |
     life benefits:                                                                                        |
     Interest credited to account balances....              175,851            94,845               7,413  |           19,276
     Benefit claims incurred in excess of                                                                  |
       account balances.......................                6,370             2,123                  --  |              125
   Underwriting, acquisition, and insurance                                                                |
     expenses:                                                                                             |
     Commissions..............................              188,383           121,171               9,437  |           26,818
     General expenses.........................               60,194            37,577               3,350  |           13,907
     Insurance taxes, state licenses, and fees                3,976             4,140                 450  |            1,889
     Policy acquisition costs deferred........             (346,396)         (197,796)            (13,678) |          (29,003)
     Amortization:                                                                                         |
      Deferred policy acquisition costs.......               33,119             5,148                 892  |            1,674
      Value of purchased insurance in force...                6,238             4,724                 948  |            5,225
      Goodwill................................                3,778             3,778                 630  |            1,398
                                                   --------------------------------------------------------|-------------------
                                                            131,513            75,710               9,442  |           41,309
                                                                                                           |
Interest expense..............................                8,894             4,390                 557  |            2,082
                                                   --------------------------------------------------------|-------------------
                                                            140,407            80,100               9,999  |           43,391
                                                   --------------------------------------------------------|-------------------
Income (loss) before income taxes.............               19,737            10,353                (279) |             (608)
                                                                                                           |
Income taxes..................................                8,523             5,279                 146  |           (1,337)
                                                   --------------------------------------------------------|-------------------
                                                                                                           |
Net income (loss).............................              $11,214            $5,074               $(425) |             $729
                                                   ============================================================================
</TABLE>


See accompanying notes.


                                                                 17
<PAGE>
<TABLE>
<CAPTION>


                                             CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                                                               (DOLLARS IN THOUSANDS)


                                                                                       Accumulated
                                                                     Additional              Other     Retained             Total
                                                         Common         Paid-in       Comprehensive    Earnings     Stockholder's
                                                          Stock         Capital       Income (Loss)   (Deficit)            Equity
                                                    -----------------------------------------------------------------------------
                                                                                        POST-ACQUISITION
                                                    -----------------------------------------------------------------------------
<S>                                                      <C>         <C>                  <C>          <C>             <C>
Balance at January 1, 1997.....................          $2,500      $137,372               $262         $350          $140,484
   Comprehensive income:
     Net income................................              --            --                 --          729               729
     Change in net unrealized investment
       gains (losses)..........................              --            --              1,543           --             1,543
                                                                                                                -----------------
   Comprehensive income........................                                                                           2,272
   Contribution of capital.....................              --         1,121                 --           --             1,121
                                                    -----------------------------------------------------------------------------
Balance at October 24, 1997....................          $2,500      $138,493             $1,805       $1,079          $143,877
                                                    =============================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                                     POST-MERGER
                                                    -----------------------------------------------------------------------------
<S>                                                      <C>         <C>                 <C>          <C>              <C>
Balance at October 25, 1997....................          $2,500      $224,997                 --           --          $227,497
   Comprehensive loss:
     Net loss..................................              --            --                 --        $(425)             (425)
     Change in net unrealized investment
       gains (losses)..........................              --            --               $241           --               241
                                                                                                                -----------------
   Comprehensive loss..........................                                                                            (184)
                                                    -----------------------------------------------------------------------------
Balance at December 31, 1997...................           2,500       224,997                241         (425)          227,313
   Comprehensive income:
     Net income................................              --            --                 --        5,074             5,074
     Change in net unrealized investment
       gains (losses)..........................              --            --             (1,136)          --            (1,136)
                                                                                                                -----------------
   Comprehensive income........................                                                                           3,938
   Contribution of capital.....................              --       122,500                 --           --           122,500
   Other.......................................              --           143                 --           --               143
                                                    -----------------------------------------------------------------------------
Balance at December 31, 1998...................           2,500       347,640               (895)       4,649           353,894
   Comprehensive income:
     Net income................................              --            --                 --       11,214            11,214
     Change in net unrealized investment
       gains (losses)..........................              --            --             (8,259)          --            (8,259)
                                                                                                                -----------------
   Comprehensive income........................                                                                           2,955
   Contribution of capital.....................              --       121,000                 --           --           121,000
                                                    -----------------------------------------------------------------------------
Balance at December 31, 1999...................          $2,500      $468,640            $(9,154)     $15,863          $477,849
                                                    =============================================================================
</TABLE>













See accompanying notes.


                                                                 18
<PAGE>
<TABLE>
<CAPTION>


                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (DOLLARS IN THOUSANDS)

                                                                                                          |      POST-
                                                                           POST-MERGER                    |   ACQUISITION
                                                       ---------------------------------------------------|-----------------
                                                                                           For the period |   For the period
                                                                                              October 25, |       January 1,
                                                           For the year    For the year              1997 |             1997
                                                                  ended           ended           through |          through
                                                           December 31,    December 31,      December 31, |      October 24,
                                                                   1999            1998              1997 |             1997
                                                       ---------------------------------------------------|------------------
<S>                                                          <C>               <C>               <C>                <C>
OPERATING ACTIVITIES                                                                                      |
Net income (loss).................................            $11,214            $5,074            $(425) |             $729
Adjustments to reconcile net income (loss) to net                                                         |
  cash provided by (used in) operations:                                                                  |
   Adjustments related to annuity and                                                                     |
     interest sensitive life products:                                                                    |
     Interest credited and other charges on                                                               |
       interest sensitive products................            175,851            94,845            7,413  |           19,276
     Charges for mortality and administration.....                524              (233)             (62) |              (99)
     Change in unearned revenues..................              2,460             2,651            1,189  |            3,292
   Increase (decrease) in policy liabilities and                                                          |
     accruals.....................................                  8               (10)              10  |               --
   Decrease (increase) in accrued investment                                                              |
     income.......................................             (1,553)           (3,222)           1,205  |           (3,489)
   Policy acquisition costs deferred..............           (346,396)         (197,796)         (13,678) |          (29,003)
   Amortization of deferred policy                                                                        |
     acquisition costs............................             33,119             5,148              892  |            1,674
   Amortization of value of purchased                                                                     |
     insurance in force...........................              6,238             4,724              948  |            5,225
   Change in other assets, due to/from                                                                    |
     affiliates, other liabilities, and accrued                                                           |
     income taxes.................................             24,845             9,979            4,205  |           (8,944)
   Provision for depreciation and amortization....              8,850             8,147            1,299  |            3,203
   Provision for deferred income taxes............              8,523             5,279              146  |              316
   Realized (gains) losses on investments.........              2,923             1,491              (15) |             (151)
                                                       ---------------------------------------------------|------------------
Net cash provided by (used in) operating                                                                  |
   activities.....................................            (73,394)          (63,923)           3,127  |           (7,971)
                                                                                                          |
INVESTING ACTIVITIES                                                                                      |
Sale, maturity, or repayment of investments:                                                              |
   Fixed maturities - available for sale..........            220,547           145,253            9,871  |           39,622
   Mortgage loans on real estate..................              6,572             3,791            1,644  |            5,828
   Short-term investments - net...................                 --                --               --  |           11,415
                                                       ---------------------------------------------------|------------------
                                                              227,119           149,044           11,515  |           56,865
Acquisition of investments:                                                                               |
   Fixed maturities - available for sale..........           (344,587)         (476,523)         (29,596) |         (155,173)
   Equity securities..............................                 --           (10,000)              (1) |           (4,865)
   Mortgage loans on real estate..................             (9,659)          (16,390)         (14,209) |          (44,481)
   Policy loans - net.............................             (2,385)           (2,940)            (328) |           (3,870)
   Short-term investments - net...................            (39,039)          (26,692)         (13,244) |               --
                                                       ---------------------------------------------------|------------------
                                                             (395,670)         (532,545)         (57,378) |         (208,389)
Net purchase of property and equipment............             (8,968)           (6,485)            (252) |             (875)
                                                       ---------------------------------------------------|------------------
Net cash used in investing activities.............           (177,519)         (389,986)         (46,115) |         (152,399)
</TABLE>

See accompanying notes.



                                                                 19
<PAGE>

<TABLE>
<CAPTION>

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                                       (DOLLARS IN THOUSANDS)

                                                                                                     |      POST-
                                                                     POST-MERGER                     |   ACQUISITION
                                                 ----------------------------------------------------|-----------------
                                                                                      For the period |  For the period
                                                                                         October 25, |      January 1,
                                                     For the year    For the year               1997 |            1997
                                                            ended           ended            through |         through
                                                     December 31,    December 31,       December 31, |     October 24,
                                                             1999            1998               1997 |            1997
                                                 ----------------------------------------------------|-----------------
<S>                                                    <C>              <C>                <C>                 <C>
FINANCING ACTIVITIES                                                                                 |
Proceeds from reciprocal loan agreement                                                              |
   borrowings................................          $396,350         $500,722                --   |              --
Repayment of reciprocal loan agreement                                                               |
   borrowings................................          (396,350)        (500,722)               --   |              --
Proceeds from revolving note payable.........           220,295          108,495                --   |              --
Repayment of revolving note payable..........          (218,895)        (108,495)               --   |              --
Proceeds from surplus note...................           160,000           60,000                --   |              --
Proceeds from line of credit borrowings......                --               --           $10,119   |         $97,124
Repayment of line of credit borrowings.......                --           (5,309)           (2,207)  |         (80,977)
Receipts from annuity and interest                                                                   |
   sensitive life policies credited to                                                               |
   account balances..........................           773,685          593,428            62,306   |         261,549
Return of account balances on annuity                                                                |
   and interest sensitive life policies......          (147,201)         (72,649)           (6,350)  |         (13,931)
Net reallocations to separate accounts.......          (650,270)        (239,671)          (17,017)  |         (93,069)
Contributions of capital by parent...........           121,000          103,750                --   |           1,011
                                                 ----------------------------------------------------|-----------------
Net cash provided by financing activities....           258,614          439,549            46,851   |         171,707
                                                 ----------------------------------------------------|-----------------
                                                                                                     |
Increase (decrease) in cash and cash                                                                 |
   equivalents...............................             7,701          (14,360)            3,863   |          11,337
Cash and cash equivalents at                                                                         |
   beginning of period.......................             6,679           21,039            17,176   |           5,839
                                                 ----------------------------------------------------|-----------------
Cash and cash equivalents at                                                                         |
   end of period.............................           $14,380           $6,679           $21,039   |         $17,176
                                                 ====================================================|=================
                                                                                                     |
SUPPLEMENTAL  DISCLOSURE                                                                             |
 OF CASH FLOW  INFORMATION                                                                           |
Cash paid during the period for:                                                                     |
   Interest..................................            $6,392           $4,305              $295   |          $1,912
   Income taxes..............................                --               99                --   |             283
Non-cash financing activities:                                                                       |
   Non-cash adjustment to additional                                                                 |
     paid-in capital for adjusted merger                                                             |
     costs...................................                --              143                --   |              --
   Contribution of property and                                                                      |
     equipment from EIC Variable,                                                                    |
     Inc. net of $353 of accumulated                                                                 |
     depreciation............................                --               --                --   |             110
   Contribution of capital from parent to                                                            |
     repay line of credit borrowings.........                --           18,750                --   |              --
</TABLE>


See accompanying notes.


                                                                 20
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1. SIGNIFICANT ACCOUNTING POLICIES

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

CONSOLIDATION

The  consolidated  financial  statements  include Golden American Life Insurance
Company  ("Golden  American")  and its wholly  owned  subsidiary,  First  Golden
American Life Insurance  Company of New York ("First  Golden," and  collectively
with Golden American,  the "Companies").  All significant  intercompany accounts
and transactions have been eliminated.

ORGANIZATION

Golden American, a wholly owned subsidiary of Equitable of Iowa Companies, Inc.,
offers variable  insurance  products and is licensed as a life insurance company
in the  District of Columbia  and all states  except New York.  First  Golden is
licensed to sell  insurance  products in New York and Delaware.  The  Companies'
products are marketed by broker/dealers,  financial institutions,  and insurance
agents. The Companies' primary customers are consumers and corporations.

On October 24,  1997,  PFHI  Holding,  Inc.  ("PFHI"),  a Delaware  corporation,
acquired all of the  outstanding  capital  stock of Equitable of Iowa  Companies
("Equitable") according to the terms of an Agreement and Plan of Merger ("Merger
Agreement")  dated  July 7, 1997  among  Equitable,  PFHI,  and ING  Groep  N.V.
("ING").  PFHI is a wholly owned subsidiary of ING, a global financial  services
holding  company  based in The  Netherlands.  As a result  of this  transaction,
Equitable was merged into PFHI, which was  simultaneously  renamed  Equitable of
Iowa Companies, Inc. ("EIC" or the "Parent"), a Delaware corporation. See Note 6
for additional information regarding the merger.

On August 13, 1996,  Equitable acquired all of the outstanding  capital stock of
BT Variable,  Inc.  (subsequently  known as EIC  Variable,  Inc.) and its wholly
owned  subsidiaries,  Golden American and Directed  Services,  Inc. ("DSI") from
Whitewood  Properties  Corporation  ("Whitewood").  See  Note  7 for  additional
information regarding the acquisition.

For financial statement purposes, the ING merger was accounted for as a purchase
effective  October 25, 1997 and the change in control of Golden American through
the  acquisition  of BT Variable,  Inc. ("BT  Variable")  was accounted for as a
purchase  effective August 14, 1996. The merger and acquisition  resulted in new
bases of accounting  reflecting  estimated fair values of assets and liabilities
at their  respective  dates. As a result,  the Companies'  financial  statements
included for the periods after October 24, 1997 are presented on the Post-Merger
new basis of accounting and for the period  January 1, 1997 through  October 24,
1997 are presented on the Post-Acquisition basis of accounting.

