MANAGEMENT SERVICES AGREEMENT


This Agreement is made by and between  ReliaStar  Life Insurance  Company of New
York ("RLNY"), an insurance company organized and existing under the laws of New
York, and ReliaStar  Life Insurance  Company  ("ReliaStar  Life"),  an insurance
company organized and existing under the laws of the State of Minnesota.

WHEREAS,  RLNY and ReliaStar  Life are  affiliates  under the common  control of
ReliaStar  Financial  Corp.  pursuant to the insurance  laws of the State of New
York;

WHEREAS,  RLNY and  ReliaStar  Life each possess  distinct  expertise in certain
administrative, management, professional, advisory, consulting and other aspects
of their respective insurance businesses ("Services");

WHEREAS,  RLNY desires to perform certain  Services on behalf of ReliaStar Life,
and ReliaStar Life desires to perform certain Services on behalf of RLNY;

WHEREAS,  RLNY and ReliaStar  Life  contemplate  that such an  arrangement  will
achieve operating economies, synergies and expense savings, and improve services
to the benefit of both the insureds of RLNY and ReliaStar Life; and

WHEREAS,  RLNY and ReliaStar Life wish to identify the respective Services to be
provided to one another and to provide a method for  identifying  the charges to
be assessed and the  compensation  to be paid for such  Services so provided (as
described with  particularity  in Attachments A, B and C hereto),  and to assure
that all charges for the  Services are  reasonable  and in  accordance  with the
applicable laws and regulations of the states where each company is domiciled.

THEREFORE, it is agreed as follows:

1.   PERFORMANCE OF SERVICES.  All services described in Attachments A and B and
     the respective exhibits thereto shall be provided as requested from time to
     time.  After  receiving  a request  by the  requesting  party  ("Requesting
     Party"),  the other  party (the  "Providing  Party")  shall  undertake  and
     provide the Services requested.

2.   CONTROL TO REMAIN WITH  REQUESTING  PARTY.  All  Services  to be  performed
     hereunder shall ultimately be the  responsibility  of the Requesting Party.
     In no event shall such Services  involve  control of the  management of the
     business  and affairs of the  Requesting  Party.  In the event any Services
     provided hereunder require the exercise of judgment by the Providing Party,
     it will perform such  Services in  accordance  with written  standards  and
     guidelines  developed by the  Requesting  Party.  RLNY will maintain at its
     Home  Office in the State of New York  qualified  personnel,  including  an
     officer,  knowledgeable  of and responsible for the functions which will be
     performed by  ReliaStar  Life.  RLNY's  officers and  directors  shall,  in
     accordance with New York Insurance Law Section 1507, retain all obligations
     and liabilities to which they are otherwise subject by law and shall ensure
     that RLNY maintains a separate operating  identity  consistent with Chapter
     28 of the New York Insurance Law.

3.   COSTS.  Services performed  hereunder shall be performed in accordance with
     the methodology for determining costs set forth in Attachment C.


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4.   BILLING.  The Providing Party shall present a bill to the Requesting  Party
     detailing the costs with  supporting  documentation  of the amount owed for
     Services  performed  during the preceding  calendar  month on or before the
     15th day  following  the end of the month and payment  will be due ten (10)
     days  thereafter.  The Providing Party shall be responsible for maintaining
     full  and  accurate   accounting  records  of  all  Services  rendered  and
     facilities used pursuant to this Agreement and such additional  information
     as the Requesting Party may reasonably request for purposes of its internal
     bookkeeping and accounting operations.  The Providing Party shall keep such
     accounting  records,  insofar as they pertain to the computation of charges
     hereunder,  available for audit,  inspection  and copying by the Requesting
     Party or any governmental  agency having  jurisdiction  over the Requesting
     Party during all reasonable business hours.

5.   RIGHT TO AUDIT. The Requesting Party shall have the right at any reasonable
     time to make an audit of the Services  rendered and the amounts  charged by
     the Providing Party performing Services hereunder.

