As filed with the Securities and Exchange Commission on April 30, 2009

Registration No. 333-131987

811-21858

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FLEXIBLE PREMIUM VARIABLE ANNUITY - J

FORM N-4

REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933

Pre-Effective Amendment No.     

Post-Effective Amendment No. 8

and

REGISTRATION STATEMENT UNDER

THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 9

SEPARATE ACCOUNT VA Y

(Exact Name of Registrant)

TRANSAMERICA LIFE INSURANCE COMPANY

(Name of Depositor)

4333 Edgewood Road N.E.

Cedar Rapids, IA 52499-0001

(Address of Depositor’s Principal Executive Offices)

Depositor’s Telephone Number: (319) 355-8330

Darin D. Smith, Esq.

Transamerica Life Insurance Company

4333 Edgewood Road, N.E.

Cedar Rapids, IA 52499-4240

(Name and Address of Agent for Service)

Copy to:

Frederick R. Bellamy, Esq.

Sutherland Asbill and Brennan LLP

1275 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2415

Title of Securities Being Registered: Flexible Premium Variable Annuity Policies

It is proposed that this filing become effective:

¨ immediately upon filing pursuant to paragraph (b) of Rule 485

x on May 1, 2009 pursuant to paragraph (b) of Rule 485

¨ 60 days after filing pursuant to paragraph (a)(1) of Rule 485

¨ on                      pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following box:

¨ This post-effective amendment designates a new effective date for a previously filed post-effective amendment

FLEXIBLE PREMIUM VARIABLE ANNUITY - J

Issued Through

SEPARATE ACCOUNT VA Y

By

TRANSAMERICA LIFE INSURANCE COMPANY

Prospectus

May 1, 2009

This flexible premium deferred annuity policy has many investment choices. There is a separate account that currently provides a means of investing in various underlying fund portfolios. There is also a fixed account, which offers interest at rates that are guaranteed by Transamerica Life Insurance Company. You can choose any combination of these investment choices. You bear the entire investment risk for all amounts you put in the separate account.

This prospectus and the underlying fund prospectuses give you important information about the policies and the underlying fund portfolios. Please read them carefully before you invest and keep them for future reference.

If you would like more information about the Flexible Premium Variable Annuity - J, you can obtain a free copy of the Statement of Additional Information (SAI) dated May 1, 2009. Please call us at (800) 525-6205 or write us at: Transamerica Life Insurance Company, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, IA 52499-0001. A registration statement, including the SAI, has been filed with the Securities and Exchange Commission (SEC) and the SAI is incorporated herein by reference. More information about the variable annuity can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may obtain information about the operation of the public reference room by calling the SEC at 1-800-732-0330. The SEC also maintains a web site (http://www.sec.gov) that contains the prospectus, the SAI, material incorporated by reference, and other information. The table of contents of the SAI is included at the end of this prospectus.

Please note that the policies and the separate account investment choices:

• are not bank deposits

• are not federally insured

• are not endorsed by any bank or government agency

• are not guaranteed to achieve their goal

• are subject to risks, including loss of premium

The Securities and Exchange Commission has not approved or disapproved these securities, or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

PORTFOLIOS ASSOCIATED WITH THE SUBACCOUNTS

TRANSAMERICA SERIES TRUST

Subadvised by American Century Investment Management, Inc.

Transamerica American Century Large Company Value VP – Service Class

Portfolio Construction Manager: Morningstar Associates, LLC

Transamerica Asset Allocation – Conservative VP – Service Class

Transamerica Asset Allocation – Growth VP – Service Class

Transamerica Asset Allocation – Moderate VP – Service Class

Transamerica Asset Allocation – Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Subadvised by BlackRock Financial Management, Inc.

Transamerica BlackRock Tactical Allocation VP – Service Class

Advised by Transamerica Asset Management, Inc.

Transamerica BlackRock Global Allocation VP – Service Class

Subadvised by BlackRock Investment Management, LLC

Transamerica BlackRock Large Cap Value VP – Service Class

Subadvised by Capital Guardian Trust Company

Transamerica Capital Guardian Value VP – Service Class

Subadvised by ING Clarion Real Estate Securities, L.P.

Transamerica Clarion Global Real Estate Securities VP – Service Class

Subadvised by J.P. Morgan Investment Management Inc.

Transamerica JPMorgan Enhanced Index VP – Service Class

Subadvised by Jennison Associates LLC

Transamerica Jennison Growth VP– Service Class

Subadvised by ClearBridge Advisors, LLC

Transamerica Legg Mason Partners All Cap VP – Service Class

Subadvised by MFS^® Investment Management

Transamerica MFS High Yield VP – Service Class

Transamerica MFS International Equity VP – Service Class

Subadvised by Columbia Management Advisors, LLC

Transamerica Marsico Growth VP – Service Class

Subadvised by Pacific Investment Management Company LLC

Transamerica PIMCO Total Return VP – Service Class

Subadvised by T. Rowe Price Associates, Inc.

Transamerica T. Rowe Price Equity Income VP – Service Class

Transamerica T. Rowe Price Growth Stock VP – Service Class

Transamerica T. Rowe Price Small Cap VP – Service Class

Subadvised by Templeton Investment Counsel, LLC and Transamerica Investment Management, LLC

Transamerica Templeton Global VP – Service Class

Subadvised by AEGON USA Investment Management, LLC.

Transamerica Efficient Markets VP – Service Class

Subadvised by Transamerica Investment Management, LLC

Transamerica Balanced VP – Service Class

Transamerica Convertible Securities VP – Service Class

Transamerica Equity VP – Service Class

Transamerica Growth Opportunities VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica Science & Technology VP – Service Class

Transamerica Small/Mid Cap Value VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Transamerica Value Balanced VP – Service Class

Managed by AEGON USA Investment Management, LLC.

Transamerica Index 50 VP – Service Class

Transamerica Index 75 VP – Service Class

Subadvised by Morgan Stanley Investment Management Inc.

Transamerica Van Kampen Active International Allocation VP – Service Class

Transamerica Van Kampen Large Cap Core VP – Service Class

Subadvised by Van Kampen Asset Management

Transamerica Van Kampen Mid-Cap Growth VP – Service Class

AIM VARIABLE INSURANCE FUNDS

Managed by Invesco Aim Advisors, Inc.

AIM V.I. Basic Value Fund – Series II Shares

AIM V.I. Capital Appreciation Fund – Series II Shares

ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.

Managed by AllianceBernstein L.P.

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

AllianceBernstein Growth and Income Portfolio – Class B

AllianceBernstein Large Cap Growth Portfolio – Class B

FIDELITY VARIABLE INSURANCE PRODUCTS FUND

Managed by Fidelity Management & Research Company

Fidelity – VIP Balanced Portfolio – Service Class 2

Fidelity – VIP Contrafund^® Portfolio – Service Class 2

Fidelity – VIP Equity-Income Portfolio – Service Class 2

Fidelity – VIP Growth Portfolio – Service Class 2

Fidelity – VIP Mid Cap Portfolio – Service Class 2

Fidelity – VIP Value Strategies Portfolio – Service Class 2

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Managed by Franklin Advisers, Inc.

Franklin Income Securities Fund – Class 2

Managed by Franklin Mutual Advisers, LLC

Mutual Shares Securities Fund – Class 2

Managed by Templeton Investment Counsel LLC

Templeton Foreign Securities Fund – Class 2

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Fund Administrator: Franklin Templeton Services, LLC

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

JANUS ASPEN SERIES

Managed by Janus Capital Management LLC

Janus Aspen – Enterprise Portfolio – Service Shares

Janus Aspen – Worldwide Portfolio – Service Shares

MFS^® VARIABLE INSURANCE TRUST^SM

Managed by MFS^® Investment Management

MFS New Discovery Series – Service Class

MFS Total Return Series – Service Class

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TABLE OF CONTENTS

GLOSSARY OF TERMS		5
SUMMARY		7
ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES		14
1.	THE ANNUITY POLICY	20
2.	PURCHASE	20
	Policy Issue Requirements	20
	Premium Payments	20
	Initial Premium Requirements	21
	Additional Premium Payments	21
	Maximum Total Premium Payments	21
	Allocation of Premium Payments	21
	Policy Value	22
3.	INVESTMENT CHOICES	22
	The Separate Account	22
	Selection of Underlying Portfolios	24
	Addition, Deletion, or Substitution of Investments	25
	The Fixed Account	26
	Transfers	27
	Market Timing and Disruptive Trading	28
4.	PERFORMANCE	31
5.	EXPENSES	31
	Surrender Charges	31
	Excess Interest Adjustment	33
	Mortality and Expense Risk Fees	33
	Premium Taxes	33
	Federal, State and Local Taxes	33
	Special Service Fees	33
	Transfer Fee	33
	Administrative Charges	34
	Initial Payment Guarantee	34
	Fund Facilitation Fee	34
	Access Rider	34
	Additional Death Distribution	34
	Additional Death Distribution+	34
	Living Benefits Rider	34
	Retirement Income Choice Rider and Additional Options Fees	35
	Retirement Income Choice with Double Withdrawal Base Benefit rider and Additional Options Fees	35
	Portfolio Fees and Expenses	35
	Revenue We Receive	35
6.	ACCESS TO YOUR MONEY	37
	Surrenders	37
	Delay of Payment and Transfers	38
	Excess Interest Adjustment	38
	Signature Guarantee	39
7.	ANNUITY PAYMENTS (THE INCOME PHASE)	39
	Annuity Payment Options	40
8.	DEATH BENEFIT	42
	When We Pay A Death Benefit	42
	When We Do Not Pay A Death Benefit	43
	Deaths After the Annuity Commencement Date	43
	Succession of Ownership	43
	Amount of Death Benefit	43
	Guaranteed Minimum Death Benefit	44
	Adjusted Partial Surrender	45
9.	TAXES	45
	Annuity Policies in General	46
	Qualified and Nonqualified Policies	46
	Surrenders-Qualified Policies Generally	47
	Surrenders-403(b) Policies	48
	Surrenders-Nonqualified Policies	48
	Taxation of Death Benefit Proceeds	49
	Annuity Payments	49
	Diversification and Distribution Requirements	49
	Federal Estate Taxes	50
	Generation-Skipping Transfer Tax	50
	Annuity Purchases by Residents of Puerto Rico	50
	Annuity Contracts Purchased by Nonresident Aliens and Foreign Corporations	50
	Transfers, Assignments or Exchanges of Policies	50
	Possible Tax Law Changes	50
	Separate Account Charges	51
	Foreign Tax Credits	51
	Guaranteed Lifetime Withdrawal Benefits	51
10.	ADDITIONAL FEATURES	51

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TABLE OF CONTENTS continued

	Systematic Payout Option	51
	Initial Payment Guarantee	52
	Access Rider	52
	Additional Death Distribution	53
	Additional Death Distribution+	54
	Nursing Care and Terminal Condition Withdrawal Option	55
	Unemployment Waiver	55
	Telephone Transactions	56
	Dollar Cost Averaging Program	56
	Asset Rebalancing	58
	Guaranteed Lifetime Withdrawal Benefits	58
	Living Benefits Rider	58
	Retirement Income Choice Rider	65
	Retirement Income Choice With Double Withdrawal Base Benefit Rider	72
	Retirement Income Choice 1.2 Rider	80
11.	OTHER INFORMATION	90
	Ownership	90
	Right to Cancel Period	90
	Assignment	91
	Sending Forms and Transaction Requests in Good Order	91
	Mixed and Shared Funding	91
	Exchanges and Reinstatements	91
	Voting Rights	92
	IMSA	92
	Legal Proceedings	92
	Transamerica Life Insurance Company	92
	Financial Condition of the Company	93
	The Separate Account	94
	Distribution of the Policies	94
	TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION	97
	APPENDIX CONDENSED FINANCIAL INFORMATION	98
	APPENDIX EXCESS INTEREST ADJUSTMENT EXAMPLES	104
	APPENDIX DEATH BENEFIT	108
	APPENDIX ADDITIONAL DEATH DISTRIBUTION RIDER — ADDITIONAL INFORMATION	111
	APPENDIX ADDITIONAL DEATH DISTRIBUTION+ RIDER — ADDITIONAL INFORMATION	112
	APPENDIX GUARANTEED LIFETIME WITHDRAWAL BENEFIT COMPARISON TABLE	113
	APPENDIX LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS	117
	APPENDIX GUARANTEED LIFETIME WITHDRAWAL BENEFIT ADJUSTED PARTIAL SURRENDERS - RETIREMENT INCOME CHOICE AND RETIREMENT INCOME CHOICE WITH DOUBLE WITHDRAWAL BASE BENEFIT RIDERS	124
	APPENDIX GUARANTEED LIFETIME WITHDRAWAL BENEFIT ADJUSTED PARTIAL SURRENDERS - RETIREMENT INCOME CHOICE 1.2 RIDER	130

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GLOSSARY OF TERMS

Accumulation Unit — An accounting unit of measure used in calculating the policy value in the separate account before the annuity commencement date.

Adjusted Policy Value — The policy value increased or decreased by any excess interest adjustment.

Administrative and Service Office — Transamerica Life Insurance Company, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, IA 52499-0001, (800) 525-6205.

Annuitant — The person on whose life any annuity payments involving life contingencies will be based.

Annuitize (Annuitization) — When you switch from the accumulation phase to the income phase and we begin to make annuity payments to you (or your designee).

Annuity Commencement Date — The date upon which annuity payments are to commence. This date may be any date after the policy date and may not be later than the last day of the policy month following the month after the annuitant attains age 95. The earliest annuity commencement date is at least thirty days after you purchase your policy. The annuity commencement date may have to be earlier for qualified policies and may be earlier if required by state law.

Annuity Payment Option — A method of receiving a stream of annuity payments selected by the owner.

Assumed Investment Return or AIR — The annual effective rate shown in the contract specifications section of the contract that is used in the calculation of each variable annuity payment.

Cash Value — The adjusted policy value less any applicable surrender charge and rider fees (imposed upon surrender).

Excess Interest Adjustment — A positive or negative adjustment to amounts surrendered (both partial or full surrenders and transfers) or applied to annuity payment options from the fixed account guaranteed period options prior to the end of the guaranteed period. The adjustment reflects changes in the interest rates declared by the Company since the date any payment was received by, or an amount was transferred to, the guaranteed period option. The excess interest adjustment can either decrease or increase the amount to be received by the owner upon full surrender or commencement of annuity payments, depending upon whether there has been an increase or decrease in interest rates, respectively.

Fixed Account — One or more investment choices under the policy that are part of the Company’s general assets and are not in the separate account.

Free Amount — The amount that can be withdrawn each year without incurring any surrender charge or excess interest adjustment.

Guaranteed Lifetime Withdrawal Benefit — Any optional benefit under the policy that provides a guaranteed minimum withdrawal benefit, including the the Living Benefits Rider, the Retirement Income Choice Rider, Retirement Income Choice with Double Withdrawal Base Benefit Rider, or the Retirement Income Choice 1.2 Rider.

Guaranteed Period Options — The various guaranteed interest rate periods of the fixed account which the Company may offer and into which premium payments may be paid or amounts transferred.

Owner (You, Your) — The person who may exercise all rights and privileges under the policy. The owner during the lifetime of the annuitant and before the annuity commencement date is the person designated as the owner in the information that we require to issue a policy.

Policy Date — The date shown on the policy data page attached to the policy and the date on which the policy becomes effective.

Policy Value — On or before the annuity commencement date, the policy value is equal to the owner’s:

• premium payments; minus

• gross partial surrenders (partial surrenders minus excess interest adjustments plus the surrender charge on the portion of the requested partial surrender that is subject to the surrender charge); plus

• interest credited in the fixed account; plus

• accumulated gains in the separate account; minus

• accumulated losses in the separate account; minus

5

• service charges, rider fees, premium taxes, transfer fees, and other charges, if any.

Policy Year — A policy year begins on the policy date and on each anniversary thereof.

Separate Account — Separate Account VA Y, a separate account established and registered as a unit investment trust under the Investment Company Act of 1940, as amended (the “1940 Act”), to which premium payments under the policies may be allocated.

Separate Account Value — The portion of the policy value that is invested in the separate account.

Subaccount — A subdivision within the separate account, the assets of which are invested in a specified underlying fund portfolio.

Valuation Period — The period of time from one determination of accumulation unit values and annuity unit values to the next subsequent determination of values. Such determination shall be made on each business day.

Written Notice — Written notice, signed by the owner, that gives the Company the information it requires and is received in good order at the Administrative and Service Office. For some transactions, the Company may accept an electronic notice such as telephone instructions. Such electronic notice must meet the requirements for good order that the Company establishes for such notices.

You (Your) — the owner of the policy.

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SUMMARY

The sections in this summary correspond to sections in this prospectus, which discuss the topics in more detail.

1. THE ANNUITY POLICY

The flexible premium deferred variable annuity policy offered by Transamerica Life Insurance Company (the Company, we, us, or our) provides a way for you to invest on a tax-deferred basis in the following investment choices: various subaccounts of the separate account and the fixed account of the Company. The policy is intended to accumulate money for retirement or other long-term investment purposes.

This policy currently offers subaccounts that are listed under “Investment Choices” in this prospectus. Each subaccount invests exclusively in shares of one of the underlying fund portfolios. The policy value may depend on the investment experience of the selected subaccounts. Therefore, you bear the entire investment risk with respect to all policy value in any subaccount. You could lose the amount that you invest.

The fixed account offers an interest rate that the Company guarantees.

The policy, like all deferred annuity policies, has two phases: the “accumulation phase” and the “income phase.” During the accumulation phase, earnings accumulate on a tax-deferred basis and are taxed as ordinary income when you take them out of the policy. The income phase occurs when you annuitize and begin receiving regular annuity payments from your policy. The money you can accumulate during the accumulation phase will largely determine the payments you receive during the income phase.

2. PURCHASE

The initial premium payment for nonqualified policies must be at least $5,000 or more, and at least $1,000 for qualified policies, under most circumstances. You must obtain prior Company approval to purchase a policy with an amount less than the stated minimum. You can generally add as little as $50 at any time during the accumulation phase.

3. INVESTMENT CHOICES

You can allocate your premium payments to one of several underlying fund portfolios listed under Investment Choices in this prospectus and described in the underlying fund prospectuses. Depending upon their investment performance, you can make or lose money in any of the subaccounts.

You can also allocate your premium payments to the fixed account.

We currently allow you to transfer money between any of the investment choices during the accumulation phase. We reserve the right to impose a $10 fee for each transfer in excess of 12 transfers per policy year and to impose restrictions and limitations on transfers.

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4. PERFORMANCE

The value of the policy will vary up or down depending upon the investment performance of the subaccounts you choose.

5. EXPENSES

No deductions are made from premium payments at the time you buy the policy so that the full amount of each premium payment is invested in one or more of your investment choices.

We may deduct a surrender charge of up to 5% of premium payments surrendered within five years after the premium is paid. We will calculate surrender charges by taking the earnings, if any, out before premium payments. If you select the Life with Emergency Cash^® annuity payment option, then you can surrender your policy after annuity payments have begun. A surrender charge of up to 4% of adjusted policy value will apply during the first four years after the annuity commencement date.

Full surrenders, partial surrenders, and transfers from a guaranteed period option of the fixed account may also be subject to an excess interest adjustment, which may increase or decrease the amount you receive. This adjustment may also apply to amounts applied to an annuity payment option from a guaranteed period option of the fixed account prior to the end of the guaranteed period option.

We deduct daily mortality and expense risk fees and administrative charges from the assets in each subaccount during the accumulation phase, at an annual rate (as a percentage of the subaccount’s value) that depend on the death benefit option that you select, as follows:

• 1.00% if you do not choose an optional guaranteed minimum death benefit

• 1.15% if you choose the Return of Premium Death Benefit

• 1.35% if you choose the Annual Step-Up Death Benefit

• 1.80% if you choose the Double Enhanced Death Benefit

During the accumulation phase, we deduct an annual service charge of no more than $35 from the policy value on each policy anniversary and at the time of surrender. The charge is waived if either the policy value or the sum of all premium payments, minus all partial surrenders, is at least $50,000.

Upon full surrender, payment of a death benefit, or when annuity payments begin, we will deduct state premium taxes, if applicable. State premium taxes currently range from 0% to 3.50%, depending on the state.

If you elect the Initial Payment Guarantee feature when you annuitize, then there is a daily fee (during the income phase) currently equal to an annual rate of 1.25% of the daily net asset value in the subaccounts.

We deduct a daily fund facilitation fee from the assets in certain investment choices at an annual rate (as a percentage of the subaccount’s value) as follows:

• 0.20% if you choose the AllianceBernstein Balanced Wealth Strategy Portfolio—Class B

• 0.15% if you choose the Franklin Templeton VIP Founding Funds Allocation Fund—Class 4

• 0.10% if you choose the Transamerica BlackRock Global Allocation VP—Service Class

If you elect the Additional Death Distribution (“ADD”), then there is an annual rider fee during the accumulation phase of 0.25% of the policy value.

8

If you elect the Additional Death Distribution+ (“ADD+”), then there is an annual rider fee during the accumulation phase of 0.55% of the policy value.

If you elect the Living Benefits Rider, then there is an annual rider fee during the accumulation phase of 0.90% of the “principal back” total withdrawal base on each anniversary (“rider anniversary”) of the date the rider was elected.

If you elect the Retirement Income Choice Rider, then there is an annual rider fee during the accumulation phase of 0.60% for single life and 0.90% for joint life of the withdrawal base on each rider anniversary. For each option you elect with the rider, you will be charged an annual fee during the accumulation phase that is also a percentage of the total withdrawal base; this fee is in addition to the rider fee for the base benefit.

If you elect the Retirement Income Choice with Double Withdrawal Base Benefit Rider, then there is an annual rider fee during the accumulation phase of 0.90% of the withdrawal base on each rider anniversary. For each additional option you elect with the rider, you will be charged an annual fee during the accumulation phase that is also a percentage of the withdrawal base; this fee is in addition to the rider fee for the base benefit.

If you elect the Retirement Income Choice 1.2 Rider, there is an annual rider fee during the accumulation phase of 1.10% of the withdrawal base charged quarterly if you elect the Open Allocation option, and 0.40% to 1.25% if you elect the Designated Allocation option depending on what designated investment options you choose. For each additional option you elect with the rider, you will be charged a quarterly fee during the accumulation phase that is also a percentage of the withdrawal base; this fee is in addition to the rider fee for the base benefit.

If you elect the Access Rider, then there is a fee equal to an effective annual rate of 0.20% of the daily net asset value in the subaccounts.

The value of the net assets of the subaccounts will reflect the management fee and other expenses incurred by the underlying fund portfolios.

6. ACCESS TO YOUR MONEY

You can generally take out $500 or more anytime during the accumulation phase (except under certain qualified policies).

You may generally take out up to the free amount free of surrender charges. Amounts surrendered in excess of this free amount may be subject to a surrender charge and an excess interest adjustment. You may have to pay income tax and a tax penalty on any money you take out.

If you have policy value in the fixed account, you may take out any cumulative interest credited free of excess interest adjustments.

Access to amounts held in qualified policies may be restricted or prohibited by law or regulation or the terms of the policy.

Surrenders are not generally permitted during the income phase unless you elect the Life with Emergency Cash^® annuity payment option.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

The policy allows you to receive income under one of several annuity payment options. You may choose from fixed payment options, variable payment options, or a combination of both. If you select a variable payment option, then the dollar amount of

9

your annuity payments may go up or down. However, the Initial Payment Guarantee is available for an extra fee and it guarantees a minimum amount for each annuity payment.

8. DEATH BENEFIT

If the sole annuitant dies before the income phase begins, then the beneficiary will generally receive a death benefit. If the owner is not the annuitant, then no death benefit is paid if the owner dies; however required distribution rules require that the policy value be distributed upon the death of any owner.

Naming different persons as owner and annuitant can affect to whom and whether amounts will be paid. Use care when naming owners, annuitants and beneficiaries, and consult your agent if you have questions.

When you purchase a policy you may generally choose an optional guaranteed minimum death benefit:

• Double Enhanced Death Benefit

• Annual Step-Up Death Benefit

• Return of Premium Death Benefit

If you elect the Double Enhanced Death Benefit, you must allocate 100% of your policy value to one or more “designated investment choices.” (See “Double Enhanced Death Benefit—Designated Investment Choices.”)

Charges are lower if you do not choose an optional guaranteed minimum death benefit.

After the policy is issued, a guaranteed minimum death benefit cannot be added, and the death benefit cannot be changed.

The death benefit is paid first to a surviving owner, if any; it is only paid to the beneficiary if there is no surviving owner.

9. TAXES

Earnings, if any, are generally not taxed until taken out. If you take money out of a nonqualified policy during the accumulation phase, earnings come out first for federal tax purposes, and are taxed as ordinary income. For nonqualified and certain qualified policies, payments during the income phase may be considered partly a return of your original investment so that part of each payment may not be taxable as income. For qualified policies, payments during the income phase are, in many cases, considered as all taxable income. If you are younger than 59 ¹ /2 when you take money out, you may incur a 10% federal penalty tax on the taxable earnings.

10. ADDITIONAL FEATURES

This policy has additional features that might interest you. These features may not be available for all policies, may vary for certain policies, may not each be available in combination with other optional benefits under the policy, and may not be suitable for your particular situation.

These features include, but are not limited to, the following:

• You can arrange to have money automatically sent to you monthly, quarterly, semi-annually or annually while your policy is in the accumulation phase. This feature is referred to as the “Systematic Payout Option” (“SPO”). Amounts you receive may be included in your gross income, and in certain circumstances, may be subject to penalty taxes.

• You can elect an optional feature at the time of annuitization that guarantees your variable annuity payments will never be less than a percentage of the initial variable annuity payment. This feature is called the “Initial Payment Guarantee” (“IPG”). There is an extra charge for this feature.

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• You may elect one of two optional riders that might pay an additional amount on top of the policy death benefit, in certain circumstances. These features are called the “Additional Death Distribution” (“ADD”) and “Additional Death Distribution+” (“ADD+”). There is an extra charge for these riders.

• Under certain medically related circumstances, you may surrender all or part of the policy value without any surrender charge or excess interest adjustment. This feature is called the “Nursing Care and Terminal Condition Withdrawal Option.”

• Under certain unemployment circumstances, you may surrender all or a portion of the policy value free of any surrender charge or excess interest adjustment. This feature is called the “Unemployment Waiver.”

• You may generally make transfers and/or change the allocation of additional premium payments by telephone. We may restrict or eliminate this feature.

• You can arrange to automatically transfer money (at least $500 per transfer) monthly or quarterly from certain investment choices into one or more subaccounts. This feature is known as “Dollar Cost Averaging.”

• We will, upon your request, automatically transfer amounts among the subaccounts on a regular basis to maintain a desired allocation of the policy value among the various subaccounts. This feature is called “Asset Rebalancing.”

• You may elect to purchase an optional rider which provides you with a guaranteed minimum accumulation benefit and a guaranteed lifetime withdrawal benefit. This feature is called the “Living Benefits Rider.” If you elect this rider, we will monitor your policy value and, as we deem necessary to support the guarantees under the rider, may transfer amounts back and forth between investment choices that we designate and the variable investment choices that you have selected. You may lose the benefit of this rider if you take “excess” withdrawals. There is an extra charge for this rider.

• You may elect to purchase an optional rider which provides you with a guaranteed lifetime withdrawal benefit. This feature is called the “Retirement Income Choice Rider.” If you elect the Retirement Income Choice Rider, you must allocate 100% of your policy value to one or more “designated investment choices.” (See “Retirement Income Choice—Designated Investment Choices.”) You may lose the benefit of this rider if you take “excess” withdrawals. There is an extra charge for this rider.

• You may elect to purchase an optional rider which provides you with a guaranteed lifetime withdrawal benefit. This feature is called the “Retirement Income Choice with Double Withdrawal Base Benefit Rider.” If you elect the Retirement Income Choice with Double Withdrawal Base Benefit Rider, you must allocate 100% of your policy value to one or more “designated investment choices.” (See “Retirement Income Choice with Double Withdrawal Base Benefit Rider—Designated Investment Choices.”) You may lose the benefit of this rider if you take “excess” withdrawals. There is an extra charge for this rider.

• You may elect to purchase an optional rider which provides you with a guaranteed lifetime withdrawal benefit. This feature is called the “Retirement Income Choice 1.2 Rider.” If you elect the Retirement Income Choice I.2 Rider, you must allocate 100% of yu policy value according to either the Designated Allocation option or the Open Allocation option and meet other conditions. (See “Retirement Income Choice 1.2—Allocation Options and

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Restrictions”.) You may lose the benefit of this rider if you take “excess” withdrawals. There is an extra charge for this rider.

• You may elect to purchase an optional rider which eliminates all surrender charges during the accumulation phase. You can only elect this rider at the time you purchase your policy. This feature is called the “Access Rider”. There is an extra charge for this rider.

11. OTHER INFORMATION

Right to Cancel Period. You may return your policy for a refund, but only if you return it within a prescribed period, which is generally 10 days (after you receive the policy), or whatever longer time may be required by state law. The amount of the refund will generally be the premiums paid plus or minus accumulated gains or losses in the separate account; if state law requires, we will refund your original premium payment(s). The policy will then be deemed void.

No Probate. Usually, the person receiving the death benefit under this policy will not have to go through probate. State laws vary on how the amount that may be paid is treated for estate tax purposes.

Who should purchase the Policy? This policy is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement or other long-term purposes; and for persons who have maximized their use of other retirement savings methods, such as 401(k) plans. The tax-deferred feature is most attractive to people in high federal and state tax brackets. The tax deferral features of variable annuities are unnecessary when purchased to fund a qualified plan. You should not buy this policy if you are looking for a short-term investment, market timing, or if you cannot take the risk of losing money that you put in.

There are various fees and charges associated with variable annuities. You should consider whether the features and benefits of this policy, unique to variable annuities, such as the opportunity for lifetime income payments, a guaranteed death benefit, the guaranteed level of certain charges, and additional features, make this policy appropriate for your needs.

State Variations. Policies issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus because of state law variations. These differences include, among other things, free look rights, issue age limitations, and the general availability of riders. Please note that this prospectus describes the material rights and obligations of a policy owner, and the maximum fees and charges for all policy features and benefits are set forth in the fee table of this prospectus. See your policy for specific variations because any such state variations will be included in your policy or in riders or endorsements attached to your policy. See your agent or contact us for specific information that is applicable to your state.

Financial Statements. Financial Statements for the Company and the subaccounts are in the SAI. Condensed financial information for the subaccounts (those in operation by year end December 31, 2008, if any) are in Appendix – Condensed Financial Information to this prospectus.

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12. INQUIRIES

If you need more information or want to make a transaction, please contact us at:

Transamerica Life Insurance Company

Administrative and Service Office

Attention: Customer Care Group

4333 Edgewood Road NE

Cedar Rapids, IA 52499-0001

(800) 525-6205

You may check your policy at www.transamericaservice.com. Follow the logon procedures. You will need your pre-assigned Personal Identification Number (“PIN”) to access information about your policy. We cannot guarantee that you will be able to access this site.

You should protect your PIN, because on-line (or telephone) options may be available and could be made by anyone who knows your PIN. We may not be able to verify that the person providing instructions using your PIN is you or someone authorized by you.

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ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES

The following describes the fees and expenses that you will pay when buying, owning, and surrendering the policy. Please be certain to review the notes following the fee table and expense examples for further information about the fees and charges presented. The order of the notes follows the order in which the fees and charges under the policy are presented in the fee tables and the expense examples.

The first section describes the fees and expenses that you will pay at the time that you buy the policy, surrender the policy, or transfer cash value between investment choices. State premium taxes may also be deducted. Excess interest adjustments may be made to amounts surrendered or applied to annuity payment options from cash value from the fixed account. (All fees are maximum for purchases made while this prospectus is effective unless otherwise noted.)

Policy Owner Transaction Expenses:
Sales Load On Purchase Payments		0	%
Maximum Surrender Charge (as a % of premium payments surrendered)
Base Policy		5	%
Transfer Fee	$	0 - $10
Special Service Fee	$	0 - $25

The next section describes the fees and expenses that you will pay periodically during the time that you own the policy, not including portfolio fees and expenses. (All fees are maximum for purchases made while this prospectus is effective unless otherwise noted.)

Annual Service Charge	$0 - $35 per policy
Separate Account Annual Expenses (as a percentage, annually, of average separate account value):
Base Separate Account Expenses:
Mortality and Expense Risk Fee	0.85	%
Administrative Charge	0.15	%
Total Base Separate Account Annual Expenses	1.00	%
Optional Separate Account Expenses:
Double Enhanced Death Benefit	0.80	%
Annual Step-Up Death Benefit	0.35	%
Return of Premium Death Benefit	0.15	%
Fund Facilitation Fee	0.20	%
Access Rider	0.20	%
Total Separate Account Annual Expenses with Highest Optional Separate Account Expenses	2.20	%
Optional Rider Fees:
Additional Death Distribution (annual charge based on policy value)	0.25	%
Additional Death Distribution+ (annual charge based on policy value)	0.55	%
Living Benefits Rider (annual charge - a % of Total Withdrawal Base)	0.90	%
Retirement Income Choice Rider - Single Life Option (annual charge - a % of Withdrawal Base)
Base Benefit (Maximum)	1.35	%
Base Benefit (Current)	0.60	%
Additional Benefits available with the Retirement Income Choice Rider:

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Death Benefit	0.25	%
Income Enhancement Benefit	0.15	%
Maximum Total Retirement Income Choice Rider Fees (Single Life) with Highest Combination of Benefits	1.75	%
Current Total Retirement Income Choice Rider Fees (Single Life) with Highest Combination of Benefits	1.00	%
Retirement Income Choice Rider - Joint Life Option (annual charge - a % of Withdrawal Base):
Base Benefit (Maximum)	1.65	%
Base Benefit (Current)	0.90	%
Additional Benefits available with the Retirement Income Choice Rider:
Death Benefit	0.20	%
Income Enhancement Benefit	0.30	%
Maximum Total Retirement Income Choice Rider Fees (Joint Life) with Highest Combination of Benefits	2.15	%
Current Total Retirement Income Choice Rider Fees (Joint Life) with Highest Combination of Benefits	1.40	%
Retirement Income Choice with Double Withdrawal Base Benefit Rider—Single Life Option (annual charge—a % of Withdrawal Base):
Base Benefit (Maximum)	1.65	%
Base Benefit (Current)	0.90	%
Additional Benefits available with the Retirement Income Choice with Double Withdrawal Base Benefit Rider:
Death Benefit	0.25	%
Income Enhancement Benefit	0.15	%
Maximum Total Retirement Income Choice with Double Withdrawal Base Benefit Rider Fees (Single Life) with Highest Combination of Benefits	2.05	%
Current Total Retirement Income Choice with Double Withdrawal Base Benefit Rider Fees (Single Life) with Highest Combination of Benefits	1.30	%
Retirement Income Choice with Double Withdrawal Base Benefit Rider—Joint Life Option (annual charge—a % of Withdrawal Base):
Base Benefit (Maximum)	1.65	%
Base Benefit (Current)	0.90	%
Additional Benefits available with the Retirement Income Choice with Double Withdrawal Base Benefit Rider:
Death Benefit	0.20	%
Income Enhancement Benefit	0.30	%
Maximum Total Retirement Income Choice with Double Withdrawal Base Benefit Rider Fees (Joint Life) with Highest Combination of Benefits	2.15	%
Current Total Retirement Income Choice with Double Withdrawal Base Benefit Rider Fees (Joint Life) with Highest Combination of Benefits	1.40	%
Retirement Income Choice 1.2 Rider (annual charge a % of withdrawal base):
Base Benefit Open Allocation Option (Maximum)	1.85	%
Base Benefit Open Allocation Option (Current)	1.10	%
Base Benefit Designated Allocation Group A (Maximum)	2.00	%
Base Benefit Designated Allocation Group A (Current)	1.25	%
Base Benefit Designated Allocation Group B (Maximum)	1.65	%

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Base Benefit Designated Allocation Group B (Current)	0.90	%
Base Benefit Designated Allocation Group C (Maximum)	1.15	%
Base Benefit Designated Allocation Group C (Current)	0.40	%
Additional Benefits available with the Retirement Income Choice 1.2 Rider:
Death Benefit (Single Life Option)	0.25	%
Death Benefit (Joint Life Option)	0.20	%
Income Enhancement Benefit (Single Life Option)	0.15	%
Income Enhancement Benefit (Joint Life Option)	0.30	%
Maximum Total Retirement Income Choice 1.2 Rider Fees (Joint Life) with Highest Combination of Benefits	2.50	%
Current Total Retirement Income Choice 1.2 Rider Fees (Joint Life) with Highest Combination of Benefits	1.75	%

The next section shows the lowest and highest total operating expenses charged by the underlying fund portfolios for the year ended December 31, 2008 (before any fee waiver or expense reimbursements). Expenses may be higher or lower in future years. More detail concerning each portfolio’s fees and expenses is contained in the prospectus for each portfolio.

Total Portfolio Annual Operating Expenses (Expenses that are deducted from portfolio assets, including management fees, distribution and/or service 12b-1 fees, and other expenses):
Lowest Gross	0.67	%
Highest Gross	1.64	%

The following Example is intended to help you compare the cost of investing in the policy with the cost of investing in other variable annuity policies. These costs include policy owner transaction expenses, policy fees, separate account annual expenses, and portfolio fees and expenses.

The Example assumes that you invest $10,000 in the policy for the time periods indicated. The Example also assumes that your investment has a 5% return each year, the highest fees and expenses of any of the portfolios for the year ended December 31, 2008, and the base policy with the combination of available optional features or riders with the highest fees and expenses, including the Highest Fund Facilitation Fee, Annual Step-Up Death Benefit, Additional Death Distribution+ Rider, and Retirement Income Choice 1.2 Rider—Joint Life with additional Death Benefit and Income Enhancement options. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

Expense Examples:
If the policy is surrendered at the end of the applicable time period (without Access Rider):
1 Year	$	1015
3 Years	$	1986
5 Years	$	2895
10 Years	$	5968
If the policy is annuitized at the end of the applicable time period or if you do not surrender your policy (without Access Rider):
1 Year	$	565

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3 Years	$	1716
5 Years	$	2895
10 Years	$	5968
If the policy is surrendered at the end of the applicable time period (with Access Rider):
1 Year	$	585
3 Years	$	1773
5 Years	$	2984
10 Years	$	6121
If the policy is annuitized at the end of the applicable time period or if you do not surrender your policy (with Access Rider):
1 Year	$	585
3 Years	$	1773
5 Years	$	2984
10 Years	$	6121

Please remember that the Example is an illustration and does not represent past or future expenses. Your actual expenses may be lower or higher than those reflected in the Example. Similarly, your rate of return may be more or less than the 5% assumed in the Example.

For information concerning compensation paid for the sale of the policies, see “Distributor of the Policies.”

NOTES TO FEE TABLE AND EXPENSE EXAMPLES

Annuity Policy Fee Table and Expense Examples: The fee table applies only to the accumulation phase and reflects the maximum charges unless otherwise noted. During the income phase the fees may be different than those described in the Fee Table. See section “5. Expenses”.

Policy Owner Transaction Expenses:

Maximum Surrender Charge: The surrender charge, if any is imposed, applies to each premium, regardless of how policy value is allocated among the investment choices. The surrender charge decreases based on the number of years since the premium payment was made.

If you select the Life with Emergency Cash^® annuity payment option, you will be subject to a surrender charge after the annuity commencement date. See section “5. Expenses”.

Transfer Fee: The transfer fee, if any is imposed, applies to each policy, regardless of how policy value is allocated among the investment choices. There is no fee for the first 12 transfers per policy year. For additional transfers, the Company may charge a fee of $10 per transfer.

Special Service Fees: We may deduct a charge for special services, such as overnight delivery.

Annual Service Charge:

Annual Service Charge: The annual service charge is assessed on each policy anniversary and at surrender. The charge is waived if your policy value, or the sum of your premiums less all partial surrenders, is at least $50,000.

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Separate Account Annual Expenses:

Mortality and Expense Risk Fee: The mortality and expense risk fee shown is for the accumulation phase with the base death benefit.

Optional Separate Account Expenses: Any optional separate account expense is in addition to the mortality and expense risk and administrative fees. Note: the Double Enhanced Death Benefit cannot be elected with the Retirement Income Choice, the Retirement Income Choice with Double Withdrawal Base Benefit, or the Retirement Income Choice 1.2

Fund Facilitation Fee: This daily fee is applied only to policy value in the subaccounts invested in the AllianceBernstein Balanced Wealth Strategy Portfolio (0.20%), the Franklin Templeton VIP Founding Funds Allocation Fund (0.15%) and the Transamerica BlackRock Global Allocation VP (0.10%). See section “5. Expenses”.