INVESTMENTS

FIXED  MATURITIES:  The  Companies  account  for  their  investments  under  the
Statement of Financial  Accounting  Standards ("SFAS") No. 115,  "Accounting for
Certain  Investments  in Debt  and  Equity  Securities,"  which  requires  fixed
maturities  to  be  designated  as  either   "available  for  sale,"  "held  for
investment," or "trading."  Sales of fixed  maturities  designated as "available
for sale" are not restricted by SFAS No. 115.  Available for sale securities are
reported at fair value and unrealized  gains and losses on these  securities are
included directly in stockholder's  equity, after adjustment for related changes
in value of purchased  insurance in force ("VPIF"),  deferred policy acquisition
costs ("DPAC"), and deferred income taxes. At December 31, 1999 and 1998, all of
the Companies' fixed  maturities are designated as available for sale,  although
the Companies are not precluded from  designating  fixed  maturities as held for
investment or trading at some future date.

Securities  determined  to have a decline in value that is other than  temporary
are written down to estimated fair value,  which becomes the new cost basis by a
charge to realized losses in the Companies'  Statements of Operations.  Premiums
and  discounts  are  amortized/accrued  utilizing  a method  which  results in a
constant yield over the  securities'  expected  lives.  Amortization/accrual  of
premiums  and   discounts  on  mortgage   and  other   asset-backed   securities
incorporates a prepayment assumption to estimate the securities' expected lives.


                                       21
<PAGE>


EQUITY  SECURITIES:  Equity  securities  are reported at estimated fair value if
readily  marketable.  The change in unrealized  appreciation and depreciation of
marketable  equity  securities (net of related deferred income taxes, if any) is
included directly in stockholder's  equity. Equity securities determined to have
a decline in value that is other than  temporary  are written  down to estimated
fair value,  which becomes the new cost basis by a charge to realized  losses in
the Companies' Statements of Operations.

MORTGAGE  LOANS ON REAL  ESTATE:  Mortgage  loans on real estate are reported at
cost  adjusted for  amortization  of premiums and accrual of  discounts.  If the
value of any  mortgage  loan is  determined  to be  impaired  (i.e.,  when it is
probable the  Companies  will be unable to collect all amounts due  according to
the contractual terms of the loan agreement), the carrying value of the mortgage
loan is reduced to the present value of expected future cash flows from the loan
discounted at the loan's  effective  interest rate, or to the loan's  observable
market price, or the fair value of the underlying collateral. The carrying value
of impaired  loans is reduced by the  establishment  of a  valuation  allowance,
which  is  adjusted  at each  reporting  date  for  significant  changes  in the
calculated value of the loan. Changes in this valuation allowance are charged or
credited to income.

OTHER  INVESTMENTS:  Policy loans are reported at unpaid  principal.  Short-term
investments  are  reported at cost,  adjusted for  amortization  of premiums and
accrual of discounts.

REALIZED GAINS AND LOSSES: Realized gains and losses are determined on the basis
of specific identification.

FAIR  VALUES:  Estimated  fair  values,  as  reported  herein,  of  conventional
mortgage-backed  securities not actively traded in a liquid market are estimated
using  a third  party  pricing  process.  This  pricing  process  uses a  matrix
calculation  assuming a spread over U.S.  Treasury bonds based upon the expected
average lives of the securities.  Estimated fair values of publicly traded fixed
maturities  are  reported  by an  independent  pricing  service.  Fair values of
private  placement  bonds are  estimated  using a matrix  that  assumes a spread
(based on interest rates and a risk assessment of the bonds) over U.S.  Treasury
bonds.  Estimated  fair  values  of  equity  securities,  which  consist  of the
Companies'  investment in its registered  separate accounts,  are based upon the
quoted  fair  value  of the  securities  comprising  the  individual  portfolios
underlying the separate accounts.

CASH AND CASH EQUIVALENTS
For  purposes  of the  accompanying  Statements  of Cash  Flows,  the  Companies
consider all demand  deposits and  interest-bearing  accounts not related to the
investment  function  to be  cash  equivalents.  All  interest-bearing  accounts
classified as cash equivalents have original maturities of three months or less.

DEFERRED POLICY ACQUISITION COSTS
Certain  costs of  acquiring  new  insurance  business,  principally  first year
commissions and interest bonuses,  premium credit, and other expenses related to
the  production  of new  business,  have been  deferred.  Acquisition  costs for
variable insurance  products are being amortized  generally in proportion to the
present  value  (using the  assumed  crediting  rate) of expected  future  gross
profits. This amortization is adjusted retrospectively when the Companies revise
their estimate of current or future gross profits to be realized from a group of
products.  DPAC is adjusted to reflect the pro forma impact of unrealized  gains
and losses on fixed  maturities the Companies have  designated as "available for
sale" under SFAS No. 115.

VALUE OF PURCHASED INSURANCE IN FORCE
As a result of the  merger and  acquisition,  a portion  of the  purchase  price
related to each  transaction  was allocated to the right to receive  future cash
flows from existing  insurance  contracts.  This allocated cost represents VPIF,
which reflects the value of those purchased  policies  calculated by discounting
actuarially   determined  expected  future  cash  flows  at  the  discount  rate
determined  by the  purchaser.  Amortization  of VPIF is  charged  to expense in
proportion  to  expected  gross  profits  of  the  underlying   business.   This
amortization is adjusted  retrospectively when the Companies revise the estimate
of current or future gross profits to be realized  from the insurance  contracts
acquired.  VPIF is adjusted to reflect the pro forma impact of unrealized  gains
and  losses  on  available  for sale  fixed  maturities.  See  Notes 6 and 7 for
additional information on VPIF resulting from the merger and acquisition.


                                       22
<PAGE>


PROPERTY AND EQUIPMENT
Property  and  equipment  primarily  represent  leasehold  improvements,  office
furniture,  certain other equipment,  and capitalized  computer software and are
not considered to be significant to the Companies' overall operations.  Property
and  equipment  are  reported  at  cost  less   allowances   for   depreciation.
Depreciation  expense is computed  primarily  on the basis of the  straight-line
method over the estimated useful lives of the assets.

GOODWILL
Goodwill was  established as a result of the merger and is being  amortized over
40 years on a  straight-line  basis.  Goodwill  established  as a result  of the
acquisition  was being  amortized over 25 years on a  straight-line  basis.  See
Notes 6 and 7 for additional information on the merger and acquisition.

FUTURE POLICY BENEFITS
Future  policy  benefits  for  divisions  of the  variable  products  with fixed
interest  guarantees  are  established   utilizing  the  retrospective   deposit
accounting  method.   Policy  reserves  represent  the  premiums  received  plus
accumulated  interest,  less  mortality  and  administration  charges.  Interest
credited to these  policies  ranged from 3.00% to 11.00%  during 1999,  3.00% to
10.00% during 1998, and 3.30% to 8.25% during 1997. The unearned revenue reserve
represents  unearned  distribution  fees.  These  distribution  fees  have  been
deferred  and are  amortized  over the life of the  contracts in  proportion  to
expected gross profits.

SEPARATE ACCOUNTS
Assets and  liabilities of the separate  accounts  reported in the  accompanying
Balance Sheets represent funds separately administered  principally for variable
contracts. Contractholders,  rather than the Companies, bear the investment risk
for the variable insurance  products.  At the direction of the  contractholders,
the separate  accounts  invest the premiums from the sale of variable  insurance
products in shares of specified  mutual funds. The assets and liabilities of the
separate  accounts are clearly  identified and segregated  from other assets and
liabilities of the Companies.  The portion of the separate  account assets equal
to the reserves and other  liabilities of variable  contracts  cannot be charged
with liabilities arising out of any other business the Companies may conduct.

Variable  separate  account  assets are carried at fair value of the  underlying
investments and generally represent contractholder  investment values maintained
in  the  accounts.  Variable  separate  account  liabilities  represent  account
balances for the variable contracts invested in the separate accounts;  the fair
value of these  liabilities  is equal to their carrying  amount.  Net investment
income and realized and unrealized  capital gains and losses related to separate
account assets are not reflected in the accompanying Statements of Operations.

Product  charges  recorded by the  Companies  from variable  insurance  products
consist of charges  applicable  to each contract for mortality and expense risk,
cost of insurance, contract administration,  and surrender charges. In addition,
some variable annuity and all variable life contracts provide for a distribution
fee collected for a limited number of years after each premium deposit.  Revenue
recognition  of collected  distribution  fees is amortized  over the life of the
contract  in  proportion  to  its  expected  gross   profits.   The  balance  of
unrecognized revenue related to the distribution fees is reported as an unearned
revenue reserve.

DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference  between
the financial statement and income tax bases of assets and liabilities using the
enacted  marginal tax rate.  Deferred tax assets or liabilities  are adjusted to
reflect the pro forma impact of unrealized gains and losses on equity securities
and fixed  maturities the Companies have  designated as available for sale under
SFAS No. 115. Changes in deferred tax assets or liabilities  resulting from this
SFAS No. 115  adjustment  are  charged or  credited  directly  to  stockholder's
equity.  Deferred  income tax expenses or credits  reflected  in the  Companies'
Statements of  Operations  are based on the changes in the deferred tax asset or
liability from period to period (excluding the SFAS No. 115 adjustment).

DIVIDEND RESTRICTIONS
Golden  American's  ability to pay dividends to its Parent is restricted.  Prior
approval  of  insurance  regulatory  authorities  is  required  for  payment  of
dividends to the stockholder  which exceed an annual limit.  During 2000, Golden
American  cannot pay dividends to its Parent without prior approval of statutory
authorities.


                                       23
<PAGE>


Under the  provisions  of the  insurance  laws of the  State of New York,  First
Golden cannot  distribute  any dividends to its  stockholder,  Golden  American,
unless a notice  of its  intent  to  declare a  dividend  and the  amount of the
dividend has been filed with the New York  Insurance  Department at least thirty
days in advance of the proposed  declaration.  If the  Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution,  the Superintendent may disapprove the distribution by
giving written notice to First Golden within thirty days after the filing.

SEGMENT REPORTING
The  Companies  manage  their  business  as one  segment,  the sale of  variable
insurance products designed to meet customer needs for tax-advantaged saving for
retirement and protection from death.  Variable  insurance  products are sold to
consumers and corporations throughout the United States.

USE OF ESTIMATES
The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates and  assumptions
affecting the amounts  reported in the  financial  statements  and  accompanying
notes. Actual results could differ from those estimates.

Management is required to utilize  historical  experience and assumptions  about
future  events and  circumstances  in order to  develop  estimates  of  material
reported  amounts and  disclosures.  Included among the material (or potentially
material)  reported  amounts  and  disclosures  that  require  extensive  use of
estimates and  assumptions  are: (1) estimates of fair values of  investments in
securities  and  other  financial  instruments,   as  well  as  fair  values  of
policyholder  liabilities,  (2)  policyholder  liabilities,  (3) deferred policy
acquisition costs and value of purchased  insurance in force, (4) fair values of
assets  and  liabilities   recorded  as  a  result  of  merger  and  acquisition
transactions,  (5) asset  valuation  allowances,  (6) guaranty  fund  assessment
accruals,  (7)  deferred  tax  benefits  (liabilities),  and (8)  estimates  for
commitments  and  contingencies  including  legal  matters,  if a  liability  is
anticipated and can be reasonably estimated. Estimates and assumptions regarding
all of the preceding  items are inherently  subject to change and are reassessed
periodically.  Changes in estimates and assumptions  could materially impact the
financial statements.

RECLASSIFICATIONS
Certain amounts for the periods ended in the 1998 and 1997 financial  statements
have been reclassified to conform to the 1999 financial statement presentation.

2. BASIS OF FINANCIAL REPORTING
--------------------------------------------------------------------------------

The financial  statements of the Companies  differ from related  statutory-basis
financial statements  principally as follows: (1) acquisition costs of acquiring
new business are deferred  and  amortized  over the life of the policies  rather
than charged to operations as incurred;  (2) an asset  representing  the present
value of future cash flows from insurance  contracts acquired was established as
a result of the  merger/acquisition and is amortized and charged to expense; (3)
future policy benefit  reserves for divisions with fixed interest  guarantees of
the variable  insurance  products are based on full account values,  rather than
the  greater  of cash  surrender  value  or  amounts  derived  from  discounting
methodologies  utilizing  statutory  interest  rates;  (4) reserves are reported
before  reduction  for  reserve  credits  related  to  reinsurance  ceded  and a
receivable is established,  net of an allowance for uncollectible  amounts,  for
these credits  rather than  presented net of these  credits;  (5) fixed maturity
investments are designated as "available for sale" and valued at fair value with
unrealized  appreciation/depreciation,  net of adjustments to value of purchased
insurance in force, deferred policy acquisition costs, and deferred income taxes
(if applicable),  credited/charged  directly to stockholder's equity rather than
valued at amortized cost; (6) the carrying value of fixed  maturities is reduced
to fair value by a charge to realized  losses in the  Statements  of  Operations
when declines in carrying  value are judged to be other than  temporary,  rather
than through the  establishment  of a  formula-determined  statutory  investment
reserve  (carried  as a  liability),  changes in which are  charged  directly to
surplus;  (7) deferred income taxes are provided for the difference  between the
financial  statement  and income tax bases of assets  and  liabilities;  (8) net
realized gains or losses attributed to changes in the level of interest rates in
the market are  recognized  when the sale is completed  rather than deferred and
amortized  over  the  remaining  life  of the  fixed  maturity  security;  (9) a
liability is  established  for  anticipated  guaranty fund  assessments,  net of
related anticipated  premium tax credits,  rather than capitalized when assessed
and amortized in accordance  with procedures  permitted by insurance  regulatory
authorities;  (10) revenues for variable  insurance  products  consist of policy
charges  applicable  to  each  contract  for  the  cost  of  insurance,   policy
administration  charges,  amortization of policy  initiation fees, and surrender
charges assessed rather than premiums received; (11) the financial statements of
Golden American's wholly owned subsidiary are consolidated  rather than recorded


                                       24
<PAGE>


at the equity in net assets;  (12)  surplus  notes are  reported as  liabilities
rather than as surplus;  and (13) assets and  liabilities  are  restated to fair
values when a change in ownership occurs, with provisions for goodwill and other
intangible assets, rather than continuing to be presented at historical cost.