6.   EFFECTIVE DATE OF AGREEMENT.  This Agreement  shall be effective as of June
     1, 1999, and it shall replace,  as of that date, any and all administrative
     or management  services  agreements  then in effect between the parties for
     the Services covered by this Agreement.

7.   TERM OF AGREEMENT.  The term of this  Agreement  shall be one year from the
     effective  date  hereof and shall  automatically  be  renewed  for one year
     periods thereafter.

8.   TERMINATION  OF  AGREEMENT.  Either party may terminate  this  Agreement by
     providing  written notice to that effect  addressed to the other party. Any
     Services provided following the date of written notice of termination which
     by their nature continue after such termination shall be provided under the
     same terms and conditions which prevailed at the time of such notice.

9.   BOOKS AND RECORDS. All books, records, and files established and maintained
     by the Providing  Party by reason of its  performance  under this Agreement
     which, absent this Agreement, would have been held by the Requesting Party,
     shall be deemed the property of the Requesting  Party, and shall be subject
     to examination by the Requesting Party and persons  authorized by it at all
     times. All such books,  records and files shall be promptly  transferred to
     the Requesting  Party upon  termination of this Agreement at the expense of
     the Providing  Party.  All books,  records and files shall be maintained in
     compliance with New York Regulation 152.

10.  LICENSING AND  AUTHORITY.  The parties  represent that they will obtain and
     maintain all such  licenses,  permits,  authorizations  or approvals as are
     necessary for each party to perform its obligations under this Agreement.

11.  COMPLIANCE WITH LAWS. The Providing  Party  represents that it will observe
     all laws and regulations  applicable to the Requesting  Party in connection
     with the rendering of Services.

12.  ASSIGNMENT.  This  Agreement  and any rights  pursuant  hereto shall not be
     assignable  by either party hereto  without the other party's prior written
     consent.  Except  as,  and to the  extent,  specifically  provided  in this
     Agreement, nothing in this Agreement,  expressed or implied, is intended to
     confer on any person  other than the parties  hereto,  or their  respective
     legal successors, any rights, remedies,  obligations or liabilities,  or to
     relieve any person other than the parties hereto, or their respective legal
     successors,  from any  obligations or liabilities  that would  otherwise be
     applicable.  The covenants and agreements contained in this Agreement shall
     be binding upon,  extend to and inure to the benefit of the parties hereto,
     and each of their successors and assigns respectively.


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<PAGE>


13.      GOVERNING LAW. This Agreement is made pursuant to and shall be governed
         by,  interpreted  under,  and the rights of the parties  determined  in
         accordance with, the laws of the state of New York.

14.      DISPUTE  RESOLUTION.  Any unresolved  difference of opinion between the
         parties  arising out of or relating  to this  Agreement,  or the breach
         thereof,  shall  be  settled  by  arbitration  in  accordance  with the
         Commercial  Arbitration Rules of the American  Arbitration  Association
         and the  Expedited  Procedures  thereof,  and  judgment  upon the award
         rendered  by  the  Arbitrator  may  be  entered  in  any  Court  having
         jurisdiction  thereof. The arbitration shall take place in the State of
         New York and the  arbitrator(s)  shall be unaffiliated with the parties
         hereto.  The costs of any such arbitration shall be split equally among
         the parties.

15.      INDEMNIFICATION.  RLNY and  ReliaStar  Life each agree to indemnify and
         hold each other  harmless  against all civil  liability  or  regulatory
         penalties,  including  attorneys' fees and costs of  investigation  and
         defense incident thereto, arising as a result of its respective errors,
         omissions, negligence, misrepresentation,  fault or wrongful action, or
         that of its  respective  affiliates,  agents,  officers,  directors  or
         employees,  including  but not limited  to,  failure to comply with any
         applicable  federal or state law or regulation,  in the  performance of
         any obligations hereunder.

