MANAGEMENT SERVICES AGREEMENT

This Agreement is made by and between  ReliaStar  Life Insurance  Company of New
York,  an insurance  corporation  organized  and existing  under the laws of New
York,  herein  called  "RLNY",  and  ReliaStar  Financial  Corp.,  a corporation
organized  and existing  under the laws of the State of Delaware,  herein called
"RFC";

WHEREAS,  RFC  has  expertise  in  and  provides   management,   administrative,
professional,  advisory  and  consulting  services and goods  pertaining  to the
business of  insurance,  as described in  Attachment  A hereto,  (herein  called
"Services"); and

WHEREAS, RLNY desires to obtain Services from RFC;

NOW, THEREFORE, it is agreed as follows:

1.   After  request  by RLNY,  RFC shall  undertake  and  provide  the  Services
     requested by RLNY.

2.   All Services to be performed  hereunder  shall be subject to the control of
     RLNY.  In no event  shall  such  Services  involve  the  management  of the
     business and affairs of RLNY. In the event any Services provided  hereunder
     require the exercise of judgment by RFC on behalf of RLNY, RFC will perform
     such Services in accordance with written standards and guidelines developed
     by RLNY.  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  for it by RFC.  Notwithstanding
     any delegation of duties to or shared  management with RFC, 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.   This  Agreement  does not  encompass the  provisions of any tax  allocation
     agreement between RLNY and RFC.

4.   Services performed  hereunder shall be performed for the costs set forth in
     Attachment B.

5.   RFC  shall  present a bill to RLNY  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.  RFC  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 RLNY may reasonably  request for purposes of its
     internal  bookkeeping  and  accounting  operations.  RFC  shall  keep  such
     accounting  records,  insofar as they pertain to the computation of charges
     hereunder,  available  for  audit,  inspection  and  copying by RLNY or any
     governmental  agency having  jurisdiction  over RLNY during all  reasonable
     business hours.

6.   RLNY shall have the right at any  reasonable  time, to make an audit of the
     Services rendered and the amounts charged by the party performing  Services
     hereunder.

7.   This  Agreement  shall be  effective  as of January  1, 1998,  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.


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

9.   Either party may terminate  this  Agreement by providing  written notice to
     that effect  addressed  to the other party.  Any  Services  provided by RFC
     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.

10.  All books,  records,  and files established and maintained by RFC by reason
     of their  performance  under this Agreement  which,  absent this Agreement,
     would have been held by RLNY,  shall be deemed the  property  of RLNY,  and
     shall be subject to examination by RLNY and persons authorized by it at all
     times. All such books,  records and files shall be promptly  transferred to
     RLNY by RFC upon  termination  of this Agreement at the expense of RFC. All
     books,  records and files shall be maintained in compliance with Regulation
     152.

11.  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.

12.  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.

13.  Any unresolved  difference of opinion between the parties arising out of or
     relating to this Agreement,  or the breach  thereof,  except as provided in
     Schedule  B,  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.




     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
     of the 29th day of January 1998.






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RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK


By: /s/ Richard R. Crowl                           By: /s/ Susan M. Bergen
---------------------------                        ----------------------------

Its: Senior Vice President and General Counsel     Its: Secretary





RELIASTAR FINANCIAL CORP.


By: /s/ Robert C. Salipante                        By: /s/ Scott H. DeLong
---------------------------                        ----------------------------

Its: Senior Vice President                         Its: Vice President








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                                  Attachment A

Accounting and Tax
------------------

     Accounting and tax services,  including,  but not limited to, assistance in
     the  preparation  of and  planning  relative  to  federal,  state and local
     income.tax returns.

Actuarial
---------

     Clerical,  technical and product  actuarial  support with regard to setting
     actuarial methodologies and standards.

Computer Sharing
----------------

     Sharing of licensing  arrangements related to computers,  computer software
     and related services.

Internal and External Audit
---------------------------

     Internal and external audit  services,  including,  but not limited to, the
     performance of internal audits and the arranging for independent evaluation
     of business processes and internal controls, and consultation and technical
     assistance in coordinating the external audit process.


General Corporate Services
--------------------------

RFC will provide  consultative  and advisory  services to RLNY's senior officers
and staff  regarding a variety of issues.  RLNY and RFC may, in some  instances,
share a common  management  in  accordance  with New York  Insurance Law Section
1507(b).  Should the RLNY CEO  perform  duties as an  officer  of RFC,  RFC will
charge back to RLNY the appropriate amount of his or her compensation.

RFC will provide the following  services to RLNY with regard to all products and
all aspects of RLNY's business.

     Consultative and advisory services with respect to the conducting of RLNY's
     business operations,  the development of RLNY's strategic plan and business
     goals,  and the  development  of  operational,  administrative  and quality
     programs.


     Management  reporting services,  both with respect to internal and external
     reports,   including  the  completion  OF  PEER  COMPANY  REVIEW  ANALYSIS,
     coordination  of the  annual  planning  process,  consolidation  of monthly
     operation results,  management and policyholder  information reports, e.g.,
     annual  report,  maintenance  of  reporting  systems and  provision of cost
     account reports and services.

     Advisory  services with respect to the  maintaining  of RLNY's  capital and
     surplus,  the development and  implementation  of financing  strategies and
     plans and the  production  of  financial  reports and  records,  and in all
     matters  relating  to  corporate  financing,  cash  management,   financial
     analysis and specialized financial systems and programming.

     Representation  of RLNY's  interests at  government  affairs and  insurance
     industry meetings and trade associations.


     Consultation   and   participation  in  press  releases  and  other  public
     announcements related to RLNY.


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     Advice and strategies with regard to matching assets and liabilities.,

     Raising  capital  services  functions as and when requested by the Board of
     Directors  of RLNY,  including,  but not  limited to, the  development  and
     implementation  of financing  strategies  and plans for  strengthening  the
     capital base of RLNY. Financing plans may include, but shall not be limited
     to,   transactions  in  investment   securities,   such  as  senior  notes,
     subordinated   convertible   notes,   common  or  preferred  stock  or  any
     combination of the preceding.

     Risk management  services functions on an as need basis,  including but not
     limited to, coverage by blanket bonds, general liability,  property damage,
     directors  and  officers  liability,   workmen's   compensation  and  other
     appropriate policies issued to RFC.







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                                  Attachment B

Services  performed  hereunder  shall be  performed  for the  costs set forth as
follows:

         a.       Direct costs incurred by RFC in providing the Services and the
                  cost of all materials purchased by RFC for the benefit of RLNY
                  shall be reimbursed by RLNY at such cost.

         b.       Costs incurred by RFC 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  RFC  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, RLNY
                  during the month for Services rendered.

The  determination of charges  hereunder by RFC shall be presented to RLNY, and,
if RLNY objects to any such determination,  it shall so advise RFC 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 RLNY and shall,  within a reasonable  time,  submit such
determination,  together  with the basis  therefor,  in writing to RFC and RLNY,
whereupon  such  determination  shall  be  binding.   The  expenses  of  such  a
determination  by a firm of  independent  certified  accountants  shall be bowie
equally  by RFC  and  RLNY.  Determination  of  charges  hereunder  shall  be in
accordance  with New York Insurance  Department  Regulation No. 33 to the extent
applicable.






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