The net loss for Golden  American as  determined in  accordance  with  statutory
accounting practices was $85,578,000 in 1999,  $68,002,000 in 1998, and $428,000
in 1997.  Total statutory  capital and surplus was  $368,928,000 at December 31,
1999 and $183,045,000 at December 31, 1998.

3. INVESTMENT OPERATIONS
--------------------------------------------------------------------------------

INVESTMENT RESULTS
Major categories of net investment income are summarized below:
<TABLE>
<CAPTION>

                                                                       POST-MERGER                       |  POST-ACQUISITION
                                                ---------------------------------------------------------|-------------------
                                                                                         For the period  |    For the period
                                                                                            October 25,  |        January 1,
                                                   For the year       For the year                 1997  |              1997
                                                          ended              ended              through  |           through
                                                   December 31,       December 31,         December 31,  |       October 24,
                                                           1999               1998                 1997  |              1997
                                                ---------------------------------------------------------|-------------------
                                                                           (DOLLARS IN THOUSANDS)        |
                                                                                                         |
<S>                                                     <C>               <C>                     <C>                 <C>
 Fixed maturities..........................             $50,352           $35,224                 $4,443 |            $18,488
 Equity securities.........................                 515                --                      3 |                 --
 Mortgage loans on real estate.............               7,074             6,616                    879 |              3,070
 Policy loans..............................                 485               619                     59 |                482
 Short-term investments....................               2,583             1,311                    129 |                443
 Other, net................................                 388               246                   (154)|                 24
                                                ---------------------------------------------------------|-------------------
 Gross investment income...................              61,397            44,016                  5,359 |             22,507
 Less investment expenses..................              (2,228)           (1,531)                  (232)|               (851)
                                                ---------------------------------------------------------|-------------------
 Net investment income.....................             $59,169           $42,485                 $5,127 |            $21,656
                                                =============================================================================
</TABLE>

Realized gains (losses) on investments follows:
<TABLE>
<CAPTION>

                                                                           POST-MERGER                   |   POST-ACQUISITION
                                                 --------------------------------------------------------|--------------------
                                                                                           For the period|     For the period
                                                                                              October 25,|         January 1,
                                                       For the year        For the year              1997|               1997
                                                              ended               ended           through|            through
                                                       December 31,        December 31,      December 31,|        October 24,
                                                               1999                1998              1997|               1997
                                                 --------------------------------------------------------|--------------------
                                                                            (DOLLARS IN THOUSANDS)       |
                                                                                                         |
<S>                                                         <C>                <C>                   <C> |               <C>
  Fixed maturities, available for sale.......               $(2,910)           $(1,428)              $25 |               $151
  Mortgage loans on real estate..............                   (13)               (63)              (10)|                 --
                                                 --------------------------------------------------------|--------------------
  Realized gains (losses) on investments.....               $(2,923)           $(1,491)              $15 |               $151
                                                 =============================================================================
</TABLE>


                                       25
<PAGE>


The change in unrealized appreciation (depreciation) of securities at fair value
follows:
<TABLE>
<CAPTION>

                                                                           POST-MERGER                     | POST-ACQUISITION
                                                  ---------------------------------------------------------|------------------
                                                                                            For the period |   For the period
                                                                                               October 25, |       January 1,
                                                       For the year        For the year               1997 |             1997
                                                              ended               ended            through |          through
                                                       December 31,        December 31,       December 31, |      October 24,
                                                               1999                1998               1997 |             1997
                                                  ---------------------------------------------------------|------------------
                                                                            (DOLLARS IN THOUSANDS)         |
<S>                                                        <C>                  <C>              <C>                   <C>
                                                                                                           |
  Fixed maturities, available for sale........             $(24,944)             $1,100          $(3,494)  |           $4,197
  Equity securities...........................                5,301              (2,390)             (68)  |             (462)
                                                  ---------------------------------------------------------|------------------
  Unrealized appreciation (depreciation)                                                                   |
     of securities............................             $(19,643)            $(1,290)         $(3,562)  |           $3,735
                                                  ============================================================================
</TABLE>

At December 31, 1999 and December 31, 1998,  amortized  cost,  gross  unrealized
gains and losses,  and estimated fair values of fixed  maturities,  all of which
are designated as available for sale, follows:
<TABLE>
<CAPTION>

                                                                                POST-MERGER
                                                 ---------------------------------------------------------------------------
                                                                                Gross             Gross           Estimated
                                                           Amortized       Unrealized        Unrealized                Fair
                                                                Cost            Gains            Losses               Value
                                                 ---------------------------------------------------------------------------
                                                                           (DOLLARS IN THOUSANDS)

<S>                                                        <C>                 <C>            <C>                 <C>
   December 31, 1999
 -----------------------------------------------
   U.S. government and governmental
    agencies and authorities.................               $21,363                --            $(260)            $21,103
   Public utilities..........................                53,754               $25           (2,464)             51,315
   Corporate securities......................               396,494                53          (12,275)            384,272
   Other asset-backed securities.............               207,044               850           (4,317)            203,577
   Mortgage-backed securities................               179,397                39           (4,382)            175,054
                                                 ---------------------------------------------------------------------------
   Total.....................................              $858,052              $967         $(23,698)           $835,321
                                                 ===========================================================================

   December 31, 1998
 -----------------------------------------------
   U.S. government and governmental
    agencies and authorities.................               $13,568              $182              $(8)            $13,742
   Foreign governments.......................                 2,028                 8               --               2,036
   Public utilities..........................                67,710               546             (447)             67,809
   Corporate securities......................               365,569             4,578           (2,658)            367,489
   Other asset-backed securities.............                99,877               281           (1,046)             99,112
   Mortgage-backed securities................               191,020             1,147             (370)            191,797
                                                 ---------------------------------------------------------------------------
   Total.....................................              $739,772            $6,742          $(4,529)           $741,985
                                                 ===========================================================================
</TABLE>

Short-term  investments  with  maturities  of 30 days or less have been excluded
from the above  schedules.  Amortized  cost  approximates  fair  value for these
securities.  At December  31,  1999,  net  unrealized  investment  loss on fixed
maturities designated as available for sale totaled $22,731,000. Depreciation of
$6,955,000  was  included in  stockholder's  equity at December 31, 1999 (net of
adjustments  of  $1,785,000  to VPIF,  $10,246,000  to DPAC,  and  $3,745,000 to
deferred income taxes). At December 31, 1998, net unrealized investment gains on
fixed   maturities   designated  as  available  for  sale  totaled   $2,213,000.
Appreciation of $1,005,000 was included in stockholder's  equity at December 31,
1998 (net of adjustments of $203,000 to VPIF,  $455,000 to DPAC, and $550,000 to
deferred income taxes).


                                       26
<PAGE>

At December 31, 1999,  net  unrealized  appreciation  on equity  securities  was
comprised  entirely of gross  appreciation of $2,378,000.  At December 31, 1998,
net unrealized depreciation of equity securities was comprised entirely of gross
depreciation of $2,923,000.

Amortized  cost and  estimated  fair  value of fixed  maturities  designated  as
available  for sale,  by  contractual  maturity,  at December 31, 1999 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.
<TABLE>
<CAPTION>

                                                                                       POST-MERGER
                                                                      ----------------------------------------------
                                                                                  Amortized               Estimated
December 31, 1999                                                                      Cost              Fair Value
--------------------------------------------------------------------------------------------------------------------
                                                                                  (DOLLARS IN THOUSANDS)
<S>                                                                               <C>                     <C>

Due within one year..............................................                  $25,317                 $25,186
Due after one year through five years............................                  355,205                 344,998
Due after five years through ten years...........................                   83,004                  78,976
Due after ten years..............................................                    8,085                   7,530
                                                                      ----------------------------------------------
                                                                                   471,611                 456,690
Other asset-backed securities....................................                  207,044                 203,577
Mortgage-backed securities.......................................                  179,397                 175,054
                                                                      ----------------------------------------------
Total............................................................                 $858,052                $835,321
                                                                      ==============================================
</TABLE>

An analysis of sales,  maturities,  and principal  repayments of the  Companies'
fixed maturities portfolio follows:
<TABLE>
<CAPTION>

                                                                             Gross          Gross         Proceeds
                                                          Amortized       Realized       Realized             from
                                                               Cost          Gains         Losses             Sale
----------------------------------------------------------------------------------------------------------------------
POST-MERGER:                                                              (DOLLARS IN THOUSANDS)
<S>                                                        <C>               <C>          <C>             <C>
FOR THE YEAR ENDED DECEMBER 31, 1999:
Scheduled principal repayments, calls, and
   tenders.........................................        $141,346          $216           $(174)        $141,388
Sales..............................................          80,472           141          (1,454)          79,159
                                                      ----------------------------------------------------------------
Total..............................................        $221,818          $357         $(1,628)        $220,547
                                                      ================================================================

FOR THE YEAR ENDED DECEMBER 31, 1998:
Scheduled principal repayments, calls, and tenders.        $102,504           $60             $(3)        $102,561
Sales..............................................          43,204           518          (1,030)          42,692
                                                      ----------------------------------------------------------------
Total..............................................        $145,708          $578         $(1,033)        $145,253
                                                      ================================================================

FOR THE PERIOD OCTOBER 25, 1997 THROUGH
   DECEMBER 31, 1997:
Scheduled principal repayments, calls, and
   tenders.........................................          $6,708            $2              --           $6,710
Sales..............................................           3,138            23              --            3,161
                                                      ----------------------------------------------------------------
Total..............................................          $9,846           $25              --           $9,871
                                                      ================================================================

POST-ACQUISITION:

FOR THE PERIOD JANUARY 1, 1997 THROUGH
   OCTOBER 24, 1997:
Scheduled principal repayments, calls, and
   tenders.........................................         $25,419            --              --          $25,419
Sales..............................................          14,052          $153             $(2)          14,203
                                                      ----------------------------------------------------------------
Total..............................................         $39,471          $153             $(2)         $39,622
                                                      ================================================================
</TABLE>


                                       27
<PAGE>


INVESTMENT VALUATION ANALYSIS: The Companies analyze the investment portfolio at
least  quarterly in order to determine if the carrying  value of any  investment
has been impaired.  The carrying value of debt and equity  securities is written
down to fair value by a charge to realized  losses when an  impairment  in value
appears to be other than temporary.

During the fourth quarter of 1998, Golden American  determined that the carrying
value of two bonds exceeded their  estimated net realizable  value. As a result,
at December  31,  1998,  Golden  American  recognized  a total  pre-tax  loss of
$973,000  to  reduce  the  carrying  value of the  bonds to their  combined  net
realizable  value of  $2,919,000.  During  the second  quarter of 1999,  further
information was received  regarding  these bonds and Golden American  determined
that the carrying value of the two bonds exceeded their estimated net realizable
value. As a result, at June 30, 1999, Golden American recognized a total pre-tax
loss of  $1,639,000 to further  reduce the carrying  value of the bonds to their
combined net realizable  value of $1,137,000.  During 1997, no investments  were
identified as having an other than temporary impairment.

INVESTMENTS  ON DEPOSIT:  At December 31, 1999 and 1998,  affidavits of deposits
covering  bonds with a par value of $6,470,000  were on deposit with  regulatory
authorities pursuant to certain statutory requirements.

INVESTMENT  DIVERSIFICATIONS:  The Companies' investment policies related to the
investment  portfolio  require  diversification  by  asset  type,  company,  and
industry  and set limits on the amount  which can be invested  in an  individual
issuer.  Such  policies  are at  least as  restrictive  as  those  set  forth by
regulatory authorities. The following percentages relate to holdings at December
31, 1999 and December 31, 1998. Fixed maturities  included  investments in basic
industrials (29% in 1999, 26% in 1998), conventional  mortgage-backed securities
(22% in 1999, 25% in 1998),  financial companies (16% in 1999, 19% in 1998), and
other asset-backed securities (19% in 1999, 11% in 1998). Mortgage loans on real
estate have been analyzed by geographical  location with concentrations by state
identified  as  California  (12% in 1999 and  1998),  Utah (10% in 1999,  11% in
1998), and Georgia (9% in 1999, 10% in 1998). There are no other  concentrations
of mortgage loans on real estate in any state  exceeding ten percent at December
31, 1999 and 1998.  Mortgage  loans on real  estate  have also been  analyzed by
collateral type with significant  concentrations  identified in office buildings
(34% in 1999,  36% in 1998),  industrial  buildings  (33% in 1999, 32% in 1998),
retail  facilities (19% in 1999, 20% in 1998), and multi-family  apartments (10%
in 1999, 8% in 1998).  Equity  securities are not  significant to the Companies'
overall investment portfolio.

No  investment  in any person or its  affiliates  (other  than  bonds  issued by
agencies of the United States government)  exceeded ten percent of stockholder's
equity at December 31, 1999.