16.      ENTIRE AGREEMENT.  This Agreement and the Attachments hereto,  together
         with such amendments as may from time to time be expected in writing by
         the parties,  constitute  the entire  agreement  between the parties in
         respect to the  transactions  contemplated  hereby and  supersedes  all
         prior agreements, arrangements an understandings related to the subject
         matter hereof.

17.      CONFLICT.  In the  event  of a  conflict  between  provisions  of  this
         Agreement and any Attachments  hereto, the terms of the Agreement shall
         govern.


         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of this 1st day of June, 1999.


RELIASTAR LIFE INSURANCE                RELIASTAR LIFE INSURANCE COMPANY
 COMPANY OF NEW YORK


By: James R. Gelder, President & CEO    By: Robert C. Salipante, President & COO

Its:  /s/James R. Gelder                Its:  /s/ Robert C. Salipante
     --------------------------------        -----------------------------------


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<PAGE>



                                  ATTACHMENT A

          SERVICES TO BE PERFORMED BY RELIASTAR LIFE INSURANCE COMPANY


For purposes of this  Attachment A, the following  predecessor  corporations  to
ReliaStar  Life  Insurance  Company of New York  ("RLNY")  shall be  referred to
collectively as the "Predecessor Company":

                  Bankers Security Life Insurance Society

                  Lincoln Security Life Insurance Company

                  North Atlantic Life Insurance Company

                  ReliaStar Bankers Security Life Insurance Company


ReliaStar Life Insurance  Company  ("ReliaStar  Life") will perform the services
described in this  Attachment A and Exhibits A-1 through A-13,  attached  hereto
and made a part  hereof,  for RLNY for the  following  products  marketed  on an
individual basis or on a group basis  (hereinafter  collectively  referred to as
the "Products"):


     General account  individual life and health  insurance and annuity products
     issued by RLNY or any Predecessor Company.

     Separate  account  individual life insurance and annuity products issued by
     RLNY or any Predecessor Company.

     Group life and health insurance  products issued by RLNY or any Predecessor
     Company.

     Separate  account and general account group annuities issued by RLNY or any
     Predecessor Company.





                                       69
<PAGE>



EXHIBITS




                  A-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES

                  A-2. LICENSING AND CONTRACTING SERVICES

                  A-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES

                  A-4. FINANCIAL MANAGEMENT SERVICES

                  A-5. REINSURANCE MANAGEMENT AND ADMINISTRATION SERVICES

                  A-6. ACTUARIAL SERVICES

                  A-7. INFORMATION SERVICES

                  A-8. LEGAL, RISK MANAGEMENT AND COMPLIANCE SERVICES

                  A-9. PRINTING, RECORD, FILE, MAIL AND SUPPLY SERVICES

                  A-10. HUMAN RESOURCE SERVICES

                  A-11. SALES PROMOTION AND MARKETING SERVICES

                  A-12. TAX SERVICES

                  A-13. GENERAL CORPORATE SERVICES




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             A-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES

ReliaStar  Life  will  provide  the  following  Underwriting  and  New  Business
Processing Services to RLNY with regard to the Products:

1.       Underwriting and risk consulting services.

2.       Analysis of underwriting standards.

3.       Assistance and advice in the  development  of appropriate  underwriting
         standards in accordance with all laws and regulations of each state.

4.       Perform underwriting if requested.

5.       Review   individual   applications  for  conformity  with  underwriting
         criteria.

6.       Medical and/or technical support and advice related to underwriting.

7.       Make  underwriting  judgments  as necessary  for rating  classification
         purposes.

8.       Approve for issue all individual  applications  which meet underwriting
         criteria.

9.       Process all approved  applications,  and issue and deliver  policies to
         policyholders.

10.      Maintain Compliance with New York Regulation 60.




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<PAGE>



                     A-2. LICENSING AND CONTRACTING SERVICES

ReliaStar Life will provide the following Licensing and Contracting  Services to
RLNY with regard to the Products:

1.   Assist  with  pre-appointment  investigations  of  producers  and  producer
     practices.

2.   Administer  producer licenses,  contracts,  and compensation and maintain a
     computer database for license and contract status.