Access Rider: The fee is a percentage of the daily net asset value in the separate account.

Total Separate Account Annual Expenses with Highest Optional Separate Account Expenses: This reflects the base separate account expenses, the Double Enhanced Death Benefit fee, the Fund Facilitation fee, plus the Access rider fee, but does not include any annual optional rider fees.

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Optional Rider Fees:

Optional Rider Fees: In some cases, riders to the policy are available that provide optional benefits. There are additional fees (each year) for those riders.

Additional Death Distribution Rider and Additional Death Distribution+ Rider: This annual fee is a percentage of the policy value and is only deducted during the accumulation phase.

Living Benefits Rider: The annual fee is a percentage of the “principal back” Total Withdrawal Base. The “principal back” Total Withdrawal Base on the rider date is the policy value (less any premium enhancements if the rider is added in the first policy year). After the rider date, the “principal back” Total Withdrawal Base is equal to: the “principal back” Total Withdrawal Base on the rider date; plus subsequent premium payments; less subsequent “principal back” adjusted partial withdrawals.

Retirement Income Choice Rider and Retirement Income Choice with Double Withdrawal Base Benefit Rider, and Retirement Income Choice 1.2 Rider - base benefit: The annual fee is a percentage of the Withdrawal Base. The Withdrawal Base on the rider date is the policy value (less any premium enhancement, if the rider is added in the first policy year). During any rider year, the Withdrawal Base is equal to the Withdrawal Base on the rider date or most recent rider anniversary, plus subsequent premium payments, less subsequent Withdrawal Base adjustments. Note: If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit.

Retirement Income Choice Rider and Retirement Income Choice with Double Withdrawal Base Benefit Rider, and Retirement Income Choice 1.2 Rider - Additional Benefits (Single Life and Joint Life Options): You may elect the Retirement Income Choice Rider or the Retirement Income Choice with Double Withdrawal Base Benefit rider or the Retirement Income Choice 1.2 Rider with one or more of the following options - Death Benefit or Income Enhancement Benefit. The charge for each of these options is a percentage of the Withdrawal Base and is in addition to the base benefit fee.

Maximum Total Retirement Income Choice Rider Fees with Highest Combination of Benefits and Maximum Total Retirement Income Choice with Double Withdrawal Base Benefit Rider Fees with Highest Combination of Benefits, and Maximum Total Retirement Income Choice 1.2 Rider Fees with Highest Combination of Benefits: After the fifth rider anniversary, the base benefit rider fees can increase when there is an automatic step-up. These fee totals reflect the maximum fee increase resulting from an automatic step-up of the Withdrawal Base while the rider is in effect.

Total Portfolio Annual Operating Expenses:

Total Portfolio Annual Operating Expenses: The fee table information relating to the underlying fund portfolios was provided to the Company by the underlying fund portfolios, their investment advisors or managers, and the Company has not and cannot independently verify the accuracy or completeness of such information. Actual future expenses of the portfolios may be greater or less than those shown in the Table.

Expense Examples:

Expense Examples: The Example does not reflect premium tax charges or transfer fees. Different fees and expenses not reflected in the Example may be assessed during the income phase of the policy.

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1. THE ANNUITY POLICY

This prospectus describes the Flexible Premium Variable Annuity—J policy offered by the Company. This prospectus generally describes policies issued on or after the date of this prospectus. Policies issued before that date may have different features (such as different death benefits or annuity payment options) and different charges.

An annuity is a contract between you, the owner, and an insurance company (in this case the Company), where the insurance company promises to pay you an income in the form of annuity payments. These payments begin on a designated date, referred to as the annuity commencement date. Until the annuity commencement date, your annuity is in the accumulation phase and the earnings (if any) are tax deferred. Tax deferral means you generally are not taxed until you take money out of your annuity. After you annuitize, your annuity switches to the income phase.

The policy is a flexible premium deferred variable annuity. You can use the policy to accumulate funds for retirement or other long-term financial planning purposes. Your individual investment and your rights are determined primarily by your own policy.

The policy is a “flexible premium” annuity because after you purchase it, you can generally make additional investments of $50 or more until the annuity commencement date. You are not required to make any additional investments.

The policy is a “variable” annuity because the value of your investments can go up or down based on the performance of your investment choices. If you invest in the separate account, the amount of money you are able to accumulate in your policy during the accumulation phase depends upon the performance of your investment choices. You could lose the amount you allocate to the separate account. The amount of annuity payments you receive during the income phase from the separate account also depends upon the investment performance of your investment choices for the income phase. However, if you annuitize under the Initial Payment Guarantee feature, then you will receive stabilized annuity payments that will never be less than a percentage of your initial annuity payment. There is an extra charge for this feature.

The policy also contains a fixed account. The fixed account offers interest at rates that we guarantee will not decrease during the selected guaranteed period. There may be different interest rates for each different guaranteed period that you select.

2. PURCHASE

Policy Issue Requirements

The Company will not issue a policy unless:

• the Company receives in good order (at our Administrative and Service Office) all information needed to issue the policy;

• the Company receives in good order (at our Administrative and Service Office) a minimum initial premium payment; and

• the annuitant, owner, and any joint owner are age 90 or younger (the limit may be lower for qualified policies).

We reserve the right to reject any application or premium payment.

Premium Payments

You should make checks for premium payments payable only to Transamerica Life Insurance Company and send them to the administrative and service office. Your check must be honored in order for us to pay any associated payments and benefits due under the policy.

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We do not accept cash. We reserve the right to not accept third party checks. A third party check is a check that is made payable to one person who endorses it and offers it as payment to a second person. Checks should normally be payable to Transamerica Life Insurance Company, however, in some circumstances, at our discretion we may accept third party checks that are from a rollover or transfer from other financial institutions. Any third party checks not accepted by our company will be returned.

We reserve the right to reject or accept any form of payment. Any unacceptable forms of payment will be returned.

Initial Premium Requirements

The initial premium payment for nonqualified policies must be at least $5,000, and at least $1,000 for qualified policies. You must obtain prior company approval to purchase a policy with an amount less than the stated minimum. There is generally no minimum initial premium payment for policies issued under section 403(b) of the Internal Revenue Code; however, your premium must be received within 90 days of the policy date or your policy will be canceled. We will credit your initial premium payment to your policy within two business days after the day we receive it and your complete policy information at our administrative and service office. If we are unable to credit your initial premium payment, we will contact you within five business days and explain why. We will also return your initial premium payment at that time unless you let us keep it and credit it as soon as possible.

The date on which we credit your initial premium payment to your policy is generally the policy date. The policy date is used to determine policy years, policy months and policy anniversaries.

There may be delays in our receipt of applications that are outside of our control (for example, because of the failure of the selling broker/dealer or sales agent to forward the application to us promptly, or because of delays in determining whether the policy is suitable for you). Any such delays will affect when your policy can be issued and your premium allocated among your investment choices.

Additional Premium Payments

You are not required to make any additional premium payments. However, you can generally make additional premium payments as often as you like during the accumulation phase. Additional premium payments must be at least $50. We will credit additional premium payments to your policy as of the business day we receive your premium and required information at our administrative and service office. Additional premium payments must be received before the close of a regular business session of the New York Stock Exchange (usually 4:00 p.m. Eastern Time) to get same-day pricing of the additional premium payment.

Maximum Total Premium Payments

We reserve the right to reject cumulative premium payments over $1,000,000 (this includes subsequent premium payments) for policies with the same owner or same annuitant for issue ages 0-80. For issue ages over 80, we reserve the right to reject cumulative premium payments over $500,000 (this includes subsequent premium payments) for policies with the same owner or same annuitant.

Allocation of Premium Payments

When you purchase a policy, we will allocate your premium payment to the investment choices you select. Your allocation must be in whole percentages and must total 100%. We will allocate additional premium payments the same way, unless you request a different allocation.

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If you allocate premium payments to the Dollar Cost Averaging program, you must give us instructions regarding the subaccount(s) to which transfers are to be made or we cannot accept your premium payment.

You may change allocations for future additional premium payments by sending written instructions to our administrative and service office, or by telephone, subject to the limitations described under “Telephone Transactions”. The allocation change will apply to premium payments received on or after the date we receive the change request in good order.

You could lose the amount you allocate to the variable subaccounts.

The Company reserves the right to restrict or refuse any premium payment.

Policy Value

You should expect your policy value to change from valuation period to valuation period. A valuation period begins at the close of regular trading on the New York Stock Exchange on each business day and ends at the close of regular trading on the next succeeding business day. A business day is each day that the New York Stock Exchange is open. The New York Stock Exchange generally closes at 4:00 p.m. Eastern time. Holidays are generally not business days.

3. INVESTMENT CHOICES

The Separate Account

The following variable subaccounts are available under the policy for new investors, but may not be available for all policies. The subaccounts invest in shares of the various underlying fund portfolios. The companies that provide investment advice and administrative services for the underlying fund portfolios offered through this policy are listed below.

The following variable investment choices are currently offered through this policy. Please be certain to review the notes following the list of variable investment choices.

TRANSAMERICA SERIES TRUST

Subadvised by American Century Investment Management, Inc.

Transamerica American Century Large Company Value VP – Service Class

Portfolio Construction Manager: Morningstar Associates, LLC

Transamerica Asset Allocation—Conservative VP – Service Class

Transamerica Asset Allocation—Growth VP – Service Class

Transamerica Asset Allocation—Moderate VP – Service Class

Transamerica Asset Allocation—Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Subadvised by BlackRock Financial Management, Inc.

Transamerica BlackRock Tactical Allocation VP – Service Class

Advised by Transamerica Asset Management, Inc.

Transamerica BlackRock Global Allocation VP – Service Class

Subadvised by BlackRock Investment Management, LLC

Transamerica BlackRock Large Cap Value VP – Service Class

Subadvised by Capital Guardian Trust Company

Transamerica Capital Guardian Value VP – Service Class

Subadvised by ING Clarion Real Estate Securities, L.P.

Transamerica Clarion Global Real Estate Securities VP – Service Class

Subadvised by J.P. Morgan Investment Management Inc.

Transamerica JPMorgan Enhanced Index VP – Service Class

Subadvised by Jennison Associates LLC

Transamerica Jennison Growth VP – Service Class

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Subadvised by ClearBridge Advisors, LLC

Transamerica Legg Mason Partners All Cap VP – Service Class

Subadvised by MFS^® Investment Management

Transamerica MFS High Yield VP – Service Class

Transamerica MFS International Equity VP – Service Class

Subadvised by Columbia Management Advisors, LLC

Transamerica Marsico Growth VP – Service Class

Subadvised by Pacific Investment Management Company LLC

Transamerica PIMCO Total Return VP – Service Class

Subadvised by T. Rowe Price Associates, Inc.

Transamerica T. Rowe Price Equity Income VP – Service

Class Transamerica T. Rowe Price Growth Stock VP – Service Class

Transamerica T. Rowe Price Small Cap VP – Service Class

Subadvised by Templeton Investment Counsel, LLC and Transamerica Investment Management, LLC

Transamerica Templeton Global VP – Service Class

Subadvised by AEGON USA Investment Management, LLC.

Transamerica Efficient Markets VP – Service Class

Subadvised by Transamerica Investment Management, LLC

Transamerica Balanced VP – Service Class

Transamerica Convertible Securities VP – Service Class

Transamerica Equity VP – Service Class

Transamerica Growth Opportunities VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica Science & Technology VP – Service Class

Transamerica Small/Mid Cap Value VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Transamerica Value Balanced VP – Service Class

Managed by AEGON USA Investment Management, LLC.

Transamerica Index 50 VP – Service Class

Transamerica Index 75 VP – Service Class

Subadvised by Morgan Stanley Investment Management Inc.

Transamerica Van Kampen Active International Allocation VP – Service Class

Transamerica Van Kampen Large Cap Core VP – Service Class

Subadvised by Van Kampen Asset Management

Transamerica Van Kampen Mid-Cap Growth VP – Service Class

AIM VARIABLE INSURANCE FUNDS

Managed by Invesco Aim Advisors, Inc.

AIM V.I. Basic Value Fund – Series II Shares

AIM V.I. Capital Appreciation Fund – Series II Shares

ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.

Managed by AllianceBernstein L.P.

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

AllianceBernstein Growth and Income Portfolio – Class B

AllianceBernstein Large Cap Growth Portfolio – Class B

FIDELITY VARIABLE INSURANCE PRODUCTS FUND

Managed by Fidelity Management & Research Company

Fidelity—VIP Balanced Portfolio – Service Class 2

Fidelity—VIP Contrafund^® Portfolio – Service Class 2

Fidelity—VIP Equity-Income Portfolio – Service Class 2

Fidelity—VIP Growth Portfolio – Service Class 2

Fidelity—VIP Mid Cap Portfolio – Service Class 2

Fidelity—VIP Value Strategies Portfolio – Service Class 2

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FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Managed by Franklin Advisers, Inc.

Franklin Income Securities Fund – Class 2

Managed by Franklin Mutual Advisers, LLC

Mutual Shares Securities Fund – Class 2

Managed by Templeton Investment Counsel LLC

Templeton Foreign Securities Fund – Class 2

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST

Fund Administrator: Franklin Templeton Services, LLC

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

JANUS ASPEN SERIES

Managed by Janus Capital Management LLC

Janus Aspen—Enterprise Portfolio – Service Shares

Janus Aspen—Worldwide Portfolio – Service Shares

MFS^® VARIABLE INSURANCE TRUST^SM

Managed by MFS^® Investment Management

MFS New Discovery Series – Service Class

MFS Total Return Series – Service Class

NOTES TO VARIABLE INVESTMENT CHOICES

Some subaccounts may be available for certain policies and may not be available for all policies. You should work with your registered representative to decide which subaccount(s) may be appropriate for you based on a thorough analysis of your particular insurance needs, financial objectives, investment goals, time horizons, and risk tolerance.

There can be no assurance that the Transamerica Money Market VP—Service Class portfolio will be able to maintain a stable net asset value per share. During extended periods of low interest rates, and partly as a result of Policy charges, the yield on the Transamerica Money Market VP – Service Class subaccount may become extremely low and possibly negative.

Transamerica Capital Guardian Global VP merged into Transamerica Templeton Global VP.

Transamerica Capital Guardian U.S. Equity VP merged into Transamerica Van Kampen Large Cap Core VP.

Janus Aspen—Enterprise Portfolio, formerly known as Janus Aspen – Mid Cap Growth Portfolio.

Janus Aspen—Worldwide Portfolio, formerly known as Janus Aspen – Worldwide Growth Portfolio.

The general public may not purchase shares of any of these underlying fund portfolios. The names and investment objectives and policies may be similar to other portfolios managed by the same investment advisor or manager that are sold directly to the public. You should not expect the investment results of the underlying fund portfolios to be the same as those of other portfolios.

More detailed information, including an explanation of the portfolios’ fees and investment objectives, may be found in the current prospectuses for the underlying fund portfolios, which accompany this prospectus. You should read the prospectuses for the underlying fund portfolios carefully before you invest.

Selection of Underlying Portfolios

The underlying fund portfolios offered through this product are selected by the Company, and the Company may consider various factors, including, but not limited to, asset class coverage, the strength of the adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the underlying fund portfolio or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates. For additional information about these arrangements, see “Revenue We Receive.” We review the portfolios periodically and may remove a portfolio, or limit its availability to new premiums and/or transfers of cash

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value if we determine that a portfolio no longer satisfies one or more of the selection criteria, and/or if the portfolio has not attracted significant allocations from owners. We have included the Transamerica Series Trust (“TST”) underlying fund portfolios at least in part because they are managed by one of our affiliates, Transamerica Asset Management, Inc. (“TAM”).

We have developed this variable annuity product in cooperation with one or more distributors, and have included certain underlying fund portfolios based on their recommendations; their selection criteria may differ from our selection criteria.

You are responsible for choosing the subaccounts which invest in the underlying fund portfolios, and the amounts allocated to each, that are appropriate for your own individual circumstances and your investment goals, financial situation, and risk tolerance. Because investment risk is borne by you, decisions regarding investment allocations should be carefully considered.

In making your investment selections, we encourage you to thoroughly investigate all of the information regarding the underlying fund portfolios that are available to you, including each underlying fund portfolio’s prospectus, statement of additional information and annual and semi-annual reports. Other sources such as the Fund’s website or newspapers and financial and other magazines provide more current information, including information about any regulatory actions or investigations relating to a Fund or underlying fund portfolio. After you select underlying fund portfolios for your initial premium, you should monitor and periodically re-evaluate your allocations to determine if they are still appropriate.

You bear the risk of any decline in the cash value of your policy resulting from the performance of the underlying fund portfolios you have chosen.

We do not recommend or endorse any particular underlying fund portfolio and we do not provide investment advice.

We do not guarantee that any of the subaccounts will always be available for premium payments, allocations, or transfers. We reserve the right, subject to compliance with applicable law, to make certain changes to the separate account and its investments. We reserve the right to add new portfolios [or portfolio classes], close existing portfolios [or portfolio classes], or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. We will not add, delete or substitute any underlying fund portfolio shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law. See the SAI for more information concerning the possible addition, deletion, or substitution of investments.

We reserve the right to limit the number of subaccounts you are invested in at any one time.

Addition, Deletion, or Substitution of Investments

The Company cannot and does not guarantee that any of the subaccounts will always be available for premium payments, allocations, or transfers. The Company retains the right, subject to any applicable law, to make certain changes in the separate account and its investments. The Company reserves the right to eliminate the shares of any portfolio held by a subaccount and to substitute shares of another portfolio of the underlying fund portfolios, or of another registered open-end management investment company for the shares of any portfolio, if the shares of the portfolio are no longer available for investment or if, in the Company’s judgment, investment in any portfolio would be inappropriate in view of the purposes of the separate account. To the extent required by the 1940 Act, as amended, substitutions of shares attributable to your interest in a subaccount

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will not be made without prior notice to you and the prior approval of the Securities and Exchange Commission (“SEC”). Nothing contained herein shall prevent the separate account from purchasing other securities for other series or classes of variable annuity policies, or from affecting an exchange between series or classes of variable annuity policies on the basis of your requests.

New subaccounts may be established when, in the sole discretion of the Company, marketing, tax, investment or other conditions warrant. Any new subaccounts may be made available to existing owners on a basis to be determined by the Company. Each additional subaccount will purchase shares in a mutual fund portfolio, or other investment vehicle. The Company may also eliminate one or more subaccounts if, in its sole discretion, marketing, tax, investment or other conditions warrant such change. In the event any subaccount is eliminated, the Company will notify you and request a reallocation of the amounts invested in the eliminated subaccount.

Similarly, the Company may, at its discretion, close a subaccount to new investment (either transfers or premium payments). Any amounts that would otherwise be invested in a closed subaccount (for premium allocations, portfolio rebalancing, dollar cost averaging, automatic checking account or payroll deductions for period premiums, etc.) will, if you do not provide instructions for a new allocation be invested in the subaccount that invests in a portfolio of money market instruments. If a portfolio of money market instruments is unavailable, the Company will reinvest the amounts in another subaccount, or in the fixed account, if appropriate.

In the event of any such substitution or change, the Company may, by appropriate endorsement, make such changes in the policies as may be necessary or appropriate to reflect such substitution or change. Furthermore, if deemed to be in the best interests of persons having voting rights under the policies, the separate account may be (1) operated as a management company under the 1940 Act or any other form permitted by law, (2) deregistered under the 1940 Act in the event such registration is no longer required or (3) combined with one or more other separate accounts. To the extent permitted by applicable law, the Company also may (1) transfer the assets of the separate account associated with the policies to another account or accounts, (2) restrict or eliminate any voting rights of owners or other persons who have voting rights as to the separate account, (3) create new separate accounts, (4) add new subaccounts to or remove existing subaccounts from the separate account, or combine subaccounts, or (5) add new underlying fund portfolios, or substitute a new fund for an existing fund.

The Fixed Account

Premium payments allocated and amounts transferred to the fixed account become part of the Company’s general account. Interests in the general account have not been registered under the Securities Act of 1933 (the “1933 Act”), nor is the general account registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are generally subject to the provisions of the 1933 or 1940 Acts. Disclosures relating to interests in the general account may, however, be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy of statements made in a registration statement.

While we do not guarantee that the fixed account will always be available for investment, we do guarantee that the interest credited to the fixed account will not be less than the guaranteed minimum effective annual interest rate shown on your policy (the “guaranteed minimum”). We determine credited rates, which are guaranteed for at least one year, in our sole discretion. You bear the risk that we will not credit interest greater than the

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guaranteed minimum. At the end of the guaranteed period option you selected, the value in that guaranteed period option will automatically be transferred into a new guaranteed period option of the same length (or the next shorter period if the same period is no longer offered) at the current interest rate for that period. You can transfer to another investment choice by giving us notice within 30 days before the end of the expiring guaranteed period.

Full and partial surrenders and transfers from a guaranteed period option of the fixed account are generally subject to an excess interest adjustment (except at the end of the guaranteed period). This adjustment will also be made to amounts that you apply to an annuity payment option. This adjustment may increase or decrease the amount of interest credited to your policy. The excess interest adjustment will not decrease the interest credited to your policy below the guaranteed minimum.

We also guarantee that upon full surrender your cash value attributable to the fixed account will not be less than the amount required by the applicable nonforfeiture law at the time the policy is issued.

If you select the fixed account, your money will be placed with the Company’s other general assets. The amount of money you are able to accumulate in the fixed account during the accumulation phase depends upon the total interest credited. The amount of each annuity payment you receive during the income phase from the fixed portion of your policy will remain level for the entire income phase.

We reserve the right to refuse any premium payment or transfer to the fixed account.

Transfers

During the accumulation phase, you may make transfers to or from any investment choice within certain limitations.

Transfers out of a guaranteed period option of the fixed account are limited to the following:

• Transfers at the end of a guaranteed period. No excess interest adjustment will apply.

• Transfers of amounts equal to interest credited. This may affect your overall interest-crediting rate, because transfers are deemed to come from the oldest premium payment first.

• Other than at the end of a guaranteed period, transfers of amounts from the guaranteed period option in excess of amounts equal to interest credited, are subject to an excess interest adjustment. If it is a negative adjustment, the maximum amount you can transfer in any one policy year is 25% of the amount in that guaranteed period option, less any previous transfers during the current policy year. If it is a positive adjustment, we do not limit the amount that you can transfer.

Each transfer must be at least $500, or the entire subaccount value. Transfers of interest from a guaranteed period option of the fixed account must be at least $50. If less than $500 remains as a result of the transfer, then we reserve the right to include that amount in the transfer. Transfer requests must be received at our administrative and service office while the New York Stock Exchange is open to get same-day pricing of the transaction.

The number of transfers permitted may be limited and a $10 charge or each transfer in excess of 12 in any policy year will apply. We reserve the right to prohibit transfers to the fixed account.

During the income phase, you may transfer values out of any subaccount; however, you cannot transfer values out of the fixed account. The minimum amount that can be transferred during this phase is the lesser of $10 of monthly income, or the entire monthly income of the annuity units in the subaccount from which the transfer is being made.

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Transfers made by telephone are subject to the limitations described below under “Telephone Transactions.”

Market Timing and Disruptive Trading

Statement of Policy. This variable insurance product was not designed for the use of market timers or frequent or disruptive traders. (Frequent transfers are considered to be disruptive.) Such transfers may be harmful to the underlying fund portfolios and increase transaction costs.

Market timing and disruptive trading among the subaccounts or between the subaccounts and the fixed account can cause risks with adverse effects for other policy owners (and beneficiaries and underlying fund portfolios). These risks and harmful effects include:

(1) dilution of the interests of long-term investors in a subaccount if purchases or transfers into or out of an underlying fund portfolio are made at prices that do not reflect an accurate value for the underlying fund portfolio’s investments (some market timers attempt to do this through methods known as “time-zone arbitrage” and “liquidity arbitrage”);

(2) an adverse effect on portfolio management, such as:

(a) impeding a portfolio manager’s ability to sustain an investment objective;

(b) causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case; or

(c) causing an underlying fund portfolio to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay withdrawals or transfers out of the underlying fund portfolio; and

(3) increased brokerage and administrative expenses.

These costs are borne by all policy owners invested in those subaccounts, not just those making the transfers.

We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain subaccounts at the request of the corresponding underlying fund portfolios) and we do not make special arrangements or grant exceptions to accommodate market timing or potentially disruptive trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us if you intend to conduct market timing or potentially disruptive trading.

Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee that all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from market timing and disruptive trading among subaccounts of variable products issued by these other insurance companies or retirement plans.

Deterrence. If we determine you are engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make transfers is subject to modification or restriction if we determine, in our sole opinion, that your exercise of the transfer privilege may disadvantage or potentially harm the rights or interests of other policy owners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms, but under our current policies and procedures will include loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be “expedited” transfers. This means that we would accept only written transfer requests with an original signature transmitted to us only by U.S. mail. We may also restrict the transfer

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privileges of others acting on your behalf, including your registered representative or an asset allocation or investment advisory service.

We reserve the right to reject any premium payment or transfer request from any person without prior notice, if, in our judgment, (1) the payment or transfer, or series of transfers, would have a negative impact on an underlying fund portfolio’s operations, or (2) if an underlying fund portfolio would reject or has rejected our purchase order or has instructed us not to allow that purchase or transfer, or (3) because of a history of market timing or disruptive trading. We may impose other restrictions on transfers, or even prohibit transfers for any owner who, in our view, has abused, or appears likely to abuse, the transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue transfer privileges, modify our procedures, impose holding period requirements or limit the number, size, frequency, manner, or timing of transfers we permit. Because determining whether to impose any such special restrictions depends on our judgement and discretion, it is possible that some policy owners could engage in disruptive trading that is not permitted for others. We also reserve the right to reverse a potentially harmful transfer if an underlying fund portfolio refuses or reverses our order; in such instances some policy owners may be treated differently than others in that some transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more variable insurance products that we believe are connected. Please note: If you engage a third party investment advisor for asset allocation services, then you may be subject to these transfer restrictions because of the actions of your investment advisor in providing these services.

In addition to our internal policies and procedures, we will administer your variable insurance product to comply with any applicable state, federal, and other regulatory requirements concerning transfers. We reserve the right to implement, administer, and charge you for any fee or restriction, including redemption fees, imposed by any underlying fund portfolio. To the extent permitted by law, we also reserve the right to defer the transfer privilege at any time that we are unable to purchase or redeem shares of any of the underlying fund portfolios.

Under our current policies and procedures, we do not:

• impose redemption fees on transfers; or

• expressly limit the number or size of transfers in a given period except for certain subaccounts where an underlying fund portfolio has advised us to prohibit certain transfers that exceed a certain size; or

• provide a certain number of allowable transfers in a given period.

Redemption fees, transfer limits, and other procedures or restrictions may be more or less successful than ours in deterring market timing or other disruptive trading and in preventing or limiting harm from such trading.

In the absence of a prophylactic transfer restriction (e.g., expressly limiting the number of trades within a given period or limiting trades by their size), it is likely that some level of market timing and disruptive trading will occur before it is detected and steps taken to deter it (although some level of market timing and disruptive trading can occur even with a prophylactic transfer restriction). As noted above, we do not impose a prophylactic transfer restriction and, therefore, it is likely that some level of market timing and disruptive trading will occur before we are able to detect it and take steps in an attempt to deter it.

Please note that the limits and restrictions described herein are subject to our ability to monitor transfer activity. Our ability to detect market timing or disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by policy owners (or those acting on their behalf) to avoid detection. As a result, despite our efforts to prevent harmful trading

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activity among the variable investment choices available under this variable insurance product, there is no assurance that we will be able to detect or deter market timing or disruptive trading by such policy owners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders that we cannot predict.

Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice, as we deem necessary or appropriate (1) to better detect and deter harmful trading that may adversely affect other policy owners, other persons with material rights under the variable insurance products, or underlying fund shareholders generally, (2) to comply with state or federal regulatory requirements, or (3) to impose additional or alternative restrictions on owners engaging in market timing or disruptive trading among the investment choices under the variable insurance product. In addition, we may not honor transfer requests if any variable investment choice that would be affected by the transfer is unable to purchase or redeem shares of its corresponding underlying fund portfolio.

Underlying Fund Portfolio Frequent Trading Policies. The underlying fund portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying fund portfolios may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for less than a certain period of time. The prospectuses for the underlying fund portfolios describe any such policies and procedures. The frequent trading policies and procedures of an underlying fund portfolio may be different, and more or less restrictive, than the frequent trading policies and procedures of other underlying fund portfolios and the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading. Policy owners should be aware that we may not have the contractual ability or the operational capacity to monitor policy owners’ transfer requests and apply the frequent trading policies and procedures of the respective underlying funds that would be affected by the transfers. Accordingly, policy owners and other persons who have material rights under our variable insurance products should assume that any protection they may have against potential harm from market timing and disruptive trading is the protection, if any, provided by the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading in certain subaccounts.

Policy owners should be aware that we are required to provide to an underlying fund portfolio or its designee, promptly upon request, certain information about the trading activity of individual policy owners, and to restrict or prohibit further purchases or transfers by specific policy owners identified by an underlying fund portfolio as violating the frequent trading policies established for the portfolio.

Omnibus Orders. Policy owners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying fund portfolios generally are “omnibus” orders from intermediaries such as retirement plans and separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual owners of variable insurance products. The omnibus nature of these orders may limit the underlying fund portfolios’ ability to apply their respective frequent trading policies and procedures. We cannot guarantee that the underlying fund portfolios will not be harmed by transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying fund portfolios. These other insurance companies are responsible for their own policies and procedures regarding frequent transfer activity. If

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their policies and procedures fail to successfully discourage harmful transfer activity, it will affect other owners of underlying fund portfolio shares, as well as the owners of all of the variable annuity or life insurance policies, including ours, whose variable investment choices correspond to the affected underlying fund portfolios. In addition, if an underlying fund portfolio believes that an omnibus order we submit may reflect one or more transfer requests from owners engaged in market timing and disruptive trading, the underlying fund portfolio may reject the entire omnibus order and thereby delay or prevent us from implementing your request.

4. PERFORMANCE

The Company periodically advertises performance of the various subaccounts. Performance figures might not reflect charges for options, riders, or endorsements. We may disclose at least three different kinds of non-standard performance. First, we may calculate performance by determining the percentage change in the value of an accumulation unit by dividing the increase (decrease) for that unit by the value of the accumulation unit at the beginning of the period. This performance number reflects the deduction of the mortality and expense risk fees and administrative charges. It does not reflect the deduction of any applicable premium taxes, surrender charges, or fees for any optional riders or endorsements. Any such deduction would reduce the percentage increase or make greater any percentage decrease.

Second, advertisements may also include total return figures, which reflect the deduction of the mortality and expense risk fees and administrative charges. These figures may also include or exclude surrender charges. These figures may also reflect the premium enhancement, if any.

Third, for certain investment portfolios, performance may be shown for the period commencing from the inception date of the investment portfolio (i.e., before commencement of subaccount operations). These figures should not be interpreted to reflect actual historical performance of the subaccounts.

Not all types of performance data presented reflect all of the fees and charges that may be deducted (such as fees for optional benefits); performance figures would be lower if these charges were included.

5. EXPENSES

Note: The following section on expenses and the Annuity Policy Fee Table and Expense Examples only apply to policies issued after the date of this prospectus.

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

Surrender Charges

During the accumulation phase, you can surrender part or all of the cash value (restrictions may apply to qualified policies). We may apply a surrender charge to compensate us for expenses relating to sales, including commissions to registered representatives and other promotional expenses.

You can surrender up to the greater of (i) 10% of your premium payments (ii) or any gains in the policy once each year free of surrender charges. This amount is referred to as the free amount and is determined at the time of surrender. (The free amount is not cumulative, so not surrendering anything in one year does not increase the surrender charge free amount in subsequent years.) If the surrender is in excess of this free amount, you might have to pay a surrender charge, which is a contingent deferred sales charge, on the excess amount.

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The following schedule shows the surrender charges that apply during the five years following payment of each premium payment:

Number of Years Since Premium Payment Date	Surrender Charge (as a percentage of premium surrendered)
0 - 1	5	%
1 - 2	4	%
2 - 3	3	%
3 - 4	2	%
4 - 5	1	%
more than 5	0	%

For example, assume your premium is $100,000 and your policy value is $106,000 at the beginning of the second policy year and you surrender $30,000. Since that amount is more than your free amount ($10,000), you would pay a surrender charge of $800 on the remaining $20,000 [4% of ($30,000 - $10,000)].

Likewise, assume your policy value is $80,000 (premium payments $100,000) at the beginning of the second policy year and you surrender your policy. You would pay a surrender charge of $3,600 [4% of ($100,000 - ($100,000 x 10%))].

You can generally choose to receive the full amount of a requested partial surrender by directing us to deduct any applicable surrender charge (and any applicable excess interest adjustment) from your remaining policy value. You receive your cash value upon full surrender.

For surrender charge purposes, earnings are considered to be surrendered first, then the oldest premium is considered to be surrendered next.

Surrender charges are waived if you surrender money under the Nursing Care and Terminal Condition Withdrawal Option or the Unemployment Waiver.

Keep in mind that surrenders may be taxable and, if made before age 59 ¹/2, may be subject to a 10% federal penalty tax. For tax purposes, surrenders from nonqualified policies are considered to come from taxable earnings first.

An optional rider is available which eliminates all surrender charges during the accumulation phase. You can only elect this rider at the time you purchase the policy. There is an extra charge for this rider. See Access Rider.

Life with Emergency Cash^® Surrender Charge

If you select the Life with Emergency Cash^® annuity payment option, then you can surrender your policy even after annuity payments have begun. However, there is a surrender charge during the first four years after the annuity commencement date. The following schedule shows the current surrender charge:

Number of Years Since Annuity Commencement Date	Surrender Charge (as a percentage of adjusted policy value)
0 – 1	4	%
1 – 2	3	%
2 – 3	2	%
3 – 4	1	%
more than 4	0	%

We can change the surrender charge, and you will be subject to whatever surrender schedule is in effect at the time you annuitize under the Life with Emergency Cash^® annuity payment option.

Note carefully the following three things about this surrender charge:

• this surrender charge is measured from the annuity commencement date and not from the premium payment date;

• this surrender charge is a percentage of the adjusted policy value applied to the Life with Emergency Cash^® annuity payment option, and not a percentage of premium; and

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• under this payment option, there is no surrender charge free amount.

Excess Interest Adjustment

Surrenders and transfers from the fixed account may be subject to an excess interest adjustment. This adjustment could retroactively reduce the interest credited in the fixed account to the guaranteed minimum or increase the amount credited. This adjustment may also apply to amounts applied to an annuity payment option. Please see “Appendix—Excess Interest Adjustment Example” for an example showing the effect of a hypothetical excess interest adjustment calculation.

Mortality and Expense Risk Fees

We charge a fee as compensation for bearing certain mortality and expense risks under the policy. This fee is assessed daily based on the net asset value of each subaccount. Examples of such risks include a guarantee of annuity rates, the death benefit, certain expenses of the policy, and assuming the risk that the current charges will be insufficient in the future to cover costs of administering the policy. We may also pay distribution expenses out of this charge.

During the accumulation phase:

• The mortality and expense risk fee is at an annual rate of 0.85% if no guaranteed minimum death benefit is elected.

• For the Return of Premium Death Benefit, the daily mortality and expense risk fee is at an annual rate of 1.00%.

• For the Annual Step-Up Death Benefit, the daily mortality and expense risk fee is at an annual rate of 1.20%.

• For the Double Enhanced Death Benefit, the daily mortality and expense risk fee is at an annual rate of 1.65%.

During the income phase, the mortality and expense risk fee is at an annual rate of 1.10% .

If this charge does not cover our actual costs, we absorb the loss. Conversely, if the charge more than covers actual costs, the excess is added to our surplus. We expect to profit from this charge. We may use any profit for any proper purpose, including distribution expenses.

Premium Taxes

Some states assess premium taxes on the premium payments you make. We currently do not deduct for these taxes at the time you make a premium payment. However, we will deduct the total amount of premium taxes, if any, from the policy value when:

• you begin receiving annuity payments;

• you surrender the policy; or

• a death benefit is paid.

State premium taxes currently range from 0% to 3.50%, depending on the state.

Federal, State and Local Taxes

We may in the future deduct charges from the policy for any taxes we incur because of the policy. However, no deductions are being made at the present time.

Special Service Fees

We will deduct a charge for special services, such as overnight delivery, up to $25 per service provided.

Transfer Fee

You are generally allowed to make 12 free transfers per policy year before the annuity commencement date. If you make more than 12 transfers per year, we reserve the right to charge $10 for each additional transfer. Premium payments, Asset Rebalancing, and Dollar Cost Averaging transfers do not count as one of your free transfers. All transfer requests made at the same time are treated as a single transfer.

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Administrative Charges

We deduct a daily administrative charge to cover the costs of administering the policy (including certain distribution-related expenses). This charge is equal to an annual rate of 0.15% of the daily net asset value of each subaccount during both the accumulation phase and the income phase.

In addition, during the accumulation phase, an annual service charge of $35 (but not more than 2% of the policy value) is charged on each policy anniversary and at surrender. The service charge is waived if your policy value or the sum of your premiums, less all partial surrenders, is at least $50,000.

Initial Payment Guarantee

If you elect the Initial Payment Guarantee feature at the time of annuitization, there is a fee (during the income phase) currently at an annual rate of 1.25% of the daily net asset value. This fee may be higher or lower at the time you annuitize and elect the feature.

Fund Facilitation Fee

We charge a fund facilitation fee in order to make certain funds available as investment choices under the policies. This fee is assessed daily based on the net asset value of subaccounts that we specify. The fund facilitation fee, expressed as an annual rate is:

• 0.20% if you choose the AllianceBernstein Balanced Wealth Strategy Portfolio—Class B

• 0.15% if you choose the Franklin Templeton VIP Founding Funds Allocation Fund—Class 4

• 0.10% if you choose the Transamerica BlackRock Global Allocation VP—Service Class

Access Rider

If you elect the Access Rider, there is a daily rider fee at an annual rate of 0.20% of the daily net asset value in the separate account.

Additional Death Distribution

If you elect the Additional Death Distribution, there is an annual rider fee during the accumulation phase of 0.25% of the policy value. The rider fee will be deducted on each rider anniversary and upon termination of the rider during the accumulation phase. The rider fee(s) is deducted from each investment choice in proportion to the amount of policy value in each investment choice.

Additional Death Distribution+

If you elect the Additional Death Distribution+, there is an annual rider fee during the accumulation phase of 0.55% of the policy value. The rider fee will be deducted on each rider anniversary and upon termination of the rider during the accumulation phase. The rider fee(s) is deducted from each investment choice in proportion to the amount of policy value in each investment choice.

Living Benefits Rider

If you elect the Living Benefits Rider, there is an annual rider fee of 0.90% of the “principal back” total withdrawal base on each rider anniversary before annuitization. We will also deduct the rider fee upon full surrender of the policy or other termination of the rider. The rider fee is deducted from each investment choice in proportion to the amount of policy value in each investment choice. Generally, the rider fee is deducted regardless of your values (i.e., even if your policy value exceeds your total withdrawal base).

We will continue to calculate the rider fee using the “principal back” total withdrawal base even after the “principal back” minimum remaining withdrawal amount reaches zero. The “principal back” total withdrawal base is always greater than or equal to the “for life” total withdrawal base.

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Retirement Income Choice Rider and Additional Options Fees

If you elect the Retirement Income Choice Rider, there is an annual rider fee of 0.60% (for single life) or 0.90% (for joint life) of the withdrawal base charged on each rider anniversary prior to annuitization for the base benefit. If you elect options with the Retirement Income Choice Rider, then you will be charged a fee, for each option you elect, that is a percentage of the withdrawal base on each rider anniversary prior to annuitization that is in addition to the rider fee for the base benefit. The additional fees are as follows:

Options	Single Life Option		Joint Life Option
Death Benefit	0.25	%	0.20	%
Income Enhancement	0.15	%	0.30	%

We will also deduct any rider fee pro rata upon full surrender of the policy or other termination of the rider. The rider fee(s) is deducted from each investment choice in proportion to the amount of policy value in each investment choice.

Retirement Income Choice with Double Withdrawal Base Benefit rider and Additional Options Fees

If you elect the Retirement Income Choice with Double Withdrawal Base Benefit rider, then for the base benefit (for single life or joint life), then there currently is an annual rider fee of 0.90% of the withdrawal base charged on each rider anniversary prior to annuitization. If you elect options with the Retirement Income Choice with Double Withdrawal Base Benefit rider, then for each option you elect, you will be charged a fee that is a percentage of the withdrawal base on each rider anniversary prior to annuitization and is in addition to the rider fee for the base benefit. The additional fees are as follows:

Options	Single Life Option		Joint Life Option
Death Benefit	0.25	%	0.20	%
Income Enhancement	0.15	%	0.30	%

We will also deduct any rider fee pro rata upon full surrender of the policy or other termination of the rider. The rider fee(s) is deducted from each investment choice in proportion to the amount of policy value in each investment choice.