                                       28
<PAGE>


4. COMPREHENSIVE INCOME
--------------------------------------------------------------------------------

Comprehensive  income  includes  all changes in  stockholder's  equity  during a
period except those  resulting  from  investments  by and  distributions  to the
stockholder.  Total  comprehensive  income  (loss)  for the  Companies  includes
$(452,000) for the year ended December 31, 1999 for First Golden ($1,015,000 for
the year ended December 31, 1998 and $159,000, and $536,000,  respectively,  for
the  periods  October  25, 1997  through  December  31, 1997 and January 1, 1997
through October 24, 1997).  Other  comprehensive  income excludes net investment
gains (losses)  included in net income,  which merely  represent  transfers from
unrealized to realized  gains and losses.  These amounts total  $(1,468,000)  in
1999 and  $(2,133,000) in 1998. Such amounts,  which have been measured  through
the date of sale,  are net of  income  taxes  and  adjustments  to VPIF and DPAC
totaling $(1,441,000) in 1999 and $705,000 in 1998.

5. FAIR VALUES OF FINANCIAL INSTRUMENTS

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

SFAS No. 107, "Disclosures about Fair Value of Financial  Instruments," requires
disclosure of estimated fair value of all financial instruments,  including both
assets and  liabilities  recognized  and not  recognized in a company's  balance
sheet, unless specifically exempted.  SFAS No. 119, "Disclosure about Derivative
Financial  Instruments  and  Fair  Value  of  Financial  Instruments,"  requires
additional  disclosures  about  derivative  financial  instruments.  Most of the
Companies'  investments,   investment  contracts,   and  debt  fall  within  the
standards' definition of a financial instrument.  Fair values for the Companies'
insurance  contracts  other than  investment  contracts  are not  required to be
disclosed. In cases where quoted market prices are not available, estimated fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly  affected by the assumptions used,  including
the discount rate and estimates of future cash flows. Accounting, actuarial, and
regulatory  bodies  are  continuing  to study  the  methodologies  to be used in
developing fair value information,  particularly as it relates to such things as
liabilities for insurance  contracts.  Accordingly,  care should be exercised in
deriving  conclusions about the Companies' business or financial condition based
on the information presented herein.

The Companies closely monitor the composition and yield of invested assets,  the
duration and interest credited on insurance liabilities,  and resulting interest
spreads and timing of cash flows.  These amounts are taken into consideration in
the  Companies'  overall  management  of interest rate risk,  which  attempts to
minimize  exposure to changing interest rates through the matching of investment
cash flows with  amounts  expected to be due under  insurance  contracts.  These
assumptions may not result in values  consistent with those obtained  through an
actuarial  appraisal of the Companies'  business or values that might arise in a
negotiated transaction.


                                       29
<PAGE>


The following compares carrying values as shown for financial reporting purposes
with estimated fair values:
<TABLE>
<CAPTION>

                                                                                    POST-MERGER
                                                         -------------------------------------------------------------------
December 31                                                             1999                              1998
----------------------------------------------------------------------------------------------------------------------------
                                                                                Estimated                       Estimated
                                                              Carrying               Fair        Carrying            Fair
                                                                 Value              Value           Value           Value
                                                         -------------------------------------------------------------------
                                                                               (DOLLARS IN THOUSANDS)

<S>                                                           <C>                <C>            <C>             <C>
ASSETS

   Fixed maturities, available for sale...............         $835,321           $835,321       $741,985        $741,985
   Equity securities..................................           17,330             17,330         11,514          11,514
   Mortgage loans on real estate......................          100,087             95,524         97,322          99,762
   Policy loans.......................................           14,157             14,157         11,772          11,772
   Short-term investments.............................           80,191             80,191         41,152          41,152
   Cash and cash equivalents..........................           14,380             14,380          6,679           6,679
   Separate account assets............................        7,562,717          7,562,717      3,396,114       3,396,114

LIABILITIES

   Annuity products...................................        1,017,105            953,546        869,009         827,597
   Surplus notes......................................          245,000            226,100         85,000          90,654
   Revolving note payable.............................            1,400              1,400             --              --
   Separate account liabilities.......................        7,562,717          7,562,717      3,396,114       3,396,114
</TABLE>

The following  methods and assumptions  were used by the Companies in estimating
fair values.

FIXED  MATURITIES:   Estimated  fair  values  of  conventional   mortgage-backed
securities not actively traded in a liquid market and publicly traded securities
are estimated using a third party pricing  process.  This pricing process uses a
matrix  calculation  assuming a spread over U.S.  Treasury  bonds based upon the
expected average lives of the securities.

EQUITY SECURITIES:  Estimated fair values of equity securities, which consist of
the Companies'  investment in the portfolios  underlying its separate  accounts,
are based upon the quoted fair value of  individual  securities  comprising  the
individual portfolios. For equity securities not actively traded, estimated fair
values are based upon values of issues of comparable returns and quality.

MORTGAGE LOANS ON REAL ESTATE: Fair values are estimated by discounting expected
cash flows, using interest rates currently offered for similar loans.

POLICY LOANS:  Carrying  values  approximate the estimated fair value for policy
loans.

SHORT-TERM  INVESTMENTS AND CASH AND CASH EQUIVALENTS:  Carrying values reported
in the Companies' historical cost basis balance sheet approximate estimated fair
value for these instruments due to their short-term nature.

SEPARATE ACCOUNT ASSETS: Separate account assets are reported at the quoted fair
values of the individual securities in the separate accounts.

ANNUITY PRODUCTS: Estimated fair values of the Companies' liabilities for future
policy  benefits for the divisions of the variable  annuity  products with fixed
interest  guarantees and for supplemental  contracts without life  contingencies
are  stated at cash  surrender  value,  the cost the  Companies  would  incur to
extinguish the liability.

SURPLUS NOTES:  Estimated fair value of the Companies'  surplus notes were based
upon  discounted  future  cash flows  using a discount  rate  approximating  the
current market value.

REVOLVING NOTE PAYABLE:  Carrying  value  reported in the Companies'  historical
cost basis balance sheet approximates  estimated fair value for this instrument,
as the agreement carries a variable interest rate provision.

SEPARATE ACCOUNT LIABILITIES:  Separate account liabilities are reported at full
account value in the Companies'  historical  cost balance sheet.  Estimated fair
values of separate account liabilities are equal to their carrying amount.


                                       30
<PAGE>


6. MERGER
--------------------------------------------------------------------------------

TRANSACTION:  On October 23, 1997, Equitable's  shareholders approved the Merger
Agreement  dated July 7, 1997 among  Equitable,  PFHI,  and ING.  On October 24,
1997,  PFHI, a Delaware  corporation,  acquired all of the  outstanding  capital
stock of  Equitable  according to the Merger  Agreement.  PFHI is a wholly owned
subsidiary  of ING, a global  financial  services  holding  company based in The
Netherlands.  Equitable, an Iowa corporation, in turn, owned all the outstanding
capital stock of Equitable Life Insurance Company of Iowa ("Equitable Life") and
Golden  American  and their wholly owned  subsidiaries.  In addition,  Equitable
owned all the  outstanding  capital  stock of  Locust  Street  Securities,  Inc.
("LSSI"),  Equitable Investment Services,  Inc. (subsequently  dissolved),  DSI,
Equitable of Iowa Companies  Capital Trust,  Equitable of Iowa Companies Capital
Trust II, and Equitable of Iowa Securities Network,  Inc.  (subsequently renamed
ING Funds Distributor,  Inc.). In exchange for the outstanding  capital stock of
Equitable,  ING paid total  consideration of approximately  $2.1 billion in cash
and stock and assumed  approximately  $400 million in debt.  As a result of this
transaction,  Equitable was merged into PFHI, which was  simultaneously  renamed
Equitable  of  Iowa  Companies,   Inc.  ("EIC"  or  the  "Parent"),  a  Delaware
corporation.  All costs of the merger,  including  expenses to terminate certain
benefit plans, were paid by the Parent.

ACCOUNTING TREATMENT:  The merger was accounted for as a purchase resulting in a
new basis of  accounting,  reflecting  estimated  fair  values  for  assets  and
liabilities at October 24, 1997. The purchase price was allocated to EIC and its
subsidiaries  with  $227,497,000  allocated  to  the  Companies.   Goodwill  was
established  for the  excess of the  merger  cost over the fair value of the net
assets and attributed to EIC and its subsidiaries  including Golden American and
First Golden.  The amount of goodwill allocated to the Companies relating to the
merger was  $151,127,000 at the merger date and is being amortized over 40 years
on a  straight-line  basis.  The  carrying  value of  goodwill  will be reviewed
periodically  for any indication of impairment in value.  The  Companies'  DPAC,
previous balance of VPIF, and unearned  revenue reserve,  as of the merger date,
were eliminated and a new asset of $44,297,000 representing VPIF was established
for all policies in force at the merger date.

VALUE OF PURCHASED  INSURANCE IN FORCE: As part of the merger,  a portion of the
acquisition  cost was  allocated to the right to receive  future cash flows from
insurance  contracts  existing  with the  Companies  at the  merger  date.  This
allocated cost represents VPIF reflecting the value of those purchased  policies
calculated by discounting the actuarially  determined  expected future cash flow
at the discount rate determined by ING.

An analysis of the VPIF asset follows:
<TABLE>
<CAPTION>

                                                                                    POST-MERGER
                                                      ------------------------------------------------------------------------
                                                                                                               For the period
                                                                 For the year             For the year       October 25, 1997
                                                                        ended                    ended                through
                                                            December 31, 1999        December 31, 1998      December 31, 1997
                                                      ------------------------------------------------------------------------
                                                                              (DOLLARS IN THOUSANDS)

<S>                                                                  <C>                       <C>                    <C>
   Beginning balance.............................                    $35,977                   $43,174                $44,297
                                                      ------------------------------------------------------------------------

   Imputed interest..............................                      2,373                     2,802                  1,004
   Amortization..................................                     (7,930)                   (7,753)                (1,952)
   Changes in assumptions of timing of
     gross profits...............................                       (681)                      227                     --
                                                      ------------------------------------------------------------------------
   Net amortization..............................                     (6,238)                   (4,724)                  (948)
   Adjustment for unrealized gains (losses)
     on available for sale securities............                      1,988                       (28)                  (175)
   Adjustment for other receivables and
     merger costs................................                         --                    (2,445)                    --
                                                      ------------------------------------------------------------------------
   Ending balance................................                    $31,727                   $35,977                $43,174
                                                      ========================================================================
</TABLE>


                                       31
<PAGE>


Interest  is imputed on the  unamortized  balance of VPIF at a rate of 7.33% for
the year ended  December 31, 1999,  7.38% for the year ended  December 31, 1998,
and 7.03% for the period  October 25, 1997 through  December 31, 1997.  In 1999,
VPIF was adjusted to increase amortization by $681,000 to reflect changes in the
assumptions  related to the timing of estimated gross profits.  The amortization
of VPIF,  net of  imputed  interest,  is  charged  to  expense.  VPIF  decreased
$2,664,000  during 1998 to adjust the value of other  receivables  and increased
$219,000  in 1998 as a result of an  adjustment  to the  merger  costs.  VPIF is
adjusted for the  unrealized  gains  (losses) on available for sale  securities;
such changes are included  directly in  stockholder's  equity.  Based on current
conditions  and  assumptions  as to the  impact  of future  events  on  acquired
policies in force, the expected approximate net amortization relating to VPIF as
of December 31, 1999 is  $3,958,000 in 2000,  $3,570,000 in 2001,  $3,322,000 in
2002,  $2,807,000 in 2003, and $2,292,000 in 2004. Actual  amortization may vary
based upon changes in assumptions and experience.

7. ACQUISITION
--------------------------------------------------------------------------------

TRANSACTION:  On August 13,  1996,  Equitable  acquired  all of the  outstanding
capital  stock of BT Variable  from  Whitewood,  a wholly  owned  subsidiary  of
Bankers Trust Company ("Bankers Trust"),  according to the terms of the Purchase
Agreement dated May 3, 1996 between Equitable and Whitewood. In exchange for the
outstanding capital stock of BT Variable,  Equitable paid the sum of $93,000,000
in cash to Whitewood  in  accordance  with the terms of the Purchase  Agreement.
Equitable  also paid the sum of  $51,000,000  in cash to Bankers Trust to retire
certain debt owed by BT Variable to Bankers Trust pursuant to a revolving credit
arrangement.  After the acquisition,  the BT Variable,  Inc. name was changed to
EIC Variable,  Inc. On April 30, 1997, EIC Variable, Inc. was liquidated and its
investments in Golden American and DSI were transferred to Equitable,  while the
remainder of its net assets were contributed to Golden American. On December 30,
1997, EIC Variable, Inc. was dissolved.

ACCOUNTING TREATMENT:  The acquisition was accounted for as a purchase resulting
in a new basis of accounting,  which reflected  estimated fair values for assets
and  liabilities  at August 13, 1996.  The purchase  price was  allocated to the
three  companies  purchased  -  BT  Variable,  DSI,  and  Golden  American.  The
allocation  of  the  purchase  price  to  Golden   American  was   approximately
$139,872,000. Goodwill was established for the excess of the purchase price over
the fair value of the net assets acquired and attributed to Golden American. The
amount of goodwill relating to the acquisition was $41,113,000 and was amortized
over 25 years on a  straight-line  basis  until the October 24, 1997 merger with
ING. Golden  American's  DPAC,  previous  balance of VPIF, and unearned  revenue
reserve, as of the acquisition date, were eliminated and an asset of $85,796,000
representing  VPIF was  established for all policies in force at the acquisition
date.

VALUE OF PURCHASED INSURANCE IN FORCE: As part of the acquisition,  a portion of
the  acquisition  cost was  allocated to the right to receive  future cash flows
from the  insurance  contracts  existing  with  Golden  American  at the date of
acquisition.  This allocated cost  represents VPIF reflecting the value of those
purchased policies calculated by discounting the actuarially determined expected
future cash flows at the discount rate determined by Equitable.