                                       72
<PAGE>



                 A-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES

ReliaStar  Life will provide the  following  Policyowner  and Claims  Processing
Services to RLNY for the Products:

1.       Bill policyholders.

2.       Collect premiums.

3.       Respond to customer inquiries by phone or letter.

4.       Administer policy changes.

5.       Administration and support services for claims.

6.       Process  claims and/or render legal,  medical or technical  support and
         advise  RLNY  relating  to the  processing,  settlement  and payment of
         claims.

7.       Surrender, lapse and maturity processing.

8.       Distribute benefits.

9.       Maintain compliance with New York Registration 60.





                                       73
<PAGE>



                       A-4. FINANCIAL MANAGEMENT SERVICES

ReliaStar  Life shall provide the  following  Financial  Management  Services to
RLNY:

1.       Consultation  and  technical  assistance  in all  matters  relating  to
         corporate   financing,   cash   management,   financial   analysis  and
         specialized financial systems and programming.

2.       Investment accounting services, including documentation and updating of
         electronic data processing records for investment  transactions such as
         investment   income,    realized   gain/loss,    carrying   value   and
         acquisition/disposal  of each investment,  recording financial activity
         in existing investments and compliance reporting.

3.       Consultation  and  technical  assistance in  coordinating  the external
         audit  process,   including  negotiating  and  paying  audit  fees  and
         communicating audit recommendations to management.

4.       Management  reporting  services,  both with  respect  to  internal  and
         external  reports,   including  coordination  of  the  annual  planning
         process,  consolidation of monthly  operation  results,  management and
         policyholder information reports (e.g., annual reports), maintenance of
         reporting systems and provision of cost account reports and services.

5.       Premium accounting.

6.       Assisting in the development of budgets and business plans.

7.       Preparation of books of account including general ledgers,  transaction
         ledgers  and trial  balances  which will be  reviewed  for  accuracy by
         officers of RLNY.

8.       Preparation  of financial  statements  and reports,  including  annual,
         quarterly and monthly financial statements on both a statutory and GAAP
         basis.

9.       Preparation and  dissemination of filings with regulatory  entities and
         rating agencies.

10.      Development of financial models.

11.      Advisory services with respect to RLNY capital and surplus.

12.      Arrangement for one or more lockboxes.

13.      Enter data regarding customer records information related to premium or
         annuity  considerations  sent to  lockboxes,  provided  that  RLNY will
         verify that all such information is accurate and properly reflected.


                                       74
<PAGE>


14.      Arrangement  of bank  accounts  in the name and  control  of RLNY,  and
         processing  receipts and  disbursements  subject to the  direction  and
         control of RLNY.

15.      Commission   accounting,   including  calculation  of  commissions  and
         generation and delivery of checks.

ReliaStar Life will provide for RLNY at RLNY's principal office in Woodbury,  NY
computer  access to RLNY  reports  from the general  ledger and  general  ledger
financial statement reporting system  (collectively,  the "Ledger Reports") used
by ReliaStar Life for RLNY pursuant to this  Agreement.  Such computer access at
RLNY's  principal office to the Ledger Reports shall be equivalent to the access
to the Ledger Reports which is available to ReliaStar Life at its home office in
Minneapolis,  Minnesota.  ReliaStar  Life will  maintain  format  integrity  and
compatibility  of such  Ledger  Reports  to  ensure  that they are  current  and
accessible. ReliaStar Life shall verify that all accounting transactions kept by
ReliaStar  Life on behalf of RLNY are  accurately  prepared and reflected in the
Ledger   Reports.   This  shall  be   accomplished  by  ReliaStar  Life  through
reconciliations  of bank and other  accounting  records and by review of general
ledgers.