Retirement Income Choice 1.2 Rider and Additional Options Fees

If you elect the Retirement Income Choice 1.2 rider, then the fee, which is charged quarterly before annuitization, depends on the allocation option that you choose. If you choose the Open Allocation option, the fee for the base benefit (for either single or joint life) is 1.10% (on an annual basis) of the withdrawal base. If you choose the Designated Investment option, then the fee for the base benefit (for single or joint life) is 1.25%, 0.90%, and 0.40% (on an annual basis) of the withdrawal base for allocating 100% of your policy value in Designated Allocation Group A, Designated Allocation Group B, or Designated Allocation Group C, respectively. If you elect a combination of designated investment options among various groups, then your fee will be based on a weighted average of your options. If you elect options with the Retirement Income Choice 1.2 rider, then each option you elect, you will be charged a fee that is a percentage of the benefit base on each rider quarter before annuitization, and is in addition to the rider fee for the base benefit. The additional fees, on an annual basis, are as follows:

Options	Single Life Option		Joint Life Option
Death Benefit	0.25	%	0.20	%
Income Enhancement	0.15	%	0.30	%

We will also deduct any rider fee pro rata upon full surrender of the policy or other termination of the rider. The rider fee(s) is deducted from each investment option in proportion to the amount of policy value in each investment option.

Portfolio Fees and Expenses

The value of the assets in each subaccount will reflect the fees and expenses paid by the underlying fund portfolios. The lowest and highest fund expenses for the previous calendar year are found in the Annuity Policy Fee Table section of this prospectus. See the prospectuses for the underlying fund portfolios for more information.

Revenue We Receive

We (and our affiliates) may directly or indirectly receive payments from the underlying fund portfolios, their advisers, subadvisers, distributors or affiliates thereof, in connection with certain administrative, marketing and other services we (and our affiliates) provide and expenses we incur. We (and/or our affiliates) generally receive three types of payments:

• Rule 12b-1 Fees. Our affiliate TCI is the principal underwriter for the policies and receives some or all of the 12b-1 fees from the funds. Any 12b-1 fees received by TCI that are attributable to our variable insurance products are then credited to us. These fees range from 0.00% to 0.25% of the average daily assets of the certain underlying fund portfolios attributable to the policies and to certain other variable insurance products that we and our affiliates issue.

• Administrative, Marketing and Support Service Fees (“Support Fees”). As noted above,

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an investment adviser, sub-adviser, administrator and/or distributor (or affiliates thereof) of the underlying fund portfolios may make payments to us and/or our affiliates, including TCI. These payments may be derived, in whole or in part, from the profits the investment advisor or sub-adviser realized on the advisory fee deducted from underlying fund portfolio assets. Policy owners, through their indirect investment in the underlying fund portfolios, bear the costs of these advisory fees (see the prospectuses for the underlying funds for more information). The amount of the payments we (or our affiliates) receive is generally based on a percentage of the assets of the particular underlying fund portfolios attributable to the policy and to certain other variable insurance products that our affiliates and we issue. These percentages differ and the amounts may be significant. Some advisers or sub-advisers (or other affiliates) pay us more than others.

The following chart provides the maximum combined percentages of 12b-1 fees and Support Fees that we anticipate will be paid to us on an annual basis:

Incoming Payments to the Company and TCI
Fund	Maximum Fee % of assets
TRANSAMERICA SERIES TRUST	0.25	%
AIM VARIABLE INSURANCE FUNDS	0.50	%
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.	0.45	%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND	0.35	%
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST	0.35	%
JANUS ASPEN SERIES	0.25	%
MFS® VARIABLE INSURANCE TRUSTSM	0.45	%

NOTES TO INCOMING PAYMENTS TABLE:

Maximum Fee % of assets: Payments are based on a percentage of the average assets of each underlying fund portfolio owned by the subaccounts available under this policy and under certain other variable insurance products offered by our affiliates and us. We and TCI may continue to receive 12b-1 fees and administrative fees on subaccounts that are closed to new investments, depending on the terms of the agreements supporting those payments and on the services we and TCI provide.

Transamerica Series Trust (“TST”): Because TST is managed by Transamerica Asset Management, Inc. (“TAM”), an affiliate of ours, there are additional benefits to us and our affiliates for amounts you allocate to the TST underlying fund portfolios, in terms of our and our affiliates’ overall profitability. These additional benefits may be significant. Payments or other benefits may be received from TAM. Such payments or benefits may be entered into for a variety of purposes, such as to allocate resources to us to provide administrative services to the policyholders who invest in the TST underlying fund portfolios. These payments or benefits may take the form of internal credits, recognition, or cash payments. A variety of financial and accounting methods may be used to allocate resources and profits to us. Additionally, if a TST portfolio is sub-advised by an entity that is affiliated with us, we may retain more revenue than on those TST portfolios that are sub-advised by non-affiliated entities. During 2008 we received $43,870,311.50 from TAM pursuant to these benefits. This includes the 0.25% amount in the above chart. We anticipate receiving comparable amounts in the future.

Variable Insurance Products Fund: We receive this percentage once $100 million in fund shares are held by the subaccounts of the Company and its affiliates.

• Other Payments. TCI also serves as the wholesale distributor for the policies, and in that capacity directly or indirectly receives additional amounts or different percentages of assets under management from certain advisers and sub-advisers to the underlying fund portfolios (or their affiliates) with regard to variable insurance products or mutual funds that are issued by us and our affiliates. These amounts may be derived, in whole or in part, from the profits the investment adviser or sub-adviser receives from the advisory fee deducted from underlying fund portfolio assets. Policy owners, through their indirect investment in the underlying fund portfolios, bear the costs of these advisory fees. Certain advisers and sub-advisers of the underlying fund portfolios (or their affiliates):

• may directly or indirectly pay TCI amounts up to $75,000 per year to participate in a “preferred sponsor” program that provides

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such advisers and sub-advisers with access to TCI’s wholesalers at TCI’s national and regional sales conferences as well as internal and external meetings and events that are attended by TCI’s wholesalers and/or other TCI employees.

• may provide our affiliates and/or selling firms with wholesaling services to assist us in the distribution of the policies

• may provide us and/or certain affiliates and/or selling firms with occasional gifts, meals, tickets or other compensation as an incentive to market the underlying fund portfolios and to assist with their promotional efforts. The amounts may be significant and these arrangements provide the adviser or subadviser (or other affiliates) with increased access to us and to our affiliates involved in the distribution of the policies.

For the calendar year ended December 31, 2008, TCI received revenue sharing payments ranging from $4,000 to $35,295 (for a total of $418,058) from the following Fund managers and/or sub-advisers to participate in TCI’s events: AIM Advisors, Inc., Alliance Capital Management L.P., American Century Investment Management, Inc., BlackRock Investment Management, LLC., Columbia Management Advisors, Inc., Dreyfus, Evergreen Investments, Federated Investment Management Company, Fidelity Management and Research Company, Franklin Templeton Services, LLC, ING Clarion Real Estate Securities, Janus Capital Management, LLC, Jennison Associates LLC, JPMorgan Investment Management, Inc., Lehman Brothers, MFS Investment Management, Oppenheimer Funds, Inc., Pacific Investment Management Company LLC, Putnam , Schroders, T. Rowe Price Associates, Inc., Transamerica Investment Management, LLC, Morgan Stanley Investment Management, Inc., Van Kampen Asset Management, Vanguard, ClearBridge Advisors, LLC. Please note some of the aforementioned managers and/or subadvisors may not be associated with underlying fund portfolios currently available in this product.

Proceeds from certain of these payments by the underlying fund portfolios, the advisers, the sub-advisers and/or their affiliates may be used for any corporate purpose, including payment of expenses (1) that we and our affiliates incur in promoting, marketing, and administering the policy, and (2) that we incur, in our role as intermediary, in promoting, marketing, and administering the underlying fund portfolios. We and our affiliates may profit from these payments.

For further details about the compensation payments we make in connection with the sale of the policies, see “Distributor of the Policies” in this prospectus.

6. ACCESS TO YOUR MONEY

During the accumulation phase, you can have access to the money in your policy in the following ways:

• by making a surrender (either a full or partial surrender); or

• by taking systematic payouts (See “Section 10, Systematic Payout Option” for more details).

Surrenders

If you take a full surrender, you will receive your cash value.

If you want to take a partial surrender, in most cases it must be for at least $500. Unless you tell us otherwise, we will take the surrender from each of the investment choices in proportion to the policy value.

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You may elect to take up to the free amount once each policy year without incurring a surrender charge. Remember that any surrender you take will reduce the policy value, and the amount of the death benefit. See “Section 8, Death Benefit”, for more details. A surrender may also reduce other benefits.

Surrenders from qualified policies may be restricted or prohibited.

Surrenders may be subject to a surrender charge. Surrenders from the fixed account may be subject to an excess interest adjustment. Income taxes, federal tax penalties and certain restrictions may apply to any surrenders you make.

During the income phase, you will receive annuity payments under the annuity payment option you select; however, you generally may not take any other surrenders, either full or partial, unless you elect a Life with Emergency Cash^® payment option.

If your policy was issued pursuant to a 403(b) plan, starting January 1, 2009 we generally are required to confirm, with your 403(b) plan sponsor or otherwise, that surrenders, loans or transfers you request comply with applicable tax requirements and to decline requests that are not in compliance. We will defer such payments you request until all information required under the tax law has been received. By requesting a surrender, loan or transfer, you consent to the sharing of confidential information about you, the policy, and transactions under the policy and any other 403(b) contracts or accounts you have under the 403(b) plan among us, your employer or plan sponsor, any plan administrator or recordkeeper, and other product providers.

Delay of Payment and Transfers

Payment of any amount due from the separate account for a surrender, a death benefit, or the death of the owner of a nonqualified policy, will generally occur within seven days from the date we receive in good order all required information at our administrative and service office. We may defer such payment from the separate account if:

• the New York Stock Exchange is closed other than for usual weekends or holidays or trading on the Exchange is otherwise restricted;

• an emergency exists as defined by the SEC or the SEC requires that trading be restricted; or

• the SEC permits a delay for the protection of owners.

In addition, transfers of amounts from the subaccounts may be deferred under these circumstances.

Any payment or transfer request which is not in good order will cause a delay.

Federal laws designed to counter terrorism and prevent money laundering by criminals might in certain circumstances require us to reject a premium payment and/or “freeze” a policy owner’s account. If these laws apply in a particular situation, we would not be allowed to pay any request for withdrawals, surrenders, or death benefits, make transfers, or continue making annuity payments absent instructions from the appropriate federal regulator. We may also be required to provide information about you and your policy to government agencies or departments.

Pursuant to the requirements of certain state laws, we reserve the right to defer payment of the cash value from the fixed account for up to six months. We may defer payment of any amount until your premium payment check has cleared your bank.

Excess Interest Adjustment

Money that you transfer out of or surrender from a guaranteed period option of the fixed account before the end of its guaranteed period (the number of years you specified the money would remain in the guaranteed period option) may be subject to an

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excess interest adjustment. At the time you request a transfer or surrender (either full or partial), if interest rates set by the Company have risen since the date of the initial guarantee, the excess interest adjustment will result in a lower cash value on surrender or transfer. However, if interest rates have fallen since the date of the initial guarantee, the excess interest adjustment will result in a higher cash value on surrender or transfer. Please see “Appendix—Excess Interest Adjustment” to see how the excess interest adjustment is calculated and illustrative examples using hypothetical values.

Any amount surrendered in excess of the cumulative interest credited is generally subject to an excess interest adjustment. An excess interest adjustment may also be made on amounts applied to an annuity payment option.

There will be no excess interest adjustment on any of the following:

• surrenders of cumulative interest credited;

• Nursing Care and Terminal Condition Withdrawal Option surrenders;

• Unemployment Waiver surrenders;

• surrenders to satisfy any minimum distribution requirements; and

• Systematic Payout Option payments, which do not exceed cumulative interest credited at the time of payment.

Please note that in these circumstances you will not receive a higher cash value if interest rates have fallen nor will you receive a lower cash value if interest rates have risen.

The excess interest adjustment may vary for certain policies and may not be applicable for all policies.

Signature Guarantee

As a protection against fraud, we require that the following transaction requests include a Medallion signature guarantee:

• All requests for disbursements (i.e. partial withdrawals and surrenders) $50,000 and over;

• Any non-electronic disbursement requests made on or within 15 days of a change to the address of record for a contract owner’s account; and

• Any disbursement request when Transamerica Life Insurance Company has been directed to send proceeds to a different address from the address of record for that contract owner’s account. PLEASE NOTE: This requirement will not apply to disbursement request made in connection with exchanges of one annuity policy for another with the same owner in a “tax-free exchange” under Section 1035 of the Internal Revenue Code or a Qualified Direct Rollover to another insurance company.

An investor can obtain a Medallion signature guarantee from more than 7,000 financial institutions across the United States and Canada that participate in a Medallion signature guarantee program. This includes many:

• National and state banks;

• Savings banks and savings and loan associations;

• Securities brokers and dealers; and

• Credit unions.

The best source of a Medallion signature guarantee is a bank, savings and loan association, brokerage firm, or credit union with which you do business. Guarantor firms may, but frequently do not, charge a fee for their services.

A notary public cannot provide a Medallion signature guarantee. Notarization will not substitute for a Medallion signature guarantee.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

You choose the annuity commencement date. You can change this date by giving us notice with the information we need. New annuity commencement dates less than 30 days after we receive notice of the

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change require prior approval. The latest maximum annuity commencement date generally cannot be after the policy month following the month in which the annuitant attains age 95. The earliest annuity commencement date is at least thirty days after you purchase your policy.

Before the annuity commencement date, if the annuitant is alive, you may choose an annuity payment option or change your election. If the annuitant dies before the annuity commencement date, the death benefit is payable in a lump sum or under one of the annuity payment options (unless the surviving spouse continues the policy).

Unless you specify otherwise, the annuitant will receive the annuity payments. After the annuitant’s death, the beneficiary you designate at annuitization will receive any remaining guaranteed payments.

Annuity Payment Options

The policy provides several annuity payment options that are described below. You may choose any combination of annuity payment options. We will use your adjusted policy value to provide these annuity payments. If the adjusted policy value on the annuity commencement date is less than $2,000, we reserve the right to pay it in one lump sum in lieu of applying it under an annuity payment option. You can receive annuity payments monthly, quarterly, semi-annually, or annually. (We reserve the right to change the frequency if payments would be less than $50.)

If you choose to receive fixed payments, then the amount of each payment will be set on the annuity commencement date and will not change. You may, however, choose to receive variable payments. The dollar amount of the first variable payment will be determined in accordance with the annuity payment rates set forth in the applicable table contained in the policy. The dollar amount of additional variable payments will vary based on the investment performance of the subaccount(s) you select. The dollar amount of each variable payment after the first may increase, decrease, or remain constant. If the actual investment performance (net of fees and expenses) exactly matched the assumed investment return of 5% at all times, the amount of each variable annuity payment would remain constant. If actual investment performance (net of fees and expenses) exceeds the assumed investment return, the amount of the variable annuity payments would increase. Conversely, if actual investment performance (net of fees and expenses) is lower than the assumed investment return, the amount of the variable annuity payments would decrease. Please note that these changes only occur annually under the Initial Payment Guarantee.

A charge for premium taxes and an excess interest adjustment may be made when annuity payments begin.

The annuity payment options are explained below. Some options are fixed only and some can be fixed or variable.

Income for a Specified Period (fixed only). We will make level payments only for a fixed period. No funds will remain at the end of the period.

If your policy is a qualified policy, this payment option may not satisfy minimum required distribution rules. Consult a tax advisor before electing this option.

Income of a Specified Amount (fixed only). Payments are made for any specified amount until the amount applied to this option, with interest, is exhausted. This will be a series of level payments followed by a smaller final payment.

If your policy is a qualified policy, this payment option may not satisfy minimum required distribution rules. Consult a tax advisor before electing this option.

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Life Income. You may choose between:

• No Period Certain (fixed or variable)-Payments will be made only during the annuitant’s lifetime.

• 10 Years Certain (fixed or variable)-Payments will be made for the longer of the annuitant’s lifetime or ten years.

• Guaranteed Return of Policy Proceeds (fixed only)-Payments will be made for the longer of the annuitant’s lifetime or until the total dollar amount of payments we made to you equals the annuitized amount.

• Life with Emergency Cash^® (fixed or variable)-Payments will be made during the annuitant’s lifetime. With the Life with Emergency Cash^® feature, you are able to surrender all or a portion of the Life with Emergency Cash^® benefit. The amount you surrender must be at least $2,500. We will provide you with a Life with Emergency Cash^® benefit schedule that will assist you in estimating the amount you have available to surrender. A partial surrender will reduce all future payments pro rata. A surrender charge may apply and there may be tax consequences (consult a tax advisor before requesting a full or partial surrender). The maximum surrender charge is 4% of the annuitized amount (see “Expenses” for the surrender charge schedule). You will be subject to whatever surrender schedule is in effect at the time you annuitize under this annuity payment option. The Life with Emergency Cash^® benefit will continue through age 100 of the annuitant.

The Life with Emergency Cash^® benefit is also a death benefit that is paid upon the death of the annuitant and is generally equal to the surrender value without any surrender charges. For qualified policies the death benefit ceases on the date the annuitant reaches the IRS age limitation.

Joint and Survivor Annuity. You may choose between:

• No Period Certain (fixed or variable)-Payments are made during the joint lifetime of the annuitant and a joint annuitant of your selection. Payments will be made as long as either person is living.

• Life with Emergency Cash^® (fixed or variable)-Payments will be made during the joint lifetime of the annuitant and a joint annuitant of your selection. Payments will be made as long as either person is living. With the Life with Emergency Cash^® feature, you are able to surrender all or a portion of the Life with Emergency Cash^® benefit. The amount you surrender must be at least $2,500. We will provide you with a Life with Emergency Cash^® benefit schedule that will assist you in estimating the amount you have available to surrender. A partial surrender will reduce all future payments pro rata. A surrender charge may apply and there may be tax consequences (consult a tax advisor before requesting a full or partial surrender). The maximum surrender charge is 4% of the annuitized amount (see “Expenses” for the surrender charge schedule). You will be subject to whatever surrender schedule is in effect at the time you annuitize under this annuity payment option. The Life with Emergency Cash^® benefit will continue through age 100 of the surviving joint annuitant.

The Life with Emergency Cash^® benefit is also a death benefit that is paid upon the death of the surviving joint annuitant and is generally equal to the surrender value without any surrender charges. For qualified policies the death benefit ceases on the date the surviving joint annuitant reaches the IRS joint age limitation.

Other annuity payment options may be arranged by agreement with the Company. Some annuity payment options may not be available for all policies.

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NOTE CAREFULLY

IF:

• you choose Life Income with No Period Certain or a Joint and Survivor Annuity with No Period Certain; and

• the annuitant dies (or both joint annuitants die) before the due date of the second (third, fourth, etc.) annuity payment;

THEN:

• we may make only one (two, three, etc.) annuity payments.

IF:

• you choose Income for a Specified Period, Life Income with 10 Years Certain, Life Income with Guaranteed Return of Policy Proceeds, or Income of a Specified Amount; and

• the person receiving payments dies prior to the end of the guaranteed period;

THEN:

• the remaining guaranteed payments will be continued to a new payee, or their present value may be paid in a single sum.

However, IF:

• you choose Life with Emergency Cash^® ; and

• the annuitant dies (if both joint annuitants die) before age 101;

THEN:

• a Life with Emergency Cash^® death benefit will be paid.

We will not pay interest on amounts represented by uncashed annuity payment checks if the postal or other delivery service is unable to deliver checks to the payee’s address of record. The person receiving payments is responsible for keeping the Company informed of his/her current address.

You must annuitize your policy no later than the maximum annuity commencement date specified in your policy (earlier for certain distribution channels).

If you do not elect an annuity payment option, the default option will be Life with 10 Years Certain option. Please note, all optional benefits (including guaranteed minimum death benefits and living benefits) terminate upon annuitization.

8. DEATH BENEFIT

We will pay a death benefit to your beneficiary, under certain circumstances, if the annuitant dies during the accumulation phase. If there is a surviving owner(s) when the annuitant dies, the surviving owner(s) will receive the death benefit instead of the listed beneficiary. The person receiving the death benefit may choose an annuity payment option, or may choose to receive a lump sum.

We will determine the amount of and pay the death benefit proceeds, if any are payable on a policy, upon receipt at our administrative and service office of satisfactory proof of the annuitant’s death, written directions from each eligible recipient of death benefit proceeds regarding how to pay the death benefit, and any other documents, forms and information that we need (collectively referred to as “due proof of death”). Please Note: Such due proof of death must be submitted in good order to avoid a delay in processing the death benefit claim.

When We Pay A Death Benefit

We will pay a death benefit IF:

• you are both the annuitant and sole owner of the policy; and

• you die before the annuity commencement date.

We will pay a death benefit to you (owner) IF:

• you are not the annuitant; and

• the annuitant dies before the annuity commencement date.

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If the only person receiving the death benefit is the surviving spouse, then he or she may elect to continue the policy as the new annuitant and owner, instead of receiving the death benefit. All surrender charges will be waived.

When We Do Not Pay A Death Benefit

We will not pay a death benefit IF:

• you are not the annuitant; and

• you die prior to the annuity commencement date.

Please note the new owner (unless it is the deceased owner’s spouse) must generally surrender the policy within five years of your death.

Distribution requirements apply to the policy value upon the death of any owner. These distribution requirements are detailed in the SAI.

Deaths After the Annuity Commencement Date

The death benefit payable, if any, on or after the annuity commencement date depends on the annuity payment option selected.

IF:

• you are not the annuitant; and

• you die on or after the annuity commencement date; and

• the entire interest in the policy has not been paid;

THEN:

• the remaining portion of such interest in the policy will continue to be distributed at least as rapidly as under the method of distribution being used as of the date of your death.

IF:

• annuity payments are being made under the Life with Emergency Cash^® ; and

• the annuitant dies before age 101 (or earlier, if a qualified policy);

THEN:

• a Life with Emergency Cash^® death benefit will be paid.

Succession of Ownership

If an owner dies during the accumulation phase, the person or entity first listed below who is alive or in existence on the date of that death will become the new owner:

• any surviving owner;

• primary beneficiary;

• contingent beneficiary; or

• owner’s estate.

Amount of Death Benefit

Death benefit provisions may differ from state to state. The death benefit may be paid as a lump sum or as annuity payments. The amount of the death benefit depends on the guaranteed minimum death benefit option, if any, you choose when you buy the policy. The “base policy” death benefit will generally be the greater of:

• the policy value on the date we receive the required information in good order at our Administrative and Service Office

• the cash value on the date we receive in good order the required information at our Administrative and Service Office (this will be more than the policy value if there is a positive excess interest adjustment that exceeds the surrender charge)

• the guaranteed minimum death benefit, if any, (discussed below), plus premium payments, less adjusted partial surrenders, from the date of death to the date the death benefit is paid.

Please note, the death benefit terminates upon annuitization and there is a maximum annuity commencement date.

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Guaranteed Minimum Death Benefit

NOTE: The following generally applies, depending on the state of issue, to policies issued after the date of this prospectus.

On the policy application, you may generally choose a guaranteed minimum death benefit (age limitations may apply) for an additional fee. After the policy is issued, you cannot make an election and the death benefit cannot be changed.

Double Enhanced Death Benefit

The death benefit under this option is the greater of 1 or 2 below:

1. The 6% Annually Compounding through age 80 Death Benefit, which is equal to:

• the total premium payments; less

• any adjusted partial surrenders;

• accumulated at an effective annual rate of 6% from each premium payment date and each surrender date to the earlier of the annuitant’s date of death or the annuitant’s 81st birthday.

2. The Monthly Step-Up through age 80 Death Benefit, which is equal to:

• the largest policy value on the policy date or on any monthly anniversary before the earlier of the annuitant’s date of death or the annuitant’s 81st birthday; plus

• any premium payments since the date of any monthly anniversary with the largest policy value; minus

• any adjusted partial surrenders since the date of the monthly anniversary with the largest policy value.

This benefit is not available if the owner or annuitant is age 76 or older on the policy date and requires you to invest only in certain “designated investment choices”. There is an extra charge for this death benefit of 0.80% annually.

Designated Investment Choices. If you elect the Double Enhanced Death Benefit, you must allocate 100% of your policy value to one or more of the following “designated investment choices:”

Transamerica Asset Allocation—Conservative VP – Service Class

Transamerica Asset Allocation—Moderate VP – Service Class

Transamerica Asset Allocation—Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Transamerica Balanced VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Transamerica PIMCO Total Return VP – Service Class

Transamerica Index 50 VP – Service Class

Transamerica Index 75 VP – Service Class

Transamerica Value Balanced VP – Service Class

Fidelity—VIP Balanced Portfolio – Service Class 2

Transamerica Efficient Markets VP – Service Class

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

Fixed Account

Please note:

• All policy value must be allocated to one or more designated investment choices.

• You may transfer amounts among the designated investment choices; however, you cannot transfer any amount to any other subaccount if you elect this death benefit.

The Double Enhanced Death Benefit is not available if a guaranteed lifetime withdrawal benefit is chosen.

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Annual Step-Up Death Benefit

Under this option, on each policy anniversary before your 81st birthday, a new “stepped-up” death benefit is determined and becomes the guaranteed minimum death benefit for that policy year. This “step-up” death benefit is equal to:

• the largest policy value on the policy date or on any policy anniversary prior to the earlier of the annuitant’s date of death or the annuitant’s 81st birthday; plus

• any premium payments since the date of any policy anniversary with the largest policy value; minus

• any adjusted partial surrenders since the date of the policy anniversary with the largest policy value.

The Annual Step-Up Death Benefit is not available if the annuitant is 76 or older on the policy date. There is an extra charge for this death benefit of 0.35% annually.

Return of Premium Death Benefit

The Return of Premium Death Benefit is equal to:

• total premium payments; less

• any adjusted partial surrenders as of the date of death.

This benefit is not available if the annuitant is 91 or older on the policy date. There is an extra charge for this death benefit of 0.15% annually.

• Please note: You will not receive an optional guaranteed minimum death benefit if you do not choose one when you purchase your policy.

• If you elect the Double Enhanced Death Benefit, then you cannot also elect the Retirement Income Choice Rider, the Retirement Income Choice with double Withdrawal Base Benefit rider, or the Retirement Income Choice Rider 1.2

The Guaranteed Minimum Death Benefit may vary for certain policies and may not be available for all policies. This disclosure explains the material features of the Guaranteed Minimum Death Benefit. The application and operation of the Guaranteed Minimum Death Benefit are governed by the terms and conditions of the policy form and riders.

Adjusted Partial Surrender

When you request a partial surrender, your guaranteed minimum death benefit will be reduced by an amount called the adjusted partial surrender. Under certain circumstances, the adjusted partial surrender may be more than the dollar amount of your surrender request. This will generally be the case if the guaranteed minimum death benefit exceeds the policy value at the time of surrender. It is also possible that if a death benefit is paid after you have made a partial surrender, then the total amount paid could be less than the total premium payments. We have included a detailed explanation of this adjustment in the “Appendix—Death Benefit.” This is referred to as “adjusted partial surrender” in your policy. If you have a qualified policy, minimum required distributions rules may require you to request a partial surrender.

9. TAXES

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

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Annuity Policies in General

Deferred annuity policies are a way of setting aside money for future needs like retirement. Congress recognized how important saving for retirement is and provided special rules in the Internal Revenue Code for annuities.

Simply stated, these rules generally provide that individuals will not be taxed on the earnings, if any, on the money held in an annuity policy until taken out. This is referred to as tax deferral. When a non-natural person (e.g., corporation or certain other entities other than tax-qualified trusts) owns a nonqualified policy, the policy will generally not be treated as an annuity for tax purposes.

There are different rules as to how you will be taxed depending on how you take the money out and the type of policy-qualified or nonqualified.

You will generally not be taxed on increases in the value of your policy until a distribution occurs (either as a surrender or as annuity payments).

Qualified and Nonqualified Policies

If you purchase the policy under an individual retirement annuity, a 403(b) plan, a pension plan, or specially sponsored program, your policy is referred to as a qualified policy.

Qualified policies are issued in connection with the following:

• Individual Retirement Annuity (IRA): A traditional IRA allows individuals to make contributions, which may be deductible, to the policy. A Roth IRA also allows individuals to make contributions to the policy, but it does not allow a deduction for contributions, and distributions may be tax-free if the owner meets certain rules.

• Tax-Sheltered Annuity (403(b) Plan): A 403(b) Plan may be made available to employees of certain public school systems and tax-exempt organizations and permits contributions to the policy on a pre-tax basis. Pursuant to new tax regulations, starting January 1, 2009 the policy is not available for purchase under a 403(b) plan and we do not accept additional premiums or transfers to existing 403(b) policies. We generally are required to confirm, with your 403(b) plan sponsor or otherwise, that surrenders, loans or transfers you request from an existing 403(b) policy comply with applicable tax requirements before we process your request.

• Corporate Pension and Profit-Sharing and H.R. 10 Plan: Employers and self-employed individuals can establish pension or profit-sharing plans for their employees or themselves and make contributions to the policy on a pre-tax basis.

• Deferred Compensation Plan (457 Plan): Certain governmental and tax-exempt organizations can establish a plan to defer compensation on behalf of their employees through contributions to the policy.

There is no additional tax deferral benefit derived from placing qualified funds into a variable annuity. Features other than tax deferral should be considered in the purchase of a qualified policy. There are limits on the amount of contributions you can make to a qualified policy. Other restrictions may apply including terms of the plan in which you participate.

Optional death benefit features in some cases may exceed the greater of the premium payments or the policy value. Such a death benefit could be characterized as an incidental benefit, the amount of which is limited in any pension or profit-sharing plan or 403(b) plan. Because an optional death benefit may exceed this limitation, anyone using the policy in connection with such plans should consult their tax adviser before purchasing an optional death benefit. The Internal Revenue Service has not reviewed the policy for qualification as an IRA, and has not addressed in a ruling of general applicability

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whether the death benefit options and riders available, with the policy, if any, comport with IRA qualification requirements.

If you purchase the policy as an individual and not under an individual retirement annuity, 403(b) plan, 457 plan, or pension or profit sharing plan, your policy is referred to as a nonqualified policy.

Surrenders-Qualified Policies Generally

There are special rules that govern qualified policies. Generally, these rules restrict:

• the amount that can be contributed to the policy during any year;

• the time when amounts can be paid from the policy; and

• the amount of any death benefit that may be allowed.

In the case of a withdrawal under a qualified policy, a pro rata portion of the amount you receive is taxable, generally based on the ratio of your “investment in the contract” to your total account balance or accrued benefit under the retirement plan. Your “investment in the contract” generally equals the amount of any non-deductible purchase payments made by you or on your behalf. In some cases, your “investment in the contract” can be zero.

In addition, a penalty tax may be assessed on amounts surrendered from the policy prior to the date you reach age 59 ¹/2, unless you meet one of the exceptions to this rule. You may also be required to begin taking minimum distributions from the policy by a certain date. Pursuant to special legislation, required minimum distributions for the 2009 tax year generally are not required, and 2009 distributions that otherwise would be required minimum distributions may be eligible for rollover. The terms of the plan may limit the rights otherwise available to you under the policy. We have provided more information in the SAI.

We may make available under the policy certain guaranteed lifetime withdrawal and other optional benefits. The tax rules for qualified policies may limit the value of these optional benefits. For example, if you elect a guaranteed lifetime withdrawal benefit and your minimum required distribution amount exceeds your guaranteed withdrawal amount, you will have to withdraw more than the guaranteed withdrawal amount to avoid imposition of a 50% excise tax. It is not clear whether guaranteed lifetime withdrawal benefit payments made during the settlement phase will be taxed as withdrawals or as annuity payments. In view of this uncertainty, we will apply the non-annuity rules for determining minimum required distributions, meaning that a percentage of the value of all benefits under the contract will need to be withdrawn each year. The value may have to include the value of enhanced death benefits and other optional contract provisions such as the guaranteed lifetime withdrawal benefit rider itself.

If you are attempting to satisfy minimum required distribution rules through partial surrenders, the value of any enhanced death benefit or other optional rider may need to be included in calculating the amount required to be distributed.

The Internal Revenue Code generally requires that interests in a qualified policy be nonforfeitable. If your policy contains a bonus rider with a recapture, forfeiture, or “vesting” feature, it may not be consistent with those requirements. Consult a tax advisor before purchasing a bonus rider as part of a qualified policy.

You should consult your legal counsel or tax adviser if you are considering purchasing an enhanced death benefit or other optional rider, or if you are considering purchasing a policy for use with any qualified retirement plan or arrangement.

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Surrenders-403(b) Policies

The rules described above for qualified policies generally apply to 403(b) policies. However, specific rules apply to surrenders from certain 403(b) policies. Partial withdrawals and surrenders can generally only be made when an owner:

• reaches age 59 ¹/2;

• leaves his/her job;

• dies;

• becomes disabled (as that term is defined in the Internal Revenue Code); or

• declares hardship. However, in the case of hardship, the owner can only surrender the premium payments and not any earnings.

Please Note: In some instances the signature of the employer may be required. For contracts issued after 2008, amounts attributable to nonelective contributions may be subject to distribution restrictions specified in the employer’s section 403(b) plan.

Pursuant to new tax regulations, we generally are required to confirm, with your 403(b) plan sponsor or otherwise, that surrenders you request from a 403(b) policy comply with applicable tax requirements before we process your request.

Defaulted loans from Code Section 403(b) arrangements, and pledges and assignments of qualified policies generally are taxed in the same manner as surrenders from such policies. Please refer to the SAI for further information applicable to distributions from 403(b) policies. Please note that a defaulted loan may stop the growth on a guaranteed lifetime withdrawal benefit.

Surrenders-Nonqualified Policies

The information above describing the taxation of qualified policies does not apply to nonqualified policies. If you take a partial withdrawal or surrender (including systematic payouts and payouts under an optional feature, if any) from a nonqualified policy before the annuity commencement date, the Internal Revenue Code treats that surrender as first coming from earnings and then from your premium payments. If your policy contains an excess interest adjustment feature (also known as a market value adjustment), then your account value immediately before the surrender may have to be increased by any positive excess interest adjustments that result from the surrender. There is, however, no definitive guidance on the proper tax treatment of excess interest adjustments, and you may want to discuss the potential tax consequences of an excess interest adjustment with your tax advisor.

When you make a surrender you are taxed on the amount of the surrender that is earnings. If you make a surrender, you are generally taxed on the amount that your surrender proceeds exceeds the “investment in the contract,” which is generally your premiums paid (adjusted for any prior surrenders or portions thereof that were not taxable). In general, loans, pledges, and assignments are taxed in the same manner as partial withdrawals and surrenders. Different rules apply for annuity payments. See “Annuity Payments” below.

The Internal Revenue Code also provides that surrendered earnings may be subject to a penalty tax. The amount of the penalty tax is equal to 10% of the amount that is includable in income. Some surrenders will be exempt from the penalty tax. They include, among others, any amounts:

• paid on or after the taxpayer reaches age 59 ¹/2;

• paid after an owner dies;

• paid if the taxpayer becomes disabled (as that term is defined in the Internal Revenue Code);

• paid in a series of substantially equal payments made annually (or more frequently) under a lifetime annuity;

• paid under an immediate annuity; or

• which come from premium payments made prior to August 14, 1982.

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If your nonqualified policy contains a guaranteed lifetime withdrawal benefit rider, certain rules may apply. It is not clear whether guaranteed lifetime withdrawal benefit payments made during the settlement or income (payout) phase may be taxed as either withdrawals or annuities. In view of this uncertainty, we intend to adopt a conservative approach and treat guaranteed lifetime withdrawal payments during the settlement phase under nonqualified policies as withdrawals. Consult a tax advisor before purchasing a guaranteed lifetime withdrawal benefit rider or option.

All nonqualified deferred annuity policies that are issued by us (or our affiliates) to the same owner during any calendar year are treated as one annuity for purposes of determining the amount includable in the owner’s income when a taxable distribution occurs.

Taxation of Death Benefit Proceeds

Amounts may be distributed from the policy because of the death of the annuitant. Generally, such amounts should be includable in the income of the recipient:

• if distributed in a lump sum, these amounts are taxed in the same manner as a surrender; or

• if distributed under an annuity payment option, these amounts are taxed in the same manner as annuity payments.

Annuity Payments

Although the tax consequences may vary depending on the annuity payment option you select, in general, for nonqualified and certain qualified policies, only a portion of the annuity payments you receive will be includable in your gross income.

In general, the excludable portion of each annuity payment you receive will be determined as follows:

• Fixed payments-by dividing the “investment in the contract” on the annuity commencement date by the total expected value of the annuity payments for the term of the payments. This is the percentage of each annuity payment that is excludable.

• Variable payments-by dividing the “investment in the contract” on the annuity commencement date by the total number of expected periodic payments. This is the amount of each annuity payment that is excludable.

The remainder of each annuity payment is includable in gross income. Once the “investment in the contract” has been fully recovered, the full amount of any additional annuity payments is includable in gross income and taxed as ordinary income.

If you select more than one annuity payment option, special rules govern the allocation of the policy’s entire “investment in the contract” to each such option, for purposes of determining the excludable amount of each payment received under that option. We advise you to consult a competent tax adviser as to the potential tax effects of allocating amounts to any particular annuity payment option.

If, after the annuity commencement date, annuity payments stop because an annuitant died, the excess (if any) of the “investment in the contract” as of the annuity commencement date over the aggregate amount of annuity payments received that was excluded from gross income may possibly be allowable as a deduction in your tax return.

You should consult a tax advisor before electing the Initial Payment Guarantee or a feature with stabilized payments.

Diversification and Distribution Requirements

The Internal Revenue Code provides that the underlying investments for a variable annuity must satisfy certain diversification requirements in order to be treated as an annuity. The policy must also meet certain distribution requirements at the death of an

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owner in order to be treated as an annuity. These diversification and distribution requirements are discussed in the SAI. We may modify the policy to attempt to maintain favorable tax treatment.

Federal Estate Taxes

While no attempt is being made to discuss the Federal estate tax implications of the Policy, a purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning advisor for more information.

Generation-Skipping Transfer Tax

Under certain circumstances, the Internal Revenue Code may impose a “generation skipping transfer tax” when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Internal Revenue Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS.

Annuity Purchases by Residents of Puerto Rico

The Internal Revenue Service recently announced that income received by residents of Puerto Rico under life insurance or annuity contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States federal income tax.

Annuity Contracts Purchased by Nonresident Aliens and Foreign Corporations

The discussion above provided general information (but not tax advice) regarding U.S. federal income tax consequences to annuity owners that are U.S. persons. Taxable distributions made to owners who are not U.S. persons will generally be subject to U.S. federal income tax withholding at a 30% rate, unless a lower treaty rate applies. In addition, distributions may be subject to state and/or municipal taxes and taxes that may be imposed by the owner’s country of citizenship or residence. Prospective foreign owners are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation for any annuity policy purchase.

Transfers, Assignments or Exchanges of Policies

A transfer of ownership or assignment of a policy, the designation of an annuitant or payee or other beneficiary who is not also the owner, the selection of certain annuity commencement dates, or a change of annuitant, may result in certain income or gift tax consequences to the owner that are beyond the scope of this discussion. An owner contemplating any such transfer, assignment, selection, or change should contact a competent tax adviser with respect to the potential tax effects of such a transaction.

Possible Tax Law Changes

Although the likelihood of legislative or regulatory changes is uncertain, there is always the possibility that the tax treatment of the policy could change by legislation, regulation, or otherwise. You should consult a tax adviser with respect to legal or regulatory developments and their effect on the policy.

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We have the right to modify the policy to meet the requirements of any applicable laws or regulations, including legislative changes that could otherwise diminish the favorable tax treatment that annuity policy owners currently receive.

Separate Account Charges

It is possible that the Internal Revenue Service may take a position that fees for certain optional benefits (e.g., death benefits other than the Return of Premium death benefit) are deemed to be taxable distributions to you. In particular, the Internal Revenue Service may treat fees associated with certain optional benefits as a taxable surrender, which might also be subject to a tax penalty if the surrender occurs prior to age 59 ¹/2. Although we do not believe that the fees associated with any optional benefit provided under the policy should be treated as taxable surrenders, the tax rules associated with these benefits are unclear, and we advise that you consult your tax advisor prior to selecting any optional benefit under the policy.

Foreign Tax Credits

We may benefit from any foreign tax credits attributable to taxes paid by certain underlying funds to foreign jurisdictions to the extent permitted under federal tax law.