An analysis of the VPIF asset follows:
<TABLE>
<CAPTION>

                                                                                 POST-ACQUISITION
                                                                            ---------------------------
                                                                                        For the period
                                                                                       January 1, 1997
                                                                                               through
                                                                                      October 24, 1997
                                                                            ---------------------------
                                                                              (DOLLARS IN THOUSANDS)

<S>                                                                                            <C>
             Beginning balance.........................................                        $83,051
                                                                            ---------------------------

             Imputed interest..........................................                          5,138
             Amortization..............................................                        (12,656)
             Changes in assumption of timing of gross profits..........                          2,293
                                                                            ---------------------------
             Net amortization..........................................                         (5,225)
             Adjustment for unrealized gains on available for sale
               securities..............................................                           (373)
                                                                            ---------------------------
             Ending balance............................................                        $77,453
                                                                            ===========================
</TABLE>


                                       32
<PAGE>


Interest  was  imputed on the  unamortized  balance of VPIF at rates of 7.70% to
7.80% for the period January 1, 1997 through October 24, 1997. The  amortization
of VPIF, net of imputed interest, was charged to expense. VPIF was also adjusted
for the  unrealized  gains on available for sale  securities;  such changes were
included directly in stockholder's equity.

8. INCOME TAXES
--------------------------------------------------------------------------------

Golden  American  files a  consolidated  federal  income tax  return.  Under the
Internal Revenue Code, a newly acquired insurance company cannot file as part of
the Parent's consolidated tax return for 5 years.

At  December  31,  1999,   the  Companies   have  net  operating   loss  ("NOL")
carryforwards  for federal  income tax purposes of  approximately  $161,799,000.
Approximately $5,094,000, $3,354,000, $53,310,000, and $100,041,000 of these NOL
carryforwards  are  available to offset future  taxable  income of the Companies
through the years 2011, 2012, 2013, and 2014, respectively.

INCOME TAX EXPENSE (BENEFIT)
Income tax expense (benefit) included in the consolidated  financial  statements
follows:
<TABLE>
<CAPTION>

                                                                        POST-MERGER                        | POST-ACQUISITION
                                                  ---------------------------------------------------------|-------------------
                                                                                            For the period |   For the period
                                                                                               October 25, |       January 1,
                                                       For the year      For the year                 1997 |             1997
                                                              ended             ended              through |          through
                                                       December 31,      December 31,         December 31, |      October 24,
                                                               1999              1998                 1997 |             1997
                                                  ---------------------------------------------------------|-------------------
                                                                             (DOLLARS IN THOUSANDS)        |
                                                                                                           |
<S>                                                          <C>                <C>                  <C>              <C>
   Current...................................                    --                 --                 --  |              $12
   Deferred..................................                $8,523             $5,279               $146  |           (1,349)
                                                  ---------------------------------------------------------|-------------------
                                                             $8,523             $5,279               $146  |          $(1,337)
                                                  =============================================================================
</TABLE>

The effective  tax rate on income  (loss) before income taxes is different  from
the prevailing  federal  income tax rate. A  reconciliation  of this  difference
follows:
<TABLE>
<CAPTION>

                                                                           POST-MERGER                     | POST-ACQUISITION
                                                       ----------------------------------------------------|------------------
                                                                                           For the period  |  For the period
                                                                                              October 25,  |      January 1,
                                                          For the year      For the year             1997  |            1997
                                                                 ended             ended          through  |         through
                                                          December 31,      December 31,     December 31,  |     October 24,
                                                                  1999              1998             1997  |            1997
                                                       ----------------------------------------------------|------------------
                                                                               (DOLLARS IN THOUSANDS)      |
                                                                                                           |
<S>                                                            <C>               <C>                <C>                <C>
   Income (loss) before income taxes...............            $19,737           $10,353            $(279) |            $(608)
                                                       ====================================================|==================
                                                                                                           |
   Income tax (benefit) at federal statutory                                                               |
     rate..........................................             $6,908            $3,624             $(98) |            $(213)
   Tax effect (decrease) of:                                                                               |
     Goodwill amortization.........................              1,322             1,322              220  |               --
     Compensatory stock option and restricted                                                              |
       stock expense...............................                 --                --               --  |           (1,011)
     Meals and entertainment.......................                199               157               23  |               53
     Other items...................................                 94               176                1  |             (166)
                                                       ----------------------------------------------------|------------------
   Income tax expense (benefit)....................             $8,523            $5,279             $146  |          $(1,337)
                                                       =======================================================================
</TABLE>


                                       33
<PAGE>


DEFERRED INCOME TAXES
The tax effect of temporary  differences giving rise to the Companies'  deferred
income tax assets and liabilities at December 31, 1999 and 1998 follows:
<TABLE>
<CAPTION>

                                                                                            POST-MERGER
                                                                           ---------------------------------------------
  December 31                                                                       1999                   1998
  ----------------------------------------------------------------------------------------------------------------------
                                                                                       (DOLLARS IN THOUSANDS)
<S>                                                                                    <C>                <C>

  Deferred tax assets:
     Net unrealized depreciation of securities
       at fair value...................................................                      --            $1,023
     Net unrealized depreciation of available for sale fixed
       maturities......................................................                  $3,745                --
     Future policy benefitS............................................                 133,494            66,273
     Goodwill..........................................................                  16,323            16,323
     Net operating loss carryforwards..................................                  56,630            17,821
     Other.............................................................                   1,333             1,272
                                                                           ---------------------------------------------
                                                                                        211,525           102,712
  Deferred tax liabilities:
    Net unrealized appreciation of securities
       at fair value...................................................                    (832)               --
     Net unrealized appreciation of available for sale fixed
       maturities......................................................                      --              (332)
     Fixed maturity securities.........................................                 (17,774)           (1,034)
     Deferred policy acquisition costs.................................                (154,706)          (55,520)
     Mortgage loans on real estate.....................................                    (715)             (845)
     Value of purchased insurance in force.............................                 (10,462)          (12,592)
     Other.............................................................                  (1,348)             (912)
                                                                           ---------------------------------------------
                                                                                       (185,837)          (71,235)
                                                                           ---------------------------------------------
  Valuation allowance..................................................                  (3,745)               --
                                                                           ---------------------------------------------
  Deferred income tax asset............................................                 $21,943           $31,477
                                                                           =============================================
</TABLE>

At December 31, 1999, the Company reported,  for financial  statement  purposes,
unrealized losses on certain  investments which have not been recognized for tax
purposes.  The  Companies  have  established a valuation  allowance  against the
deferred  income tax assets  associated  with  unrealized  depreciation on fixed
maturities available for sale as the Companies are uncertain as to whether their
capital  losses,  if ever  realized,  could be utilized to offset future capital
gains.

9. RETIREMENT PLANS AND EMPLOYEE STOCK COMPENSATION
--------------------------------------------------------------------------------

DEFINED BENEFIT PLANS

In 1999 and 1998,  the  Companies  were  allocated  their  share of the  pension
liability associated with their employees.  The Companies' employees are covered
by the  employee  retirement  plan of an  affiliate,  Equitable  Life.  Further,
Equitable  Life  sponsors a defined  contribution  plan that is qualified  under
Internal Revenue Code Section 401(k).


                                       34
<PAGE>


The following tables summarize the benefit obligations and the funded status for
pension benefits over the two-year period ended December 31, 1999:
<TABLE>
<CAPTION>

                                                                                    1999                    1998
                                                                           ------------------------------------------------
                                                                                       (DOLLARS IN THOUSANDS)
<S>                                                                                <C>                     <C>

    Change in benefit obligation:
      Benefit obligation at January 1..................................             $4,454                    $956
      Service cost.....................................................              1,500                   1,138
      Interest cost....................................................                323                      97
      Actuarial (gain) loss............................................             (2,056)                  2,266
      Benefit payments.................................................                 --                      (3)
                                                                           ------------------------------------------------
      Benefit obligation at December 31................................             $4,221                  $4,454
                                                                           ================================================

    Funded status:
      Funded status at December 31.....................................            $(4,221)                $(4,454)
      Unrecognized net loss............................................                210                   2,266
                                                                           ------------------------------------------------
      Net amount recognized............................................            $(4,011)                $(2,188)
                                                                           ================================================
</TABLE>

The  Companies'  plan assets were held by Equitable  Life, an affiliate.  During
1998, the Equitable Life Employee  Pension Plan began  investing in an undivided
interest of the ING-NA  Master Trust (the "Master  Trust").  Boston Safe Deposit
and Trust Company holds the Master Trust's investment assets.

The  weighted-average  assumptions  used in the  measurement  of the  Companies'
benefit obligation follows:

    December 31                              1999                    1998
--------------------------------------------------------------------------------

    Discount rate....................       8.00%                   6.75%
    Expected return on plan assets...       9.25                    9.50
    Rate of compensation increase....       5.00                    4.00

The following table provides the net periodic  benefit cost for the fiscal years
1999, 1998, and 1997:
<TABLE>
<CAPTION>

                                                                     POST-MERGER                       |  POST-ACQUISITION
                                                -------------------------------------------------------|-----------------------
                                                    For the year     For the year     For the period   |    For the period
                                                           ended            ended   October 25, 1997   |   January 1, 1997
                                                    December 31,     December 31,            through   |           through
                                                            1999             1998  December 31, 1997   |  October 24, 1997
                                                -------------------------------------------------------|-----------------------
                                                                            (DOLLARS IN THOUSANDS)     |
                                                                                                       |
<S>                                                       <C>              <C>                  <C>                   <C>
    Service cost...............................           $1,500           $1,138               $114   |              $568
    Interest cost..............................              323               97                 10   |                15
    Amortization of net loss...................               --               --                 --   |                 1
                                                -------------------------------------------------------|-----------------------
    Net periodic benefit cost..................           $1,823           $1,235               $124   |              $584
                                                ===============================================================================
</TABLE>

There were no gains or losses resulting from curtailments or settlements  during
1999, 1998, or 1997.

The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for pension plans with accumulated  benefit obligations in excess
of plan assets were $4,221,000, $2,488,000, and $0, respectively, as of December
31, 1999 and $4,454,000,  $3,142,000,  and $0, respectively,  as of December 31,
1998.

During 1997, ING approved the 1997 Phantom Plan for certain key  employees.  The
Phantom Plan is similar to a standard  stock option plan;  however,  the phantom
share option  entitles the holder to a cash benefit in Dutch Guilders  linked to
the rise in value of ING ordinary shares on the Amsterdam  Stock  Exchange.  The
plan  participants are entitled to any appreciation in the value of ING ordinary
shares over the  Phantom  Plan option  price  (strike  price) of 53.85 Euros for
options issued on July 1, 1999,  140.40 Dutch Guilders for options issued on May
26, 1998,  and 85.10 Dutch  Guilders for options issued on May 23, 1997, not the
ordinary shares themselves.
                                       35
<PAGE>


Options are  granted at fair value on the date of grant.  Options in the Phantom
Plan are subject to forfeiture  to ING should the  individuals  terminate  their
relationship  with ING  before  the  three-year  initial  retention  period  has
elapsed. All options expire five years from the date of grant.

On July 1, 1999,  ING issued  34,750  options to  employees  of Golden  American
related to this plan at a strike price of 53.85 Euros.

On May 26,  1998,  ING issued  42,400  options  related to this plan at a strike
price of 140.40 Dutch Guilders.  Since the strike price at December 31, 1998 was
higher than the ING share price,  there was no  compensation  expense related to
these options in 1998.

On May 23, 1997, ING issued 3,500 options related to this plan at a strike price
of 85.10  Dutch  Guilders.  Since the strike  price was lower than the ING share
price at December 31, 1998,  Golden  American  incurred  $46,000 of compensation
expense related to these options during 1998.

No expense was recognized in 1999 related to the above  options.  As of December
31, 1999, 58,250 options remain outstanding.

10. RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

OPERATING AGREEMENTS:  DSI, an affiliate,  acts as the principal underwriter (as
defined in the Securities Act of 1933 and the Investment Company Act of 1940, as
amended)  and  distributor  of the  variable  insurance  products  issued by the
Companies.  DSI is authorized to enter into  agreements with  broker/dealers  to
distribute   the   Companies'    variable   insurance   products   and   appoint
representatives  of the  broker/dealers as agents.  For the years ended December
31, 1999 and 1998 and for the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997, the Companies paid  commissions to
DSI  totaling   $181,536,000,   $117,470,000,   $9,931,000,   and   $26,419,000,
respectively.

Golden American provides certain managerial and supervisory services to DSI. The
fee paid by DSI for these  services is  calculated  as a  percentage  of average
assets in the variable separate accounts.  For the years ended December 31, 1999
and 1998 and for the  periods  October 25, 1997  through  December  31, 1997 and
January 1, 1997 through October 24, 1997, the fee was  $10,136,000,  $4,771,000,
$508,000, and $2,262,000, respectively.

Effective January 1, 1998, the Companies have an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM provides
asset  management and accounting  services.  Under the agreement,  the Companies
record a fee  based on the  value of the  assets  under  management.  The fee is
payable quarterly. For the years ended December 31, 1999 and 1998, the Companies
incurred fees of $2,227,000 and $1,504,000, respectively, under this agreement.

Prior to 1998, the Companies had a service  agreement with Equitable  Investment
Services,  Inc.  ("EISI"),  an  affiliate,  in which  EISI  provided  investment
management  services.  Payments for these services totaled $200,000 and $768,000
for the periods  October 25, 1997 through  December 31, 1997 and January 1, 1997
through October 24, 1997, respectively.