                                       75
<PAGE>



             A-5. REINSURANCE MANAGEMENT AND ADMINISTRATION SERVICES

ReliaStar   Life  will  provide  the  following   Reinsurance   Management   and
Administration Services to RLNY:

1.       Reinsurance   retrocession  consulting  services  and  supervisory  and
         clerical support to process business,  and coverage under  retrocession
         contracts purchased to cover ReliaStar Life and its subsidiaries.

2.       Advice with respect to reinsurance retention limits.

3.       Advice and  support  with  respect to the  negotiation  of  reinsurance
         treaties.

4.       Advice  and  support  with  respect  to  the  management  of  reinsurer
         relationships.






                                       76
<PAGE>



                             A-6. ACTUARIAL SERVICES

ReliaStar Life will provide the following Actuarial Services to RLNY:

1.       Actuarial services, including clerical, technical and product actuarial
         support and product  development  support.  The above functions will be
         performed to provide  actuarial  support  relative to the operations of
         RLNY and to assist in the consolidation of the actuarial certification,
         including valuations and cash flow testing, for RLNY.

2.       Prepare  actuarial  reports,  opinions  and  memoranda  and assist with
         asset/liability management and cash flow testing.

3.       Conduct product experience studies.

4.       Prepare reserve calculations and valuations.

5.       Develop new products.

6.       Evaluate product performance versus expectations.






                                       77
<PAGE>



                            A-7. INFORMATION SERVICES

ReliaStar Life will provide the following Information Services to RLNY:

1.       Professional,  technical, supervisory, programming and clerical support
         for information services.

2.       Informational  and computer  services provided by ReliaStar Life may be
         in the  nature  of  applications  and  programming  support,  enhancing
         existing  systems,  helping  to install  new  systems  and  centralized
         computer systems.

3.       Develop data processing systems strategy.

4.       Implement systems strategy.

5.       Program computers.

6.       Provide  data center  services,  including  maintenance  and support of
         mainframe and distribution process hardware and software.

7.       Standard  systems  for  product   administration,   accounts   payable,
         accounting  and financial  reporting,  human  resource  management  and
         inventory control.

8.       Manage voice communication systems.

9.       Manage data communications.

10.      Manage  local area  network,  e-mail  and other  desktop  software  and
         systems.

11.      Provide  data  security.  ReliaStar  Life shall  maintain an  effective
         disaster  recovery  program to recover  RLNY's data in the event of the
         loss of the physical data center.

12.      Purchase hardware, software and supplies.

Upon  termination  of this  Agreement,  and subject to the terms  (including any
limitations and restrictions) of any applicable  software or hardware  licensing
agreement then in effect between ReliaStar Life and any licensor, ReliaStar Life
shall grant to RLNY a license for any  software  developed  or used by ReliaStar
Life in  connection  with the  services  provided to RLNY  hereunder;  provided,
however, that such software is not commercially available,  and is necessary, in
RLNY's reasonable judgement,  for RLNY's performance of the functions which have
been provided by ReliaStar Life hereunder.




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               A-8. LEGAL, RISK MANAGEMENT AND COMPLIANCE SERVICES

ReliaStar Life will provide the following Legal,  Risk Management and Compliance
Services to RLNY:

1.       ReliaStar Life's Law Division,  under the direction of ReliaStar Life's
         Senior Vice President and General Counsel,  will provide to RLNY or its
         counsel,  advice  and  assistance  in  any  matter  of  law,  corporate
         governance  and   governmental   relations,   including   advisory  and
         consulting  services,  in  connection  with  maintenance  of  corporate
         existence,  licenses, dealings with regulatory agencies,  acquisitions,
         sale of assets, development of products, contracts and legal documents,
         product approvals,  registration and filing of insurance and securities
         products,  handling of claims and matters involving legal  controversy,
         assist  with  dispute  resolution,  select,  retain and manage  outside
         counsel,  and provide other legal  services as  reasonably  required or
         requested.