Guaranteed Lifetime Withdrawal Benefits

We may make available, as options under the policy, certain guaranteed lifetime withdrawal and other optional benefits. If your policy contains a guaranteed lifetime withdrawal benefit rider the application of certain tax rules, particularly those rules relating to distributions from your policy, are not entirely clear. The tax rules for qualified policies may limit the value of these optional benefits. In view of this uncertainty, you should consult a tax advisor before purchasing a guaranteed lifetime withdrawal benefit rider for a qualified policy.

10. ADDITIONAL FEATURES

Systematic Payout Option

You can select at any time (during the accumulation phase) to receive regular withdrawals from your policy by using the Systematic Payout Option. Under this option, you can receive the greater of (1) or (2), divided by the number of withdrawals made per year, where: (1) up to 10% of your premium payments (reduced by prior withdrawals in that policy year); and (2) is any gains in the policy. For amounts greater than 10% of your premium payments, you must receive prior Company approval.

This amount may be taken free of surrender charges. Any payment in excess of the cumulative interest credited at the time of the payment may be subject to an excess interest adjustment.

Systematic withdrawals can be made monthly, quarterly, semi-annually, or annually and will not begin until one withdrawal period from the date we receive your written instructions in good order at our administrative and service office. Each withdrawal must be at least $50. Monthly and quarterly withdrawals must generally be made by electronic funds transfer directly to your checking or savings account.

If you request an additional withdrawal while a Systematic Payout Option is in effect, then the Systematic Payout Option will terminate.

Keep in mind that partial withdrawals under the Systematic Payout Option may be taxable, and if made before age 59 ¹/2, may be subject to a 10% federal penalty tax.

Please note, if you elect certain features (e.g. living benefit riders) your Systematic Payout Option may be different for the first year.

There is no charge for this benefit.

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Initial Payment Guarantee

You may only elect to purchase the Initial Payment Guarantee at the time you annuitize your policy. You cannot terminate this payment guarantee (or eliminate the charge for it) after you have elected it. The guarantee only applies to variable annuity payments. There is an additional charge for this guarantee.

The Initial Payment Guarantee does not establish or guarantee the performance of any subaccount.

Under the Initial Payment Guarantee, you receive stabilized annuity payments that are guaranteed to never be less than a percentage of the initial payment. The guaranteed percentage is subject to change from time to time; however once you annuitize, the guaranteed percentage will not change during the life of the Initial Payment Guarantee. Contact us for the current guaranteed percentage.

In addition, with this guarantee your annuity payments are stabilized, or held level, throughout each year. The payment amount is adjusted once each year to reflect the investment performance of your selected investment choice(s) over the preceding year (but your payment will not be less than the guaranteed minimum).

Fee. There is a charge for the Initial Payment Guarantee, which is in addition to the base product mortality and expense risk fee and administrative charge. This fee is reflected in the amount of the annuity payments that you receive if you select the Initial Payment Guarantee. It is reflected in the calculation of the annuity unit values.

The Initial Payment Guarantee fee is currently equal to an annual rate of 1.25% of the daily net asset value in the subaccounts. We can change the fee, and you pay whatever the fee is when you annuitize.

Other Terms and Conditions. The Initial Payment Guarantee uses a 5% assumed investment return to calculate your annuity payments. This means that the dollar amount of the annuity payments will remain level if the investment return (net of fees and expenses) exactly equals 5%. The payments will increase if actual investment performance (net of fees and expenses) exceeds the assumed investment return, and decrease if actual performance is below the assumed investment return (but not below the guaranteed level).

Termination. The Initial Payment Guarantee is irrevocable.

The Initial Payment Guarantee may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Initial Payment Guarantee. The application and operation of the Initial Payment Guarantee are governed by the terms and conditions of the policy itself.

Access Rider

You may elect to purchase the optional “Access Rider” which eliminates all surrender charges during the accumulation phase. You can only elect this rider at the time you purchase your policy.

Please note that the Access Rider does not eliminate any excess interest adjustment, nor does it modify other provisions including the systematic payout option. The Access Rider also does not eliminate the surrender charge under the Life with Emergency Cash^® annuity payment options.

Rider Fee. A rider fee equal to an effective annual rate of 0.20% of the daily net asset value in the separate account is deducted in calculating the accumulation unit values. Please note we may credit interest in the fixed account at a lower rate if you select this rider.

Termination. The rider is irrevocable.

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Please note:

• This feature terminates upon annuitization and there is a mandatory annuitization date.

• The rider fee is deducted in all years during the accumulation phase, even if a surrender would not be subject to a surrender charge because you have not made any premium payments in the immediately preceding five years.

The Access Rider may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Access Rider. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Additional Death Distribution

The optional Additional Death Distribution rider pays an additional amount (based on earnings, if any, since the rider was issued) when a death benefit is payable during the accumulation phase under your policy, in certain circumstances. The Additional Death Distribution is only available for issue ages through age 80.

Additional Death Distribution Benefit Amount. The Additional Death Distribution is only payable if you elected the rider prior to the death triggering the payment of the policy death benefit and a death benefit is payable under the policy. The Additional Death Distribution is equal to:

• the Additional Death Distribution factor (see below); multiplied by

• the rider earnings, if any, on the date the death benefit is calculated.

Rider earnings equal:

• the policy value on the date the death benefit is determined; minus

• policy value on the rider date; minus

• premium payments after the rider date; plus

• surrenders after the rider date that exceed the rider earnings on the date of the surrender.

No benefit is payable under the Additional Death Distribution rider if there are no rider earnings on the date the death benefit is calculated.

If you purchase your policy as part of a 1035 exchange or add the Additional Death Distribution rider after you purchase the policy, rider earnings do not include any gains before the 1035 exchange or the date the Additional Death Distribution is added to your policy.

The Additional Death Distribution factor is currently 40% for issue ages under 71 and 25% for issue ages 71-80, based on the annuitant’s age.

No benefit is paid under the rider unless (a) the rider is in force, (b) a death benefit is payable on the policy, and (c) there are rider earnings when the death benefit is calculated.

For purposes of computing taxable gains, both the death benefit payable under the policy and the Additional Death Distribution will be considered.

Please see “Appendix – Additional Death Distribution—Additional Information” for an example which illustrates the Additional Death Distribution payable as well as the effect of a partial surrender on the Additional Death Distribution benefit amount.

Spousal Continuation. If a spouse, as the new owner of the policy, elects to continue the policy instead of receiving a death benefit and Additional Death Distribution, the spouse will receive a one-time policy value increase equal to the Additional Death Distribution. At this time the rider will terminate. The spouse will have the option of immediately re-electing the rider through age 80.

Rider Fee. A rider fee, 0.25% of the policy value, is deducted annually on each rider anniversary prior to annuitization. We will also deduct this fee upon full surrender of the policy or other termination of the

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rider. The rider fee is deducted pro rata from each investment choice. The fee is deducted even during periods when the Additional Death Distribution would not pay any benefit (because there are no rider earnings).

Termination. The rider will remain in effect until:

• you cancel it by notifying our administrative and service office in writing,

• the policy is annuitized or surrendered, or

• the Additional Death Distribution is paid or added to the policy value under a spousal continuation.

Once terminated, the Additional Death Distribution may be re-elected; however, a new rider will be issued and the additional death benefit will be re-determined. Please note that if the rider is terminated and then re-elected, it will only cover gains, if any, since it was re-elected and the terms of the new rider may be different than the terminated rider.

The tax consequences associated with this rider are not clear. This rider may violate the requirements of certain qualified plans and IRAs. Consult a tax advisor before electing this rider for any qualified plan or IRA.

Please note: This feature terminates upon annuitization and there is a mandatory annuitization date.

The Additional Death Distribution may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Additional Death Distribution. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Additional Death Distribution+

The optional Additional Death Distribution+ rider pays an additional death benefit amount when a death benefit is payable during the accumulation phase under your policy, in certain circumstances. The Additional Death Distribution+ is only available for issue ages through age 75.

Additional Death Distribution+ Benefit Amount. An additional death benefit is only payable if a death benefit is paid on the base policy to which the rider is attached. The amount of the additional benefit is dependent on the amount of time that has passed since the rider date as follows:

• If a death benefit is payable within the first five years after the rider date, the additional benefit amount will be equal to the sum of all rider fees paid since the rider date.

• If a death benefit is payable after five years following the rider date, the additional benefit will be equal to the rider benefit base multiplied by the rider benefit percentage.

The rider benefit base at any time is equal to the policy value less any premiums added after the rider date.

The rider benefit percentage may vary but currently equals 30% for issue ages 0—70 and 20% for issue ages 71—75, based on the annuitant’s age.

No benefit is payable under the Additional Death Distribution+ if the policy value on the date the death benefit is paid is less than the premium payments after the rider date.

For purposes of computing taxable gains, both the death benefit payable under the policy and the additional benefit will be considered.

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Please see “Appendix – Additional Death Distribution+ —Additional Information” for an example that illustrates the additional death benefit payable as well as the effect of a partial surrender on the Additional Death Distribution+ benefit amount.

Spousal Continuation. If a spouse, as the new owner of the policy, elects to continue the policy instead of receiving the death benefit and Additional Death Distribution+, then the spouse will receive a one-time policy value increase equal to the Additional Death Distribution+. At this time the rider will terminate. The spouse will have the option of immediately re-electing the rider through age 75.

Rider Fee. A rider fee, currently 0.55% of the policy value, is deducted annually on each rider anniversary prior to annuitization. We will also deduct this fee upon full surrender of the policy or other termination of the rider. Please note: the rider fee is deducted pro rata from each investment choice. The fee is deducted even during periods when the rider would not pay any benefits.

Termination. The rider will remain in effect until:

• you cancel it by notifying our Administrative and Service Office in writing in good order,

• the policy is annuitized or surrendered, or

• the additional death benefit is paid or added to the policy value under a spousal continuation.

Once terminated, the Additional Death Distribution+ may not be re-elected for one year.

The tax consequences associated with this rider are not clear. This rider may violate the requirements of certain qualified plans and for any qualified plan or IRAs. Consult a tax adviser before electing this rider.

Please note: This feature terminates upon annuitization and there is a maximum annuity commencement date.

The Additional Death Distribution+ may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Additional Death Distribution+. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Nursing Care and Terminal Condition Withdrawal Option

No surrender charges or excess interest adjustment will apply if you make a surrender ($1,000 minimum), under certain circumstances, because you or your spouse has been:

• confined in a hospital or nursing facility for 30 days in a row after the policy issue date; or

• diagnosed with a terminal condition after the policy issue date (usually a life expectancy of 12 months or less).

This benefit is also available to the annuitant or annuitant’s spouse if the owner is not a natural person.

You may exercise this benefit at any time (during the accumulation phase). There is no charge for this benefit.

This benefit may vary for certain policies, may not be available for all policies, and may not be available in all states.

Unemployment Waiver

No surrender charges or excess interest adjustment will apply to surrenders after you or your spouse become unemployed in certain circumstances, because you were terminated, laid off, or otherwise lost your job involuntarily. In order to qualify, you (or your spouse, whichever is applicable) must have been:

• employed full time for at least two years prior to becoming unemployed;

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• employed full time on the policy date;

• unemployed for at least 60 days in a row at the time of surrender;

• must have a minimum cash value at the time of surrender of $5,000; and

• you (or your spouse) must be receiving unemployment benefits.

You must provide written proof from your State’s Department of Labor, which verifies that you qualify for and are receiving unemployment benefits at the time of surrender.

You may select this benefit at any time (during the accumulation phase) and there is no charge for this benefit.

This benefit is also available to the annuitant or annuitant’s spouse if the owner is not a natural person. There is no charge for this benefit.

This benefit may vary for certain policies, may not be available for all policies, and may not be available in all states.

Telephone Transactions

You may generally make transfers and change the allocation of additional premium payments by telephone IF:

• you select the “Telephone Transfer/Reallocation Authorization” box in the policy application or enrollment information; or

• you later complete an authorization form.

You will be required to provide certain information for identification purposes when requesting a transaction by telephone and we may record your telephone call. We may also require written confirmation of your request. We will not be liable for following telephone requests that we believe are genuine. We reserve the right to revoke your telephone transaction privileges at any time without revoking all owners’ telephone transfer privileges.

Telephone requests must be received while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. We may discontinue this option at any time.

We may deny the telephone transaction privileges to market timers and frequent or disruptive traders.

We cannot guarantee that telephone transactions will always be available. For example, our offices may be closed during severe circumstances or other emergencies. There may be interruptions in service beyond our control, and if the volume of calls is unusually high, we might not have anyone available, or lines available, to take your call. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability in all circumstances.

Dollar Cost Averaging Program

During the accumulation phase, you may instruct us to automatically make transfers into one or more variable subaccounts in accordance with your allocation instructions. This is known as Dollar Cost Averaging. While Dollar Cost Averaging buys more accumulation units when prices are low and fewer accumulation units when prices are high, it does not guarantee profits or assure that you will not experience a loss.

There are two Dollar Cost Averaging programs available under your policy:

• Traditional—You may specify the dollar amount to be transferred or the number of transfers. Transfers will begin as soon as the program is started.

• Special—You may only elect either a six or twelve month program. Transfers will begin as soon as the program is started. You cannot transfer from another investment choice into a Special Dollar Cost Averaging program. This program is only available for new premium,

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requires transfers from a fixed source, and may credit a higher or lower interest rate than a traditional program.

A minimum of $500 per transfer is required. A minimum of $3,000 is required to start a 6-month program and $6,000 is required to start a 12-month program. The minimum number of transfers is 6 monthly or 4 quarterly, and the maximum is 24 monthly or 8 quarterly.

You can elect to transfer from one of the fixed or variable sources listed on the Dollar Cost Averaging election form (only fixed sources are available for special Dollar Cost Averaging programs).

A Dollar Cost Averaging program will begin once we have received in good order all necessary information and the minimum required amount. Please note: Dollar Cost Averaging programs will not begin on the 29th, 30th, or 31st. If a program would have started on one of those dates, it will start on the 1st business day of the following month. If we receive additional premium payments while a Dollar Cost Averaging program is running, absent new instructions to the contrary, the amount of the Dollar Cost Averaging transfers will increase, but the length of the Dollar Cost Averaging program will not.

NOTE CAREFULLY:

IF:

• we do not receive all necessary information to begin an initial Dollar Cost Averaging program within 30 days of allocating the minimum required amount to a Dollar Cost Averaging program; or

• we do not receive the minimum required amount to begin an initial Dollar Cost Averaging program within 30 days of allocating an insufficient amount;

THEN:

• any amount in a fixed source will be transferred to the money market investment choice; and

• any amount in a variable source will remain in that variable investment choice; and

• new instructions will be required to begin a Dollar Cost Averaging program.

IF:

• we receive additional premium payments after a Dollar Cost Averaging program is completed and the additional premium meets the minimum requirements to start a Dollar Cost Averaging program;

THEN:

• we will, absent new instructions to the contrary, start a new Dollar Cost Averaging program using the previous instructions.

IF:

• we receive additional premium payments after a Dollar Cost Averaging program is completed, and the additional premium does not meet the minimum requirements to start a Dollar Cost Averaging program;

THEN:

• we will, absent new instructions to the contrary, allocate the additional premium as identified in the previous Dollar Cost Averaging program.

IF:

• you discontinue a Dollar Cost Averaging program before its completion;

THEN:

• we will, absent new instructions to the contrary, transfer any remaining balance directly into the subaccounts in the Dollar Cost Averaging instructions.

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You should consider your ability to continue a Dollar Cost Averaging program during all economic conditions.

There is no charge for this benefit.

The Dollar Cost Averaging Program may vary for certain policies, may not be available for all policies, and may not be available in all states. See your policy for availability of the fixed account options.

Asset Rebalancing

During the accumulation phase you can instruct us to automatically rebalance the amounts in your subaccounts to maintain your desired asset allocation. This feature is called Asset Rebalancing and can be started and stopped at any time. However, we will not rebalance if you are in the Dollar Cost Averaging program or if any other transfer is requested. If a transfer is requested, we will honor the requested transfer and discontinue Asset Rebalancing. New instructions are required to start Asset Rebalancing. Asset Rebalancing ignores amounts in the fixed account. You can choose to rebalance monthly, quarterly, semi-annually, or annually.

There is no charge for this benefit.

Guaranteed Lifetime Withdrawal Benefits

You may elect one of the following optional riders under the policy that offers guaranteed lifetime withdrawal benefits—the Living Benefits Rider, the Retirement Income Choice Rider, Retirement Income Choice with Double Withdrawal Base Benefit Rider, or the Retirement Income Choice 1.2 Rider. Important aspects of each of these riders are summarized in the Appendix—Guaranteed Lifetime Withdrawal benefit Comparison Table and are described in more detail below. You should consult with tax and financial professionals to determine which of these riders is appropriate for you.

Note: The Income Select for Life Rider is no longer available for new sales, but if you have previously elected this rider you can still upgrade.

Living Benefits Rider

You may elect to purchase the optional Living Benefits Rider which provides you with a guaranteed minimum accumulation benefit and a guaranteed minimum withdrawal benefit. The Living Benefits Rider is only available during the accumulation phase. The Living Benefits Rider is only available for annuitant issue ages through age 80. The maximum issue age may be lower if required by state law.

You should view the Living Benefits Rider as a way to permit you to invest in variable investment choices while still having your policy value and liquidity protected to the extent provided by the Living Benefits Rider.

Please note:

• If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.

• Certain protections under the rider are available only if you hold the rider for ten years.

• If you elect the rider, we will monitor your policy value and we may transfer amounts back and forth between specified investment choices under the policy (including guaranteed period options in the fixed account) and the variable investment choices you choose, according to a mathematical model that we will use to assist us in managing portfolio risk and supporting the guarantees under the rider. See “Portfolio Allocation Method” below.

• You will begin paying the rider charge as of the date the rider takes effect, even if you do not begin taking withdrawals for many years, or ever. We will not refund the charges you have paid under the rider if you never choose to take withdrawals and/or if you never receive any payments under the rider.

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• We have designed this rider for you to take withdrawals each rider year that are less than or equal to the maximum annual withdrawal amount. You should not purchase this rider if you plan to take withdrawals in excess of the maximum annual withdrawal amount, because such excess withdrawals may significantly reduce or eliminate the value of the guarantees provided by the rider.

• Because the guaranteed minimum withdrawal benefit under this rider is accessed through regular withdrawals that do not exceed the maximum annual withdrawal amount, the rider may not be appropriate for you if you do not foresee a need for liquidity and your primary objective is to take the maximum advantage of the tax deferral aspect of the policy.

• The tax rules for qualified policies may limit the value of this rider. Please consult a qualified tax advisor before electing the Living Benefits Rider for a qualified policy.

• Any such transfers out of a guaranteed period option may be subject to an excess interest adjustment. We intend to include among the specified investment choices fixed account options to which excess interest adjustments do not apply. (See “Portfolio Allocation Method,” below.)

Guaranteed Minimum Accumulation Benefit

If you elect the Living Benefits Rider, we will provide a guaranteed future value. This benefit is intended to provide a level of protection regardless of the performance of the variable investment choices you select.

Guaranteed Future Value. We guarantee that, on the guaranteed future value date (ten years after you elect the rider), your policy value will at least equal your guaranteed future value. The guaranteed future value on the rider date (i.e., the date the rider is added to the policy) is the policy value (less any premium enhancements if the rider is added in the first policy year). After the rider date and before the guaranteed future value date, the guaranteed future value is equal to:

• the guaranteed future value on the rider date; plus

• a percentage of subsequent premium payments (as described below); less

• subsequent adjusted partial withdrawals (as described below).

After the guaranteed future value date, the guaranteed future value equals zero.

Subsequent Premium Payments. The percentage of subsequent premium payments that will be added to the guaranteed future value is as follows:

Rider Year	Percent of subsequent premium payments added to guaranteed future value
1	100%
2	90%
3	80%
4	70%
5	60%
6	50%
7	50%
8	50%
9	50%
10	0%

Guaranteed Future Value Adjusted Partial Withdrawals. If you take a partial withdrawal, it will reduce your guaranteed future value. The amount of the reduction is referred to as the adjusted partial withdrawal amount, which will be equal to the greater of:

• the guaranteed future value immediately prior to the withdrawal multiplied by the percentage reduction in the policy value resulting from the gross partial withdrawal; or

• the gross partial withdrawal amount.

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(The gross partial withdrawal amount is the amount you request, plus any surrender charge or excess interest adjustment that may be applicable.)

In other words, if your policy value is greater than the guaranteed future value at the time you make a partial withdrawal, then your guaranteed future value is reduced by the same amount we reduce your policy value. However, if your policy value is less than the guaranteed future value at the time you make a partial withdrawal, then your guaranteed future value will be reduced by more than the amount we reduce your policy value.

See the “Appendix—Living Benefits Rider Adjusted Partial Withdrawals” to this prospectus for examples showing the effect of hypothetical withdrawals in more detail, including withdrawals that reduce the guaranteed future value by more than the amount of the gross partial withdrawal.

Guaranteed Minimum Accumulation Benefit. On the guaranteed future value date (ten years after you elect the rider), if the policy value is less than the guaranteed future value, we will add an amount equal to the difference to your policy value. After the guaranteed future value date, the guaranteed minimum accumulation benefit will terminate.

Example. Assume you make a single premium payment of $100,000 and you do not make any withdrawals or additional premium payments. If, on the guaranteed future value date, your policy value has declined to $90,000 because of negative investment performance, then we will add $10,000 ($100,000 – $90,000) to your policy value.

Please note: You do not have any protection under the guaranteed minimum accumulation benefit unless you hold the policy with the rider for ten years. If you think that you may terminate the policy or elect to start receiving annuity payments (or if you must begin taking required minimum distributions) before the guaranteed future value date, electing the rider may not be in your best interests.

Guaranteed Minimum Withdrawal Benefit

If you elect the Living Benefits Rider, we will provide a maximum annual withdrawal amount (first, as withdrawals from your policy value or, if necessary, as payments from us) regardless of your policy value. This benefit is intended to provide a level of benefits regardless of the performance of the variable investment choices you select.

Withdrawal Guarantees. We account for the withdrawals you take under the rider by applying two different withdrawal guarantees:

• “principal back,” for withdrawals of up to 7% of your total withdrawal base.

• “for life,” for withdrawals of up to 5% of your total withdrawal base.

When you make a withdrawal, you do not need to specify it as being under either withdrawal guarantee. Any withdrawals that you take while the rider is in effect could have different impacts under each of the withdrawal guarantees—on your maximum annual withdrawal amount, on your total withdrawal base, and on your minimum remaining withdrawal amount. For example, withdrawals that are compliant with the “principal back” maximum withdrawal amount could result in excess withdrawals under the “for life” withdrawal guarantee and, consequently, would reduce the maximum annual withdrawal amount, the total withdrawal base, and the minimum remaining withdrawal amount under the “for life” withdrawal guarantee. (See “Adjusted Partial Withdrawals” below.)

Your ability to change the frequency or amount of your withdrawals ceases if your policy value reaches zero.

Of course, you can always withdraw an amount up to your cash value pursuant to your rights under the policy at your discretion. See “Appendix—Living

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Benefits Rider Adjusted Partial Withdrawals,” for examples showing the effect of hypothetical withdrawals in more detail, including an excess withdrawal that reduces the total withdrawal base by a pro rata amount.

Please note:

• Any amount withdrawn in a rider year (including any surrender charge or excess interest adjustment) in excess of the maximum withdrawal amount is an excess withdrawal.

• The amount of your excess withdrawal will impact the maximum annual withdrawal amount, total withdrawal base, and minimum remaining withdrawal amount under each guarantee on a greater than dollar-for-dollar basis. (See “Maximum Annual Withdrawal Benefit,” “Total Withdrawal Base,” and “Minimum Remaining Withdrawal Amount,” below.)

Withdrawals under the guaranteed minimum withdrawal benefit also:

• reduce your policy value;

• reduce your death benefit and other benefits;

• may be subject to any surrender charge or excess interest adjustment; and

• may be subject to income taxes and federal tax penalties (See “Section 9. Taxes”).

Maximum Annual Withdrawal Amount. Under this benefit:

• you can withdraw up to 7% of your “principal back” total withdrawal base each rider year until your “principal back” minimum remaining withdrawal amount reaches zero;

Example. Assume you make a single premium payment of $100,000 and that you do not make any withdrawals or additional premium payments. Assume that after five years, your policy value has declined to $70,000 solely because of negative investment performance. You could still receive up to $7,000 (7% of $100,000) each rider year for the next fourteen years and $2,000 in the year immediately thereafter so you would get back your full $100,000 (assuming that you do not withdraw more than $7,000 in any one rider year).

• or, you can withdraw up to 5% of your “for life” total withdrawal base each rider year starting with the rider anniversary immediately following the annuitant’s 59th birthday and lasting until the annuitant’s death, unless your “for life” minimum remaining withdrawal amount reaches zero because of “excess withdrawals” (see “Adjusted Partial Withdrawals,” below). A penalty tax may be assessed on amounts surrendered from the policy before the annuitant reaches age 59 ¹/2.

Example. Assume you are the owner and annuitant and you make a single premium payment of $100,000 when you are 55 years old. Assume you do not make any withdrawals or additional premium payments. Assume that after five years, your policy value has declined to $70,000 solely because of negative investment performance. You could still receive up to $5,000 (5% of $100,000) each rider year for the rest of your life (assuming that you do not withdraw more than $5,000 in any one rider year).

You can receive up to the maximum annual withdrawal amount each rider year (first as withdrawals from your policy value and, if necessary, as payments from us) under this rider regardless of your policy value; however, once your policy value reaches zero you cannot make premium payments, and all other policy features, benefits, and guarantees (except those provided by this rider) are terminated. In order to continue withdrawals under this rider after your policy value reaches zero, you must select an amount and frequency of future withdrawals. Once selected, the amount and frequency of future withdrawals after your policy value reaches zero cannot be changed.

Please note:

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• Withdrawals under the 5% “for life” guarantee cannot begin until after the rider anniversary following the annuitant’s 59th birthday.

• Any withdrawal before the rider anniversary following the annuitant’s 59th birthday will reduce the benefits under the 5% “for life” guarantee.

• The maximum annual withdrawal amounts described above (the 7% “principal back” and 5% “for life”) are based on rider years, not calendar or policy years (if different from rider years).

• You cannot carry over any portion of your maximum annual withdrawal amount that is not withdrawn during a rider year for withdrawal in a future rider year. This means that if you do not take the maximum annual withdrawal amount during a rider year, you cannot take more than the maximum annual withdrawal amount in the next rider year and maintain the rider’s guarantees.

• Excess withdrawals may cause you to lose the benefit of the rider.

• If you have a qualified policy, minimum required distribution rules may force you to take excess withdrawals to avoid the imposition of a 50% excise tax. You should consult a tax advisor before purchasing this rider with a qualified policy.

Total Withdrawal Base. We use the total withdrawal base to calculate the maximum annual withdrawal amount. The total withdrawal base on the rider date is the policy value (less any premium enhancements if the rider is added in the first policy year). After the rider date, the total withdrawal base is equal to:

• the total withdrawal base on the rider date; plus

• subsequent premium payments; less

• subsequent adjusted partial withdrawals (as described below).

We will calculate separate total withdrawal bases for the “principal back” and “for life” guarantees.

Please note: We determine the total withdrawal base solely to calculate the maximum annual withdrawal amount. Your total withdrawal base is not a cash value, a surrender value, or a death benefit. It is not available for withdrawal, it is not a minimum return for any subaccount, and it is not a guarantee of policy value.

Minimum Remaining Withdrawal Amount. The minimum remaining withdrawal amount represents the total amount of guaranteed withdrawals still available under the rider. The minimum remaining withdrawal amount on the rider date is the policy value (less any premium enhancements if the rider is added in the first policy year). After the rider date, the minimum remaining withdrawal amount is equal to:

• the minimum remaining withdrawal amount on the rider date; plus

• subsequent premium payments; less

• subsequent adjusted partial withdrawals (as described below).

We will calculate separate minimum remaining withdrawal amounts for the “principal back” and “for life” guarantees.

Adjusted Partial Withdrawals. Each rider year, for each withdrawal guarantee (i.e., “principal back” and “for life”), gross partial withdrawals (the amount that you request be withdrawn, plus any surrender charge or excess interest adjustment that may be applicable) up to the maximum annual withdrawal amount for that withdrawal guarantee, will reduce the minimum remaining withdrawal amount for that withdrawal guarantee on a dollar-for-dollar basis, but will not reduce the total withdrawal base for that withdrawal guarantee. For each withdrawal guarantee, gross partial withdrawals in excess of the maximum annual withdrawal amount for that withdrawal guarantee will reduce the total withdrawal base and minimum remaining withdrawal amount for that withdrawal guarantee by a pro rata amount (possibly to zero). See “Appendix—Living Benefits Rider Adjusted

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Partial Withdrawals,” which provides examples showing the effect of a withdrawal. Excess withdrawals may cause you to lose the withdrawal guarantees under this rider.

Please note: Gross partial withdrawals that are compliant with the “principal back” withdrawal guarantee (i.e., withdrawals of the “principal back” maximum annual withdrawal amount) and any partial withdrawal before the rider anniversary following the annuitant’s 59th birthday, will result in an excess partial withdrawal under the “for life” guarantee, and will reduce the “for life” maximum annual withdrawal amount, the “for life” total withdrawal base, and the “for life” minimum remaining withdrawal amount. Such reduction may be on a greater than dollar-for-dollar basis.

Rider Fee. A rider fee, 0.90% of the “principal back” total withdrawal base on each rider anniversary, is charged annually before annuitization. We will also deduct the rider fee upon full surrender of the policy or other termination of the rider. The rider fee is deducted from each investment choice in proportion to the amount of policy value in each investment choice. Generally, the rider fee is deducted regardless of your values (i.e., even if your policy value exceeds your total withdrawal base).

We will continue to calculate the rider fee using the “principal back” total withdrawal base even after the “principal back” minimum remaining withdrawal amount reaches zero. The “principal back” total withdrawal base is always greater than or equal to the “for life” total withdrawal base.

Please note: Because the rider fee is a percentage of your “principal back” total withdrawal base on each rider anniversary, the fee can be substantially more than 0.90% of your policy value if that total withdrawal base is higher than your policy value.

Portfolio Allocation Method

If you elect the Living Benefits Rider, the Portfolio Allocation Method (“PAM”) will automatically be in effect. PAM is designed to help manage portfolio risk and support the guarantees under the Living Benefits Rider. Using PAM, we will monitor your policy value and may transfer amounts back and forth between the PAM Transamerica U.S. Government Securities—Service Class subaccount (which invests in the Transamerica U.S. Government Securities—Service Class portfolio of the Transamerica Series Fund, Inc.) or certain guaranteed period options of the fixed account (each a “PAM investment choice” and collectively, the “PAM investment choices”) and the variable investment choices you choose. You should read the underlying fund prospectus for the variable PAM investment choice(s) carefully before you elect the Living Benefits Rider. We will transfer amounts from your variable investment choices to the PAM investment choices to the extent we deem, at our sole discretion, necessary to support the guarantees under the rider. We will transfer amounts to the PAM investment choices proportionally from all your variable investment choices. Currently, PAM transfers are being made to the PAM Transamerica U.S. Government Securities—Service Class subaccount.

PAM is designed to help reduce portfolio risk associated with negative performance. Using PAM, we will transfer amounts from your variable investment choices to the PAM investment choices to the extent we deem, in our sole discretion, necessary to help manage portfolio risk and support the guarantees under the Living Benefits Rider. You should not view the Living Benefits Rider nor PAM as a “market timing” or other type of investment program designed to enhance your policy value. If you choose this rider, it may result in a lower policy value in certain situations. If policy value is transferred from your chosen variable investment choices to the PAM investment choices, less of your policy value may be available to participate in any

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future positive investment performance of your variable investment choices. This may potentially provide a lower policy value than if you did not select the Living Benefits Rider.

We will use a mathematical model to compare your policy value and the guarantees to be provided in the future. Based upon this comparison, we may transfer some or all of your policy value to or from the PAM investment choices.

You may not allocate premium payments to, nor transfer policy value into or out of, the PAM investment choices. PAM transfers are not subject to any transfer fee and do not count against the number of any free transfers we allow. Transfers out of a fixed account PAM investment choice are at our discretion and may be subject to an excess interest adjustment if the transfer occurs before the end of a guarantee period. Any transfer to your variable investment choices will be allocated into your variable investment choices in proportion to the amount of policy value in each variable investment choice.

Generally, transfers to the PAM investment choices first occur when the policy value drops by a cumulative amount of 3% to 5% over any period of time, although we may make transfers to the PAM investment choices when the policy value drops by less than 3%. If the policy value continues to fall, more transfers to the PAM investment choices will occur. When a transfer occurs, the transferred policy value is allocated to the PAM investment choice(s) we deem appropriate. The policy value allocated to the PAM investment choices will remain there unless the performance of your chosen investment choices recovers sufficiently to enable us to transfer amounts back to your investment choices while maintaining the guarantees under the Living Benefits Rider. This generally occurs when the policy value increases by 5% to 10% in relation to the guarantees, although we may require a larger increase before transferring amounts back to your investment options.

Upgrades

Prior to the annuitant’s 86th birthday and after the third rider anniversary, you can upgrade the total withdrawal base and guaranteed future value to the policy value by sending us written notice. The minimum remaining withdrawal amounts will also be upgraded to the policy value and the maximum annual withdrawal amounts will be recalculated.

If an upgrade is elected, your current rider will terminate and a new rider will be issued with a new rider date, guaranteed future value date, and its own rider fee percentage (which may be higher than your current rider fee percentage). The “principal back” and “for life” withdrawal percentages will not change. The new rider date will be the date the Company receives all necessary information.

Annuitization

If you have reached your maximum annuity commencement date, we will allow you to annuitize your policy and elect to receive lifetime annuity payments equal to your 5% “for life” maximum annual withdrawal amount.

Termination

The Living Benefits Rider will terminate upon the earliest of the following:

• the date we receive written notice from you in good order requesting termination of the Living Benefits Rider (you may not terminate the rider before the third rider anniversary);

• annuitization (however, if you have reached your maximum annuity commencement date you may choose an annuitization option which guarantees you lifetime payments in an amount equal to your 5% “for life” maximum annual withdrawal amount); or

• termination of your policy.

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Please note: This feature terminates upon annuitization and there is a maximum annuity commencement date.

The Living Benefits Rider may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Living Benefits Rider. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Retirement Income Choice Rider

You may elect to purchase the optional Retirement Income Choice rider which provides you with a guaranteed lifetime withdrawal benefit if you invest only in certain designated investment choices. This rider is available during the accumulation phase. The tax rules for qualified policies may limit the value of this rider. Please consult a qualified tax advisor before electing the Retirement Income Choice rider for a qualified policy.

Retirement Income Choice – Base Benefit

This benefit is intended to provide a level of cash withdrawals and payments from us, if necessary, regardless of the performance of the designated investment choices you select. Under this benefit, you can receive (first as withdrawals from your policy value and, if necessary, as payments from us) up to the rider withdrawal amount each rider year, starting with the rider year immediately following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) 59th birthday and lasting until the annuitant’s death (unless your withdrawal base is reduced to zero because of “excess withdrawals”; see Withdrawal Base Adjustments, and Rider Death Benefit Adjustments, below). A rider year begins on the rider date (the date the rider becomes effective) and on each anniversary thereafter. All withdrawals before the annuitant (or the annuitant’s spouse if younger and the joint life option is elected) is 59 are excess withdrawals; a penalty tax may be assessed on amounts withdrawn from the policy before the owner reaches age 59 ¹/2.

Example. Assume you are the owner and annuitant and you make a single premium payment of $100,000 when you are 56 years old. Further assume that you do not make any additional withdrawals or premium payments, no automatic step-ups occurred, but that after ten years your policy value has declined to $90,000 solely because of negative investment performance. With an annual growth rate percentage of 5.0%, after 10 years the withdrawal base is equal to $162,889. You could receive up to $8,144 which is the applicable withdrawal percentage of 5.0% multiplied by the withdrawal base of $162,889, each rider year for the rest of your life (assuming that you take your first withdrawal when you are age 66, that you do not withdraw more than the rider withdrawal amount in any one year and there are no future automatic step-ups.)

Of course, you can always withdraw an amount up to your cash value pursuant to your rights under the policy at your discretion.

Example continued. Assume the same facts as above, but you withdraw $10,000 when you are 66 years old. That excess withdrawal decreases your future rider withdrawal amount to $7,960.

See the “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders -Retirement Income Choice” for examples showing the effect of hypothetical withdrawals in more detail.

Please note:

• If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.

• You will begin paying the rider charge as of the date the rider takes effect, even if you do not begin taking withdrawals for many years, or ever. We will not refund the charges you have paid under the rider if you never choose to take withdrawals and/or if you never receive any payments under the rider.

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• We have designed this rider for you to take withdrawals each calendar year that are less than or equal to the rider withdrawal amount. You should not purchase this rider if you plan to take withdrawals in excess of the rider withdrawal amount, because such excess withdrawals may significantly reduce or eliminate the value of the guarantees provided by the rider.

• The longer you wait to start making withdrawals under the benefit, the less time you have to benefit from the guarantee because of decreasing life expectancy as you age. On the other hand, the longer you wait to begin making withdrawals, the higher your withdrawal percentage may be and the more opportunities you will have to lock in a higher withdrawal base. You should carefully consider when to begin making withdrawals. There is a risk that you will not begin making withdrawals at the most financially beneficial time for you.

• Because the guaranteed lifetime withdrawal benefit under this rider is accessed through regular withdrawals that do not exceed the rider withdrawal amount, the rider may not be appropriate for you if you do not foresee a need for liquidity and your primary objective is to take maximum advantage of the tax deferral aspect of the policy.

• All policy value must be allocated to a limited number of specified funds (see “Designated Investment Choices” below). You should consult with your registered representative to assist you in determining whether these investment restrictions are suited for your financial needs and risk tolerance.

• Cumulative withdrawals in any rider year that are in excess of the rider withdrawal amount are excess withdrawals.

• An excess withdrawal may impact the rider withdrawal amount, withdrawal base, and rider death benefit (if applicable) on a greater than dollar-for-dollar basis.

• Any withdrawal will reduce your rider death benefit (if applicable).

• Upon the death of the annuitant, the Retirement Income Choice rider terminates and there are no more additional guaranteed withdrawals.

Like all withdrawals, withdrawals under this benefit also:

• reduce your policy value;

• reduce your base policy death benefit and other benefits;

• may be subject to surrender charges and excess interest adjustments;

• may be subject to income taxes and federal tax penalties; and

• may be limited or restricted under certain qualified policies.

Rider Withdrawal Amount. You can withdraw up to the rider withdrawal amount (after age 59) in any rider year without causing an excess withdrawal. See “Withdrawal Base Adjustments” and “Rider Death Benefit Adjustments”, below. The rider withdrawal amount may be referred to as “minimum remaining withdrawal amount” in your policy statement and other documents.

The rider withdrawal amount is zero if the annuitant is not 59 years old on the rider date and remains zero until the first day of the rider year after the annuitant’s 59th birthday. If the annuitant (or the annuitant’s spouse if younger and the joint life option is elected) is at least 59 years old on the date that the rider is elected (“rider date”), then the rider withdrawal amount is equal to the withdrawal base multiplied by the withdrawal percentage (see below).

For qualified policies: If the plan participant (generally the annuitant) is at least 70 ¹/2 years old, the rider withdrawal amount for that rider year (and each subsequent rider year) is equal to the greater of:

• the rider withdrawal amount described above; or

• an amount equal to a minimum required distribution amount (for the tax year of that rider anniversary) calculated using only: (1) the living annuitant’s age, (2) the IRS Uniform

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Lifetime table or, if applicable, the Joint Life and Survivor Expectancy table, (3) the policy value of the base policy, (including the present value of any additional benefits provided under the policy to the extent required to be taken into account under IRS guidance) and (4) amounts from the current calendar year (no carry-over from past years). Only amounts calculated as set forth above can be used as the rider withdrawal amount. If the minimum required distribution amount (determined as set forth above) exceeds the rider withdrawal amount, the excess will not be treated as an excess withdrawal under the rider.

Once your policy value reaches zero, you cannot make premium payments and all other policy features, benefits, and guarantees (except those provided by this rider) are terminated. In order to receive benefits guaranteed by this rider after your policy value reaches zero, you must select the amount and frequency of future payments. Once selected, the amount and frequency of payments cannot be changed.

Please note:

• If the rider is added prior to the annuitant’s 59th birthday, the rider withdrawal amount will be zero until the beginning of the rider year after the annuitant’s 59th birthday, however, you will still be charged a rider fee prior to this time.