Golden American has a guaranty  agreement with Equitable Life, an affiliate.  In
consideration  of an annual fee,  payable June 30,  Equitable Life guarantees to
Golden American that it will make funds available, if needed, to Golden American
to pay the  contractual  claims made under the  provisions of Golden  American's
life  insurance  and  annuity  contracts.  The  agreement  is not,  and  nothing
contained  therein or done pursuant thereto by Equitable Life shall be deemed to
constitute,  a direct or indirect  guaranty by Equitable  Life of the payment of
any  debt or  other  obligation,  indebtedness,  or  liability,  of any  kind or
character whatsoever,  of Golden American.  The agreement does not guarantee the
value of the  underlying  assets  held in  separate  accounts  in which funds of
variable life insurance and variable  annuity  policies have been invested.  The
calculation  of the  annual  fee is  based  on risk  based  capital.  As  Golden
American's  risk based capital level was above required  amounts,  no annual fee
was payable in 1999 or in 1998.


                                       36
<PAGE>


Golden American  provides certain  advisory,  computer,  and other resources and
services to Equitable Life.  Revenues for these services,  which reduced general
expenses incurred by Golden American,  totaled $6,107,000 and $5,833,000 for the
years ended December 31, 1999 and 1998, respectively  ($1,338,000 and $2,992,000
for the periods  October 25, 1997 through  December 31, 1997 and January 1, 1997
through October 24, 1997, respectively).

The Companies have a service  agreement  with Equitable Life in which  Equitable
Life  provides  administrative  and  financial  related  services.   Under  this
agreement,  the Companies incurred expenses of $1,251,000 and $1,058,000 for the
years ended  December 31, 1999 and 1998,  respectively  ($13,000 and $16,000 for
the  periods  October  25, 1997  through  December  31, 1997 and January 1, 1997
through October 24, 1997, respectively).

First  Golden  provides  resources  and  services  to DSI.  Revenues  for  these
services,  which reduce  general  expenses  incurred by the  Companies,  totaled
$387,000 in 1999 and $75,000 in 1998.

Golden American  provides  resources and services to ING Mutual Funds Management
Co.,  LLC, an  affiliate.  Revenues for these  services,  which  reduce  general
expenses incurred by Golden American, totaled $244,000 in 1999.

Golden  American  provides  resources  and  services  to  United  Life & Annuity
Insurance  Company,  an  affiliate.  Revenues for these  services,  which reduce
general expenses incurred by Golden American, totaled $460,000 in 1999.

The  Companies  provide  resources  and  services  to  Security  Life of  Denver
Insurance  Company,  an  affiliate.  Revenues for these  services,  which reduce
general expenses incurred by the Companies, totaled $216,000 in 1999.

The  Companies  provide  resources  and  services to  Southland  Life  Insurance
Company,  an  affiliate.  Revenues  for these  services,  which  reduce  general
expenses incurred by the Companies, totaled $103,000 in 1999.

In 1999, 1998, and 1997, the Companies  received 10.0%,  9.6%, and 5.1% of total
premiums, net of reinsurance, for variable products sold through five affiliates
as noted in the following table:
<TABLE>
<CAPTION>

                                                                     POST-MERGER                        | POST-ACQUISITION
                                                --------------------------------------------------------|----------------------
                                                                                                        |
                                                   For the year      For the year      For the period   |     For the period
                                                          ended             ended    October 25, 1997   |    January 1, 1997
                                                   December 31,      December 31,             through   |            through
                                                           1999              1998   December 31, 1997   |   October 24, 1997
                                                --------------------------------------------------------|----------------------
                                                                             (DOLLARS IN MILLIONS)      |
<S>                                                       <C>              <C>                 <C>                     <C>
                                                                                                        |
   LSSI......................................             $168.5           $122.9               $9.3    |              $16.9
   Vestax Securities Corporation.............               88.1             44.9                1.9    |                1.2
   DSI.......................................                2.5             13.6                2.1    |                0.4
   Multi-Financial Securities Corporation....               44.1             13.4                 --    |                 --
   IFG Network Securities, Inc...............               25.8              3.7                 --    |                 --
                                                --------------------------------------------------------|----------------------
   Total.....................................             $329.0           $198.5              $13.3    |              $18.5
                                                ===============================================================================
</TABLE>

RECIPROCAL LOAN AGREEMENT: Golden American maintains a reciprocal loan agreement
with ING America Insurance  Holdings,  Inc. ("ING AIH"), a Delaware  corporation
and  affiliate,  to  facilitate  the  handling of unusual  and/or  unanticipated
short-term  cash  requirements.  Under this  agreement,  which became  effective
January 1, 1998 and expires  December 31, 2007,  Golden American and ING AIH can
borrow up to  $65,000,000  from one another.  Prior to lending funds to ING AIH,
Golden American must obtain the approval from the Department of Insurance of the
State of Delaware.  Interest on any Golden American borrowings is charged at the
rate of ING AIH's cost of funds for the interest period plus 0.15%.  Interest on
any ING AIH  borrowings  is charged at a rate based on the  prevailing  interest
rate of U.S.  commercial  paper available for purchase with a similar  duration.
Under this agreement,  Golden American  incurred interest expense of $815,000 in
1999 and $1,765,000 in 1998. At December 31, 1999 and 1998,  Golden American did
not have any borrowings or receivables from ING AIH under this agreement.


                                       37
<PAGE>


LINE OF CREDIT:  Golden  American  maintained  a line of credit  agreement  with
Equitable to facilitate the handling of unusual and/or unanticipated  short-term
cash requirements. Under this agreement, which became effective December 1, 1996
and expired  December 31, 1997,  Golden American could borrow up to $25,000,000.
Interest  on any  borrowings  was  charged  at the rate of  Equitable's  monthly
average  aggregate cost of short-term  funds plus 1.00%.  Under this  agreement,
Golden  American  incurred  interest  expense  of  $211,000  for the year  ended
December 31, 1998 ($213,000 for the period October 25, 1997 through December 31,
1997 and $362,000 for the period January 1, 1997 through October 24, 1997).  The
outstanding  balance was paid by a capital  contribution and with funds borrowed
from ING AIH.

SURPLUS NOTES:  On December 30, 1999,  Golden  American issued an 8.179% surplus
note in the  amount of  $50,000,000  to  Equitable  Life.  The note  matures  on
December  29,  2029.  Payment  of the  note  and  related  accrued  interest  is
subordinate to payments due to policyholders,  claimant and beneficiary  claims,
as well as debts owed to all other  classes of debtors,  other than surplus note
holders,  of Golden  American.  Any payment of principal and/or interest made is
subject to the prior approval of the Delaware Insurance Commissioner. Under this
agreement, Golden American incurred no interest in 1999.

On December 8, 1999,  Golden American issued a 7.979% surplus note in the amount
of $35,000,000 to First Columbine Life Insurance Company ("First Columbine"), an
affiliate. The note matures on December 7, 2029. Payment of the note and related
accrued interest is subordinate to payments due to  policyholders,  claimant and
beneficiary claims, as well as debts owed to all other classes of debtors, other
than surplus note holders,  of Golden American.  Any payment of principal and/or
interest  made is  subject  to the  prior  approval  of the  Delaware  Insurance
Commissioner. Under this agreement, Golden American paid no interest in 1999.

On September 30, 1999, Golden American issued a 7.75% surplus note in the amount
of  $75,000,000  to ING AIH. The note matures on September 29, 2029.  Payment of
the  note and  related  accrued  interest  is  subordinate  to  payments  due to
policyholders,  claimant,  and beneficiary  claims, as well as debts owed to all
other classes of debtors,  other than surplus note holders,  of Golden American.
Any payment of principal  and/or  interest made is subject to the prior approval
of the Delaware Insurance  Commissioner.  Under this agreement,  Golden American
incurred  interest  expense of $1,469,000 in 1999. On December 30, 1999, ING AIH
assigned the note to Equitable Life.

On December 30, 1998,  Golden American issued a 7.25% surplus note in the amount
of $60,000,000 to Equitable Life. The note matures on December 29, 2028. Payment
of the note and related  accrued  interest  is  subordinate  to payments  due to
policyholders,  claimant,  and beneficiary  claims, as well as debts owed to all
other classes of debtors,  other than surplus note holders,  of Golden American.
Any payment of principal  and/or  interest made is subject to the prior approval
of the Delaware Insurance  Commissioner.  Under this agreement,  Golden American
incurred  interest  expense of $4,350,000 in 1999.  Golden American  incurred no
interest in 1998.

On December 17, 1996, Golden American issued an 8.25% surplus note in the amount
of $25,000,000 to Equitable.  The note matures on December 17, 2026.  Payment of
the  note and  related  accrued  interest  is  subordinate  to  payments  due to
policyholders,  claimant,  and beneficiary  claims, as well as debts owed to all
other classes of debtors of Golden  American.  Any payment of principal  made is
subject to the prior  approval of the Delaware  Insurance  Commissioner.  Golden
American  incurred  interest  totaling  $2,063,000 in 1999,  unchanged from 1998
($344,000 and $1,720,000 for the periods  October 25, 1997 through  December 31,
1997 and January 1, 1997 through  October 24, 1997,  respectively).  On December
17, 1996, Golden American  contributed the $25,000,000 to First Golden acquiring
200,000 shares of common stock (100% of outstanding stock).

STOCKHOLDER'S  EQUITY:  During 1999 and 1998,  Golden American  received capital
contributions from its Parent of $121,000,000 and $122,500,000, respectively.


                                       38
<PAGE>


11. COMMITMENTS AND CONTINGENCIES
--------------------------------------------------------------------------------

REINSURANCE:  At December 31, 1999, the Companies had reinsurance  treaties with
four unaffiliated reinsurers and one affiliated reinsurer covering a significant
portion of the mortality  risks under its variable  contracts.  Golden  American
remains liable to the extent  reinsurers do not meet their obligations under the
reinsurance agreements. Reinsurance ceded in force for life mortality risks were
$119,575,000  and $111,552,000 at December 31, 1999 and 1998,  respectively.  At
December 31, 1999 and 1998,  the Companies  have a net receivable of $14,834,000
and $7,586,000,  respectively, for reserve credits, reinsurance claims, or other
receivables   from  these   reinsurers   comprised  of  $493,000  and  $439,000,
respectively,  for claims recoverable from reinsurers,  $1,201,000 and $543,000,
respectively,  for a payable  for  reinsurance  premiums,  and  $15,542,000  and
$7,690,000,  respectively,  for a  receivable  from an  unaffiliated  reinsurer.
Included in the  accompanying  financial  statements are net  considerations  to
reinsurers of $9,883,000,  $4,797,000,  $326,000,  and $1,871,000 and net policy
benefits recoveries of $3,059,000,  $2,170,000, $461,000, and $1,021,000 for the
years ended  December  31,  1999 and 1998 and for the  periods  October 25, 1997
through  December  31,  1997 and  January  1, 1997  through  October  24,  1997,
respectively.

Effective  June 1, 1994,  Golden  American  entered into a modified  coinsurance
agreement with an unaffiliated reinsurer.  The accompanying financial statements
are  presented  net of the  effects  of the  treaty  which  increased  income by
$1,729,000,  $1,022,000, $265,000, and $335,000 for the years ended December 31,
1999 and 1998 and for the periods October 25, 1997 through December 31, 1997 and
January 1, 1997 through October 24, 1997, respectively.

The reinsurance  treaties that covered the nonstandard  minimum guaranteed death
benefits  for new  business  have been  terminated  for  business  issued  after
December 31, 1999. The Companies are currently pursuing alternative  reinsurance
arrangements  for new business  issued after December 31, 1999.  There can be no
assurance that such alternative  arrangements will be available. The reinsurance
covering  business in force at December  31, 1999 will  continue to apply in the
future.

GUARANTY FUND  ASSESSMENTS:  Assessments are levied on the Companies by life and
health guaranty  associations in most states in which the Companies are licensed
to cover losses of policyholders of insolvent or rehabilitated insurers. In some
states,  these  assessments  can be partially  recovered  through a reduction in
future premium taxes.  The Companies  cannot predict  whether and to what extent
legislative  initiatives may affect the right to offset. The associated cost for
a  particular  insurance  company  can vary  significantly  based upon its fixed
account  premium  volume by line of business  and state  premiums as well as its
potential for premium tax offset. The Companies have established an undiscounted
reserve to cover such assessments,  review information regarding known failures,
and revise  estimates of future  guaranty  fund  assessments.  Accordingly,  the
Companies accrued and charged to expense an additional $3,000 and $1,123,000 for
the years ended  December  31,  1999 and 1998,  respectively,  $141,000  for the
period  October 25, 1997  through  December 31, 1997 and $446,000 for the period
January 1, 1997  through  October 24, 1997.  At December 31, 1999 and 1998,  the
Companies  have  an   undiscounted   reserve  of  $2,444,000   and   $2,446,000,
respectively,  to cover estimated future assessments (net of related anticipated
premium  tax  credits)  and has  established  an  asset  totaling  $618,000  and
$586,000,  respectively,  for assessments paid which may be recoverable  through
future premium tax offsets.  The Companies believe this reserve is sufficient to
cover expected future guaranty fund assessments based upon previous premiums and
known insolvencies at this time.

LITIGATION:  The  Companies,  like other  insurance  companies,  may be named or
otherwise   involved  in  lawsuits,   including   class   action   lawsuits  and
arbitrations.  In some  class  action  and other  lawsuits  involving  insurers,
substantial  damages  have  been  sought  and/or  material  settlement  or award
payments  have  been  made.  The  Companies  currently  believe  no  pending  or
threatened  lawsuits  or  actions  exist  that are  reasonably  likely to have a
material adverse impact on the Companies.