2.       ReliaStar Life's Risk Manager,  or other staff of ReliaStar Life, under
         the  direction of ReliaStar  Life's  Senior Vice  President and General
         Counsel,  will provide to RLNY  advice,  and  assistance  in any matter
         relating to risk management,  including RLNY's  procurement of fidelity
         bond insurance,  blanket bonds, general liability  insurance,  property
         damage  insurance,   directors'  and  officers'  liability   insurance,
         workmen's  compensation,  and  any  other  insurance  purchased  either
         directly by RLNY or under  policies  purchased  by  ReliaStar  Life for
         itself and its subsidiaries.

3.       ReliaStar Life's Law Division,  under the direction of ReliaStar Life's
         Senior  Vice  President  and  General  Counsel,   will  assist  in  the
         development  and  maintenance of a corporate  compliance  program and a
         state insurance fraud reporting program.  ReliaStar Life personnel will
         assist RLNY to maintain  appropriate  records and systems in connection
         with RLNY's  compliance  obligations  under applicable New York law and
         regulations.




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<PAGE>



              A-9. PRINTING, RECORD, FILE, MAIL AND SUPPLY SERVICES

ReliaStar  Life will provide the  following  Printing,  Record,  File,  Mail and
Supply Services to RLNY:

1.   Maintain policy files.

2.   Document control.

3.   Produce standard forms.

4.   Distribute standardized forms and other materials.

5.   Arrange for warehouse storage space.

6.   Supply fulfillment.

7.   Mail processing, delivery and shipping.

8.   Participate in national purchase agreements.

9.   Retrieve   and  produce   documents   for  federal  and  state   regulatory
     examinations and for litigation.

10.  Develop and administer a records retention program.






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                         A-10. HUMAN RESOURCES SERVICES

ReliaStar Life will provide the following Human Resources Services to RLNY:

1. Personnel recruiting and support services.

2. Design and implementation of human resources training.

3. Compensation studies and benefits consulting.

4. Support employee communications.

5. Payroll services.

6. Benefits compensation design and administration.

7. Employee relations.









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<PAGE>



                  A-11. SALES PROMOTION AND MARKETING SERVICES

ReliaStar Life will provide the following Sales Promotion and Marketing Services
to RLNY with regard to the Products:

1.       Prepare sales promotional  items,  advertising  materials and art work,
         design,  text and articles relevant to such work,  including  clerical,
         technical and supervisory support and related communications.

2.       Support general communications with producers.

3.       Conduct formal insurance market research.

4.       Develop sales illustrations,  advertising  materials,  and software for
         the  Products  in  compliance  with  all  applicable   state  laws  and
         regulations.

5.       Design and implement training programs,  including product and industry
         developments and legal compliance.

6.       Plan producer conferences.

7.       Distribute to employees and/or agents  underwriting  guidelines for the
         Products, where applicable.

8.       Analyze and develop  compensation  and benefit plans for general agents
         and agents.







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<PAGE>



                               A-12. TAX SERVICES

ReliaStar Life shall provide RLNY the following Tax Services:

1.       Maintenance of tax  compliance,  including tax return  preparation  and
         consolidation,  review of separate returns, and financial statement tax
         provisions.

2.       Management of tax audit and appeals,  including processing  information
         requests,  protest  preparation,   and  participation  in  any  appeals
         conference.

3.       Direction  of  tax  research  and  planning,   including   research  of
         compliance  issues for  consistency,  development of tax strategies for
         consolidation, and working with new legislative proposals.

4.       Administration  of tax liens,  levies and  garnishment of wages of RLNY
         employees and independent contractors.