• You cannot carry over any portion of your rider withdrawal amount that is not withdrawn during a rider year for withdrawal in a future rider year. This means that if you do not take the rider withdrawal amount during a rider year, you cannot take more than the rider withdrawal amount in the next rider year and maintain the rider’s guarantees.

• Excess withdrawals may cause you to lose the benefit of the rider.

• All policy value must be allocated to a limited number of specified funds (See “Designated Investment Choices” below).

Withdrawal Percentage. We use the withdrawal percentage to calculate the rider withdrawal amount. The withdrawal percentage is determined by the annuitant’s age (or the annuitant’s spouse if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the rider anniversary immediately following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) 59th birthday. The withdrawal percentage is as follows:

Age at time of first withdrawal	Withdrawal Percentage
0-58	0.0	%
59-69	5.0	%
70-79	6.0	%
³80	7.0	%

Please note, once established, the withdrawal percentage will not increase even though the annuitant’s age increases.

Withdrawal Base. We use the withdrawal base to calculate the rider withdrawal amount. The withdrawal base on the rider date is the policy value (less any premium enhancement, if the rider is added in the first policy year). During any rider year, the withdrawal base is equal to the withdrawal base on the rider date or most recent rider anniversary, plus subsequent premium payments, less subsequent withdrawal base adjustments. The withdrawal base may be referred to as “total withdrawal base” in your policy statement and other documents.

Please note:

• We determine the withdrawal base solely to calculate the rider withdrawal amount. Your withdrawal base is not a cash value, a surrender value, or a death benefit. It is not available for withdrawal, it is not a minimum return for any subaccount, and it is not a guarantee of policy value.

• Because the withdrawal base is generally equal to the policy value on the rider date, the rider

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withdrawal amount may be lower if you delay electing the rider and the policy value decreases before you elect the rider.

On each rider anniversary, the withdrawal base will equal the greatest of:

• Current withdrawal base;

• The withdrawal base immediately before the rider anniversary, increased by the growth credit (see “Growth” below);

• The policy value on any monthiversary, including the current rider anniversary (see “Automatic Step-Up” below).

Growth. On each of the first ten rider anniversaries, we will add an annual growth credit to your withdrawal base if no withdrawal occurred during the preceding rider year. The annual growth credit is equal to 5% of the withdrawal base immediately before the rider anniversary (i.e., withdrawal base x 0.05) .

Please note: Because a withdrawal will eliminate a potential growth credit, you should consider your need or possible need to take withdrawals within 10 rider years in deciding whether to purchase the rider.

Automatic Step-Up. On each rider anniversary, we will automatically step-up the withdrawal base to an amount equal to the greater of (1) the highest policy value on any monthiversary during the preceding rider year if no excess withdrawal occurred or (2) the policy value on the rider anniversary, if the withdrawal base after any annual growth credit is applied, is less than that amount.

Beginning on the fifth rider anniversary, the rider fee percentage may increase (or decrease) at the time of any automatic step-up.

Automatic Step-Up Opt Out. Each time an automatic step-up will result in a rider fee percentage increase, you have the option to reject the automatic step-up and reinstate the withdrawal base and rider fee percentage to their respective amounts immediately before the automatic step-up, provided that you do so within 30 days after a rider anniversary on which the automatic step-up occurred. We must receive your rejection (each time you elect to opt out), in a form satisfactory to us, at our administrative and service office within the same 30 day period after the rider anniversary on which the automatic step-up occurred. Opting out of one step-up does not operate as an opt-out of any future step-ups.

Withdrawal Base Adjustments. Cumulative gross partial withdrawals up to the rider withdrawal amount in any rider year will not reduce the withdrawal base. Cumulative gross partial withdrawals in excess of the rider withdrawal amount in any rider year (“excess withdrawals”) will reduce the withdrawal base, however, by the greater of the dollar amount of the excess withdrawal or a pro rata amount (in proportion to the reduction in the policy value), possibly to zero. Withdrawal base adjustments occur immediately following excess withdrawals. See “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders—Retirement Income Choice” for examples showing the effect of hypothetical withdrawals in more detail including an excess withdrawal that reduces the withdrawal base by a pro rata amount. Excess withdrawals may eliminate any guarantee offered by this rider.

Please Note: We do not monitor for, or notify you of, excess withdrawals. If you take regular or scheduled withdrawals, please pay particular attention to any excess withdrawal because your otherwise regular or scheduled non-excess withdrawals may thereafter all be excess withdrawals that reduce or eliminate your benefit on an accelerated basis.

Designated Investment Choices. If you elect this rider, you must allocate 100% of your policy value to one or more of the following “designated investment choices:”

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Transamerica Asset Allocation—Conservative VP – Service Class

Transamerica Asset Allocation—Moderate VP – Service Class

Transamerica Asset Allocation—Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Transamerica Balanced VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Transamerica Index 50 VP – Service Class

Transamerica Index 75 VP – Service Class

Transamerica Value Balanced VP – Service Class

Fidelity—VIP Balanced Portfolio – Service Class 2

Transamerica PIMCO Total Return VP – Service Class

Transamerica Efficient Markets VP – Service Class

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

Fixed Account

If you elect this rider, you may transfer amounts among the designated investment choices (subject to the terms and conditions stated in the prospectus); however, you cannot transfer any amount (or allocate premium payments) to any other subaccount. After the fifth rider anniversary (and each successive fifth rider anniversary), you can terminate this rider. Starting the next business day, you may transfer to a non-designated investment choice. Terminating the rider will result in losing all your benefits under the rider.

Please note:

• The earliest you can transfer to a non-designated investment choice is the first business day after the fifth rider anniversary. You will be required to terminate the rider first.

• We can eliminate a designated investment choice at any time. If a designated investment choice is eliminated, then a policy owner will be given the option to reallocate the value in the eliminated designated investment choice to other designated investment choices.

Manual Upgrades. You can upgrade the withdrawal base to the policy value during the 30-day period following each successive fifth rider anniversary by sending us written notice in a form acceptable to us, as long as the rider issue requirements for a new rider are met. At this time the rider withdrawal amount and, if applicable, the rider death benefit will be recalculated. If an upgrade is elected, your current rider will terminate and a new rider will be issued with a new rider date and its own rider fee percentage and growth rate (which may be higher or lower than your current rider fee percentage and growth rate). The new rider date will be the date the Company receives all necessary information in good order. You cannot elect a manual upgrade if the annuitant is 86 or older.

Retirement Income Choice – Additional Options

You may elect the following options with the Retirement Income Choice rider (the options are not mutually exclusive):

• Death Benefit;

• Joint Life; and

• Income Enhancement.

There is an additional fee for each option.

1. Additional Death Payment Option. If you elect this rider, you can also elect to add an additional amount to the death benefit payable under the base policy, upon the death of the annuitant (or if the joint life option is selected, the annuitant’s spouse). The additional amount will be equal to the excess, if any, of the rider death benefit over the greater of any optional guaranteed minimum death benefit or the base policy death benefit. If you elect this rider, then you cannot also elect the Double Enhanced Death

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Benefit guaranteed minimum death benefit option. See “Section 8. Death Benefit.” The additional amount can be zero.

Rider Death Benefit. The rider death benefit on the rider date is the policy value (less any premium enhancement if the rider is added in the first policy year). After the rider date, the rider death benefit is equal to:

• the rider death benefit on the rider date; plus

• subsequent premium payments; less

• adjustments for withdrawals (as described under “Rider Death Benefit Adjustments,” below).

Rider Death Benefit Adjustments. Gross partial withdrawals up to the rider withdrawal amount in a rider year will reduce the rider death benefit on a dollar-for-dollar basis. Gross partial withdrawals in excess of the rider withdrawal amount in a rider year will reduce the rider death benefit by the greater of the dollar amount of the excess withdrawal or a pro rata amount (in proportion to the reduction in policy value), and possibly to zero. See “Appendix -Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders—Retirement Income Choice” for examples showing the effect of hypothetical withdrawals in more detail, including any excess withdrawal that results in pro rata adjustments. Rider death benefit adjustments occur immediately following all withdrawals.

Please note:

• No additional death benefit is payable if the base policy death benefit (including the guaranteed minimum death benefit) exceeds the rider death benefit. The greater the death benefit payable under the guaranteed minimum death benefit selected, the more likely it is that an additional amount will not be payable under the rider death benefit option.

• Excess withdrawals may eliminate the additional death benefit available with the Retirement Income Choice rider. You will continue to pay the fee for this option, even if the additional death benefit available under the rider is $0.

• Manual upgrades to the withdrawal base will result in a recalculation of the rider death benefit. However, automatic step-ups will not reset the rider death benefit.

• If an owner who is not the annuitant dies and the surviving spouse continues the policy, then no additional amount is payable. If the policy is not continued, then the surviving owner (who is also the sole beneficiary) may elect to receive lifetime income payments equal to the rider withdrawal amount divided by the number of payments each year instead of receiving the policy’s cash value.

The additional death benefit payment option may be referred to as “minimum remaining withdrawal amount” on your policy statement and other documents.

2. Joint Life Option. If you elect this rider, then you can also elect to postpone termination of the rider until the later of the annuitant or annuitant’s spouse’s death (only if the annuitant’s spouse continues the policy).

Please note:

• The annuitant’s spouse must be either a joint owner along with the annuitant or the sole primary beneficiary (and there is no joint owner), if you elect this option.

• A former spouse of the annuitant cannot continue to keep the policy in force if no longer married to the annuitant at the time of the annuitant’s death. In that event, the rider will terminate and no additional withdrawals under the rider will be permitted.

• The annuitant’s spouse for purposes of this rider cannot be changed.

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• The rider withdrawal percentage is based on the age of the younger of the annuitant and annuitant’s spouse, if you elect this option.

• The rider death benefit is not payable until the death of the surviving spouse, if you elect this option.

• You cannot elect a manual upgrade if the annuitant or annuitant’s spouse is 86 or older (lower if required by state law).

3. Income Enhancement Option. If you elect this rider, you can also elect to have your withdrawal percentage double if either the annuitant (or the annuitant’s spouse if the joint life option is elected) is confined, because of a medical necessity, in a hospital or nursing facility and has been so confined for the elimination period (180 days within the last 365 days). Benefits from this option are not available unless the rider has been in effect for 12 months (the “waiting period”). The elimination period and waiting period can, but do not need to, run concurrently.

Please note:

• You cannot elect the Income Enhancement Option if the qualifying person or persons is/are already confined in a hospital or nursing facility.

• The increase to the withdrawal percentage stops when the qualifying person or persons is/are no longer confined as described above.

We will require confirmation of confinement while benefits are being received. Confirmation of confinement may be a physician’s statement, a statement from a hospital or nursing facility administrator, or any other information satisfactory to us. If confinement ceases, you may re-qualify by satisfying a 180-day elimination period requirement.

Retirement Income Choice Rider and Additional Option Fees. A rider fee, 0.60% for single life or 0.90% for joint life of the withdrawal base on each rider anniversary, is charged annually prior to annuitization for the base benefit.

If you elect options with the Retirement Income Choice rider, you will be charged a fee for each option you elect, that is in addition to the rider fee for the base benefit. Each additional fee is charged annually prior to annuitization and is a percentage of the withdrawal base on each rider anniversary. The additional fees are as follows:

Option	Single Life	Joint Life
Death Benefit	0.25%	0.20%
Income Enhancement	0.15%	0.30%

We will also deduct all rider fees pro rata upon full surrender of the policy or other termination of the rider. The rider fees are deducted from each investment choice in proportion to the amount of policy value in each investment choice.

Please Note: Because the rider fee is a percentage of your withdrawal base on each rider anniversary, the fee can be substantially more than 0.60% (single life) or 0.90% (joint life) of your policy value if that withdrawal base is higher than your policy value.

Retirement Income Choice Rider Issue Requirements

The Company will not issue the Retirement Income Choice rider unless:

• the annuitant is not yet age 86 (lower if required by state law);

• the annuitant is also an owner (except in the case of non-natural owners);

• there are no more than two owners; and

• if the joint life option is elected, the annuitant’s spouse is also not yet 86 (lower if required by state law) and (1) is a joint owner along with the annuitant or (2) is the sole primary beneficiary (and there is no joint owner).

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Termination

The Retirement Income Choice rider and any additional options will terminate upon the earliest of the following:

• the date we receive written notice from you requesting termination of the Retirement Income Choice rider if such notice is received by us during the 30 days following the fifth rider anniversary or every fifth rider anniversary thereafter;

• the death of the annuitant (or if the joint life option was elected, the death of the annuitant’s spouse if that spouse continued the policy as the surviving spouse);

• annuitization (however, if you have reached your maximum annuity commencement date you may choose an annuitization option which guarantees you lifetime payments in an amount equal to your rider withdrawal amount); or

• termination of your policy.

Please note: This rider terminates upon annuitization and there is a maximum annuity commencement date at which time your policy will be annuitized according to its terms. However, if you have reached your maximum annuity commencement date, we will allow you to annuitize your policy and elect to receive lifetime annuity payments equal to your rider withdrawal amount.

The Retirement Income Choice rider and additional options may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Retirement Income Choice rider. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Retirement Income Choice With Double Withdrawal Base Benefit Rider

You may elect to purchase the optional Retirement Income Choice with Double Withdrawal Base Benefit Rider which, provides you with: (1) a guaranteed lifetime withdrawal benefit; and (2) an opportunity to increase the withdrawal base if no withdrawals have been made before the 10^th rider anniversary or before the anniversary following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) attaining age 67, whichever is later. This rider is available during the accumulation phase, and requires that you invest only in certain investment choices. The tax rules for qualified policies may limit the value of this rider. Please consult a qualified tax advisor before electing the Retirement Income Choice with Double Withdrawal Base Benefit Rider for a qualified policy.

Retirement Income Choice with Double Withdrawal Base Benefit Rider – Base Benefit

This benefit is intended to provide a level of cash withdrawals and payments from us, if necessary, regardless of the performance of the designated investment choices you select. Under this benefit, you can receive (first as withdrawals from your policy value and, if necessary, as payments from us) up to the rider withdrawal amount each rider year, starting with the rider year immediately following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) 59th birthday and lasting until the annuitant’s death (unless your withdrawal base is reduced to zero because of “excess withdrawals”; see Withdrawal Base Adjustments, and Rider Death Benefit Adjustments, below). A rider year begins on the rider date (the date the rider becomes effective) and on each anniversary thereafter. All withdrawals before the annuitant (or the annuitant’s spouse if younger and the joint life option is elected) is 59 are excess withdrawals; a penalty tax may be assessed on amounts withdrawn from the policy before the owner reaches age 59 ¹/2.

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Example. Assume you are the owner and annuitant and you make a single premium payment of $100,000 when you are 56 years old. Further assume that you do not make any withdrawals or additional premium payments, no automatic step-ups occurred, but that after five years your policy value has declined to $90,000 solely because of negative investment performance. With an annual growth rate percentage of 5.0%, after 5 years the withdrawal base is equal to $127,628 ($100,000 x 1.05⁵). You could receive up to $6,381 which is the applicable withdrawal percentage of 5.0% for the single life option multiplied by the withdrawal base of $127,628, each rider year for the rest of your life (assuming that you take your first withdrawal when you are age 61, that you do not withdraw more than the rider withdrawal amount in any one year and there are no future automatic step-ups.)

Of course, you can always withdraw an amount up to your cash value pursuant to your rights under the policy at your discretion.

Example continued. Assume the same facts as above, but you withdraw $10,000 when you are 61 years old. That excess withdrawal decreases your future rider withdrawal amount to $6,105.

See the “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders - Retirement Income Choice and Retirement Income Choice with Double Withdrawal Base Benefit Riders” for examples showing the effect of hypothetical withdrawals in more detail.

Please note:

• If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.

• You will begin paying the rider charge as of the date the rider takes effect, even if you do not begin taking withdrawals for many years, or ever. We will not refund the charges you have paid under the rider if you never choose to take withdrawals and/or if you never receive any payments under the rider.

• We have designed this rider for you to take withdrawals each rider year that are less than or equal to the rider withdrawal amount. You should not purchase this rider if you plan to take withdrawals in excess of the rider withdrawal amount, because such excess withdrawals may significantly reduce or eliminate the value of the guarantees provided by the rider.

• The longer you wait to start making withdrawals under the benefit, the less time you have to benefit from the guarantee because of decreasing life expectancy as you age. On the other hand, the longer you wait to begin making withdrawals, the higher your withdrawal percentage may be and the more opportunities you will have to lock in a higher withdrawal base. You should carefully consider when to begin making withdrawals. There is a risk that you will not begin making withdrawals at the most financially beneficial time for you.

• Because the guaranteed lifetime withdrawal benefit under this rider is accessed through regular withdrawals that do not exceed the rider withdrawal amount, the rider may not be appropriate for you if you do not foresee a need for liquidity and your primary objective is to take maximum advantage of the tax deferral aspect of the policy.

• All policy value must be allocated to a limited number of specified funds (see “Designated Investment Choices”). You should consult with your registered representative to assist you in determining whether these investment restrictions are suited for your financial needs and risk tolerance.

• Cumulative withdrawals in any rider year that are in excess of the rider withdrawal amount are excess withdrawals.

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• An excess withdrawal may impact the rider withdrawal amount, withdrawal base, and rider death benefit (if applicable) on a greater than dollar-for-dollar basis.

• Any withdrawal will reduce your rider death benefit (if applicable).

• Upon the death of the annuitant, the Retirement Income Choice with Double Withdrawal Base Benefit rider terminates and there are no more additional guaranteed withdrawals.

Like all withdrawals, withdrawals under this benefit also:

• reduce your policy value;

• reduce your base policy death benefit and other benefits;

• may be subject to surrender charges and excess interest adjustments;

• may be subject to income taxes and federal tax penalties; and

• may be limited or restricted under certain qualified policies.

Rider Withdrawal Amount. You can withdraw up to the rider withdrawal amount (after age 59) in any rider year without causing an excess withdrawal. See “Withdrawal Base Adjustments” and “Rider Death Benefit Adjustments”, below.

The rider withdrawal amount is zero if the annuitant is not 59 years old on the rider date and remains zero until the first day of the rider year after the annuitant’s 59th birthday. If the annuitant (or the annuitant’s spouse if younger and the joint life option is elected) is at least 59 years old on the date that the rider is elected (“rider date”), then the rider withdrawal amount is equal to the withdrawal base multiplied by the withdrawal percentage (see below).

For qualified policies: If the plan participant (generally the annuitant) is at least 70 ¹/2 years old, the rider withdrawal amount for that rider year (and each subsequent rider year) is equal to the greater of:

• the rider withdrawal amount described above; or

• an amount equal to a minimum required distribution amount (for the tax year on that rider anniversary date) calculated using only: (1) the living annuitant’s age, (2) the IRS Uniform Lifetime table or, if applicable, the Joint Life and Survivor Expectancy table, (3) the policy value of the base policy, (including the present value of any additional benefits provided under the policy to the extent required to be taken into account under IRS guidance) and (4) amounts from the current calendar year (no carry-over from past years).

Only amounts calculated as set forth above can be used as the rider withdrawal amount. If the minimum required distribution amount (determined as set forth above) exceeds the rider withdrawal amount, the excess will not be treated as an excess withdrawal under the rider.

Once your policy value reaches zero, you cannot make premium payments and all other policy features, benefits, and guarantees (except those provided by this rider) are terminated. In order to receive benefits guaranteed by this rider after your policy value reaches zero, you must select the amount and frequency of future payments. Once selected, the amount and frequency of future withdrawals after your policy value reaches zero cannot be changed.

Please note:

• If the rider is added prior to the annuitant’s 59th birthday, the rider withdrawal amount will be zero until the beginning of the rider year after the annuitant’s 59th birthday, however, you will still be charged a rider fee prior to this time.

• You cannot carry over any portion of your rider withdrawal amount that is not withdrawn during a rider year for withdrawal in a future rider year. This means that if you do not take the entire rider withdrawal amount during a rider year, you cannot take more than the rider withdrawal amount in the next rider year and maintain the rider’s guarantees.

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• Excess withdrawals may cause you to lose the benefit of the rider.

• All policy value must be allocated to a limited number of specified funds (See “Designated Investment Choices” below).

Withdrawal Percentage. We use the withdrawal percentage to calculate the rider withdrawal amount. The withdrawal percentage is determined by the annuitant’s age (or the annuitant’s spouse if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the rider anniversary immediately following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) 59th birthday. The withdrawal percentage is as follows:

Age at time of first withdrawal	Withdrawal Percentage— Single Life Option	Withdrawal Percentage— Joint Life Option
0-58	0.0%	0.0%
59-69	5.0%	4.5%
70-79	6.0%	5.5%
³80	7.0%	6.5%

Please note, once established, the withdrawal percentage will not increase even though the annuitant’s age increases.

Withdrawal Base. We use the withdrawal base to calculate the rider withdrawal amount. The withdrawal base on the rider date is the policy value (less any premium enhancement, if the rider is added in the first policy year). During any rider year, the withdrawal base is equal to the withdrawal base on the rider date or most recent rider anniversary, plus subsequent premium payments, less subsequent withdrawal base adjustments.

Please note:

• We determine the withdrawal base solely to calculate the rider withdrawal amount. Your withdrawal base is not a cash value, a surrender value, or a death benefit. It is not available for withdrawal, it is not a minimum return for any subaccount, and it is not a guarantee of policy value.

• Because the withdrawal base is generally equal to the policy value on the rider date, the rider withdrawal amount may be lower if you delay electing the rider and the policy value decreases before you elect the rider.

On each rider anniversary, the withdrawal base will equal the greatest of:

• Current withdrawal base;

• The withdrawal base immediately before the rider anniversary, increased by the growth credit (see “Growth” below);

• The policy value on any monthiversary, including the current rider anniversary (see “Automatic Step-Up” below).

Growth. On each of the first ten rider anniversaries, we will add an annual growth credit to your withdrawal base if no withdrawal occurred during the preceding rider year. The annual growth credit is equal to 5% of the withdrawal base immediately before the rider anniversary (i.e., withdrawal base x 0.05) .

Please note: Because a withdrawal will eliminate a potential growth credit, you should consider your need or possible need to take withdrawals within 10 rider years in deciding whether to purchase the rider.

Automatic Step-Up. On each rider anniversary, we will automatically step-up the withdrawal base to an amount equal to the greater of (1) the highest policy value on any monthiversary during the preceding rider year if no excess withdrawal occurred or (2) the policy value on the rider anniversary, if the withdrawal base after any annual growth credit is applied, is less than that amount.

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Beginning on the fifth rider anniversary, the rider fee percentage may increase (or decrease) at the time of any automatic step-up. The rider fee percentage will not exceed the maximum rider fee percentage in the fee table.

Automatic Step-Up Opt Out. Each time an automatic step-up will result in a rider fee percentage increase, you have the option to reject the automatic step-up and reinstate the withdrawal base and rider fee percentage to their respective amounts immediately before the automatic step-up, provided that you do so within 30 days after a rider anniversary on which the automatic step-up occurred. We must receive your rejection (each time you elect to opt out), in a form satisfactory to us, at our administrative and service office within the same 30 day period after the rider anniversary on which the automatic step-up occurred. Opting out of one step-up does not operate as an opt-out of any future step-ups.

Double Withdrawal Base Benefit. If no withdrawals have been made 1) before the 10^th rider anniversary, or 2) before the rider anniversary following the annuitant (or annuitant’s spouse if younger and the Joint Life is elected) attaining age 67, whichever is later, then the withdrawal base on that rider anniversary will be the greater of 1) the withdrawal base as calculated above or 2) the result of the withdrawal base on the rider date plus any premiums received within 90 days of the rider date, multiplied by 2. See “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders -Retirement Income Choice and Retirement Income Choice with Double Withdrawal Base Benefit Riders—Example 5 (no excess withdrawals) and Example 6 (excess withdrawals).”

Withdrawal Base Adjustments. Cumulative gross partial withdrawals up to the rider withdrawal amount in any rider year will not reduce the withdrawal base. Cumulative gross partial withdrawals in excess of the rider withdrawal amount in any rider year (“excess withdrawals”) will reduce the withdrawal base, however, by the greater of the dollar amount of the excess withdrawal or a pro rata amount (in proportion to the reduction in the policy value), possibly to zero. Withdrawal base adjustments occur immediately following excess withdrawals. See “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders—Retirement Income Choice and Retirement Income Choice with Double Withdrawal Base Benefit Riders” for examples showing the effect of hypothetical withdrawals in more detail including an excess withdrawal that reduces the withdrawal base by a pro rata amount. Excess withdrawals may eliminate any guarantee offered by this rider.

Please Note: We do monitor for, or notify you of, excess withdrawals. If you take regular or scheduled withdrawals, please pay particular attention to any excess withdrawal because your otherwise regular or scheduled non-excess withdrawals may thereafter all be excess withdrawals that reduce or eliminate your benefit on an accelerated basis.

Designated Investment Choices. If you elect this rider, you must allocate 100% of your policy value to one or more of the following “designated investment choices:”

Transamerica Asset Allocation—Conservative VP – Service Class

Transamerica Asset Allocation—Moderate VP – Service Class

Transamerica Asset Allocation—Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Transamerica Efficient Markets VP – Service Class

Transamerica Balanced VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Transamerica Index 50 VP – Service Class

Transamerica Index 75 VP – Service Class

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Transamerica Value Balanced VP – Service Class

Fidelity—VIP Balanced Portfolio – Service Class 2

Transamerica PIMCO Total Return VP – Service Class

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

Fixed Account

If you elect this rider, you may transfer amounts among the designated investment choices (subject to the terms and conditions stated in the prospectus); however, you cannot transfer any amount (or allocate premium payments) to any other subaccount. After the fifth rider anniversary (and each successive fifth rider anniversary), you can terminate this rider. Starting the next business day, you may transfer to a non-designated investment choice. Terminating the rider will result in losing all your benefits under the rider.

Please note:

• The earliest you can transfer to a non-designated investment choice is the first business day after the fifth rider anniversary. You will be required to terminate the rider first.

• We can eliminate a designated investment choice at any time. If a designated investment choice is eliminated, then a policy owner will be given the option to reallocate the value in the eliminated designated investment choice to other designated investment choices.

Manual Upgrades. You can upgrade the withdrawal base to the policy value during the 30-day period following each successive fifth rider anniversary by sending us written notice in a form acceptable to us, as long as the rider issue requirements for a new rider are met. At this time the rider withdrawal amount and, if applicable, the rider death benefit will be recalculated. If an upgrade is elected, your current rider will terminate and a new rider will be issued with a new rider date, its own rider fee percentage, and growth rate (which may be higher or lower than your current rider fee percentage and growth rate); and any options you elect to change or add to the rider base benefit. The new rider date will be the date the Company receives all necessary information in good order. You cannot elect a manual upgrade if the annuitant (or the annuitant’s spouse if younger and the joint option is elected) is 86 or older.

Retirement Income Choice with Double Withdrawal Base Benefit – Additional Options

You may elect the following options with this rider (the options are not mutually exclusive):

• Death Benefit;

• Joint Life; and

• Income Enhancement.

There is an additional fee if you elect the Death Benefit and/or the Income Enhancement Benefit option(s) under the rider. If you elect the Joint Life option, then the withdrawal percentage (used to calculate the rider withdrawal amount) is lower. Furthermore, if you elect the Joint Life option in combination with the Death Benefit and/or the Income Enhancement Benefit option(s), then the fee for each of those additional options will be different than under the Single Life option. See “Retirement Income Choice with Double Withdrawal Base Benefit Rider and Additional Option Fees”.

1. Death Benefit. If you elect this rider, you can also elect to add an additional amount to the death benefit payable under the base policy, upon the death of the annuitant (or if the joint life option is selected, the annuitant’s spouse). The additional amount will be equal to the excess, if any, of the rider death benefit over the greater of any optional guaranteed minimum death benefit or the base policy death benefit.The additional amount can be zero. If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option. See “Section 8. Death Benefit.”

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Rider Death Benefit. The rider death benefit on the rider date is the policy value (less any premium enhancement if the rider is added in the first policy year). After the rider date, the rider death benefit is equal to:

• the rider death benefit on the rider date; plus

• subsequent premium payments; less

• adjustments for withdrawals (as described under “Rider Death Benefit Adjustments,” below).

Rider Death Benefit Adjustments. Gross partial withdrawals up to the rider withdrawal amount in a rider year will reduce the rider death benefit on a dollar-for-dollar basis. Gross partial withdrawals in excess of the rider withdrawal amount in a rider year will reduce the rider death benefit by the greater of the dollar amount of the excess withdrawal or a pro rata amount (in proportion to the reduction in policy value), and possibly to zero. See “Appendix -Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders—Retirement Income Choice and Retirement Income Choice with Double Withdrawal Base Benefit Riders” for examples showing the effect of hypothetical withdrawals in more detail, including any excess withdrawal that results in pro rata adjustments. Rider death benefit adjustments occur immediately following all withdrawals.

Please note:

• No additional death benefit is payable if the base policy death benefit (including the guaranteed minimum death benefit) exceeds the rider death benefit. The greater the death benefit payable under the guaranteed minimum death benefit selected, the more likely it is that an additional amount will not be payable under the rider death benefit option.

• Excess withdrawals may eliminate the additional death benefit available with this rider. You will continue to pay the fee for this option, even if the additional death benefit available under the rider is $0.

• Manual upgrades to the withdrawal base will result in a recalculation of the rider death benefit. However, automatic step-ups will not reset the rider death benefit.

• If an owner who is not the annuitant dies and the surviving spouse continues the policy, then no additional amount is payable. If the policy is not continued, then the surviving owner (who is also the sole beneficiary) may elect to receive lifetime income payments equal to the rider withdrawal amount divided by the number of payments each year instead of receiving the policy’s cash value.

The additional death benefit payment option may be referred to as “minimum remaining withdrawal amount” on your policy statement and other documents.

2. Joint Life Benefit. If you elect this rider, then you can also elect to postpone termination of the rider until the later of the annuitant or annuitant’s spouse’s death (only if the annuitant’s spouse continues the policy), whichever is later.

Please note:

• The withdrawal percentage for each “age at the time of first withdrawal” is lower if you elect this option.

• The annuitant’s spouse must be either a joint owner along with the annuitant or the sole primary beneficiary (and there is no joint owner), if you elect this option.

• A former spouse of the annuitant cannot continue to keep the policy in force if no longer married to the annuitant at the time of the annuitant’s death. In that event, the rider will terminate and no additional withdrawals under the rider will be permitted.

• The annuitant’s spouse for purposes of this rider cannot be changed to a new spouse.

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• The rider withdrawal percentage is based on the age of the younger of the annuitant and annuitant’s spouse, if you elect this option.

• The rider death benefit is not payable until the death of the surviving spouse, if you elect this option.

• You cannot elect a manual upgrade if the annuitant or annuitant’s spouse is 86 or older (lower if required by state law).

3. Income Enhancement Benefit. If you elect this rider, you can also elect to have your withdrawal percentage double if either the annuitant (or the annuitant’s spouse if the joint life option is elected) is confined, because of a medical necessity, in a hospital or nursing facility and has been so confined for the elimination period (180 days within the last 365 days). Benefits from this option are not available unless the rider has been in effect for 12 months (the “waiting period”). The elimination period and waiting period can, but do not need to, run concurrently.

Please note:

• You cannot elect the Income Enhancement Option if the qualifying person or persons is/are already confined in a hospital or nursing facility.

• The increase to the withdrawal percentage stops when the qualifying person or persons is/are no longer confined as described above.

We will require confirmation of confinement while benefits are being received. Confirmation of confinement may be a physician’s statement, a statement from a hospital or nursing facility administrator, or any other information satisfactory to us. If confinement ceases, you may re-qualify by satisfying a 180-day elimination period requirement.

Retirement Income Choice with Double Withdrawal Base Benefit Rider and Additional Option Fees. A rider fee, 0.90% of the withdrawal base on each rider anniversary, is charged annually prior to annuitization for the base benefit.

If you elect options with this rider, then you will be charged a fee for each option you elect that is in addition to the rider fee for the base benefit. Each additional fee is charged annually prior to annuitization and is a percentage of the withdrawal base on each rider anniversary. The additional fees are as follows:

Option	Single Life	Joint Life
Death Benefit	0.25%	0.20%
Income Enhancement	0.15%	0.30%

We will also deduct all rider fees pro rata upon full surrender of the policy or other termination of the rider. The rider fees are deducted from each investment choice in proportion to the amount of policy value in that investment choice.

Please Note: Because the rider fee is a percentage of your withdrawal base on each rider anniversary, the fee can be substantially more than 0.90% of your policy value if that withdrawal base is higher than your policy value.

Retirement Income Choice with Double Withdrawal Base Benefit Rider Issue Requirements

The Company will not issue the Retirement Income Choice with Double Withdrawal Base Benefit rider unless:

• the annuitant is not yet age 86 (lower if required by state law);

• the annuitant is also an owner (except in the case of non-natural owners);

• there are no more than two owners; and

• if the joint life option is elected, the annuitant’s spouse is also not yet 86 (lower if required by state law) and (1) is a joint owner along with the annuitant or (2) is the sole primary beneficiary (and there is no joint owner).

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Termination

The Retirement Income Choice with Double Withdrawal Base Benefit rider and any additional options will terminate upon the earliest of the following:

• the date we receive written notice from you requesting termination of the rider if such notice is received by us during the 30 days following the fifth rider anniversary or every fifth rider anniversary thereafter;

• the death of the annuitant (or if the joint life option was elected, the death of the annuitant’s spouse if that spouse continued the policy as the surviving spouse);

• annuitization (however, if you have reached your maximum annuity commencement date you may choose an annuitization option which guarantees you lifetime payments in an amount equal to your rider withdrawal amount); or

• termination of your policy.

Please note: This rider terminates upon annuitization and there is a maximum annuity commencement date at which time your policy will be annuitized according to its terms. However, if you have reached your maximum annuity commencement date, we will allow you to annuitize your policy and elect to receive lifetime annuity payments which are at least equal to your rider withdrawal amount. Please contact us for more information concerning your options.

The Retirement Income Choice with Double Withdrawal Base Benefit rider and additional options may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Retirement Income Choice with Double Withdrawal Base Benefit rider. The application and operation of the rider are governed by the terms and conditions of the rider itself.

Retirement Income Choice 1.2 Rider

You may elect to purchase the optional Retirement Income Choice 1.2 Rider which, provides you with: (1) a guaranteed lifetime withdrawal benefit; and (2) an opportunity for increases in the rider withdrawal amount. This rider is available during the accumulation phase, and requires that you allocate 100% of your policy value according to either the designated allocation option or open allocation option both of which are designed to help manage the Company’s risk and support the guarantees under the rider. The tax rules for qualified policies may limit the value of this rider. Please consult a qualified tax advisor before electing the Retirement Income Choice 1.2 rider for a qualified policy.

Retirement Income Choice 1.2 – Base Benefit

Under this benefit, you can receive up to the rider withdrawal amount each rider year (first as withdrawals from your policy value and, if necessary, as payments from us), starting with the rider year immediately following the annuitant’s (or the annuitant’s spouse if younger and the joint life option is elected) 59th birthday and lasting until the annuitant’s death (unless your withdrawal base is reduced to zero because of an “excess withdrawal”; see Withdrawal Base Adjustments and Rider Death Benefit Adjustments, below). A rider year begins on the rider date (the date the rider becomes effective) and thereafter on each anniversary of that date.

Example. Assume you are the owner and annuitant and you make a single premium payment of $100,000 when you are 66 years old. Further assume that you do not make any withdrawals or additional premium payments, no automatic step-ups occurred, but that after five years your policy value has declined to $90,000 solely because of negative investment performance. With an annual growth rate percentage of 5.0%, after 5 years the withdrawal base is equal to $127,628 ($100,000 x 1.05⁵). You could receive up to $5,105 which is the applicable withdrawal percentage of 5.0% for the single

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life option multiplied by the withdrawal base of $127,628, each rider year for the rest of your life (assuming that you take your first withdrawal when you are age 71, that you do not withdraw more than the rider withdrawal amount in any one year and there are no future automatic step-ups.)

Of course, you can always withdraw an amount up to your cash value pursuant to your rights under the policy at your discretion.

Example continued. Assume the same facts as above, but you withdraw $10,000 when you are 71 years old. That excess withdrawal decreases your future rider withdrawal amount to $4,811.

See the “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders - Retirement Income Choice 1.2 Rider” for examples showing the effect of hypothetical withdrawals in more detail.

Please note:

• If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.

• You will begin paying the rider charge as of the date the rider takes effect, even if you do not begin taking withdrawals for many years, or ever. We will not refund the charges you have paid under the rider if you never choose to take withdrawals and/or if you never receive any payments under the rider.

• We have designed this rider to allow for withdrawals from your policy value each rider year that are less than or equal to the rider withdrawal amount. You should not purchase this rider if you plan to take withdrawals in excess of the rider withdrawal amount, because such excess withdrawals may significantly reduce or eliminate the value of the guarantees provided by the rider.

• The longer you wait to start making withdrawals under the benefit, the less time you have to benefit from the guarantee because of decreasing life expectancy as you age. On the other hand, the longer you wait to begin making withdrawals, the higher your withdrawal percentage may be, the higher the withdrawal base due to growth may be, and the more opportunities you will have to lock in a higher withdrawal base. You should carefully consider when to begin making withdrawals. There is a risk that you will not begin making withdrawals at the most financially beneficial time for you.

• Because the guaranteed lifetime withdrawal benefit under this rider is accessed through regular withdrawals that do not exceed the rider withdrawal amount, the rider may not be appropriate for you if you do not foresee a need for liquidity and your primary objective is to take maximum advantage of the tax deferral aspect of the policy.

• All policy value must be allocated according to the Designated Allocation option or the Open Allocation option. You should consult with your registered representative to assist you in determining whether the investment restrictions attributable to each option are suited for your financial needs and risk tolerance.

• Cumulative withdrawals in any rider year that are in excess of the rider withdrawal amount are excess withdrawals.

• An excess withdrawal may impact the withdrawal base, and rider death benefit (if applicable) on a greater than dollar-for-dollar basis.

• Any withdrawal will reduce your rider death benefit (if applicable).

• Upon the death of the annuitant (or the death of the surviving spouse if the joint option is elected), the Retirement Income Choice 1.2 rider terminates and all benefits thereunder cease.

Like all withdrawals, withdrawals while this rider is in effect also:

• reduce your policy value;

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• reduce your base policy death benefit and other benefits;

• may be subject to surrender charges and excess interest adjustments;

• may be subject to income taxes and federal tax penalties; and

• may be limited or restricted under certain qualified policies.

Rider Withdrawal Amount. You can withdraw up to the rider withdrawal amount in any rider year (after age 59) from your policy value without causing an excess withdrawal. See “Withdrawal Base Adjustments” and “Rider Death Benefit Adjustments” below.

The rider withdrawal amount is zero if the annuitant is not 59 years old on the rider date and remains zero until the first day of the rider year after the annuitant’s 59th birthday. If the annuitant (or the annuitant’s spouse if younger and the joint life option is elected) is at least 59 years old on the rider date, then the rider withdrawal amount is equal to the withdrawal base multiplied by the withdrawal percentage (see below).

For qualified policies: If the plan participant (generally the annuitant) is at least 70 ¹/2 years old, the rider withdrawal amount for that rider year (and each subsequent rider year) is equal to the greater of:

• the rider withdrawal amount described above; or

• an amount equal to any minimum required distribution amount (for the tax year on that rider anniversary) calculated using only: (1) the living annuitant’s age, (2) the IRS Uniform Lifetime table or, if applicable, the Joint Life and Survivor Expectancy table, (3) the policy value of the base policy, (including the present value of any additional benefits provided under the policy to the extent required to be taken into account under IRS guidance) and (4) amounts from the current calendar year (no carry-over from past years).

Only amounts calculated as set forth above can be used as the rider withdrawal amount. If the minimum required distribution amount (determined as set forth above) exceeds the rider withdrawal amount, the excess will not be treated as an excess withdrawal under the rider.

If your policy value reaches zero, then you cannot make premium payments and all other policy features, benefits, and guarantees (except those provided by this rider) are terminated. In order to receive benefits guaranteed by this rider after your policy value reaches zero, you must select the amount and frequency of future payments. Once selected, the amount and frequency cannot be changed.

Please note:

• If the rider is added prior to the annuitant’s 59th birthday, the rider withdrawal amount will be zero until the beginning of the rider year after the annuitant’s 59th birthday, however, you will still be charged a rider fee prior to this time.

• You cannot carry over any portion of your rider withdrawal amount that is not withdrawn during a rider year for withdrawal in a future rider year. This means that if you do not take the entire rider withdrawal amount during a rider year, you cannot take more than the rider withdrawal amount in the next rider year and maintain the rider’s guarantees.

• Excess withdrawals may cause you to lose the benefit of the rider.

• All policy value must be allocated according to either the Designated Allocation option or the Open Allocation option. (See: Allocation Options and Restrictions).