VULNERABILITY FROM CONCENTRATIONS:  The Companies have various concentrations in
the investment  portfolio (see Note 3 for further  information).  The Companies'
asset growth, net investment income, and cash flow are primarily  generated from
the sale of variable  insurance  products and associated  future policy benefits
and separate  account  liabilities.  Substantial  changes in tax laws that would
make these  products less  attractive to consumers and extreme  fluctuations  in
interest  rates or stock  market  returns,  which may  result  in  higher  lapse
experience than assumed, could cause a severe impact to the Companies' financial
condition. Two broker/dealers,  each having at least ten percent of total sales,


                                       39
<PAGE>


generated 28% of the Companies' sales in 1999 (26% and 53% by two broker/dealers
during 1998 and 1997,  respectively).  The Premium Plus product generated 79% of
the Companies' sales during 1999 (63% during 1998 and 11% during 1997).

LEASES:  The Companies lease their home office space,  certain other  equipment,
and capitalized  computer  software under operating  leases which expire through
2018.  During the years  ended  December  31,  1999 and 1998 and for the periods
October 25, 1997 through  December 31, 1997 and January 1, 1997 through  October
24, 1997, rent expense totaled $2,273,000,  $1,241,000,  $39,000,  and $331,000,
respectively.  At December  31,  1999,  minimum  rental  payments  due under all
non-cancelable operating leases with initial terms of one year or more are: 2000
- $3,596,000;  2001 - $3,403,000;  2002 - $2,859,000;  2003 - $2,486,000; 2004 -
$2,419,000, and 2005 and thereafter - $42,852,000.

REVOLVING  NOTE  PAYABLE:  To  enhance  short-term   liquidity,   the  Companies
established a revolving  note payable  effective July 27, 1998 and expiring July
31, 1999 with SunTrust Bank, Atlanta (the "Bank").  The note was approved by the
Boards of  Directors  of Golden  American and First Golden on August 5, 1998 and
September  29,  1998,  respectively.  As of July 31, 1999,  the  SunTrust  Bank,
Atlanta  revolving note facility was extended to July 31, 2000. The total amount
the Companies may have outstanding is $85,000,000,  of which Golden American and
First Golden have individual  credit  sublimits of $75,000,000 and  $10,000,000,
respectively. The note accrues interest at an annual rate equal to: (1) the cost
of funds for the Bank for the period  applicable  for the advance  plus 0.25% or
(2) a rate quoted by the Bank to the Companies for the advance. The terms of the
agreement  require the Companies to maintain the minimum level of Company Action
Level Risk Based Capital as established  by applicable  state law or regulation.
During the years  ended  December  31,  1999 and 1998,  the  Companies  incurred
interest expense of $198,000 and $352,000,  respectively.


                                       40
<PAGE>


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE.

None.

PART III.

ITEMS 10 - 13.

Information  called for by items 10 through 13 of this part is omitted  pursuant
to General Instruction I (2) (c) of Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)(1) and (a)(2) Financial statements and schedules

The  following   consolidated  financial  statements  of  Golden  American  Life
Insurance Company are included in Item 8:
<TABLE>
<CAPTION>

                                                                                                                     PAGE
                                                                                                                     ----
<S>                                                                                                                    <C>
Balance Sheets - December 31, 1999 and 1998............................................................................15
Statements of Operations - For the years ended December 31, 1999 and 1998 and for the periods
  October 25, 1997 through December 31, 1997 and January 1, 1997 through October 24, 1997............................. 17
Statements  of Changes in  Stockholder's  Equity - For the years ended December 31, 1999 and 1998
  and for the periods October 25, 1997 through December 31, 1997 and January 1, 1997 through
  October 24, 1997.....................................................................................................18
Statements of Cash Flows - For the years ended December 31, 1999 and 1998 and for the periods
   October 25, 1997 through December 31, 1997 and January 1, 1997 through October 24, 1997.............................19
Notes to Financial Statements..........................................................................................21

The following consolidated financial statement schedules of Golden American Life
Insurance Company are included in Item 14(d):

                                                                                                                     PAGE
                                                                                                                     ----
Schedule I - Summary of investments - other than investments in related parties........................................42
Schedule III - Supplementary insurance information.....................................................................43
Schedule IV - Reinsurance..............................................................................................44
</TABLE>

All other schedules listed in Article 7 of Regulation S-X are not required under
the related instructions or are inapplicable and therefore have been omitted.

(a)(3), and (c) Exhibits

Exhibits filed are listed in the attached exhibit index.

(b) No reports on Form 8-K were filed for the quarter ended December 31, 1999.


                                       41
<PAGE>


ITEM 14(D). SCHEDULES.
<TABLE>
<CAPTION>

                                                             SCHEDULE I
                                                       SUMMARY OF INVESTMENTS
                                              OTHER THAN INVESTMENTS IN RELATED PARTIES
                                                       (DOLLARS IN THOUSANDS)

                                                                                                                     BALANCE
                                                                                                                       SHEET
   DECEMBER 31, 1999                                                                    COST 1         VALUE          AMOUNT
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>              <C>           <C>
   TYPE OF INVESTMENT
   Fixed maturities, available for sale:
    Bonds:
      United States government and governmental agencies and authorities....            $21,363       $21,103          $21,103
      Public utilities......................................................             53,754        51,315           51,315
      Corporate securities..................................................            396,494       384,272          384,272
      Other asset-backed securities.........................................            207,044       203,577          203,577
      Mortgage-backed securities............................................            179,397       175,054          175,054
                                                                                  --------------------------------------------
      Total fixed maturities, available for sale............................            858,052       835,321          835,321

   Equity securities:
      Common stocks: industrial, miscellaneous, and all other...............             14,952        17,330           17,330

   Mortgage loans on real estate............................................            100,087                        100,087
   Policy loans.............................................................             14,157                         14,157
   Short-term investments...................................................             80,191                         80,191
                                                                                  ---------------                -------------
   Total investments........................................................         $1,067,439                     $1,047,086
                                                                                  ===============                =============
</TABLE>
[FN]
Note 1: Cost is defined as original cost for common  stocks,  amortized cost for
bonds and  short-term  investments,  and unpaid  principal  for policy loans and
mortgage loans on real estate, adjusted for amortization of premiums and accrual
of discounts.
</FN>


                                                                 42
<PAGE>

<TABLE>
<CAPTION>

                                                            SCHEDULE III
                                                 SUPPLEMENTARY INSURANCE INFORMATION
                                                       (DOLLARS IN THOUSANDS)

COLUMN A        COLUMN B     COLUMN C     COLUMN D    COLUMN E   COLUMN F   COLUMN G    COLUMN H    COLUMN I   COLUMN J   COLUMN K
------------------------------------------------------------------------------------------------------------------------------------
                                 FUTURE
                                 POLICY                                                             AMORTIZA-
                              BENEFITS,                   OTHER                           BENEFITS    TION OF
                                LOSSES,                  POLICY                            CLAIMS,   DEFERRED
                 DEFERRED        CLAIMS                  CLAIMS  INSURANCE                  LOSSES     POLICY
                   POLICY           AND    UNEARNED         AND   PREMIUMS        NET          AND     ACQUI-     OTHER
              ACQUISITION          LOSS     REVENUE    BENEFITS        AND INVESTMENT   SETTLEMENT     SITION  OPERATING   PREMIUMS
SEGMENT             COSTS      EXPENSES     RESERVE     PAYABLE    CHARGES     INCOME     EXPENSES      COSTS  EXPENSES*    WRITTEN
------------------------------------------------------------------------------------------------------------------------------------
                                                             POST-MERGER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>         <C>             <C>           <C>      <C>         <C>      <C>           <C>       <C>              <C>
YEAR ENDED DECEMBER 31, 1999:

Life insurance  $528,957    $1,033,701      $6,300         $8      $82,935     $59,169  $182,221      $33,119   $(83,827)         --

YEAR ENDED DECEMBER 31, 1998:

Life insurance   204,979       881,112       3,840         --       39,119      42,485    96,968        5,148    (26,406)         --

PERIOD OCTOBER 25, 1997 THROUGH
  DECEMBER 31, 1997:

Life insurance    12,752       505,304       1,189         10        3,834       5,127     7,413          892       1,137         --

                                                          POST-ACQUISITION
------------------------------------------------------------------------------------------------------------------------------------
PERIOD JANUARY 1, 1997 THROUGH
  OCTOBER 24, 1997:

Life insurance       N/A           N/A         N/A        N/A       18,288      21,656    19,401        1,674      20,234         --
</TABLE>

[FN]
*    This includes policy  acquisition costs deferred for first year commissions
     and interest  bonuses,  premium credit,  and other expenses  related to the
     production  of new  business.  The costs  related  to first  year  interest
     bonuses and the premium credit are included in benefits claims, losses, and
     settlement expenses.
</FN>

                                                                 43
<PAGE>

<TABLE>
<CAPTION>

                                                             SCHEDULE IV
                                                             REINSURANCE

COLUMN A                                              COLUMN B        COLUMN C         COLUMN D        COLUMN E        COLUMN F
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     PERCENTAGE
                                                                      CEDED TO          ASSUMED                       OF AMOUNT
                                                         GROSS           OTHER       FROM OTHER             NET         ASSUMED
                                                        AMOUNT       COMPANIES        COMPANIES          AMOUNT          TO NET
--------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>                       <C>    <C>                       <C>
AT DECEMBER 31, 1999:
    Life insurance in force.................     $225,000,000    $119,575,000              --     $105,425,000              --
                                                ================================================================================

AT DECEMBER 31, 1998:
    Life insurance in force.................     $181,456,000    $111,552,000              --      $69,904,000              --
                                                ================================================================================

AT DECEMBER 31, 1997:
    Life insurance in force.................     $149,842,000     $96,686,000              --      $53,156,000              --
                                                ================================================================================
</TABLE>


                                                                 44
<PAGE>
<PAGE>

<TABLE>

Pursuant to the requirements of the Securities  Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY
                                                            (Registrant)

DATE: MARCH 29, 2000                                                                              BY /s/ Barnett Chernow
                                                                                                     --------------------------
                                                                                                       Barnett Chernow
                                                                                                       President and Director

Pursuant to the requirements of the Securities  Exchange Act of 1934, this report has been signed below by the following  persons on
behalf of the Registrant and in the capacities and on the dates indicated.

                      SIGNATURES                                         TITLE
<S>      <C>                                           <C>
         -----------------------------------           ----------------------------------------------|
                                                                                                     |
         /s/ Barnett Chernow                           President and Director                        |
         -----------------------------------                                                         |
         Barnett Chernow                                                                             |
         (principal executive officer)                                                               |
                                                                                                     |
         /s/ E. Robert Koster                          Senior Vice President and Chief               |
         -----------------------------------           Financial Officer                             |
         E. Robert Koster                                                                            |
         (principal financial officer)                                                               |
                                                                                                     |
         /s/ Myles R. Tashman                          Executive Vice President, General             |
         -----------------------------------           Counsel, Secretary and Director               |
         Myles R. Tashman                                                                            |
                                                                                                     |-- March 29, 2000
         /s/ Cheryl L. Harding                         Assistant Vice President and                  |
         -----------------------------------           Chief Accounting Officer                      |
         Cheryl L. Harding                                                                           |
         (principal accounting officer)                                                              |
                                                                                                     |
                                                                                                     |
         /s/ Michael W. Cunningham                                                                   |
         -----------------------------------           Director                                      |
         Michael W. Cunningham                                                                       |
                                                                                                     |
                                                                                                     |
         /s/ Phillip R. Lowrey                                                                       |
         -----------------------------------           Director                                      |
         Phillip R. Lowrey                                                                           |
                                                                                                     |
                                                                                             --------|


</TABLE>
                                       45
<PAGE>

<TABLE>
<CAPTION>

                                                                INDEX

                                               Exhibits to Annual Report on Form 10-K
                                                    Year ended December 31, 1999
                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                                                                                                    PAGE NUMBER
                                                                                                                    -----------
<S>                                                                                                                          <C>

2        PLAN OF ACQUISITION
           (a)     Stock Purchase Agreement dated as of May 3, 1996, between Equitable of Iowa
                   Companies ("Equitable") and Whitewood Properties Corp. (incorporated by
                   reference from Exhibit 2 in Equitable's Form 8-K filed August 28, 1996)..............................     __

           (b)     Agreement and Plan of Merger dated as of July 7, 1997, among ING Groep N.V.,
                   PFHI Holdings, Inc., and Equitable (incorporated by reference from Exhibit 2 in
                   Equitable's Form 8-K filed July 11, 1997)............................................................     __

3        ARTICLES OF INCORPORATION AND BY-LAWS
           (a)     Articles of Incorporation of Golden American Life Insurance Company ("Registrant"
                   or "Golden American") (incorporated by reference from Exhibit 3(a) to Amendment
                   No. 9 to Registrant's Registration Statement on Form S-1 filed with the Securities
                   and Exchange Commission (the "SEC") on February 17, 1998 (File No. 33-87272))........................     __

           (b)(i)  By-laws of Golden American (incorporated by reference from Exhibit 3(b)(i)
                   to Amendment No. 9 to Registrant's Registration Statement on Form S-1
                   filed with the SEC on February 17, 1998 (File No. 33-87272)).........................................     __

              (ii) By-laws of Golden American, as amended (incorporated by reference from
                   Exhibit 3(b)(ii) to Amendment No. 9 to the Registrant's Registration
                   Statement on Form S-1 filed with the SEC on February 17, 1998 (File No. 33-87272))...................     __

              (iii)Certificate  of Amendment of the By-laws of MB Variable  Life Insurance Company,
                   as amended (incorporated by reference from Exhibit   3(b)(iii)  to  Amendment
                   No.  9  to   Registrant's Registration Statement on Form S-1 filed with the SEC
                   on February 17, 1998 (File No. 33-87272))............................................................     __