                                       83
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                        A-13. GENERAL CORPORATE SERVICES

ReliaStar  Life,  through  its  Chairman,   President,   Senior  Executive  Vice
President,  Senior  Vice  Presidents,  Vice  Presidents,   General  Counsel  and
Secretary,  or through  the staff of any of these  officers,  shall  provide the
following General Corporate Services to RLNY:

     1.   Consultative and advisory services to RLNY's senior executive officers
          and staff with  respect to the conduct of RLNY's  business  operations
          and the execution of  directives  and  resolutions  of RLNY's Board of
          Directors pertaining to business operations and functions.

     2.   Consultation and  participation in RLNY's strategic  planning process,
          including the  development of business  goals,  objectives and policy,
          the development of operations,  administrative  and quality  programs,
          and the coordination of such processes, goals, objectives,  policy and
          programs and those of the holding company's systems.

     3.   Common and shared management,  including  executive officers and other
          senior management.






                                       84
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                                  ATTACHMENT B

    SERVICES TO BE PERFORMED BY RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK

ReliaStar Life Insurance  Company of New York ("RLNY") will perform the services
described in this Attachment B and Exhibits B-1 through B-5, attached hereto and
made a part hereof, as well as other administrative services, for ReliaStar Life
Insurance Company  ("ReliaStar  Life") for the following  products  (hereinafter
collectively referred to as the "ReliaStar Life Products"):

     Group  or  individual  insurance  products  issued  by  ReliaStar  Life and
     marketed as payroll deduction products at the worksite.







                                       85
<PAGE>



EXHIBITS




                  B-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES

                  B-2. LICENSING AND CONTRACTING SERVICES

                  B-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES

                  B-4. INFORMATION SERVICES

                  B-5. SALES PROMOTION AND MARKETING SERVICES






                                       86
<PAGE>



             B-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES

RLNY  will  provide  the  following  Underwriting  and New  Business  Processing
Services to ReliaStar Life with regard to the ReliaStar Life Products:

1.       Underwriting and risk consulting services.

2.       Analysis of underwriting standards.

3.       Assistance and advice in the  development  of appropriate  underwriting
         standards in accordance with all laws and regulations of each state.

4.       Perform underwriting if requested.

5.       Review applications for conformity with underwriting criteria.

6.       Medical and/or technical support and advice related to underwriting.

7.       Designate as ready for issue all applications  that clearly fall within
         underwriting criteria.

8.       Process all applications and deliver policies to policyholders.




                                       87
<PAGE>



                     B-2. LICENSING AND CONTRACTING SERVICES

RLNY will provide the following Licensing and Contracting  Services to ReliaStar
Life with regard to the ReliaStar Life Products:

1. Assist with due diligence investigations of producers and producer practices.

2. Administer producer licenses, contracts, and compensation.












                                       88
<PAGE>



                 B-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES

RLNY will provide the following  Policyowner and Claims Processing  Services for
the ReliaStar Life Products to ReliaStar Life with the ReliaStar:

1.       Bill policyholders.

2.       Collect premiums.

3.       Respond to customer inquiries by phone or letter.

4.       Administer policy changes.

5.       Administration and support services for claims.

6.       Process  claims and/or render legal,  medical or technical  support and
         advise  ReliaStar  Life  relating  to the  processing,  settlement  and
         payment of claims.

7.       Surrender, lapse and maturity processing.

8.       Distribute benefits.





                                       89
<PAGE>



                            B-4. INFORMATION SERVICES

RLNY shall provide the following Information Services to ReliaStar Life:

1.       Professional,  technical, supervisory, programming and clerical support
         for information services.

2.       Informational  and  computer  services  provided  by RLNY may be in the
         nature of applications  and  programming  support,  enhancing  existing
         systems,  helping to  install  new  systems  and  centralized  computer
         systems.

3.       Develop data processing systems strategy.

4.       Implement systems strategy.

5.       Program computers.

6.       Provide  data center  services,  including  maintenance  and support of
         mainframe and distribution process hardware and software.