Withdrawal Percentage. We use the withdrawal percentage to calculate the rider withdrawal amount. The withdrawal percentage is determined by the annuitant’s age (or the annuitant’s spouse if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the rider anniversary immediately following the annuitant’s (or

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the annuitant’s spouse if younger and the joint life option is elected) 59th birthday. The withdrawal percentage is as follows:

Age at time of first withdrawal	Withdrawal Percentage— Single Life Option	Withdrawal Percentage— Joint Life Option
0-58	0.0%	0.0%
59-69	4.0%	3.5%
70-79	5.0%	4.5%
³80	6.0%	5.5%

Please note, once established, the withdrawal percentage will not generally increase even though the annuitant’s age increases except in certain instances involving automatic step-ups.

Withdrawal Base. We use the withdrawal base to calculate the rider withdrawal amount. The withdrawal base on the rider date is the policy value (less any premium enhancement, if the rider is added in the first policy year). During any rider year, the withdrawal base is equal to the withdrawal base on the rider date or most recent rider anniversary, plus subsequent premium payments, less subsequent withdrawal base adjustments due to excess withdrawals.

Please note:

• We determine the withdrawal base solely to calculate the rider withdrawal amount. Your withdrawal base is not a cash value, a surrender value, or a death benefit. It is not available for withdrawal, it is not a minimum return for any subaccount, and it is not a guarantee of policy value.

• Because the withdrawal base is generally equal to the policy value on the rider date, the rider withdrawal amount may be lower if you delay electing the rider and the policy value decreases before you elect the rider.

On each rider anniversary, the withdrawal base will equal the greatest of:

• Current withdrawal base;

• The withdrawal base immediately before the rider anniversary, increased by the growth credit, if any (see “Growth” below);

• The policy value on any monthiversary, including the current rider anniversary (see “Automatic Step-Up” below).

Growth. On each of the first ten rider anniversaries, we will add an annual growth credit to your withdrawal base if no withdrawal occurred during the preceding rider year. The annual growth credit is equal to 5.0% of the withdrawal base immediately before the rider anniversary (i.e., withdrawal base x 0.05).

Please note: Because a withdrawal will eliminate a potential growth credit for that rider year, you should consider your need or possible need to take withdrawals within the first 10 rider years in deciding whether to purchase the rider.

Automatic Step-Up. On each rider anniversary, we will automatically step-up the withdrawal base to an amount equal to the greater of (1) the highest policy value on any monthiversary during the preceding rider year, if no excess withdrawal occurred, or (2) the policy value on the rider anniversary. This comparison takes place after the application of any applicable annual growth credit. The withdrawal percentage (as indicated in the withdrawal percentage table) will also increase if you have crossed into another age band prior to the automatic step-up.

Beginning on the fifth rider anniversary, the rider fee percentage may increase (or decrease) at the time of any automatic step-up. The rider fee percentage will not exceed the maximum rider fee percentage in the fee table.

Automatic Step-Up Opt Out. Each time an automatic step-up results in a rider fee percentage increase, you have the option to reject the automatic step-up and reinstate the withdrawal base,

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withdrawal percentage, and rider fee percentage to their respective amounts immediately before the automatic step-up, provided that you do so within 30 days after a rider anniversary on which the automatic step-up occurred. We must receive your rejection (each time you elect to opt out), in good order, at our Administrative and Service Office within the same 30 day period after the rider anniversary on which the automatic step-up occurred. Opting out of one step-up does not operate as an opt-out of any future step-ups.

Withdrawal Base Adjustments. Cumulative gross partial withdrawals up to the rider withdrawal amount in any rider year will not reduce the withdrawal base. Cumulative gross partial withdrawals in excess of the rider withdrawal amount in any rider year (“excess withdrawals”) will reduce the withdrawal base, however, by the greater of the dollar amount of the excess withdrawal (if the policy value is greater than the withdrawal base) or a pro rata amount (in proportion to the reduction in the policy value when the policy value is less than the withdrawal base), possibly to zero. Withdrawal base adjustments occur immediately following excess withdrawals. See “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders -Retirement Income Choice 1.2 Rider” for examples showing the effect of hypothetical withdrawals in more detail, including an excess withdrawal that reduces the withdrawal base by a pro rata amount. The effect of an excess withdrawal is amplified if the policy value is less than the withdrawal base. See the “Appendix—Excess Interest Adjustment Example” for examples showing the effect hypothetical excess withdrawals in more detail.

Please Note: We do not monitor for, or notify you of, excess withdrawals. If you take regular or scheduled withdrawals please pay particular attention to any excess withdrawal because your otherwise regular or scheduled non-excess withdrawals may thereafter all be excess withdrawals that reduce or eliminate your benefit on an accelerated basis.

Allocation Options and Restrictions. If you elect this rider, you must allocate 100% of your policy value according to either the Designated Allocation option or the Open Allocation option. Transfers will be permitted between the Designated Allocation option and the Open Allocation option at any time.

Designated Allocation option. Under the Designated Allocation option, you must designate 100% of your policy value into one or more of the designated investment options in the following designated allocation groups:

Designated Allocation Group A

AllianceBernstein Balanced Wealth Strategy Portfolio – Class B

Fidelity—VIP Balanced Portfolio – Service Class 2

Franklin Templeton VIP Founding Funds Allocation Fund – Class 4

Transamerica Asset Allocation—Moderate Growth VP – Service Class

Transamerica International Moderate Growth VP – Service Class

Transamerica Balanced VP – Service Class

Transamerica Efficient Markets VP – Service Class

Transamerica Index 75 VP – Service Class

Transamerica Value Balanced VP – Service Class

Designated Allocation Group B

Transamerica Asset Allocation—Moderate VP – Service Class

Transamerica BlackRock Global Allocation VP – Service Class

Transamerica BlackRock Tactical Allocation VP – Service Class

Transamerica Index 50 VP – Service Class

Designated Allocation Group C

Transamerica Asset Allocation—Conservative VP – Service Class

Transamerica PIMCO Total Return VP – Service Class

Transamerica Money Market VP – Service Class

Transamerica U.S. Government Securities VP – Service Class

Fixed Account

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Transfers between the designated investment options in the Designated Allocation option are allowed as permitted under the policy; however, transfers as provided for in the policy from a designated investment option to a non-designated investment option are not permitted unless you change your allocation option to the Open Allocation method.

Open Allocation Option. Under the Open Allocation option, you may allocate to any investment options available under the policy.

If you elect the Open Allocation option, the OA Method will automatically be in effect. The OA Method uses a mathematical model which is designed to help the Company manage portfolio risk and support the guarantees under the rider. Under the OA Method, the mathematical model monitors your policy value and guarantees under the rider and transfers amounts back and forth between the OA Transamerica ProFund UltraBear VP subaccount (the “OA subaccount”) and the variable investment options you choose to the extent necessary to support the benefit guarantees. You will still have complete discretion over the selection of, and allocation to, the variable investment options for any portion of your policy value that the OA Method does not allocate to the OA subaccount. You should read the underlying fund prospectus for the variable OA subaccount carefully before you elect the Open Allocation option.

Transfers to the OA subaccount according to the mathematical model will be proportionally from all your variable investment options. This mathematical model will not change once you purchase the rider, but we may use a different model for riders issued in the future.

The OA Method is designed to help manage the Company’s portfolio risk associated with negative performance and support the guarantees under the rider. You should not view the rider nor the OA Method as a “market timing” or other type of investment program designed to enhance your policy value. If you choose the Open Allocation option, it may result in a lower policy value in certain situations. If policy value is transferred from your chosen variable investment options to the OA subaccount, less of your policy value may be available to participate in any future positive investment performance of your variable investment options. This may potentially provide a lower policy value than if you did not select the Open Allocation option.

Under the OA Method, the mathematical model compares a number of interrelated factors including your policy value and the guarantees under the rider to be provided in the future. The mathematical model also uses assumptions for interest rates, the duration of the policy and stock market volatility. The following table sets forth the most influential of these factors and indicates how each one (assuming all other factors remain constant) could trigger a transfer into or out of the OA subaccount.

Factor	Direction of Transfer
Policy Value Increases	Transfer to the investment options
Interest Rates Increase	Transfer to the investment options
Volatility Increases	Transfer to the OA subaccount

The amount of the transfer will vary depending on the magnitude and direction of the change in these factors.

Transactions you make may also affect the number of OA transfers including:

• additional premium payments; and

• excess withdrawals.

These transactions will change the policy value relative to the guarantees under the rider and may result in additional OA transfers.

You may not allocate premium payments to, nor transfer policy value into or out of, the OA subaccount. OA Method transfers are not subject to any transfer fee and do not count against the number of any free transfers we allow. Any transfer to your variable investment options will be allocated into your variable investment options in proportion to the amount of policy value in each variable investment option.

Generally, transfers to the OA subaccount first occur when the policy value drops by a cumulative amount of 3% to 5% over any period of time, although, the mathematical model may make transfers to the OA subaccount when the policy value drops by less than 3%. The mathematical model will not transfer more than 20% of the policy value to the OA subaccount. If the policy value continues to fall, no more transfers to the OA subaccount will occur. However, up to 30% of the policy value could be in the OA subaccount due to negative performance of the investment options. If negative investment performance causes the percentage of the policy value

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in the OA subaccount to exceed 30%, then the mathematical model will transfer the excess policy value back into your investment options. The policy value allocated to the OA subaccount will remain there unless your policy value recovers sufficiently to enable us to transfer amounts back to your investment options while maintaining the guarantees under the rider. This generally occurs when the policy value increases by 2.5% to 10% in relation to the guarantees under the rider, although the mathematical model may require a larger increase before transferring amounts back to your investment options.

The Daily Rebalancing Formula Under the Mathematical Model: As noted above, to limit our exposure under the rider, we transfer policy value from your investment options to the OA subaccount, to the extent called for by a mathematical model that will not change once you purchase the policy. We do this in order to minimize the need to provide payments (for example, when your policy value goes to zero by other than an excess withdrawal), or to extend the time before any payment is required. When payments become more likely (because your policy value is approaching zero), the mathematical model will tend to allocate more policy value to the OA subaccount. If, on the other hand, the policy value is much higher than the guarantees under the rider, then payments may not be necessary, and therefore, the mathematical model will tend to allocate more policy value to the investment options.

Each business day the mathematical model computes a “target allocation,” which is the portion of the policy value that is to be allocated to the investment options.

The target allocation depends on several factors, including the policy value as compared to the guarantees under the rider, the time until payments are likely required, and interest rates. However, as time passes, these factors change. Therefore, the target allocation changes from one business day to the next.

See the SAI for more detail regarding the workings of the mathematical model, including the formula used to compute the allocation on a daily basis.

Please Note: The OA Transamerica ProFunds UltraBear VP subaccount invests in the Transamerica ProFunds UltraBear portfolio which is designed to seek daily investment results, before fees and expenses that correspond to twice (200%) the inverse (opposite) of the daily performance of the S&P 500 Index. Please read the prospectus for the Transamerica ProFunds UltraBear portfolio to understand how its investment objective may affect your policy value if OA Method transfers occur to the OA Transamerica ProFunds UltraBear VP subaccount.

You cannot allocate premium payments or transfers to the OA subaccount.

Please note:

• If you no longer want to be subject to an allocation option, you will be required to terminate the rider. If you terminate the rider you will lose all of its benefits.

• We can change or eliminate a designated allocation group at any time. If this occurs, then a policy owner will be required to reallocate values in the effected designated investment options to other designated investment options that meet the allocation requirements.

Manual Upgrades. You can upgrade the withdrawal base to the policy value during the 30-day period following each successive fifth rider anniversary by sending us written notice in a form acceptable to us, as long as the rider issue requirements for a new rider are met. At this time the rider withdrawal amount and, if applicable, the rider death benefit will be recalculated. If an upgrade is elected, your current rider will terminate and a new rider will be issued with a new rider date, its own rider fee percentage (which may be higher or lower than your current rider fee percentage) and its own terms and benefits (which may not be as advantageous as the current rider); and any options you elect to change or add. The new rider date will be the date the Company receives all necessary information in good order. You cannot elect a manual upgrade if the annuitant (or the annuitant’s spouse if younger and the joint option is elected) is 86 or older.

Retirement Income Choice 1.2 – Additional Options

You may elect the following options with this rider (the options are not mutually exclusive):

• Death Benefit;

• Joint Life; and

• Income Enhancement.

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There is an additional fee if you elect the Death Benefit and/or the Income Enhancement Benefit option(s) under the rider. If you elect the Joint Life option, then the withdrawal percentage (used to calculate the rider withdrawal amount) is lower. Furthermore, if you elect the Joint Life option in combination with the Death Benefit and/or the Income Enhancement Benefit option(s), then the fee

for each of those additional options will be different than under the Single Life option. See “Retirement Income Choice 1.2 Rider and Additional Option Fees”.

1. Death Benefit. If you elect this rider, you can also elect to add an additional amount to the death benefit payable under the base policy, upon the death of the annuitant (or if the joint life option is selected, the annuitant’s spouse). The additional amount will be equal to the excess, if any, of the rider death benefit over the greater of any optional guaranteed minimum death benefit or the base policy death benefit. The additional amount can be zero. If you elect this rider, then you cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option. See “Section 8. Death Benefit.”

Rider Death Benefit. The rider death benefit on the rider date is the policy value (less any premium enhancement if the rider is added in the first policy year). After the rider date, the rider death benefit is equal to:

• the rider death benefit on the rider date; plus

• subsequent premium payments; less

• adjustments for withdrawals (as described under “Rider Death Benefit Adjustments,” below).

Rider Death Benefit Adjustments. Gross partial withdrawals up to the rider withdrawal amount in a rider year will reduce the rider death benefit on a dollar-for-dollar basis. Gross partial withdrawals in excess of the rider withdrawal amount in a rider year will reduce the rider death benefit by the greater of the dollar amount of the excess withdrawal or a pro rata amount (in proportion to the reduction in policy value), and possibly to zero. See “Appendix—Guaranteed Lifetime Withdrawal Benefit Adjusted Partial Surrenders—Retirement Income Choice, Retirement Income Choice with Double Withdrawal Base Benefit, and Retirement Income Choice 1.2 Riders” for examples showing the effect of hypothetical withdrawals in more detail, including an excess withdrawal that results in pro rata adjustments. Rider death benefit adjustments occur immediately following all withdrawals.

Please note:

• No additional death benefit is payable if the base policy death benefit (including the guaranteed minimum death benefit) exceeds the rider death benefit. The greater the death benefit payable under the guaranteed minimum death benefit selected, the more likely it is that an additional amount will not be payable under the rider death benefit option.

• Excess withdrawals may eliminate the additional death benefit available with this rider. You will continue to pay the fee for this option, even if the additional death benefit available under the rider is $0.

• Manual upgrades to the withdrawal base will result in a recalculation of the rider death benefit. However, automatic step-ups will not reset the rider death benefit.

• If an owner who is not the annuitant dies and the surviving spouse continues the policy, then no additional amount is payable. If the policy is not continued, then the surviving owner (who is also the sole beneficiary) may elect to receive lifetime annuity payments equal to the rider withdrawal amount divided by the number of payments each year instead of receiving the policy’s cash value.

The additional death benefit payment option may be referred to as “minimum remaining withdrawal amount” on your policy statement and other documents.

2. Joint Life Benefit. If you elect this rider, then you can also elect to postpone termination of the rider until the later of the annuitant or annuitant’s spouse’s death (only if the annuitant’s spouse continues the policy).

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Please note:

• The withdrawal percentage for each “age at the time of first withdrawal” is lower if you elect this option.

• The annuitant’s spouse must be either a joint owner along with the annuitant or the sole primary beneficiary (and there is no joint owner), if you elect this option.

• A former spouse of the annuitant cannot continue to keep the policy in force if no longer married to the annuitant at the time of the annuitant’s death. In that event, the rider will terminate and no additional withdrawals under the rider will be permitted.

• The annuitant’s spouse for purposes of this rider cannot be changed to a new spouse.

• The rider withdrawal percentage is based on the age of the younger of the annuitant and annuitant’s spouse, if you elect this option.

• The rider death benefit is not payable until the death of the surviving spouse, if you elect this option.

• You cannot elect a manual upgrade if the annuitant or annuitant’s spouse is 86 or older (lower if required by state law).

3. Income Enhancement Benefit. If you elect this rider, you can also elect to have your withdrawal percentage double if either the annuitant (or the annuitant’s spouse if the joint life option is elected) is confined, because of a medical necessity, in a hospital or nursing facility and has been so confined for the elimination period (180 days within the last 365 days). Benefits from this option are not available unless the rider has been in effect for 12 months (the “waiting period”). The elimination period and waiting period can, but do not need to, run concurrently.

Please note:

• You cannot elect the Income Enhancement Option if the qualifying person or persons is/are already confined in a hospital or nursing facility.

• The increase to the withdrawal percentage stops when the qualifying person or persons is/are no longer confined as described above.

We will require confirmation of confinement while benefits are being received. Confirmation of confinement may be a physician’s statement, a statement from a hospital or nursing facility administrator, or any other information satisfactory to us. If confinement ceases, you may re-qualify by satisfying a 180-day elimination period requirement.

Retirement Income Choice 1.2 Fees

Retirement Income Choice 1.2 Base Rider Fee. The base rider fee is calculated on the rider date and at the beginning of each rider quarter. The base rider fee will be adjusted for any premium additions, excess withdrawals, transfers between designated investment groups, or changes to other allocation options during the rider quarter. It will be deducted automatically from your policy value at the end of each rider quarter.

On an annual basis, in general terms, the base rider fee is the applicable “rider fee percentage” (see the Fee Table) times the benefit base.

The Open Allocation option base quarterly fee is calculated by multiplying (A) by (B) by (C), where:

(A) is the withdrawal base;

(B) is the rider fee percentage; and

(C) is the number of remaining days in the rider quarter divided by the total number of days in the applicable rider year.

The Designated Allocation option base quarterly fee is calculated by multiplying (A) by (B) divided by (C) multiplied by (D), where:

(A) is the withdrawal base;

(B) is the sum of each designated investment class’s rider fee percentage

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multiplied by the applicable designated investment class’s value;

(C) is the total policy value; and

(D) is the number of remaining days in the rider quarter divided by the total number of days in the applicable rider year.

We will assess a prorated rider fee upon termination of the rider for the period beginning on the first day of the most recent rider quarter and ending on the date of termination.

Beginning on the fifth rider anniversary, the rider fee percentage may increase (or decrease) at the time of an automatic step-up. Each time an automatic step-up will result in a rider fee percentage increase, you will have the option to reject the automatic step-up and reinstate the benefit base and rider fee percentage to their respective amounts immediately before the automatic step-up (adjusted for any subsequent premium payments or withdrawals), provided that you do so within 30 calendar days after the rider anniversary on which the automatic step-up occurred. We must receive your rejection, in good order, at our Administrative and Service Office within the 30 day period after the rider anniversary on which the automatic step-up occurred.

Please note regarding the base rider fee:

• Because the base rider fee is a percentage of the withdrawal base, it could be a much higher percentage of your policy value, particularly in the event that your policy value decreases significantly;

• Because the base rider fee is a percentage of the withdrawal base, the amount of the base rider fee we deduct will increase if the withdrawal base increases (although the percentage(s) may remain the same).

• If you make a transfer from one designated allocation group to another designated allocation group class that has a higher rider fee percentage, then the resulting rider fee will be higher.

Base Rider Fee Adjustment for Transfers. For transfers that you make between different designated investment in different classes or different allocation options on other than the first business day of a rider quarter, a “rider fee adjustment” will be applied. This adjustment is necessary because different designated investment classes or allocation options may have different rider fee percentages. The adjustment in the rider fee percentage will ensure that you are charged the correct overall rider fee. The base rider fee adjustment will be calculated using the same formula as the base rider fee and compare the fee for the remainder of the rider quarter to the initially calculated fee for the same period. The rider fee adjustment may be positive or negative and will be added to or subtracted from the rider fee to be allocated.

Base Rider Fee Adjustment for Premium Payments and Excess Withdrawals. A rider fee adjustment will also be calculated for subsequent premium payments and excess withdrawals because these events will change the benefit base. The rider fee adjustment will be calculated using the same formula as the base rider fee and compare the fee for the remainder of the rider quarter to the initially calculated fee for the same period. As with the rider fee adjustments calculated for transfers, the rider fee adjustment may be positive or negative and will be added to or subtracted from the rider fee to be collected.

Additional Option Fees. If you elect options with this rider, then you will be charged a fee for each option you elect that is in addition to the rider fee for the base benefit (see the Fee Table). Each additional fee is charged quarterly before annuitization and is a percentage of the benefit base on each rider anniversary.

We will also deduct all rider fees pro rata upon full surrender of the policy or other termination of the rider.

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Retirement Income Choice 1.2 Rider Issue Requirements

The Company will not issue the Retirement Income Choice 1.2 rider unless:

• the annuitant is not yet age 86 (lower if required by state law);

• the annuitant is also an owner (except in the case of non-natural owners);

• there are no more than two owners; and

• if the joint life option is elected, the annuitant’s spouse is also not yet 86 (lower if required by state law) and (1) is a joint owner along with the annuitant or (2) is the sole primary beneficiary (and there is no joint owner).

Termination

The Retirement Income Choice 1.2 rider and any additional options will terminate upon the earliest of the following:

• the date we receive written notice from you requesting termination of the rider if such notice is received by us during the 30 days following the fifth rider anniversary or every fifth rider anniversary thereafter;

• the death of the annuitant (or if the joint life option was elected, the death of the annuitant’s spouse if that spouse continued the policy as the surviving spouse);

• annuitization (however, if you have reached your maximum annuity commencement date you may choose an annuitization option which guarantees you lifetime payments in an amount equal to your rider withdrawal amount); or

• termination of your policy.

Please note: This rider terminates upon annuitization and there is a maximum annuity commencement date at which time your policy will be annuitized according to its terms. However, if you have reached your maximum annuity commencement date, we will allow you to annuitize your policy and elect to receive lifetime annuity payments which are at least equal to your rider withdrawal amount. Please contact us for more information concerning your options.

The Retirement Income Choice 1.2 rider and additional options may vary for certain policies, may not be available for all policies, and may not be available in all states. This disclosure explains the material features of the Retirement Income Choice 1.2 rider. The application and operation of the rider are governed by the terms and conditions of the rider itself.

11. OTHER INFORMATION

Ownership

You, as owner of the policy, exercise all rights under the policy. You can change the owner at any time by notifying us in writing at our administrative and service office. An ownership change may be a taxable event.

Right to Cancel Period

You may return your policy for a refund, but only if you return it within a prescribed period, which is generally 10 days (after you receive the policy), or whatever longer time may be required by state law. The amount of the refund will generally be the premiums paid plus or minus accumulated gains or losses in the separate account. You bear the risk of any decline in policy value during the right to cancel period. However, if state law requires, we will refund your original premium payment(s). We will pay the refund within seven days after we receive in good order within the applicable period at our Administrative and Service Office, written notice of cancellation and the returned policy. The policy will then be deemed void.

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Assignment

You can also generally assign the policy any time during your lifetime. We will not be bound by the assignment until we receive written notice of the assignment in good order at our Administrative and Service Office and approve it. We reserve the right, except to the extent prohibited by applicable laws, regulations, or actions of the State insurance commissioner, to require that an assignment will be effective only upon acceptance by us, and to refuse assignments or transfers at any time on a non-discriminatory basis. We will not be liable for any payment or other action we take in accordance with the policy before we approve the assignment. There may be limitations on your ability to assign a qualified policy. An assignment may have tax consequences.

Sending Forms and Transaction Requests in Good Order

We cannot process your requests for transactions relating to the policy until we have received them in good order at our Administrative and Service Office. “good order” means the actual receipt by us of the instructions relating to the requested transaction in writing (or, when appropriate, by telephone or electronically, along with all forms, information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes, to the extend applicable to the transaction: your completed application; the policy number; the transaction amount (in dollars or percentage terms); the names and allocations to and/or from the Subaccounts affected by the requested transaction; the signatures of all policy owners (exactly as registered on the Policy) if necessary; Social Security Number or Taxpayer I.D.; and any other information or supporting documentation that we may require, including any spousal or joint owner’s consents. With respect to purchase requests, “good order” also generally includes receipt (by us) of sufficient funds to effect the purchase. We ma, in our sole discretion, determine whether any particular transaction request is in good order, and we reserve the right to change or waive any good order requirements at any time.

Mixed and Shared Funding

Before making a decision concerning the allocation of premium payments to a particular subaccount, please read the prospectuses for the underlying fund portfolios. The underlying fund portfolios are not limited to selling their shares to this separate account and can accept investments from any insurance company separate account or qualified retirement plan. Since the underlying fund portfolios are available to registered separate accounts offering variable annuity products of the Company, as well as variable annuity and variable life products of other insurance companies, and qualified retirement plans, there is a possibility that a material conflict may arise between the interests of this separate account and one or more of the other separate accounts of another participating insurance company. In the event of a material conflict, the affected insurance companies, including the Company, agree to take any necessary steps to resolve the matter. This may include removing their separate accounts from the underlying fund portfolios. See the underlying fund portfolios prospectuses for more details.

Exchanges and Reinstatements

You can generally exchange one annuity policy for another in a “tax-free exchange” under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both annuities carefully. Remember that if you exchange another annuity for the one described in this prospectus, then you may pay a surrender charge on the other annuity, and there will be a new surrender charge period under this annuity and other charges may be higher (or lower) and the benefits under this annuity may be different. You should not exchange another annuity for this one unless you determine, after knowing all

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the facts, that the exchange is in your best interest and not just better for the person trying to sell you this policy (that person will generally earn a commission if you buy this policy through an exchange or otherwise).

You may surrender your policy and transfer your money directly to another life insurance company (sometimes referred to as a 1035 Exchange or a trustee-to-trustee transfer). You may also ask us to reinstate your policy after such a transfer and in certain limited circumstances we will allow you to do so by returning the same total dollar amount of funds to the applicable investment choices. The dollar amount will be used to purchase new accumulation units at the then current price. Because of changes in market value, your new accumulation units may be worth more or less than the units you previously owned. We recommend that you consult a tax professional to explain the possible tax consequences of exchanges and/or reinstatements.

Voting Rights

To the extent required by law, the Company will vote all shares of the underlying fund portfolios held in the separate account in accordance with instructions we receive from you and other owners that have voting interests in the portfolios. We will send you and other owners requests for instructions on how to vote those shares. When we receive those instructions, we will vote all of the shares in proportion to those instructions. Accordingly, it is possible for a small number of policy owners (assuming there is a quorum) to determine the outcome of a vote, especially if they have large policy values. If, however, we determine that we are permitted to vote the shares in our own right, we may do so.

Each person having a voting interest will receive proxy material, reports, and other materials relating to the appropriate portfolio.

IMSA

We are a member of the Insurance Marketplace Standards Association (IMSA). IMSA is an independent, voluntary organization of life insurance companies. It promotes high ethical standards in the sales and advertising of individual life insurance, long-term care insurance, and annuity products. Through its Principles and Code of Ethical Market Conduct, IMSA encourages its member companies to develop and implement policies and procedures to promote sound market practices. Companies must undergo a rigorous self and independent assessment of their practices to become a member of IMSA. The IMSA logo in our sales literature shows our ongoing commitment to these standards. You may find more information about IMSA and its ethical standards at www.imsaethics.org in the “Consumer” section or by contacting IMSA at: 240-744-3030.

Legal Proceedings

There are no legal proceedings to which the separate account is a party or to which the assets of the separate account are subject. The Company, like other life insurance companies, is involved in lawsuits. In some class action and other lawsuits involving other insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation cannot be predicted with certainty, the Company believes that at the present time there are no pending or threatened lawsuits that are reasonably likely to have a material adverse impact on the separate account, on the ability of Transamerica Capital, Inc., to perform under its principal underwriting agreement, or on the ability of the Company to meet its obligations under the policy.

Transamerica Life Insurance Company

Transamerica Life Insurance Company was incorporated under the laws of the State of Iowa on April 19, 1961 as NN Investors Life Insurance

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Company, Inc. It is engaged in the sale of life and health insurance and annuity policies. The Company is a wholly-owned indirect subsidiary of Transamerica Corporation which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by AEGON N.V. of The Netherlands, the securities of which are publicly traded. AEGON N.V., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business. The Company is licensed in the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, and all states except New York.

All obligations arising under the policies, including the promise to make annuity payments, are general corporate obligations of the Company.

Financial Condition of the Company

Many financial services companies, including insurance companies, have been facing challenges in this unprecedented economic and market environment, and we are not immune to those challenges. It is important for you to understand the impact these events may have, not only on your Policy Value, but also on our ability to meet the guarantees under your Policy.

Assets in the Separate Account.You assume all of the investment risk for your Policy Value that is allocated to the Subaccounts of the Separate Account. Your Policy Value in those Subaccounts constitutes a portion of the assets of the Separate Account. These assets are segregated and insulated from our general account, and may not be charged with liabilities arising from any other business that we may conduct.

Assets in the General Account. You also may be permitted to make allocations to Guaranteed Period Options of the fixed account, which are supported by the assets in our general account. Any guarantees under a policy that exceed policy value, such as those associated with any lifetime withdrawal benefit riders and any optional death benefits, are paid from our general account (and not the Separate account). Therefore, any amounts that we may be obligated to pay under the Policy in excess of Policy Value are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. The assets of the separate Account, however, are also available to cover the liabilities of our general account, but only to the extent that the Separate Account assets exceed the Separate Account liabilities arising under the Policies supported by it.

We issue other types of insurance policies and financial products as well, and we also pay our obligations under these products from our assets in the general account.

Our Financial Condition. As an insurance company, we are required by state insurance regulation to hold a specified amount of reserves in order to meet all the contractual obligations of our general account. In order to meet our claims-paying obligation we monitor our reserves so that we hold sufficient amounts to cover actual or expected policy and claims payments. However, it is important to note that there are risks to purchasing any insurance product.

State insurance regulators also require insurance companies to maintain a minimum amount of capital, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurer’s operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on our general account assets, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in market value of these investments.

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How to Obtain More Information. We encourage both existing and prospective Policy Owners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the [Iowa Department of Commerce, Insurance Division] as well as the financial statements of the separate account—are located in the statement of Additional Information (SAI). For a free copy of the SAI, simply call or write us at the phone number or address of our Administrative and Service Office referenced in this prospectus. In addition, the SAI’s available on the SEC;s website at http://www.sec.gov. Our financial strength can be found on our website.

The Separate Account

The Company established a separate account, called Separate Account VA Y, under the laws of the State of Iowa on October 19, 2001. The separate account receives and invests the premium payments that are allocated to it for investment in shares of the underlying fund portfolios.

The separate account is registered with the SEC as a unit investment trust under the 1940 Act. However, the SEC does not supervise the management, the investment practices, or the policies of the separate account or the Company. Income, gains and losses (whether or not realized), from assets allocated to the separate account are, in accordance with the policies, credited to or charged against the separate account without regard to the Company’s other income, gains or losses.

The assets of the separate account are held in the Company’s name on behalf of the separate account and belong to the Company. However, those assets that underlie the policies are not chargeable with liabilities arising out of any other business the Company may conduct. The separate account may include other subaccounts that are not available under these policies.

Distribution of the Policies

Distribution and Principal Underwriting Agreement. We have entered into a principal underwriting agreement with our affiliate, Transamerica Capital, Inc. (TCI), for the distribution and sale of the policies. We pay commissions to TCI which are passed through to selling firms. (See below). We also pay TCI an “override” that is a percentage of total commissions paid on sales of our policies which is not passed through to the selling firms and we may reimburse TCI for certain expenses it incurs in order to pay for the distribution of the policies. TCI markets the policies through bank affiliated firms, national brokerage firms, regional and independent broker-dealers and independent financial planners.

Compensation to Broker-Dealers Selling the Policies. The policies are offered to the public through broker-dealers (“selling firms”) that are licensed under the federal securities laws; the selling firm and/or its affiliates are also licensed under state insurance laws. The selling firms have entered into written selling agreements with us and with TCI as principal underwriter for the policies. We pay commissions through TCI to the selling firms for their sales of the policies.

A limited number of affiliated and unaffiliated broker-dealers may also be paid commissions and overrides to “wholesale” the policies, that is, to provide sales support and training to sales representatives at the selling firms. We also provide compensation to a limited number of broker-dealers for providing ongoing service in relation to the policies that have already been purchased.

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The selling firms that have selling agreements with us and TCI are paid commissions for the promotion and sale of the policies according to one or more schedules. The amount and timing of commissions may vary depending on the selling agreement, but the maximum commission is 5% of premiums (additional amounts may be paid as overrides to wholesalers).

To the extent permitted by Financial Industry Regulatory Authority (FINRA) rules, TCI may pay (or allow other broker-dealers to provide) promotional incentives or payments in the form of cash or non-cash compensation or reimbursement to some, but not all, selling firms and their sales representatives. These arrangements are sometimes referred to as “revenue sharing” arrangements and are described further below.

The sales representative who sells you the policy typically receives a portion of the compensation we (and our affiliates) pay to the selling firms, depending on the agreement between the selling firm and its registered representative and the firm’s internal compensation program. These programs may include other types of cash and non-cash compensation and other benefits. Ask your sales representative for further information about the compensation your sales representative, and the selling firm that employs your sales representative, may receive in connection with your purchase of a policy. Also inquire about any revenue sharing arrangements that we and our affiliates may have with the selling firm, including the conflicts of interests that such arrangements may create.

You should be aware that a selling firm or its sales representatives may receive different compensation or incentives for selling one product over another. In some cases, these payments may create an incentive for the selling firm or its sales representatives to recommend or sell this policy to you. You may wish to take such payments into account when considering and evaluating any recommendation relating to the policies.

Special Compensation Paid to Affiliated Firms. We and/or our affiliates provide paid-in capital to TCI and pay the cost of TCI’s operating and other expenses, including costs for facilities, legal and accounting services, and other internal administrative functions. We and/or our affiliates also provide TCI with a percentage of total commissions paid on sales of our policies and provide TCI with capital payments that are not contingent on sales.

TCI’s registered representatives and supervisors may receive non-cash compensation, such as attendance at conferences, seminars and trips (such as travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items, payments, loans, loan forgiveness or loan guaranties.

Additional Compensation That We, TCI and/or Our Affiliates Pay to Selected Selling Firms. TCI, in connection with the sales of the policies, may pay certain selling firms additional cash amounts for “preferred product” treatment of the policies in their marketing programs in order to receive enhanced marketing services and increased access to their sales representatives. In exchange for providing TCI with access to their distribution network, such selling firms may receive additional compensation or reimbursement for, among other things, the hiring and training of sales personnel, marketing, sponsoring of conferences, meetings, seminars, events, and/or other services they provide to us and our affiliates. To the extent permitted by applicable law, TCI and other parties may provide the selling firms with occasional gifts, meals, tickets or other non-cash compensation as an incentive to sell the policies. These special compensation arrangements are not offered to all selling firms and the terms of such arrangements may differ among selling firms.

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Special compensation arrangements are calculated in different ways by different selling firms and may be based on past or anticipated sales of the policies and other criteria. For instance, in 2008, TCI, in connection with the sales of our policies, made flat fee payments to several selling firms ranging from $ to $, and payments of between % and % on new sales. TCI also paid selling firms special fees based on new sales and/or assets under management.

During 2008, we and/or TCI had such “preferred product” arrangements with the following selling firms:

Bank of America

Bank West

Citizens Bank

CUNA

CUSO

Compass Bank

Eagle One

Financial Network

Fintegra

FNIC

Girard

Guaranty

Hantz Financial

H Beck

Huntington Bank

Investment Centers of America

LPL Financial, includes UVEST, Associates Securities, Waterstone Financial and Mutual Service Corp.

M & T Bank

Merrill Lynch

Money Concepts

Morgan Keegan

National Planning Network

Planner Network

PNC Investments

Raymond James Financial Services

Raymond James and Associates

Sigma

Citigroup/Smith Barney

Suntrust Bank

/TCF Bank

UBS Financial

US Bancorp

Union Bank

Wachovia, including both Wire and Bank Side as well as AG Edwards

Wells Fargo

During 2008, in conjunction with TCI, we paid the following amounts (in addition to sales commissions) to the top 10 selling firms (in terms of amounts paid):

Name of Firm	Amount Paid in 2008
Merrill Lynch	$	2,074,412
Wachovia Wire/Wachovia Bank	$	1,362,846
Citigroup/Smith Barney	$	1,101,888
LPL Financial	$	890,763
UBS Financial	$	555,980
Raymond James Financial Services	$	418,385
M & T Bank	$	162,936
Suntrust Bank	$	151,592
Raymond James and Associates	$	146,405
US Bancorp	$	141,390

No specific charge is assessed directly to policy owners or the separate account to cover commissions, non-cash compensation, and other incentives or payments described above. We do intend to recoup commissions and other sales expenses and incentives we pay, however, through fees and charges deducted under the policy and other corporate revenue.

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TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

Glossary of Terms

The Policy—General Provisions

Certain Federal Income Tax Consequences

Investment Experience

Historical Performance Data

Published Ratings

State Regulation of Transamerica Life Insurance Company

Administration

Records and Reports

Distribution of the Policies

Voting Rights

Other Products

Custody of Assets

Legal Matters

Independent Registered Public Accounting Firm

Other Information

Financial Statements

Appendix A—Condensed Financial Information

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APPENDIX

CONDENSED FINANCIAL INFORMATION

The following tables list the accumulation unit value information for accumulation units outstanding for policies with the highest total separate account expenses and policies with the lowest total separate account expenses available on December 31, 2008. Should the total separate account expense applicable to your policy fall between the highest and lowest charges, AND you wish to see a copy of the Condensed Financial Information applicable to your policy, such information is contained in the SAI. You can obtain a copy of the SAI FREE OF CHARGE by contacting us at:

98

CONDENSED FINANCIAL INFORMATION — (Continued)

calling: (800) 525-6205

writing: Transamerica Life Insurance Company

4333 Edgewood Road NE

Cedar Rapids, IA 52499-0001

	Year	2.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.793632	56,794
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.764313	238,838
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.715742	64,539
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.684342	0
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.917520	48,428
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.036128	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.732685	0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	1.000350	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	1.029863	0
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.713074	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.815125	0
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.719388	0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.012300	0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.663418	0
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.989628	0
		1.00%
Subaccount	Year	Beginning AUV		Ending AUV		# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.089672 1.115489 1.000000	$ $ $	0.679153 1.089672 1.115489	34,154 33,331 0
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.107334 1.053969 1.000000	$ $ $	0.861688 1.107334 1.053969	5,631,661 2,517,181 1,180,078

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CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Asset Allocation—Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.186073 1.114056 1.000000	$ $ $	0.707427 1.186073 1.114056	2,072,246 1,453,548 290,595
Transamerica Asset Allocation - Moderate VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.148406 1.076671 1.000000	$ $ $	0.839162 1.148406 1.076671	24,305,600 12,628,451 4,087,867
Transamerica Asset Allocation - Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.166573 1.095500 1.000000	$ $ $	0.774733 1.166573 1.095500	73,353,147 43,284,348 9,746,373
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.169720 1.088991 1.000000	$ $ $	0.737518 1.169720 1.088991	10,500,872 7,133,361 1,119,065
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.123964 1.087948 1.000000	$ $ $	0.733737 1.123964 1.087948	25,221 115,905 0
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.156228 1.100672 1.000000	$ $ $	0.674376 1.156228 1.100672	269,796 236,703 197,242
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.068634 1.083607 1.000000	$ $ $	0.629688 1.068634 1.083607	177,920 152,255 108,510
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.012497 1.094238 1.000000	$ $ $	0.604624 1.012497 1.094238	243,457 171,550 112,062
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.106146 1.200179 1.000000	$ $ $	0.629749 1.106146 1.200179	205,257 175,526 36,271
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.158096 1.121489 1.000000	$ $ $	0.716377 1.158096 1.121489	16,374 16,261 0
Transamerica Jennison Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.228813 1.115379 1.000000	$ $ $	0.765142 1.228813 1.115379	0 0 0
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.122490 1.125176 1.000000	$ $ $	0.705260 1.122490 1.125176	5,260 2,911 1,967
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.075132 1.067501 1.000000	$ $ $	0.793411 1.075132 1.067501	19,539 0 0
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.199480 1.112852 1.000000	$ $ $	0.765484 1.199480 1.112852	112,682 62,289 2,001
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.307903 1.099653 1.000000	$ $ $	0.762305 1.307903 1.099653	45,768 151,773 51,150
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.107516 1.028119 1.000000	$ $ $	1.062809 1.107516 1.028119	1,175,987 75,995 17,358

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CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.136946 1.114296 1.000000	$ $ $	0.718220 1.136946 1.114296	181,060 202,521 66,835
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.228046 1.131707 1.000000	$ $ $	0.699120 1.228046 1.131707	22,551 20,877 21,744
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.176510 1.087448 1.000000	$ $ $	0.740781 1.176510 1.087448	46,998 71,681 39,048
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.271592 1.117037 1.000000	$ $ $	0.707352 1.271592 1.117037	18,725 16,282 0
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.037554	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.192988 1.062815 1.000000	$ $ $	0.796399 1.192988 1.062815	1,628,344 436,089 46,365
Transamerica Convertible Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.254566 1.071274 1.000000	$ $ $	0.782542 1.254566 1.071274	103,577 95,812 37,419
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.248500 1.086701 1.000000	$ $ $	0.665328 1.248500 1.086701	0 0 1,481
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.312376 1.080004 1.000000	$ $ $	0.765757 1.312376 1.080004	64,967 156,491 69,663
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.053248 1.015429 1.000000	$ $ $	1.065348 1.053248 1.015429	3,416,072 746,254 218,805
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.476282 1.125369 1.000000	$ $ $	0.747283 1.476282 1.125369	1,972 0 0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$	1.000000	$	0.664552	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.076663 1.028045 1.000000	$ $ $	1.145005 1.076663 1.028045	253,708 8,292 0
Transamerica Value Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.717801	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.820520	1,788,126
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.724155	3,249,393
Transamerica Van Kampen Active International Allocation VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.273086 1.115511 1.000000	$ $ $	0.768272 1.273086 1.115511	52,297 37,533 0
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.201710 1.114147 1.000000	$ $ $	0.687634 1.201710 1.114147	60,166 49,252 0

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CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.353486 1.118380 1.000000	$ $ $	0.717735 1.353486 1.118380	48,137 68,455 12,670
PAM Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.076663 1.028045 1.000000	$ $ $	1.145005 1.076663 1.028045	3,624 0 0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.122355 1.118391 1.000000	$ $ $	0.534453 1.122355 1.118391	58,221 16,436 0
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.214651 1.098029 1.000000	$ $ $	0.689967 1.214651 1.098029	3,681 3,777 0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.013687	127,445
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.176307 1.133057 1.000000	$ $ $	0.690681 1.176307 1.133057	105,060 105,060 105,060
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.246947 1.108560 1.000000	$ $ $	0.742942 1.246947 1.108560	151,021 104,935 104,935
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.667815	270,880
Fidelity—VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.258333 1.083504 1.000000	$ $ $	0.713966 1.258333 1.083504	107,425 92,843 26,138
Fidelity—VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.123157 1.120193 1.000000	$ $ $	0.635921 1.123157 1.120193	28,080 9,452 2,840
Fidelity—VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.362724 1.086705 1.000000	$ $ $	0.710898 1.362724 1.086705	4,919 0 0
Fidelity—VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.216793 1.065585 1.000000	$ $ $	0.727560 1.216793 1.065585	40,903 155,381 23,449
Fidelity—VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.181642 1.131933 1.000000	$ $ $	0.569896 1.181642 1.131933	10,507 10,120 2,818
Franklin Income Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.972958 1.000000	$ $	0.677613 0.972958	123,982 2,381
Mutual Shares Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.966988 1.000000	$ $	0.602110 0.966988	22,712 3,556
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	1.071902 1.000000	$ $	0.632734 1.071902	22,216 8,952
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.990993	89,239
Janus Aspen—Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.362941 1.130792 1.000000	$ $ $	0.757588 1.362941 1.130792	28,040 24,859 20,146

102

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Janus Aspen—Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.292250 1.193490 1.000000	$ $ $	0.706136 1.292250 1.193490	26,489 24,699 0
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.170634 1.156373 1.000000	$ $ $	0.700970 1.170634 1.156373	23,693 3,584 0
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.111468 1.080133 1.000000	$ $ $	0.854799 1.111468 1.080133	55,174 55,198 2,011

(1) Transamerica Capital Guardian Global VP merged into Transamerica Templeton Global VP.