              (iv) By-laws of Golden American, as amended (12/21/93) (incorporated by reference
                   from Exhibit 3(b)(iv) to Amendment No. 9 to Registrant's Registration Statement
                   on Form S-1 filed with the SEC on February 17, 1998 (File No. 33-87272)).............................     __

4         INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
           (a)     Individual Deferred Combination Variable and Fixed Annuity Contract (incorporated
                   by reference from Exhibit 4(a) to Amendment No. 5 of Registrant's Registration
                   Statement on Form S-1 filed with the SEC on or about April 23, 1999
                   (File No. 333-51353))................................................................................     __

           (b)     Discretionary Group Deferred Combination Variable Annuity Contract (incorporated
                   by reference from Exhibit 4(b) to Amendment No. 5 of Registrant's Registration
                   Statement on Form S-1 filed with the SEC on or about April 23, 1999
                   (File No. 333-51353))................................................................................     __
</TABLE>


                                                                 46
<PAGE>

<TABLE>
<CAPTION>

                                                                INDEX

                                               Exhibits to Annual Report on Form 10-K
                                                    Year ended December 31, 1999
                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                                                                                                    PAGE NUMBER
                                                                                                                    -----------
<S>                                                                                                                          <C>

          (c)      Individual Deferred Variable Annuity Contract (incorporated by reference from
                   Exhibit 4(c) to Amendment No. 5 of Registrant's Registration Statement on
                   Form S-1 filed with the SEC on or about December 3, 1999 (File No. 333-51353)).......................     __

          (d)      Individual Deferred Combination Variable and Fixed Annuity Application
                   (incorporated by reference from Exhibit 4(g) to Amendment No. 6 of Registrant's
                   Registration Statement on Form S-1 filed with the SEC on or about December 3, 1999
                   (File No. 333-51353))................................................................................     __

          (e)      Group Deferred Combination Variable and Fixed Annuity Enrollment Form
                   (incorporated by reference from Exhibit 4(h) to Amendment No. 6 of Registrant's
                   Registration Statement on Form S-1 filed with the SEC on or about December 3, 1999
                   (File No. 333-51353))................................................................................     __

          (f)      Individual Deferred Variable Annuity Application (incorporated by reference
                   from Exhibit 4(i) to Amendment No. 6 of Registrant's Registration Statement
                   on Form S-1 filed with the SEC on or about December 3, 1999 (File No. 333-51353))....................     __

          (g)      Minimum Guaranteed Accumulation Benefit Rider (incorporated by reference from
                   Exhibit 4(i) to Amendment No. 6 to a Registration Statement for Golden American on
                   Form S-1 filed with the SEC on or about December 3, 1999 (File No. 333-28765)).......................     __

          (h)      Minimum Guaranteed Income Benefit Rider (incorporated by reference from
                   Exhibit 4(j) to Amendment No. 6 to a Registration Statement for Golden American
                   on Form S-1 filed with the SEC on or about December 3, 1999 (File No. 333-28765))....................     __

          (i)      Minimum Guaranteed Withdrawal Benefit Rider (incorporated by reference from
                   Exhibit 4(k) to Amendment No. 6 to a Registration Statement for Golden American
                   on Form S-1 filed with the SEC on or about December 3, 1999 (File No. 333-28765))....................     __

          (j)      Death Benefit Endorsement Number 1 describing the 7% Solution Enhanced  Death
                   Benefit (incorporated  by  reference  from Exhibit 4(l) to Amendment No. 6 to a
                   Registration  Statement for Golden American on Form S-1 filed with the SEC on or
                   about December 3, 1999 (File No. 333-28765)).........................................................     __

          (k)      Death Benefit Endorsement Number 2 describing the Annual Ratchet Enhanced
                   Death Benefit (incorporated by reference from Exhibit 4(m) to Amendment No. 6 to
                   a Registration Statement for Golden American on Form S-1 filed with the SEC on or
                   about December 3, 1999 (File No. 333-28765)).........................................................     __

          (l)      Death Benefit Endorsement Number 1 describing the Standard Death Benefit
                   (incorporated by reference from Exhibit 4(n) to Amendment No. 6 to a Registration
                   Statement for Golden American on Form S-1 filed with the SEC on or about
                   December 3, 1999 (File No. 333-28765))...............................................................     __

          (m)      Death Benefit Endorsement Number 1 describing the Max 7 Enhanced Death Benefit
                   (incorporated by reference from Exhibit 4(o) to Amendment No. 6 to a Registration
                   Statement for Golden American on Form S-1 filed with the SEC on or about
                   December 3, 1999 (File No. 333-28765))...............................................................     __
</TABLE>


                                                                 47
<PAGE>
<TABLE>
<CAPTION>


                                                                INDEX

                                               Exhibits to Annual Report on Form 10-K
                                                    Year ended December 31, 1999
                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                                                                                                    PAGE NUMBER
                                                                                                                    -----------
<S>                                                                                                                          <C>

          (n)      Individual Deferred Variable and Fixed Annuity Contract (incorporated by
                   reference from Exhibit 4(a) to Amendment No. 6 to Registrant's Registration
                   Statement filed with the SEC on or about December 3, 1999 (File No. 333-28765))......................     __

          (o)      Group Deferred Variable and Fixed Annuity Contract Individual Deferred Variable
                   and Fixed Annuity Contract (incorporated by reference from Exhibit 4(b) to Amendment
                   No. 6 to Registrant's Registration Statement filed with the SEC on or about December 3,
                   1999 (File No. 333-28765))...........................................................................     __

          (p)      Individual Deferred Variable Annuity Contract (incorporated by reference from
                   Exhibit 4(c) to Amendment No. 6 to Registrant's Registration Statement filed with
                   the SEC on or about December 3, 1999 (File No. 333-28765))...........................................     __

          (q)      Individual Deferred Variable and Fixed Annuity Contract (incorporated by reference
                   from Exhibit 4(a) to a Registration Statement for Golden American filed with the SEC
                   on or about April 23, 1999 (File No. 333-76941)).....................................................     __

          (r)      Group Deferred Variable and Fixed Annuity Contract Individual Deferred Variable
                   and Fixed Annuity Contract (incorporated by reference from Exhibit 4(b) to a Registration
                   Statement for Golden American filed with the SEC on or about April 23, 1999
                   (File No. 333-76941))................................................................................     __

          (s)      Individual Deferred Variable Annuity Contract (incorporated by reference from
                   Exhibit 4(c) to a Registration Statement for Golden American filed with the SEC
                   on or about April 23, 1999 (File No. 333-76941)).....................................................     __

          (t)      Individual Deferred Variable and Fixed Annuity Contract (incorporated by reference
                   from Exhibit 4(a) to a Registration Statement for Golden American filed with the SEC
                   on or about April 23, 1999 (File No. 333-76945)).....................................................     __

          (u)      Group Deferred Variable and Fixed Annuity Contract Individual Deferred Variable
                   and Fixed Annuity Contract (incorporated by reference from Exhibit 4(b) to a
                   Registration Statement for Golden American filed with the SEC on or about April 23,
                   1999 (File No. 333-76945))...........................................................................     __

          (v)      Individual Deferred Variable Annuity Contract (incorporated by reference from
                   Exhibit 4(c) to a Registration Statement for Golden American filed with the SEC
                   on or about April 23, 1999 (File No. 333-76945)).....................................................     __

          (w)      Schedule Page to the Premium Plus Contract featuring the Galaxy VIP Fund
                   (incorporated by reference from Exhibit 4(i) to a Registration Statement for Golden
                   American on Form S-1 filed with the SEC on or about September 24, 1999
                   (File No. 333-76945))................................................................................     __

          (x)      Individual Deferred Variable and Fixed Annuity Contract (incorporated by reference
                   from Exhibit 4(a) to Amendment No. 3 to Registrant's Registration Statement filed
                   with the SEC on or about April 23, 1999 (File No. 333-66745))........................................     __
</TABLE>


                                                                 48
<PAGE>
<TABLE>
<CAPTION>




                                                                INDEX

                                               Exhibits to Annual Report on Form 10-K
                                                    Year ended December 31, 1999
                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                                                                                                    PAGE NUMBER
                                                                                                                    -----------

<S>                                                                                                                          <C>
          (y)      Group Deferred Variable and Fixed Annuity Contract Individual Deferred Variable
                   and Fixed Annuity Contract (incorporated by reference from Exhibit 4(b) to
                   Amendment No. 3 to Registrant's Registration Statement filed with the SEC on or
                   about April 23, 1999 (File No. 333-66745))...........................................................     __

          (z)      Individual Deferred Variable Annuity Contract (incorporated by reference from
                   Exhibit 4(c) to Amendment No. 3 to Registrant's Registration Statement filed with
                   the SEC on or about April 23, 1999 (File No. 333-66745)).............................................     __

10        MATERIAL CONTRACTS
          (a)      Administrative Services Agreement, dated as of January 1, 1997, between Golden
                   American and Equitable Life Insurance Company of Iowa (incorporated by reference
                   from Exhibit 10(a) to a Registration Statement for Golden American on Form S-1 filed
                   with the SEC on April 29, 1998 (File No. 333-51353)).................................................     __

          (b)      Service Agreement, dated as of January 1, 1994, between Golden American and Directed
                   Services, Inc. (incorporated by reference from Exhibit 10(b) to a Registration Statement
                   for Golden American on Form S-1 filed with the SEC on April 29, 1998
                   (File No. 333-51353))................................................................................     __

          (c)      Service Agreement, dated as of January 1, 1997, between Golden American and
                   Equitable Investment Services, Inc. (incorporated by reference from Exhibit 10(c)
                   to a Registration Statement for Golden American on Form S-1 filed with the SEC on
                   April 29, 1998 (File No. 333-51353)).................................................................     __

          (d)      Participation Agreement between Golden American and Warburg Pincus Trust (incorporated
                   by reference from Exhibit 8(a) to Amendment No. 54 to Separate Account B of Golden
                   American's Registration Statement on Form N-4 filed with SEC on or about April 30, 1998
                   (File No. 333-28679 and 811-5626))...................................................................     __

          (e)      Participation  Agreement  between  Golden  American and PIMCO Variable Trust
                   (incorporated  by reference from Exhibit 8(b) to  Amendment No. 54 to Separate
                   Account B of Golden American's Registration Statement on Form N-4 filed with the SEC
                   on or about April 30, 1998 (File No. 333-28679 and 811-5626))........................................     __

          (f)      Participation  Agreement  between  Golden  American  and  The Galaxy VIP Fund
                   (incorporated by reference from Exhibit 10(i) to a Registration  Statement for Golden
                   American on Form S-1 filed with the SEC on or about September 24, 1999
                   (File No. 333-76945))................................................................................     __

          (g)      Asset Management Agreement, dated January 20, 1998, between Golden American and ING
                   Investment Management LLC (incorporated by reference from Exhibit 10(f) to Golden
                   American's Form 10-Q filed with the SEC on August 14, 1998 (File No. 33-87272))......................     __

          (h)      Reciprocal Loan Agreement,  dated January 1, 1998, as amended March 20,  1998, between
                   Golden American and ING America Insurance  Holdings,  Inc.  (incorporated  by reference
                   from Exhibit 10(g) to Golden American's Form 10-Q filed with the SEC on August 14, 1998
                   (File No. 33-87272)).................................................................................     __
</TABLE>


                                                                 49
<PAGE>
<TABLE>
<CAPTION>



                                                                INDEX

                                               Exhibits to Annual Report on Form 10-K
                                                    Year ended December 31, 1999
                                               GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                                                                                                    PAGE NUMBER
                                                                                                                    -----------
<S>                                                                                                                          <C>

          (i)      Underwriting Agreement between Golden American and Directed Services, Inc.
                   (incorporated by reference from Exhibit 1 to Amendment No. 9 to Registrant's
                   Registration Statement on Form S-1 filed with the SEC on or about February 17, 1998
                   (File No. 33-87272)).................................................................................     __

          (j)      Revolving Note Payable, dated July 27, 1998, between Golden American and SunTrust
                   Bank, Atlanta (incorporated by reference from Exhibit 10(i) to Golden American's
                   Form 10-Q filed with the SEC on November 13, 1998 (File No. 33-87272))...............................     __

          (k)      Revolving Note Payable, dated July 31, 1999, between Golden American and SunTrust
                   Bank, Atlanta (incorporated by reference from Exhibit 10(j) to Golden American's
                   Form 10-Q filed with the SEC on August 13, 1999 (File No. 33-87272)).................................     __

          (l)      Surplus Note, dated November, 1996, between Golden American and Equitable of Iowa
                   Companies............................................................................................     51

          (m)      Surplus Note, dated December 30, 1998, between Golden American and Equitable
                   Life Insurance Company of Iowa.......................................................................     52

          (n)      Surplus Note, dated September 30, 1998, between Golden American and ING America
                   Insurance Holdings, Inc..............................................................................     53

          (o)      Surplus Note, dated December 8, 1999, between Golden American and First
                   Columbine Life Insurance Company (incorporated by reference from Exhibit 10(g)
                   to Amendment No. 7 to a Registration Statement for Golden American on Form S-1
                   filed with the SEC on or about January 27, 2000 (File No. 333-28765))................................     __

          (p)      Surplus Note, dated December 30, 1999, between Golden American and Equitable
                   Life Insurance Company of Iowa (incorporated by reference from Exhibit 10(h) to
                   Amendment No. 7 to a Registration Statement for Golden American on Form S-1
                   filed with the SEC on or about January 27, 2000 (File No. 333-28765))................................     __


27        FINANCIAL DATA SCHEDULE (ELECTRONIC FILING ONLY)..............................................................     __
</TABLE>


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