7.       Standard  systems  for  product   administration,   accounts   payable,
         accounting  and financial  reporting,  human  resource  management  and
         inventory control.

8.       Manage voice communication systems.

9.       Manage data communications.

10.      Manage  local area  network,  e-mail  and other  desktop  software  and
         systems.

11.      Provide  data  security.  RLNY shall  maintain  an  effective  disaster
         recovery  program to recover  ReliaStar Life's data in the event of the
         loss of the physical data center.

12.      Purchase hardware, software and supplies.

Upon  termination  of this  Agreement,  and subject to the terms  (including any
limitations and restrictions) of any applicable  software or hardware  licensing
agreement  then in effect  between  RLNY and any  licensor,  RLNY shall grant to
ReliaStar  Life a  license  for  any  software  developed  or  used  by  RLNY in
connection  with the services  provided to ReliaStar Life  hereunder;  provided,
however, that such software is not commercially available,  and is necessary, in
ReliaStar Life's reasonable  judgement,  for ReliaStar Life's performance of the
functions which have been provided by RLNY hereunder.




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                   B-5. SALES PROMOTION AND MARKETING SERVICES

RLNY will  provide the  following  Sales  Promotion  and  Marketing  Services to
ReliaStar Life with regard to the ReliaStar Life Products:

1.       Prepare sales promotional  items,  advertising  materials and art work,
         design,  text and articles relevant to such work,  including  clerical,
         technical and supervisory support and related communications.

2.       Support general communications with producers.

3.       Conduct formal insurance market research.

4.       Develop sales  illustrations,  advertising  materials,  and software in
         compliance with all applicable state laws and regulations.

5.       Design and implement training programs,  including product and industry
         developments and legal compliance.

6.       Distribute to employees and/or agents  underwriting  guidelines,  where
         applicable.

7.       Analyze and develop  compensation  and benefit plans for general agents
         and agents.




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                                  ATTACHMENT C

                                 COST ALLOCATION


Services  performed under this Management  Services Agreement shall be performed
for the costs set forth as follows:

     A.   Direct costs incurred by the Providing Party in providing the Services
          and the cost of materials  purchased for the benefit of the Requesting
          Party shall be reimbursed by the Requesting Party at such cost.

     B.   Costs incurred by the Providing  Party service  areas,  which allocate
          cost among the various  users of such  services in  proportion  to the
          services actually  rendered to each user, shall be determined  monthly
          by  the  appropriate  Providing  Party  servicing  unit  based  on the
          assessment  of a  mutually  agreed  upon  operational  or  maintenance
          servicing  unit cost  multiplied  by the number of hours billed to, or
          the volume of activity incurred by, the Providing Party service areas.
          Such costs shall be  reimbursed  by the  Requesting  Party  during the
          month for Services rendered.

The determination of charges hereunder by the Providing Party shall be presented
to the  Requesting  Party,  and if the  Requesting  Party  objects  to any  such
determination, it shall so advise the Providing Party within thirty (30) days of
receipt of notice of said  determination.  Unless the parties can  reconcile any
such  objection,  they shall  agree to the  selection  of a firm of  independent
certified  public   accountants  which  shall  determine  the  charges  properly
allocable to the Requesting Party and shall,  within a reasonable  time,  submit
such  determination,  together  with  the  basis  therefor,  in  writing  to the
Providing Party and the Requesting Party,  whereupon such determination shall be
binding. The expenses of such a determination by a firm of independent certified
accountants shall be borne equally by ReliaStar Life and RLNY.

Each party  shall from time to time  perform  cost  analyses  to  determine,  as
closely as possible,  the actual cost of services  rendered and facilities  made
available  pursuant  to this  Management  Services  Agreement.  Each party shall
forward  to  the  other  information  developed  by  these  analyses,  and  such
information  shall be used to develop  bases for the  distribution  of  expenses
which more currently reflect actual costs incurred.






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