(2) Transamerica Capital Guardian U.S. Equity VP merged into Transamerica Van Kampen Large Cap Core VP.

(3) formerly known as Janus Aspen—Mid Cap Growth Portfolio.

(4) formerly known as Janus Aspen—Worldwide Growth Portfolio.

The Transamerica BlackRock Tactical Allocation VP, the Transamerica BlackRock Global Allocation VP, and the Transamerica ProFund UltraBear VP had not commenced operations as of December 31, 2008 therefore, comparable data is not available.

103

APPENDIX

EXCESS INTEREST ADJUSTMENT EXAMPLES

Money that you surrender from, transfer out of, or apply to an annuity payment option, from a guaranteed period option of the fixed account before the end of its guaranteed period (the number of years you specified the money would remain in the guaranteed period option) may be subject to an excess interest adjustment (“EIA”). At the time you request a surrender, if interest rates set by the Company have risen since the date of the initial guarantee, the excess interest adjustment will result in a lower cash value. However, if interest rates have fallen since the date of the initial guarantee, the excess interest adjustment will result in a higher cash value.

Excess interest adjustments will not reduce the adjusted policy value for a guaranteed period option below the premium payments and transfers to that guaranteed period option, less any prior partial surrenders and transfers from the guaranteed period option, plus interest at the policy’s minimum guaranteed effective annual interest rate. This is referred to as the excess interest adjustment floor.

The formula that will be used to determine the excess interest adjustment is:

S* (G-C)* (M/12)

S	=	Gross amount being surrendered that is subject to the excess interest adjustment
G	=	Guaranteed interest rate in effect for the policy
C	=	Current guaranteed interest rate then being offered on new premiums for the next longer option period than “M”. If this policy form or such an option period is no longer offered, “C” will be the U.S. Treasury rate for the next longer maturity (in whole years) than “M” on the 25th day of the previous calendar month, plus up to 2%.
M	=	Number of months remaining in the current option period, rounded up to the next higher whole number of months.
*	=	multiplication
^	=	exponentiation

The following examples are for illustrative purposes only and ore calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

104

Excess Interest Adjustment Examples — (Continued)

Example 1 (Full Surrender, rates increase by 3%):

Single premium:	$50,000.00
Guarantee period:	5 Years
Guarantee rate:	5.50% per annum
Surrender:	Middle of policy year 2
Cumulative Earnings	= 54,181.21 - 50,000.00 = 4,181.21
Amount free of excess interest adjustment	= 4,181.21
Amount subject to excess interest adjustment	= 54,181.21 - 4,181.21 = 50,000.00
Excess interest adjustment floor	= 50,000.00 * (1.015) ^ 1.5 = 51,129.21
Excess interest adjustment
G = .055
C = .085
M = 42
Excess interest adjustment	= S* (G-C)* (M/12)
	= 50,000.00 * (.055-.085) * (42/12)
	= -5,250.00, but excess interest adjustment cannot cause the adjusted policy value to fall below the excess interest adjustment floor, so the adjustment is limited to 51,129.21 - 54,181.21 = -3,052.00
Adjusted policy value	= policy value + excess interest adjustment
	= 54,181.21 + (-3,052.00) = 51,129.21

Upon full surrender of the policy, the net surrender value (adjusted policy value less any surrender charge) will never be less than that required by the non-forfeiture laws of your state.

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

105

Excess Interest Adjustment Examples — (Continued)

Example 2 (Full Surrender, rates decrease by 1%):

Single premium:	$50,000.00
Guarantee period:	5 Years
Guarantee rate:	5.50% per annum
Surrender:	Middle of policy year 2
Policy value at middle of policy year 2	= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative Earnings	= 54,181.21 - 50,000.00 = 4,181.21
Amount free of excess interest adjustment	= 4,181.21
Amount subject to excess interest adjustment	= 54,181.21 - 4,181.21 = 50,000.00
Excess interest adjustment floor	= 50,000.00 * (1.015) ^ 1.5 = 51,129.21
Excess interest adjustment
G = .055
C = .045
M = 42
Excess interest adjustment	= S* (G-C)* (M/12)
	= 50,000.00 * (.055-.045) * (42/12) = 1,750.00
Adjusted policy value	= 54,181.21 + 1,750.00 = 55,931.21

Upon full surrender of the policy, the net surrender value will never by less than that required by the non-forfeiture laws of your state. For the purpose of these illustrations no surrender charges are assumed.

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

On a partial surrender, the Company will pay the policyholder the full amount of surrender requested (as long as the policy value is sufficient). Amounts surrendered will reduce the policy value by an amount equal to:

R - E + SC

R	=	the requested partial surrender;
E	=	the excess interest adjustment; and
SC	=	the surrender charges on (EPW - E); where
EPW	=	the excess partial withdrawal amount.

106

Excess Interest Adjustment Examples — (Continued)

Example 3 (Partial Surrender, rates increase by 1%):

Single premium:	$50,000.00
Guarantee period:	5 Years
Guarantee rate:	5.50% per annum
Partial surrender:	$20,000 ; middle of policy year 2
Policy value at middle of policy year 2	= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative Earnings	= 54,181.21 - 50,000.00 = 4,181.21
Amount free of excess interest adjustment	= 4,181.21
Excess interest adjustment
S = 20,000 - 4,181.21 = 15,818.79
G = .055
C = .065
M = 42
E = 15,818.79 * (.055 - .065) * (42/12) = -553.66	= 54,181.21 - (R - E + surrender charge)
Remaining policy value at middle of policy year 2	= 54,181.21 - (20,000.00 - (-553.66) + 0.00) = 33,627.55

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

Example 4 (Partial Surrender, rates decrease by 1%):

Single premium:	$50,000.00
Guarantee period:	5 Years
Guarantee rate:	5.50% per annum
Partial surrender:	$20,000; middle of policy year 2
Policy value at middle of policy year 2	= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative Earnings	= 54,181.21 - 50,000.00 = 4,181.21
Amount free of excess interest adjustment	= 4,181.21
Excess interest adjustment
S = 20,000 - 4,181.21 = 15,818.79
G = .055
C = .045
M = 42
E = 15,818.79 * (.055 - .045)* (42/12) = 553.66	= 54,181.21 - (R - E + surrender charge)
Remaining policy value at middle of policy year 2	= 54,181.21 - (20,000.00 – 553.66 + 0.00) = 34,734.87

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

107

APPENDIX

DEATH BENEFIT

Adjusted Partial Surrender. If you make a partial surrender (withdrawal), then your guaranteed minimum death benefit is reduced by an amount called the adjusted partial surrender. The amount of the reduction depends on the relationship between your death benefit and policy value. The adjusted partial surrender is equal to (1) plus (2) multiplied by (3), where:

(1) is the amount of the gross partial surrender that is less than the remaining annual adjustment-free amount for the policy year. For any death benefit other than the Double Enhanced Death Benefit, this amount is equal to zero;

(2) is the gross partial surrender amount that exceeds the annual adjustment-free amount (excess gross partial surrender);

(3) is the adjustment factor = current death proceeds after the annual free surrender amount but prior to the excess gross partial surrender divided by the policy value after the free amount but prior to the gross partial surrender.

The following examples describe the effect of a surrender on the guaranteed minimum death benefit and policy value.

Example 1 (Assumed Facts for Example)

Current guaranteed minimum death benefit before surrender	$	75,000
Current policy value before surrender	$	50,000
Current death proceeds	$	75,000
Remaining guaranteed minimum death benefit adjustment free amount	$	3,000
Total Gross Partial Surrender	$	15,494
Adjusted partial surrender = 3,000 + (15,494 – 3,000) * (75,000 – 3,000) / (50,000 – 3,000)	$	22,140
New guaranteed minimum death benefit (after surrender) = 75,000 – 22,140	$	52,860
New policy value (after surrender) = 50,000 - 15,494	$	34,506

Summary:

Reduction in guaranteed minimum death benefit	= $	22,140
Reduction in policy value	= $	15,494

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

** The guaranteed minimum death benefit is reduced more than the policy value because the guaranteed minimum death benefit was greater than the policy value just prior to the surrender.

108

Death Benefit — (Continued)

Example 2 (Assumed Facts for Example)

Current guaranteed minimum death benefit before surrender	$	50,000
Current policy value before surrender	$	75,000
Current death proceeds	$	75,000
Remaining guaranteed minimum death benefit adjustment free surrender amount	$	1,000
Total Gross Partial Surrender	$	15,556
Adjusted partial surrender = 1,000 + (15,556 – 1,000) * (75,000 – 1,000) / (75,000 – 1,000)	$	15,556
New guaranteed minimum death benefit (after surrender) = 50,000 - 15,556	$	34,444
New policy value (after surrender) = 75,000 - 15,556	$	59,444

Summary:

Reduction in guaranteed minimum death benefit	=$	15,556
Reduction in policy value	=$	15,556

* This example is for illustrative purposes only. The purpose of this illustration is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.

** The guaranteed minimum death benefit and policy value are reduced by the same amount because the policy value was higher than the guaranteed minimum death benefit just prior to the surrender.

Due proof of death of the annuitant is proof that the annuitant died prior to the commencement of annuity payments. A certified copy of a death certificate, a certified copy of a decree of a court of competent jurisdiction as to the finding of death, a written statement by the attending physician, or any other proof satisfactory to the Company will constitute due proof of death.

Upon receipt in good order (at our Administrative and Service Office) of this proof and an election of a method of settlement and return of the policy, the death benefit generally will be paid within seven days, or as soon thereafter as the Company has sufficient information about the beneficiary(ies) to make the payment. The beneficiary may receive the amount payable in a lump sum cash benefit, or, subject to any limitation under any state or federal law, rule, or regulation, under one of the annuity payment options described above, unless a settlement agreement is effective at the death of the owner preventing such election.

If an owner is not an annuitant, and dies prior to the annuity commencement date, the new owner may surrender the policy at any time for the amount of the adjusted policy value. If the new owner is not the deceased owner’s spouse, however, (1) the adjusted policy value must be distributed within five years after the date of the deceased owner’s death, or (2) payments under an annuity payment option must begin no later than one year after the deceased owner’s death and must be made for the new owner’s lifetime or for a period certain (so long as any period certain does not exceed the new owner’s life expectancy). If the sole new owner is the deceased owner’s surviving spouse, such spouse may elect to continue the policy as the new owner instead of receiving the death benefit.

109

Death Benefit — (Continued)

Beneficiary. The beneficiary designation in the enrollment form will remain in effect until changed. The owner may change the designated beneficiary by sending written notice to the Company. The beneficiary’s consent to such change is not required unless the beneficiary was irrevocably designated or law requires consent. (If an irrevocable beneficiary dies, the owner may then designate a new beneficiary.) The change will take effect as of the date the owner signs the written notice, whether or not the owner is living when the notice is received by the Company. The Company will not be liable for any payment made before the written notice is received. If more than one beneficiary is designated, and the owner fails to specify their interests, they will share equally. If upon the death of the annuitant there is a surviving owner(s), the surviving owner(s) automatically takes the place of any beneficiary designation.

Hypothetical Example

In this example, certain death benefit values at various points in time are depicted based on hypothetical assumed rates of performance. This example is for illustrative purposes only and assumes a single $100,000 premium payment by a sole owner and annuitant who is age 50. It further assumes no subsequent premium payments or withdrawals.

End of Year	Net Rate of Return for Fund*	Return of Premium	Annual Step-Up	Greater of 6% & Monthly Step-Up**
Issue	N/A	$100,000	$100,000	$100,000
1	-4%	$100,000	$100,000	$106,000
2	20%	$100,000	$112,622	$112,360
3	17%	$100,000	$130,417	$128,804
4	-7%	$100,000	$130,417	$128,804
5	18%	$100,000	$139,836	$136,900
6	10%	$100,000	$152,142	$148,331
7	16%	$100,000	$174,658	$169,616
8	10%	$100,000	$190,028	$183,779
9	19%	$100,000	$223,853	$215,665
10	10%	$100,000	$243,553	$233,673

* The assumed rate does reflect the deduction of a hypothetical fund fee but does not reflect the deduction of any other fees, charges or taxes. The death benefit values do reflect the deduction of hypothetical base policy fees and hypothetical death benefit fees. Different hypothetical returns would produce different results.

** For years 1-2, the cumulative portion is higher, for the remaining years the step-up portion is higher (if the hypothetical returns for these years had been lower, the cumulative portion would be larger than the step-up portion).

110

APPENDIX

ADDITIONAL DEATH DISTRIBUTION RIDER — ADDITIONAL INFORMATION

The following example illustrates the Additional Death Distribution additional death benefit payable by this rider as well as the effect of a partial surrender on the Additional Death Distribution benefit amount. The annuitant is less than age 71 on the Rider Date.

Example 1

Policy Value on the Rider Date:	$	100,000
Premiums paid after the Rider Date before Surrender:	$	25,000
Gross Partial Surrenders after the Rider Date:	$	30,000
Policy Value on date of Surrender:	$	150,000
Rider Earnings on Date of Surrender (Policy Value on date of surrender – Policy Value on Rider Date – Premiums paid after Rider Date + Surrenders since Rider Date that exceeded Rider Earnings = $150,000 - $100,000 - $25,000 + 0):	$	25,000
Amount of Surrender that exceeds Rider Earnings ($30,000 - $25,000):	$	5,000
Base Policy Death Benefit on the date of Death Benefit Calculation:	$	200,000
Policy Value on the date of Death Benefit Calculations:	$	175,000
Rider Earnings (= Policy Value on date of Death Benefit Calculations – policy value on Rider Date – Premiums since Rider Date + Surrenders since Rider Date that exceeded Rider Earnings = $175,000 - $100,000 - $25,000 + $5,000):	$	55,000
Additional Death Benefit Amount (= Additional Death Benefit Factor * Rider Earnings = 40%* $55,000):	$	22,000
Total Death Benefit paid (=Base policy death benefit plus Additional Death Benefit Amount):	$	222,000

Example 2

Policy Value on the Rider Date:	$	100,000
Premiums paid after the Rider Date before Surrender:	$	0
Gross Partial Surrenders after the Rider Date:	$	0
Base Policy Death Benefit on the date of Death Benefit Calculation:	$	100,000
Policy Value on the date of Death Benefit Calculations:	$	75,000
Rider Earnings (= Policy Value on date of death benefit calculations – policy value on Rider Date – Premiums since Rider Date + Surrenders since Rider Date that exceeded Rider Earnings = $75,000 - $100,000 - $0 + $0):	$	0
Additional Death Benefit Amount (= Additional Death Benefit Factor * Rider Earnings = 40%* $0):	$	0
Total Death Benefit paid (=Base policy death benefit plus Additional Death Benefit Amount):	$	100,000

111

APPENDIX

ADDITIONAL DEATH DISTRIBUTION+ RIDER—ADDITIONAL INFORMATION

Assume the Additional Death Distribution+ is added to a new policy opened with $100,000 initial premium. The annuitant is less than age 71 on the Rider Date. On the first and second Rider Anniversaries, the Policy Value is $110,000 and $95,000 respectively when the Rider Fees are deducted. The annuitant adds $25,000 premium in the 3rd Rider Year when the Policy Value is equal to $115,000 and then takes a withdrawal of $35,000 during the 4th Rider Year when the Policy Value is equal to $145,000. After 5 years, the Policy Value is equal to $130,000 and the death proceeds are equal to $145,000.

Example 1

Account Value on Rider Date (equals initial policy value since new policy)	$	100,000
Additional Death Benefit during first Rider Year	$	0
Rider Fee on first Rider Anniversary (= Rider Fee * Policy Value = 0.55% * $110,000)	$	605
Additional Death Benefit during 2nd Rider Year (= sum of total Rider Fees paid)	$	605
Rider Fee on second Rider Anniversary (= Rider Fee * Policy Value = 0.55% * $95,000)	$	522.50
Additional Death Benefit during 3rd Rider Year (= sum of total Rider Fees paid = $605 + $522.50)	$	1,127.50
Rider Benefit Base in 3rd Rider Year prior to Premium addition (= Account Value less premiums added since Rider Date = $115,000 – $0)	$	115,000
Rider Benefit Base in 3rd Rider Year after Premium addition (= $140,000 - $25,000)	$	115,000
Rider Benefit Base in 4th Rider Year prior to withdrawal (= Account Value less premiums added since Rider Date = $145,000 - $25,000)	$	120,000
Rider Benefit Base in 4th Rider Year after withdrawal = (Account Value less premiums added since Rider Date =$110,000 - $25,000)	$	85,000
Rider Benefit Base in 5th Rider Year (= $130,000 - $25,000)	$	105,000
Additional Death Benefit = Rider Benefit Percentage * Rider Benefit Base = 30% * $105,000	$	31,500
Total Death Proceeds in 5th Rider Year (= base policy Death Proceeds + Additional Death Benefit Amount = $145,000 + $31,500)	$	176,500

112

APPENDIX

GUARANTEED LIFETIME WITHDRAWAL BENEFIT COMPARISON TABLE

You may elect one of the following optional riders (depending on your state of residence and when you decide to purchase a rider) under the policy that—the Living Benefits Rider, the Retirement Income Choice Rider, Retirement Income Choice with Double Withdrawal Base Benefit Rider, or the Retirement Income Choice 1.2 Rider. Important aspects of each of these riders are summarized in the following chart.

Note: The Living Benefits Rider, the Retirement Income Choice Rider, Retirement Income Choice with Double Withdrawal Base Benefit Rider, or the Retirement Income Choice 1.2 Rider and any additional options available under that rider, may vary for certain policies and may not be available for all policies; the Guaranteed Lifetime Withdrawal Benefit Riders may not be available in all states. You should consult with tax and financial professionals to determine which of these riders is appropriate for you.

Living Benefits Rider	Retirement Income Choice Rider	Retirement Income Choice with Double Withdrawal Base Benefit Rider	Retirement Income Choice 1.2
Benefit: •      Provides: (1) Guaranteed Minimum Accumulation Benefit (“GMAB”)—Ten years after you elect the rider (“guaranteed future value date”), your policy value will equal your guaranteed future value (calculated as described below). After that date, the guaranteed future value equals zero. (2) Guaranteed Minimum Withdrawal Benefit (“GMWB”)—a maximum annual withdrawal amount (calculated as described below) regardless of your policy value; we account for withdrawals you take under the rider by applying two different withdrawal guarantees, “principal back,” for withdrawals of up to 7% of your total withdrawal base, or “for life,” for withdrawals up to 5% of your total withdrawal base.	Benefit: •      Provides: (1) Guaranteed Lifetime Withdrawal Benefit (“GLWB”)—i.e., a level of cash withdrawals (and payments from us, if necessary) regardless of the performance of the designated investment choices that you select - if you invest in certain designated investment choices. (2) Growth—On each of the first 10 rider anniversaries, we add an annual growth credit (5% of the withdrawal base immediately before the rider anniversary) to the withdrawal base if no withdrawals have occurred during the preceding rider year. (3) Automatic Step-Up—We will automatically step-up the withdrawal base on each rider anniversary. You can opt out of the automatic step-up if the automatic step-up would result in an increase in the rider fee percentage.	Benefit: •      Provides: (1) Guaranteed Lifetime Withdrawal Benefit (“GLWB”)—i.e., a level of cash withdrawals (and payments from us, if necessary) regardless of the performance of the designated investment choices that you select - if you invest in certain designated investment choices. (2) Growth—On each of the first 10 rider anniversaries, we add an annual growth credit (5% of the withdrawal base immediately before the rider anniversary) to the withdrawal base if no withdrawals have occurred during the preceding rider year. (3) Automatic Step-Up—We will automatically step-up the withdrawal base on each rider anniversary. You can opt out of the automatic step-up if the automatic step-up would result in an increase in the rider fee percentage.	Benefit: •      Provides: (1) Guaranteed Lifetime Withdrawal Benefit (“GLWB”)—i.e., a level of cash withdrawals (and payments from us, if necessary) regardless of the performance of the Designated Investment Option or the Open Allocation Option that you select. (2) Growth—On each of the first 10 rider anniversaries, we add an annual growth credit (5% of the withdrawal base immediately before the rider anniversary) to the withdrawal base if no withdrawals have occurred during the preceding rider year. (3) Automatic Step-Up—We will automatically step-up the withdrawal base on each rider anniversary. You can opt out of the automatic step-up if the automatic step-up would result in an increase in the rider fee percentage.

113

Guaranteed Lifetime Withdrawal Benefit Comparison Table — (Continued)

Living Benefits Rider	Retirement Income Choice Rider	Retirement Income Choice with Double Withdrawal Base Benefit Rider	Retirement Income Choice 1.2
		(4) Double Withdrawal Base Benefit—If you have not taken any withdrawals by the later of (A) during the first 10 rider years or (B) before the rider anniversary following the annuitant’s (or, the annuitant’s spouse, if younger and the joint life option is elected) attaining age 67, the withdrawal base on that rider anniversary will be the greater of (i) the withdrawal base as calculated under the rider or (ii) twice the sum of the withdrawal base on the rider date and any premiums received within 90 days of the rider date.
•      Upgrades: (1) Before the annuitant’s 86th birthday, you can upgrade the total withdrawal base (for GMWB) and the guaranteed future value (for GMAB) by sending us written notice. (2) If you upgrade, the current rider terminates and a new rider is issued (which may have a higher rider fee).	•      Upgrades: You may request by sending us written notice. If you upgrade, the current rider terminates and a new rider is issued (which may have a higher rider fee). If you have elected the joint life option under the rider, you cannot elect a manual upgrade if the annuitant or an annuitant’s spouse is 86 or older (lower if required by state law).	•      Upgrades: You may request by sending us written notice. If you upgrade, the current rider terminates and a new rider is issued (which may have a higher rider fee). If you have elected the joint life option under the rider, you cannot elect a manual upgrade if the annuitant or an annuitant’s spouse is 86 or older (unless state law requires a lower maximum age).	•      Upgrades: You may request by sending us written notice. If you upgrade, the current rider terminates and a new rider is issued (which may have a higher rider fee). If you have elected the joint life option under the rider, you cannot elect a manual upgrade if the annuitant or an annuitant’s spouse is 86 or older (unless state law requires a lower maximum age).

114

Guaranteed Lifetime Withdrawal Benefit Comparison Table — (Continued)

Living Benefits Rider	Retirement Income Choice Rider	Retirement Income Choice with Double Withdrawal Base Benefit Rider	Retirement Income Choice 1.2
	•      Additional Options: (1) Death Benefit Option—You may add an amount to the death benefit payable under the base policy. (2) Joint Life Option—You may elect to postpone termination of the rider until the later of the death of the annuitant or the death of the annuitant’s spouse. The annuitant’s spouse must be either a joint owner (along with the annuitant) or the sole primary beneficiary (without a joint owner). (3) Income Enhancement Option—If the rider has been in effect for at least 12 months, then you may elect to have your withdrawal percentage double if either the annuitant or the annuitant’s spouse, if the joint life option is elected, is confined in a hospital or nursing facility because of a medical necessity, and has been so confined for an “elimination period” (i.e., 180 days within the last 365 days). You cannot elect this option if the qualifying person(s) is/are already confined in a hospital or nursing facility when the rider is elected. In addition, the increase to the withdrawal percentage stops when the qualifying person(s) is/are no longer confined.	•      Additional Options: (1) Death Benefit Option—You may add an amount to the death benefit payable under the base policy. (2) Joint Life Option—You may elect to postpone termination of the rider until the later of the death of the annuitant or the death of the annuitant’s spouse. The annuitant’s spouse must be either a joint owner (along with the annuitant) or the sole primary beneficiary (without a joint owner). (3) Income Enhancement Option—If the rider has been in effect for at least 12 months, then you may elect to have your withdrawal percentage double if either the annuitant or the annuitant’s spouse, if the joint life option is elected, is confined in a hospital or nursing facility because of a medical necessity, and has been so confined for an “elimination period” (i.e., 180 days within the last 365 days). You cannot elect this option if the qualifying person(s) is/are already confined in a hospital or nursing facility when the rider is elected. In addition, the increase to the withdrawal percentage stops when the qualifying person(s) is/are no longer confined.	•      Additional Options: (1) Death Benefit Option—You may add an amount to the death benefit payable under the base policy. (2) Joint Life Option—You may elect to postpone termination of the rider until the later of the death of the annuitant or the death of the annuitant’s spouse. The annuitant’s spouse must be either a joint owner (along with the annuitant) or the sole primary beneficiary (without a joint owner). (3) Income Enhancement Option—If the rider has been in effect for at least 12 months, then you may elect to have your withdrawal percentage double if either the annuitant or the annuitant’s spouse, if the joint life option is elected, is confined in a hospital or nursing facility because of a medical necessity, and has been so confined for an “elimination period” (i.e. 180 days within the last 365 days). You cannot elect this option if the qualifying person(s) is/are already confined in a hospital or nursing facility when the rider is elected. In addition, the increase to the withdrawal percentage stops when the qualifying person(s) is/are no longer confined.

115

Guaranteed Lifetime Withdrawal Benefit Comparison Table — (Continued)

Living Benefits Rider	Retirement Income Choice Rider	Retirement Income Choice with Double Withdrawal Base Benefit Rider	Retirement Income Choice 1.2
Availability: •     0 - 80 (unless state law requires a lower maximum issue age); •     You cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.	Availability: •     Younger than age 86 (unless state law requires a lower maximum issue age); •     You cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.	Availability: •     Younger than age 86 (unless state law requires a lower maximum issue age); •     You cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.	Availability: •     Younger than age 86 (unless state law requires a lower maximum issue age): •     You cannot also elect the Double Enhanced Death Benefit guaranteed minimum death benefit option.
Charge: 0.90% of total withdrawal base on each rider anniversary under the “principal back” withdrawal guarantee under the rider.	Charges: (1) for Base Benefit only—0.60% (single life) or 0.90% (joint life) of withdrawal base on each rider anniversary; (2) with Death Benefit Option— 0.25% (single life) or 0.20% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee; (3) with Income Enhancement Option—0.15% (single life) or 0.30% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee.	Charges: (1) for Base Benefit only—0.90% (single life and joint life) of withdrawal base on each rider anniversary; (2) with Death Benefit Option— 0.25% (single life) or 0.20% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee; (3) with Income Enhancement Option—0.15% (single life) or 0.30% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee.	Charges: (1) for Base Benefit only: Designated Investment option—0.40% to 1.25% (single life and joint life) of withdrawal base on each rider anniversary: Open Investment Option—1.10% (single life and joint life) of withdrawal base on each rider anniversary: (2) with Death Benefit Option—0.25% (single life) or 0.20% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee: (3) with Income Enhancement—0.15% (single life) or 0.30% (joint life) of withdrawal base on each rider anniversary, in addition to the base benefit fee.
Investment Restrictions: •     Portfolio Allocation Method (“PAM”)—We monitor your policy value and, as we deem necessary to support the guarantees under the rider, may transfer amounts between investment options that we designate and the variable investment choices that you select.	Investment Restrictions: •     You must allocate 100% of your policy value to one or more investment options that we designate.	Investment Restrictions: •     You must allocate 100% of your policy value to one or more investment options that we designate.	Investment Restrictions: •     Designated Investment option—You must allocate 100% of your policy value to one or more investment options we designate. •     Open Investment option (“OA”)—We monitor your policy value and, as we deem necessary to support the guarantees under the rider, may transfer amounts between investment options that we designate and the variable investment choices that you select.

116

APPENDIX

LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS

The following examples show the effect of withdrawals on the benefits under the Living Benefits Rider.

GUARANTEED MINIMUM ACCUMULATION BENEFIT

Gross partial withdrawals will reduce the guaranteed future value by an amount equal to the greater of:

1) the gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the amount of gross partial withdrawal;

B is the policy value immediately prior to the gross partial withdrawal; and

C is the guaranteed future value immediately prior to the gross partial withdrawal.

The following demonstrates, on a purely hypothetical basis, the effects of partial withdrawals under the guaranteed minimum accumulation benefit.

EXAMPLE 1:

Assumptions:

Policy value prior to withdrawal (“PV”) = $90,000

Guaranteed future value prior to withdrawal (“GFV”) = $100,000

Gross withdrawal amount (“WD”) = $10,000

Step One. What is the pro rata value of the amount withdrawn?

1. Formula is (WD / PV) * GFV = pro rata amount

2. ($10,000 / $90,000) * $100,000 = $11,111.11

Step Two. Which is larger, the $10,000 withdrawal or the $11,111.11 pro rata amount?

$11,111.11 pro rata amount

Step Three. After the withdrawal is taken, what will be new guaranteed future value?

$100,000 - $11,111.11 = $88,888.89

Result. If no more withdrawals are taken, the guaranteed future value on the 10th rider anniversary is $88,888.89.

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LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

EXAMPLE 2:

Assumptions:

PV = $120,000

GFV = $100,000

WD = $10,000

Step One. What is the pro rata value of the amount withdrawn?

1. Formula is (WD / PV) * GFV = pro rata amount

2. ($10,000 / $120,000) * $100,000 = $8,333.33

Step Two. Which is larger, the $10,000 withdrawal or the $8,333.33 pro rata amount?

$10,000 withdrawal

Step Three. After the withdrawal is taken, what will be new guaranteed future value?

$100,000 - $10,000 = $90,000

Result. If no more withdrawals are taken, the guaranteed future value on the 10th Rider Anniversary is $90,000.

GUARANTEED LIFETIME WITHDRAWAL BENEFIT

Total Withdrawal Base. Gross partial withdrawals up to the maximum annual withdrawal amount will not reduce the total withdrawal base. Gross partial withdrawals in excess of the maximum annual withdrawal amount will reduce the total withdrawal base by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the total withdrawal base prior to the withdrawal of the excess amount.

Minimum Remaining Withdrawal Amount. Gross partial withdrawals up to the maximum annual withdrawal amount will reduce the minimum remaining withdrawal amount by the same amount (dollar-for-dollar). Gross partial withdrawals in excess of the maximum annual withdrawal amount will reduce the minimum remaining withdrawal amount by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

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LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the minimum remaining withdrawal amount after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount.

The following demonstrates, on a purely hypothetical basis, the effects of partial withdrawals under the guaranteed lifetime withdrawal benefit.

When a withdrawal is taken, three parts of the guaranteed lifetime withdrawal benefit can be affected:

1. Minimum remaining withdrawal amount (“MRWA”)

2. Total withdrawal base (“TWB”)

3. Maximum annual withdrawal amount (“MAWA”)

EXAMPLE 1 (7% “PRINCIPAL BACK”):

Assumptions:

TWB = $100,000

MRWA = $100,000

7% WD would be $7,000 (7% of the current $100,000 total withdrawal base)

WD = $7,000

Excess withdrawal (“EWD”) = None

PV = $100,000

You = Owner and Annuitant (Age 60)

Step One. Is any portion of the withdrawal greater than the “principal back” maximum annual withdrawal amount?

No. There is no excess withdrawal under the “principal back” guarantee if no more than $7,000 is withdrawn.

Step Two. What is the minimum remaining withdrawal amount after the withdrawal has been taken?

1. Total to deduct from the minimum remaining withdrawal amount is $7,000 (there is no excess to deduct)

2. $100,000 - $7,000 = $93,000.

Result. In this example, because no portion of the withdrawal was in excess of $7,000, the “principal back” total withdrawal base does not change and the “principal back” minimum remaining withdrawal amount is $93,000.00.

EXAMPLE 2 (7% “PRINCIPAL BACK”):

Assumptions:

TWB = $100,000

119

LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

MRWA = $100,000

7% WD would be $7,000 (7% of the current $100,000 total withdrawal base)

WD = $8,000

EWD = $1,000 ($8,000 - $7,000)

PV = $90,000

You = Owner and Annuitant (Age 60)

Step One. Is any portion of the total withdrawal greater than the maximum annual withdrawal amount? Yes. $8,000—$7,000 = $1,000 (the excess withdrawal amount)

Step Two. Calculate how much of the “principal back” minimum remaining withdrawal amount is affected by the excess withdrawal.

1. Formula for pro rata amount is: (EWD / (PV - 7% WD)) * (MRWA - 7% WD)

2. ($1,000 / ($90,000 - $7,000)) * ($100,000 - $7,000) = $1,120.48

Step Three. Which is larger, the actual $1,000 excess withdrawal amount or the $1,120.48 pro rata amount?

$1,120.48 pro rata amount

Step Four. What is the “principal back” minimum remaining withdrawal amount after the withdrawal has been taken?

1. Total to deduct from the minimum remaining withdrawal amount is $7,000 + $1,120.48 (pro rata excess) = $8,120.48

2. $100,000 - $8,120.48 = $91,879.52

Result. The “principal back” minimum remaining withdrawal amount is $91,879.52.

NOTE. For the guaranteed lifetime withdrawal benefit, because there was an excess withdrawal amount, the total withdrawal base needs to be adjusted as well as a new lower maximum annual withdrawal amount. Had the withdrawal for this example not been more than $7,000, the “principal back” total withdrawal base would remain at $100,000 and the “principal back” maximum annual withdrawal amount would be $7,000. However, because an excess withdrawal has been taken, the total withdrawal base is also changed (this is the amount the 7% is based on).

New “principal back” total withdrawal base:

Step One. The total withdrawal base is only reduced by the excess withdrawal amount or the pro rata amount if greater.

Step Two. Calculate how much the total withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD / (PV - 7% WD)) * TWB before any adjustments

2. ($1,000 / ($90,000 - $7,000)) * $100,000 = $1,204.82

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LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

Step Three. Which is larger, the actual $1,000 excess withdrawal amount or the $1,204.82 pro rata amount?

$1,204.82 pro rata amount.

Step Four. What is the new total withdrawal base upon which the maximum annual withdrawal amount is based?

$100,000 - $1,204.82 = $98,795.18

Result. The new “principal back” total withdrawal base is $98,795.18

New “principal back” maximum annual withdrawal amount:

Because the “principal back” total withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new maximum annual withdrawal amount for the 7% “principal back” guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Step One. What is the new “principal back” maximum annual withdrawal amount?

$98,795.18 (the adjusted total withdrawal base) * 7% = $6,915.66

Result. Going forward, the maximum you can take out in a rider year is $6,915.66 without causing an excess withdrawal for the “principal back” guarantee and further reduction of the “principal back” total withdrawal base.

EXAMPLE 3 (5% “FOR LIFE”):

Assumptions:

TWB = $100,000

MRWA = $100,000

5% WD would be $5,000 (5% of the current $100,000 total withdrawal base)

WD = $5,000

Excess withdrawal (“EWD”) = None

PV = $100,000

You = Owner and Annuitant (Age 60)

Step One. Is any portion of the withdrawal greater than the “for life” maximum annual withdrawal amount?

No. There is no excess withdrawal under the “for life” guarantee if no more than $5,000 is withdrawn.

Step Two. What is the minimum remaining withdrawal amount after the withdrawal has been taken?

1. Total to deduct from the minimum remaining withdrawal amount is $5,000 (there is no excess to deduct).

2. $100,000 - $5,000 = $95,000.

Result. In this example, because no portion of the withdrawal was in excess of $5,000, the “for life” total withdrawal base does not change and the “for life” minimum remaining withdrawal amount is $95,000.00.

121

LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

EXAMPLE 4 (5% “FOR LIFE”):

Assumptions:

TWB = $100,000

MRWA = $100,000

5% WD would be $5,000 (5% of the current $100,000 total withdrawal base)

WD = $7,000

EWD = $2,000 ($7,000 - $5,000)

PV = $90,000

You = Owner and Annuitant (Age 60)

Step One. Is any portion of the total withdrawal greater than the maximum annual withdrawal amount?

Yes. $7,000 - $5,000 = $2,000 (the excess withdrawal amount)

Step Two. Calculate how much of the “for life” minimum remaining withdrawal amount is affected by the excess withdrawal.

1. Formula for pro rata amount is: (EWD / (PV - 5% WD)) * (MRWA - 5% WD)

2. ($2,000 / ($90,000 - $5,000)) * ($100,000 - $5,000) = $2,235.29

Step Three. Which is larger, the actual $2,000 excess withdrawal amount or the $2,235.29 pro rata amount?

$2,235.29 pro rata amount

Step Four. What is the “for life” minimum remaining withdrawal amount after the withdrawal has been taken?

1. Total to deduct from the minimum remaining withdrawal amount is $5,000 + $2,235.29 (pro rata excess) = $7,235.29

2. $100,000 - $7,235.29 = $92,764.71

Result. The “for life” minimum remaining withdrawal amount is $92,764.71.

NOTE. For the guaranteed lifetime withdrawal benefit, because there was an excess withdrawal amount, the total withdrawal base needs to be adjusted as well as a new lower maximum annual withdrawal amount. Had the withdrawal for this example not been more than $5,000, the “for life” total withdrawal base would remain at $100,000 and the “for life” maximum annual withdrawal amount would be $5,000. However, because an excess withdrawal has been taken, the total withdrawal base is also changed (this is the amount the 5% is based on).

New “for life” total withdrawal base:

Step One. The total withdrawal base is only reduced by the excess withdrawal amount or the pro rata amount if greater.

122

LIVING BENEFITS RIDER ADJUSTED PARTIAL WITHDRAWALS — (Continued)

Step Two. Calculate how much the total withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD / (PV - 5% WD)) * TWB before any adjustments

2. ($2,000 / ($90,000 - $5,000)) * $100,000 = $2,352.94

Step Three. Which is larger, the actual $2,000 excess withdrawal amount or the $2,352.94 pro rata amount?

$2,352.94 pro rata amount.

Step Four. What is the new total withdrawal base upon which the maximum annual withdrawal amount is based?

$100,000 - $2,352.94 = $97,647.06

Result. The new “for life” total withdrawal base is $97,647.06

New “for life” maximum annual withdrawal amount:

Because the “for life” total withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new maximum annual withdrawal amount for the 5% “for life” guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Step One. What is the new “for life” maximum annual withdrawal amount?

$97,647.06 (the adjusted total withdrawal base) * 5% = $4,882.35

Result. Going forward, the maximum you can take out in a rider year is $4,882.35 without causing an excess withdrawal for the “for life” guarantee and further reduction of the “for life” total withdrawal base.

123

APPENDIX

GUARANTEED LIFETIME WITHDRAWAL BENEFIT

ADJUSTED PARTIAL SURRENDERS—RETIREMENT INCOME CHOICE AND

RETIREMENT INCOME CHOICE WITH DOUBLE WITHDRAWAL BASE BENEFIT RIDERS

When a withdrawal is taken, three parts of the guaranteed lifetime withdrawal benefit can be affected:

1. Withdrawal Base (“WB”)

2. Rider Withdrawal Amount (“RWA”)

3. Rider Death Benefit (“RDB”)

Withdrawal Base. Gross partial withdrawals in a rider year up to the rider withdrawal amount will not reduce the withdrawal base. Gross partial withdrawals in a rider year in excess of the rider withdrawal amount will reduce the withdrawal base by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the withdrawal base prior to the withdrawal of the excess amount.

Rider Death Benefit. Gross partial withdrawals in a rider year up to the rider withdrawal amount will reduce the rider death benefit by the amount withdrawn (dollar-for-dollar). Gross partial withdrawals in a rider year in excess of the rider withdrawal amount will reduce the rider death benefit by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the rider death benefit after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount.

The following demonstrates, on a purely hypothetical basis, the effects of partial withdrawals under this guaranteed lifetime withdrawal benefit.

Example 1 (Base):

Assumptions:

Withdrawal Base (“WB”) = $100,000

124

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Rider Withdrawal Amount (“RWA”) = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)

Gross partial withdrawal (“GPWD”) = $5,000

Excess withdrawal (“EWD”) = None

Policy Value (“PV”) = $100,000

You = owner and annuitant, age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

Question: Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee since no more than $5,000 is withdrawn.

Result. In this example, because no portion of the withdrawal was in excess of $5,000, the withdrawal base does not change.

Example 2 (Excess Withdrawal):

Assumptions:

WB = $100,000

RWA = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)

GPWD = $7,000

EWD = $2,000 ($7,000 - $5,000)

PV = $90,000

You = owner and annuitant, age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

Result. For the guaranteed lifetime withdrawal benefit, because there was an excess withdrawal amount, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $5,000, the withdrawal base would remain at $100,000 and the rider withdrawal amount would be $5,000 starting on the next rider anniversary. However, because an excess withdrawal has been taken, the withdrawal base is also reduced (this is the amount the 5% is based on).

New withdrawal base:

Step One. The withdrawal base is reduced only by the amount of the excess withdrawal or the pro rata amount, if greater.

Step Two. Calculate how much the withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD / (PV - 5% withdrawal)) * WB before any adjustments

2. ($2,000 / ($90,000 - $5,000)) * $100,000 = $2,353

Step Three. Which is larger, the actual $2,000 excess withdrawal or the $2,353 pro rata amount? $2,353 pro rata amount.

125

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based? $100,000 - $2,353 = $97,647

Result. The new withdrawal base is $97,647

New rider withdrawal amount:

Because the withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new rider withdrawal amount for the 5% guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Question: What is the new rider withdrawal amount?

$97,647 (the adjusted withdrawal base) * 5% = $4,882

Result. Going forward, the maximum you can take out in a year without causing an excess withdrawal and further reduction of the withdrawal base (assuming there are no future automatic step-ups) is $4,882.

Example 3 (Base demonstrating growth):

Assumptions:

WB = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 8 years (assuming an annual growth rate percentage of 5.0%) = $100,000 * (1 + .05) ^ 8 = $147,745

RWA = 5% withdrawal beginning 8 years from the rider date would be $7,387 (5% of the then-current $147,745 withdrawal base)

GPWD = $7,387

EWD = None

PV = $90,000 in 8 years

You (if you elected RIC) = owner and annuitant, age 63 on rider issue; age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

You (if you elected RIC 1.2) = owner and annuitant, age 68 on rider issue; age 76 at time withdrawals begin, which means Withdrawal Percentage is 5%

Question: Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee if no more than $7,387 is withdrawn in a rider year.

Result. In this example, because no portion of the withdrawal was in excess of $7,387, the withdrawal base does not change.

126

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Example 4 (Base demonstrating WB growth with Additional Death Payment Option):

Assumptions:

You (if you elected RIC) = owner and annuitant, age 63 on rider issue; age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

You (if you elected RIC 1.2) = owner and annuitant, age 68 on rider issue; age 76 at time withdrawals begin, which means Withdrawal Percentage is 5%

WB at rider issue = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 8 years (assuming an annual growth rate percentage of 5.0%) = $100,000 * (1 + .05) ^ 8 = $147,745

Rider Death Benefit (“RDB”) (optional additional death benefit for additional cost) = $100,000

RWA = 5% withdrawal beginning 8 years from the rider date would be $7,387 (5% of the then-current $147,745 withdrawal base)

GPWD = $7,387

EWD = None

PV = $90,000 in 8 years

Step One. Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee if no more than $7,387 is withdrawn.

Step Two. What is the rider death benefit after the withdrawal has been taken?

1. Total to deduct from the rider death benefit is $7,387 (there is no excess to deduct)

2. $100,000 - $7,387 = $92,613.

Result. In this example, because no portion of the withdrawal was in excess of $7,387, the total withdrawal base does not change and the rider death benefit reduces to $92,613.

Example 5 (For Retirement Income Choice with Double Withdrawal Base Benefit Rider only—Base demonstrating doubling of WB with Additional Death Payment Option):

Assumptions:

You = owner and annuitant, age 58 on rider issue; age 69 at time withdrawals begin, which means Withdrawal Percentage is 5%.

WB at rider issue = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 10 years (assuming an annual growth rate percentage of 5.0%) = the greater of $100,000 * (1 + .05) ^ 10 = $162,889, or $100,000 * 2 = $200,000 (premiums applied within 90 days of rider date).

RDB (optional additional death benefit for additional cost) = $100,000

RWA = 5% withdrawal beginning 10 years from the rider date would be $10,000 (5% of the then-current $200,000 withdrawal base)

GPWD = $10,000

127

Guaranteed Lifetime Withdrawal Benefit — (Continued)

EWD = $0

PV = $90,000 in 10 years

Step One. Is any portion of the total withdrawal greater than the rider withdrawal amount?

No, there is no excess withdrawal under the guarantee since no more than $10,000 is withdrawn.

Result. In this example, because no portion of the withdrawal base was in excess of $10,000, the withdrawal base does not change.

Example 6 (Retirement Income Choice with Double Withdrawal Base Benefit rider only—Base with WB growth with Additional Death Payment Option illustrating excess withdrawal):

Assumptions:

You = owner and annuitant, age 56 on rider issue; age 69 at time withdrawals begin, which means Withdrawal Percentage is 5%.

WB at rider issue = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 10 years (assuming an annual growth rate percentage of 5.0%) = the greater of $100,000 * (1 + .05) ^ 10 = $162,889, or $100,000 (premiums applied within 90 days of rider date) * 2 = $200,000.

RDB (optional additional death benefit for additional cost) = $100,000

RWA = 5% withdrawal beginning 10 years from the rider date would be $10,000 (5% of the then-current $200,000 withdrawal base)

GPWD = $15,000

EWD = $5,000 ($15,000 - $9,000)

PV = $90,000 in 10 years

Step One. Is any portion of the total withdrawal greater than the rider withdrawal amount?

Yes. $15,000 - $10,000 = $5,000 (the excess withdrawal amount)

Step Two. Calculate how much of the rider death benefit is affected by the excess withdrawal.

1. Formula for pro rata amount is: (EWD / (PV - 5% withdrawal)) * (RDB - 5% withdrawal)

2. ($5,000 / ($90,000 - $10,000)) * ($100,000 - $10,000) = $5,625

Step Three. Which is larger, the actual $5,000 excess withdrawal amount or the $5,625 pro rata amount?

$5,625 pro rata amount

Step Four. What is the rider death benefit after the withdrawal has been taken?

1. Total to deduct from the rider death benefit is $10,000 (RWA) + $5,625 (pro rata excess) = $15,625

2. $100,000 – $15,625 = $84,375

Result. The rider benefit is $84,375.

128

Guaranteed Lifetime Withdrawal Benefit — (Continued)

NOTE. Because there was an excess withdrawal amount in this example, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $10,000, the withdrawal base would remain at $200,000 and the rider withdrawal amount would be $10,000 starting on the next rider anniversary. However, because an excess withdrawal has been taken, the withdrawal base is also reduced.

New withdrawal base:

Step One. The withdrawal base is reduced only by the amount of the excess withdrawal or the pro rata amount if greater.

Step Two. Calculate how much the withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD / (PV - 5% withdrawal)) * WB before any adjustments

2. ($5,000 / ($90,000 - $10,000)) * $200,000 = $12,500

Step Three. Which is larger, the actual $5,000 excess withdrawal amount or the $12,500 pro rata amount?

$12,500 pro rata amount.

Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based?

$200,000 - $12,500 = $187,500

Result. The new withdrawal base is $187,500.

New rider withdrawal amount:

Because the withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new rider withdrawal amount for the 5% withdrawal percentage guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Step One. What is the new rider withdrawal amount?

$187,500 (the adjusted withdrawal base) * 5% = $9,375

Result. Going forward, the maximum you can take out in a year without causing an excess withdrawal and further reduction of the withdrawal base is $9,375.

129

APPENDIX

GUARANTEED LIFETIME WITHDRAWAL BENEFIT

ADJUSTED PARTIAL SURRENDERS—RETIREMENT INCOME CHOICE 1.2 RIDER

When a withdrawal is taken, three parts of the guaranteed lifetime withdrawal benefit can be affected:

1. Withdrawal Base (“WB”)

2. Rider Withdrawal Amount (“RWA”)

3. Rider Death Benefit (“RDB”)

Withdrawal Base. Gross partial withdrawals in a rider year up to the rider withdrawal amount will not reduce the withdrawal base. Gross partial withdrawals in a rider year in excess of the rider withdrawal amount will reduce the withdrawal base by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the withdrawal base prior to the withdrawal of the excess amount.

Rider Death Benefit. Gross partial withdrawals in a rider year up to the rider withdrawal amount will reduce the rider death benefit by the amount withdrawn (dollar-for-dollar). Gross partial withdrawals in a rider year in excess of the rider withdrawal amount will reduce the rider death benefit by an amount equal to the greater of:

1) the excess gross partial withdrawal amount; and

2) a pro rata amount, the result of (A / B) * C, where:

A is the excess gross partial withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);

B is the policy value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and

C is the rider death benefit after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount.

The following demonstrates, on a purely hypothetical basis, the effects of partial withdrawals under this guaranteed lifetime withdrawal benefit.

Example 1 (Base):

Assumptions:

Withdrawal Base (“WB”) = $100,000

Rider Withdrawal Amount (“RWA”) = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)

130

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Gross partial withdrawal (“GPWD”) = $5,000

Excess withdrawal (“EWD”) = None

Policy Value (“PV”) = $100,000

You = owner and annuitant, age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

Question: Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee since no more than $5,000 is withdrawn.

Result. In this example, because no portion of the withdrawal was in excess of $5,000, the withdrawal base does not change.

Example 2 (Excess Withdrawal):

Assumptions:

WB = $100,000

RWA = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)

GPWD = $7,000

EWD = $2,000 ($7,000 - $5,000)

PV = $90,000

You = owner and annuitant, age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

Result. For the guaranteed lifetime withdrawal benefit, because there was an excess withdrawal amount, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $5,000, the withdrawal base would remain at $100,000 and the rider withdrawal amount would be $5,000 starting on the next rider anniversary. However, because an excess withdrawal has been taken, the withdrawal base is also reduced (this is the amount the 5% is based on).

New withdrawal base:

Step One. The withdrawal base is reduced only by the amount of the excess withdrawal or the pro rata amount, if greater.

Step Two. Calculate how much the withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD / (PV - 5% withdrawal)) * WB before any adjustments

2. ($2,000 / ($90,000 - $5,000)) * $100,000 = $2,353

Step Three. Which is larger, the actual $2,000 excess withdrawal or the $2,353 pro rata amount? $2,353 pro rata amount.

Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based? $100,000—$2,353 = $97,647

131

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Result. The new withdrawal base is $97,647

New rider withdrawal amount:

Because the withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new rider withdrawal amount for the 5% guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Question: What is the new rider withdrawal amount?

$97,647 (the adjusted withdrawal base) * 5% = $4,882

Result. Going forward, the maximum you can take out in a year without causing an excess withdrawal and further reduction of the withdrawal base (assuming there are no future automatic step-ups) is $4,882.

Example 3 (Base demonstrating growth):

Assumptions:

WB = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 8 years (assuming an annual growth rate percentage of 5.0%) = $100,000 * (1 + .05) ^ 8 = $147,745

RWA = 5% withdrawal beginning 8 years from the rider date would be $7,387 (5% of the then-current $147,745 withdrawal base)

GPWD = $7,387

EWD = None

PV = $90,000 in 8 years

You (if you elected RIC) = owner and annuitant, age 63 on rider issue; age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

You (if you elected RIC 1.2) = owner and annuitant, age 68 on rider issue; age 76 at time withdrawals begin, which means Withdrawal Percentage is 5%

Question: Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee if no more than $7,387 is withdrawn in a rider year.

Result. In this example, because no portion of the withdrawal was in excess of $7,387, the withdrawal base does not change.

132

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Example 4 (Base demonstrating WB growth with Additional Death Payment Option):

Assumptions:

You (if you elected RIC) = owner and annuitant, age 63 on rider issue; age 71 at time withdrawals begin, which means Withdrawal Percentage is 5%.

You (if you elected RIC 1.2) = owner and annuitant, age 68 on rider issue; age 76 at time withdrawals begin, which means Withdrawal Percentage is 5%

WB at rider issue = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 8 years (assuming an annual growth rate percentage of 5.0%) = $100,000 * (1 + .05) ^ 8 = $147,745 Rider Death Benefit (“RDB”) (optional additional death benefit for additional cost) = $100,000

RWA = 5% withdrawal beginning 8 years from the rider date would be $7,387 (5% of the then-current $147,745 withdrawal base)

GPWD = $7,387

EWD = None

PV = $90,000 in 8 years

Step One. Is any portion of the withdrawal greater than the rider withdrawal amount?

No. There is no excess withdrawal under the guarantee if no more than $7,387 is withdrawn.

Step Two. What is the rider death benefit after the withdrawal has been taken?

1. Total to deduct from the rider death benefit is $7,387 (there is no excess to deduct)

2. $100,000 - $7,387 = $92,613.

Result. In this example, because no portion of the withdrawal was in excess of $7,387, the total withdrawal base does not change and the rider death benefit reduces to $92,613.

Example 5 (Base with WB growth with Additional Death Payment Option illustrating excess withdrawal):

Assumptions:

You = owner and annuitant, age 61 on rider issue; age 74 at time withdrawals begin, which means withdrawal percentage is 5%.

WB at rider issue = $100,000

Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.

WB in 10 years (assuming an annual growth rate percentage of 5.0%) = the greater of $100,000 * (1 + .05) ^ 10 = $162,889.

RDB (optional additional death benefit for additional cost) = $100,000

RWA = 5% withdrawal beginning 10 years from the rider date would be $8,144 (5% of the then-current $162,889 withdrawal base)

GPWD = $15,000

EWD = $6,856 ($15,000 - $8,144)

133

Guaranteed Lifetime Withdrawal Benefit — (Continued)

PV = $90,000 in 10 years

Step One. Is any portion of the total withdrawal greater than the rider withdrawal amount?

Yes. $15,000 - $8,144 = $6,856 (the excess withdrawal amount)

Step Two. Calculate how much of the rider death benefit is affected by the excess withdrawal.

1. Formula for pro rata amount is: (EWD / (PV - 5% withdrawal)) * (RDB - 5% withdrawal)

2. ($6,856 / ($90,000 - $8,144)) * ($100,000 - $8,144) = $7,694

Step Three. Which is larger, the actual $6,856 excess withdrawal amount or the $7,694 pro rata amount?

$7,694 pro rata amount.

Step Four. What is the rider death benefit after the withdrawal has been taken?

1. Total to deduct from the rider death benefit is $8,144 (RWA) + $7,694 (pro rata excess) = $15,838

2. $100,000 - $15,838 = $84,162.

Result. The rider benefit is $84,162.

Note: Because there was an excess withdrawal amount in this example, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $8,144, the withdrawal base would remain at $162,889 and the rider withdrawal amount would be $8,144. However, because an excess withdrawal has been taken, the withdrawal base is also reduced.

New benefit base:

Step One. The withdrawal base is reduced only by the amount of the excess withdrawal or the pro rata amount if greater.

Step Two. Calculate how much the withdrawal base is affected by the excess withdrawal.

1. The formula is (EWD/(PV - 5% withdrawal)) * WB before any adjustments

2. ($6,856 / ($90,000 - $8,144)) * $162,889 = $13,643

Step Three. Which is larger, the actual $6,856 excess withdrawal amount or the $13,643 pro rata amount?

$13,643 pro rata amount.

Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based?

$162,889 - $13,643 = $149,246

Result. The new benefit base is $149,246

New rider withdrawal amount:

134

Guaranteed Lifetime Withdrawal Benefit — (Continued)

Because the withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new rider withdrawal amount for the 5% benefit percentage guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.

Step One. What is the new rider withdrawal amount?

$149,246 (the adjusted withdrawal base) * 5% = $7,462

Result. Going forward, the maximum you can take out in a year without causing an excess withdrawal and further reduction of the benefit base is $7,462.

135

STATEMENT OF ADDITIONAL INFORMATION

FLEXIBLE PREMIUM VARIABLE ANNUITY – J

Issued through

SEPARATE ACCOUNT VA Y

Offered by

TRANSAMERICA LIFE INSURANCE COMPANY

This Statement of Additional Information expands upon subjects discussed in the current prospectus for the Flexible Premium Variable Annuity – J offered by Transamerica Life Insurance Company. You may obtain a copy of the current prospectus, dated May 1, 2009, by calling (800) 525-6205, or write us at: Transamerica Life Insurance Company, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, IA 52499-0001. The prospectus sets forth information that a prospective investor should know before investing in a policy. Terms used in the current prospectus for the policy are incorporated in this Statement of Additional Information.

This Statement of Additional Information (SAI) is not a prospectus and should be read only in conjunction with the prospectuses for the policy and the underlying fund portfolios.

Dated: May 1, 2009

TABLE OF CONTENTS

GLOSSARY OF TERMS	4
THE POLICY — GENERAL PROVISIONS	7
Owner	7
Entire Policy	7
Misstatement of Age or Sex	8
Reallocation of Annuity Units After the Annuity Commencement Date	8
Annuity Payment Options	8
Death Benefit	9
Death of Owner	10
Assignment	10
Evidence of Survival	10
Non-Participating	10
Amendments	10
Employee and Agent Purchases	11
Present Value of Future Variable Payments	11
Stabilized Payments	11
CERTAIN FEDERAL INCOME TAX CONSEQUENCES	12
Tax Status of the Policy	12
Taxation of Annuities	13
Taxation of the Company	16
INVESTMENT EXPERIENCE	16
Accumulation Units	16
Annuity Unit Value and Annuity Payment Rates	18
HISTORICAL PERFORMANCE DATA	20
Money Market Yields	20
Total Returns	21
Other Performance Data	22
Adjusted Historical Performance Data	22
PUBLISHED RATINGS	22
STATE REGULATION OF TRANSAMERICA LIFE INSURANCE COMPANY	23
ADMINISTRATION	23
RECORDS AND REPORTS	23
DISTRIBUTION OF THE POLICIES	23
VOTING RIGHTS	24
OTHER PRODUCTS	25
CUSTODY OF ASSETS	25
LEGAL MATTERS	25
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	25
OTHER INFORMATION	25
FINANCIAL STATEMENTS	26

2

APPENDIX A
CONDENSED FINANCIAL INFORMATION	27

3

GLOSSARY OF TERMS

Accumulation Unit — An accounting unit of measure used in calculating the policy value in the separate account before the annuity commencement date.

Adjusted Policy Value — The policy value increased or decreased by any excess interest adjustment.

Administrative and Service Office — Transamerica Life Insurance Company, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, IA 52499-0001, (800) 525-6205.

Annuitant — The person on whose life any annuity payments involving life contingencies will be based.

Annuity Commencement Date — The date upon which annuity payments are to commence. This date may be any date after the policy date and may not be later than the last day of the policy month following the month after the annuitant attains age 95. The earliest annuity commencement date is at least thirty days after you purchase your policy. The annuity commencement date may have to be earlier for qualified policies and may be earlier if required by state law.

Annuity Payment Option — A method of receiving a stream of annuity payments selected by the owner.

Annuity Unit — An accounting unit of measure used in the calculation of the amount of the second and each subsequent variable annuity payment.

Assumed Investment Return or AIR — The annual effective rate shown in the contract specifications section of the contract that is used in the calculation of each variable annuity payment.

Beneficiary — The person who has the right to the death benefit as set forth in the policy.

Business Day — A day when the New York Stock Exchange is open for regular trading.

Cash Value — The adjusted policy value less any applicable surrender charge and rider fees (imposed upon surrender).

Code — The Internal Revenue Code of 1986, as amended.

Enrollment form — A written application, order form, or any other information received electronically or otherwise upon which the policy is issued and/or is reflected on the data or specifications page.

Excess Interest Adjustment — A positive or negative adjustment to amounts surrendered (both partial or full surrenders and transfers) or applied to annuity payment options from the fixed account guaranteed period options prior to the end of the guaranteed period. The adjustment reflects changes in the interest rates declared by the Company since the date any payment was received by, or an amount was transferred to, the guaranteed period option. The excess interest adjustment can either decrease or increase the amount to be received by the owner upon full surrender or commencement of annuity payments, depending upon whether there has been an increase or decrease in interest rates, respectively.

Fixed Account — One or more investment choices under the policy that are part of the Company’s general assets and are not in the separate account.

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Free Amount — The amount that can be withdrawn each year without incurring any surrender charge or excess interest adjustment.

Guaranteed Lifetime Withdrawal Benefit — Any optional benefit under the policy that provides a guaranteed minimum withdrawal benefit, including the Living Benefits Rider, the Retirement Income Choice Rider, Retirement Income Choice with Double Withdrawal Base Benefit Rider, or the Retirement Income Choice 1.2 Rider

Guaranteed Period Options — The various guaranteed interest rate periods of the fixed account which the Company may offer and into which premium payments may be paid or amounts transferred.

Nonqualified Policy — A policy other than a qualified policy.

Owner (You, Your) — The person who may exercise all rights and privileges under the policy. The owner during the lifetime of the annuitant and prior to the annuity commencement date is the person designated as the owner in the information provided to us to issue a policy.

Policy Date — The date shown on the policy data page attached to the policy and the date on which the policy becomes effective.

Policy Value — On or before the annuity commencement date, the policy value is equal to the owner’s:

• premium payments; minus

• gross partial surrenders (partial surrenders minus excess interest adjustments plus the surrender charge on the portion of the requested partial surrender that is subject to the surrender charge); plus

• interest credited in the fixed account; plus

• accumulated gains in the separate account; minus

• accumulated losses in the separate account; minus

• service charges, rider fees, premium taxes, transfer fees, and other charges, if any.

Policy Year — A policy year begins on the policy date and on each anniversary thereof.

Premium Payment — An amount paid to the Company by the owner or on the owner’s behalf as consideration for the benefits provided by the policy.

Qualified Policy — A policy issued in connection with retirement plans that qualify for special federal income tax treatment under the Code.

Separate Account — Separate Account VA Y, a separate account established and registered as a unit investment trust under the Investment Company Act of 1940, as amended (the “1940 Act”), to which premium payments under the policies may be allocated.

Separate Account Value — The portion of the policy value that is invested in the separate account.

Service Charge — An annual charge on each policy anniversary (and a charge at the time of surrender during any policy year) for policy maintenance and related administrative expenses. This annual charge is $35, but will not exceed 2% of the policy value.

5

Subaccount — A subdivision within the separate account, the assets of which are invested in a specified underlying fund portfolios.

Supportable Payment — The amount equal to the sum of the variable annuity unit values multiplied by the number of variable annuity units in each of the selected subaccounts.

Surrender Charge — A percentage of each premium payment that depends upon the length of time from the date of each premium payment. The surrender charge is assessed on full or partial surrenders from the policy. A surrender charge may also be referred to as a “contingent deferred sales charge.” If the Access Rider is elected, the surrender charge percentage is zero.

Valuation Period — The period of time from one determination of accumulation unit values and annuity unit values to the next subsequent determination of values. Such determination shall be made on each business day.

Variable Annuity Payments — Payments made pursuant to an annuity payment option which fluctuate as to dollar amount or payment term in relation to the investment performance of the specified subaccounts within the separate account.

Written Notice — Written notice, signed by the owner, that gives the Company the information it requires and is received at the administrative and service office. For some transactions, the Company may accept an electronic notice, such as telephone instructions, instead of written notice. Such written or electronic notice must meet the requirements the Company establishes for such notices.

6

In order to supplement the description in the prospectus, the following provides additional information about Transamerica Life Insurance Company (the Company, we, us or our) and the policy, which may be of interest to a prospective purchaser.

THE POLICY — GENERAL PROVISIONS

Owner

The policy shall belong to the owner upon issuance of the policy after completion of an enrollment form and delivery of the initial premium payment. While the annuitant is living, the owner may: (1) assign the policy; (2) surrender the policy; (3) amend or modify the policy with the Company’s consent; (4) receive annuity payments or name a payee to receive the payments; and (5) exercise, receive and enjoy every other right and benefit contained in the policy. The exercise of these rights may be subject to the consent of any assignee or irrevocable beneficiary; and of your spouse in a community or marital property state.

Unless the Company has been notified of a community or marital property interest in the policy, it will rely on its good faith belief that no such interest exists and will assume no responsibility for inquiry.

Note carefully. If the owner predeceases the annuitant and no joint owner, primary beneficiary, or contingent beneficiary is alive or in existence on the date of death, the owner’s estate will become the new owner. If no probate estate is opened because the owner has precluded the opening of a probate estate by means of a trust or other instrument, that trust may not exercise ownership rights to the policy. It may be necessary to open a probate estate in order to exercise ownership rights to the policy.

The owner may change the ownership of the policy in a written notice. When this change takes effect, all rights of ownership in the policy will pass to the new owner. A change of ownership may have tax consequences.

When there is a change of owner, the change will not be effective until it is recorded in our records. Once recorded, it will take effect as of the date the owner signs the written notice, subject to any payment the Company has made or action the Company has taken before recording the change. Changing the owner does not change the designation of the beneficiary or the annuitant.

If ownership is transferred to a new owner (except to the owner’s spouse) because the owner dies before the annuitant, then (a) the cash value generally must be distributed to the new owner within five years of the owner’s death, or (b) annuity payments must be made for a period certain or for the new owner’s lifetime so long as any period certain does not exceed that new owner’s life expectancy, if the first payment begins within one year of your death.

Entire Policy

The policy, any endorsements or riders thereon, the enrollment form, or information provided in lieu thereof, constitute the entire contract between the Company and the owner. All statements in the enrollment form are representations and not warranties. No statement will cause the policy to be void or to be used in defense of a claim unless contained in the enrollment form or information provided in lieu thereof.

7

Misstatement of Age or Sex

If the age or sex of the annuitant or owner has been misstated, the Company will change the annuity benefit payable to that which the premium payments would have purchased for the correct age or sex. The dollar amount of any underpayment made by the Company shall be paid in full with the next payment due such person or the beneficiary. The dollar amount of any overpayment made by the Company due to any misstatement shall be deducted from payments subsequently accruing to such person or beneficiary. Any underpayment or overpayment will include interest at 5% per year, from the date of the wrong payment to the date of the adjustment. The age of the annuitant or owner may be established at any time by the submission of proof satisfactory to the Company.

Reallocation of Annuity Units After the Annuity Commencement Date

After the annuity commencement date, you may reallocate the value of a designated number of annuity units of a subaccount then credited to a policy into an equal value of annuity units of one or more other subaccounts or the fixed account. The reallocation shall be based on the relative value of the annuity units of the account(s) or subaccount(s) at the end of the business day on the next payment date. The minimum amount which may be reallocated is the lesser of (1) $10 of monthly income or (2) the entire monthly income of the annuity units in the account or subaccount from which the transfer is being made. If the monthly income of the annuity units remaining in an account or subaccount after a reallocation is less than $10, the Company reserves the right to include the value of those annuity units as part of the transfer. The request must be in writing to the Company’s administrative and service office. There is no charge assessed in connection with such reallocation. A reallocation of annuity units may be made up to four times in any given policy year.

After the annuity commencement date, no transfers may be made from the fixed account to the separate account.

Annuity Payment Options

Note: Portions of the following discussion do not apply to annuity payments under the Initial Payment Guarantee. See the “Stabilized Payments” section of this SAI.

During the lifetime of the annuitant and before the annuity commencement date, the owner may choose an annuity payment option or change the election, but notice of any election or change of election must be received by the Company in good order at its Administrative and Service Office at least thirty (30) days before the annuity commencement date (elections less than 30 days require prior approval). If no election is made before the annuity commencement date, annuity payments will be made under (1) life income with level (fixed) payments for 10 years certain, using the existing policy value of the fixed account, or (2) life income with variable payments for 10 years certain using the existing policy value of the separate account, or (3) a combination of (1) and (2).

The person who elects an annuity payment option can also name one or more successor payees to receive any unpaid amount the Company has at the death of a payee. Naming these payees cancels any prior choice of a successor payee.

A payee who did not elect the annuity payment option does not have the right to advance or assign payments, take the payments in one sum, or make any other change. However, the payee may be given the right to do one or more of these things if the person who elects the option tells the Company in writing and the Company agrees.

8

Variable Payment Options. The dollar amount of the first variable annuity payment will be determined in accordance with the annuity payment rates set forth in the applicable table contained in the policy. For annuity payments the tables are based on a 5% effective annual Assumed Investment Return and the “2000 Table”, using an assumed annuity commencement date of 2005 (static projection to this point) with dynamic projection using scale G from that point (100% of G for male, 50% of G for females). The dollar amount of additional variable annuity payments will vary based on the investment performance of the subaccount(s) of the separate account selected by the annuitant or beneficiary.

Determination of the First Variable Payment. The amount of the first variable payment depends upon the sex (if consideration of sex is allowed under state law) and adjusted age of the annuitant. For regular annuity payments, the adjusted age is the annuitant’s actual age nearest birthday, on the annuity commencement date, adjusted as described in your policy. This adjustment assumes an increase in life expectancy, and therefore it results in lower payments than without such an adjustment.

Determination of Additional Variable Payments. All variable annuity payments other than the first are calculated using annuity units which are credited to the policy. The number of annuity units to be credited in respect of a particular subaccount is determined by dividing that portion of the first variable annuity payment attributable to that subaccount by the annuity unit value of that subaccount on the annuity commencement date. The number of annuity units of each particular subaccount credited to the policy then remains fixed, assuming no transfers to or from that subaccount occur. The dollar value of variable annuity units in the chosen subaccount will increase or decrease reflecting the investment experience of the chosen subaccount. The dollar amount of each variable annuity payment after the first may increase, decrease or remain constant. This amount is equal to the sum of the amounts determined by multiplying the number of annuity units of each particular subaccount credited to the policy by the annuity unit value for the particular subaccount on the date the payment is made.

Death Benefit

Due proof of death of the annuitant is proof that the annuitant died prior to the commencement of annuity payments. A certified copy of a death certificate, a certified copy of a decree of a court of competent jurisdiction as to the finding of death, a written statement by the attending physician, or any other proof satisfactory to the Company will constitute due proof of death.

Upon receipt in good order (at our Administrative and Service Office) of this proof and an election of a method of settlement and return of the policy, the death benefit generally will be paid within seven days, or as soon thereafter as the Company has sufficient information about the beneficiary(ies) to make the payment. The beneficiary may receive the amount payable in a lump sum cash benefit, or, subject to any limitation under any state or federal law, rule, or regulation, under one of the annuity payment options described above, unless a settlement agreement is effective at the death of the owner preventing such election.

If an owner is not an annuitant, and dies prior to the annuity commencement date, the new owner may surrender the policy at any time for the amount of the adjusted policy value. If the new owner is not the deceased owner’s spouse, however, (1) the adjusted policy value must be distributed within five years after the date of the deceased owner’s death, or (2) payments under an annuity payment option must begin no later than one year after the deceased owner’s death and must be made for the new owner’s lifetime or for a period certain (so long as any period certain does not exceed the new owner’s life expectancy). If the sole new owner is the deceased owner’s surviving spouse, such spouse may elect to continue the policy as the new owner instead of receiving the death benefit.

9

Beneficiary. The beneficiary designation in the enrollment form will remain in effect until changed. The owner may change the designated beneficiary by sending written notice to the Company. The beneficiary’s consent to such change is not required unless the beneficiary was irrevocably designated or law requires consent. (If an irrevocable beneficiary dies, the owner may then designate a new beneficiary.) The change will take effect as of the date the owner signs the written notice, whether or not the owner is living when the notice is received by the Company. The Company will not be liable for any payment made before the written notice is received. If more than one beneficiary is designated, and the owner fails to specify their interests, they will share equally. If upon the death of the annuitant there is a surviving owner(s), the surviving owner(s) automatically takes the place of any beneficiary designation.

Death of Owner

Federal tax law requires that if any owner (including any joint owner who has become a current owner) dies before the annuity commencement date, then the entire value of the policy must generally be distributed within five years of the date of death of such owner. Certain rules apply where (1) the spouse of the deceased owner is the sole beneficiary, (2) the owner is not a natural person and the primary annuitant dies or is changed, or (3) any owner dies after the annuity commencement date. See “Certain Federal Income Tax Consequences” for more information about these rules. Other rules may apply to qualified policies.

Assignment

During the lifetime of the annuitant you may assign any rights or benefits provided by the policy if your policy is a nonqualified policy. An assignment will not be binding on the Company until a copy has been filed at its administrative and service office. Your rights and benefits and those of the beneficiary are subject to the rights of the assignee. The Company assumes no responsibility for the validity or effect of any assignment. Any claim made under an assignment shall be subject to proof of interest and the extent of the assignment. An assignment may have tax consequences.

Unless you so direct by filing written notice with the Company, no beneficiary may assign any payments under the policy before they are due. To the extent permitted by law, no payments will be subject to the claims of any beneficiary’s creditors.

Ownership under qualified policies is restricted to comply with the Code.

Evidence of Survival

The Company reserves the right to require satisfactory evidence that a person is alive if a payment is based on that person being alive. No payment will be made until the Company receives such evidence.

Non-Participating

The policy will not share in the Company’s surplus earnings; no dividends will be paid.

Amendments

No change in the policy is valid unless made in writing by the Company and approved by one of the Company’s officers. No registered representative has authority to change or waive any provision of the policy.

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The Company reserves the right to amend the policies to meet the requirements of the Code, regulations or published rulings. You can refuse such a change by giving written notice, but a refusal may result in adverse tax consequences.

Employee and Agent Purchases

The policy may be acquired by an employee or registered representative of any broker/dealer authorized to sell the policy or their immediate family, or by an officer, director, trustee or bona-fide full-time employee of the Company or its affiliated companies or their immediate family. In such a case, the Company in its discretion, may credit an amount equal to a percentage of each premium payment to the policy due to lower acquisition costs the Company experiences on those purchases. The Company may offer certain employer sponsored savings plans, reduced fees and charges including, but not limited to, the annual service charge, the surrender charges, the mortality and expense risk fee and the administrative charge for certain sales under circumstances which may result in savings of certain costs and expenses. In addition, there may be other circumstances of which the Company is not presently aware which could result in reduced sales or distribution expenses. Credits to the policy or reductions in these fees and charges will not be unfairly discriminatory against any owner.

Present Value of Future Variable Payments

The present value of future period certain variable payments is calculated by taking (a) the supportable payment on the business day we receive the surrender request (in good order at our Administrative and Service Office), multiplied by (b) the number of payments remaining, multiplied by a discount rate (such as the assumed investment rate or “AIR”).

Stabilized Payments

If you have selected a payout feature that provides for stabilized payments (e.g., the Initial Payment Guarantee), please note that the stabilized payments remain level throughout each year and are adjusted on your annuitization anniversary. Without stabilized payments, each payment throughout the year would fluctuate based on the performance of your selected subaccounts. To reflect the difference in these payments we adjust (both increase and decrease as appropriate) the number of annuity units. The annuity units are adjusted when we calculate the supportable payment. Supportable payments are used in the calculation of surrender values, death benefits and transfers. On the anniversary of your annuity commencement date we set the new stabilized payment equal to the current supportable payment. In the case of an increase in the number of variable annuity units, your participation in the future investment performance of the subaccounts will be increased because more variable annuity units are credited to you. Conversely, in the case of a reduction of the number of variable annuity units, your participation in the future investment performance of the subaccounts will be decreased because fewer variable annuity units are credited to you. If the Initial Payment Guarantee is chosen, then the stabilized variable annuity payment will equal the greater of the guaranteed payment or the supportable payment at that time.

The following table demonstrates, on a purely hypothetical basis, the changes in the number of variable annuity units. The changes in the variable annuity unit values reflect the investment performance of the applicable subaccounts as well as the separate account charge.

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Hypothetical Changes in Annuity Units with Stabilized Payments*

Assumed Investment Rate			5.0	%
Life & 10 Year Certain
Male aged 65
First Variable Payment		$	500
		Beginning Annuity Units			Annuity Unit Values	Monthly Payment Without Stabilization		Monthly Stabilized Payment		Adjustments In Annuity Units		Cumulative Adjusted Annuity Units
At Issue:	January 1		400.0000		1.250000	$	500.00	$	500.00	0.0000		400.0000
	February 1		400.0000		1.252005	$	500.80	$	500.00	0.0041		400.0041
	March 1		400.0000		1.252915	$	501.17	$	500.00	0.0059		400.0100
	April 1		400.0000		1.245595	$	498.24	$	500.00	(0.0089	)	400.0011
	May 1		400.0000		1.244616	$	497.85	$	500.00	(0.0108	)	399.9903
	June 1		400.0000		1.239469	$	495.79	$	500.00	(0.0212	)	399.9691
	July 1		400.0000		1.244217	$	497.69	$	500.00	(0.0115	)	399.9576
	August 1		400.0000		1.237483	$	494.99	$	500.00	(0.0249	)	399.9327
	September 1		400.0000		1.242382	$	496.95	$	500.00	(0.0150	)	399.9177
	October 1		400.0000		1.242382	$	496.95	$	500.00	(0.0149	)	399.9027
	November 1		400.0000		1.249210	$	499.68	$	500.00	(0.0016	)	399.9012
	December 1		400.0000		1.252106	$	500.84	$	500.00	0.0040		399.9052
	January 1		399.9052		1.255106	$	501.92	$	501.92	0.0000		399.9052

* The total separate account expenses and portfolio expenses included in the calculations are 2.25% (2.25% is a hypothetical figure). If higher (or lower) expenses were charged, the numbers would be lower (or higher).

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary does not constitute tax advice. It is a general discussion of certain of the expected federal income tax consequences of investment in and distributions with respect to a policy, based on the Code, Regulations thereunder, judicial authority, and current administrative rulings and practice. This summary discusses only certain federal income tax consequences to “United States Persons,” and does not discuss state, local, or foreign tax consequences. United States Persons means citizens or residents of the United States, domestic corporations, domestic partnerships and trusts, or estates that are subject to United States federal income tax regardless of the source of their income.

Tax Status of the Policy

Diversification Requirements. Section 817(h) of the Code provides that in order for a non-qualified variable contract which is based on a segregated asset account to qualify as an annuity contract under the Code, the investments made by such account must be “adequately diversified” in accordance with Treasury Regulations. The Regulations issued under Section 817(h) (Treas. Reg. Section 1.817 -5) apply a diversification requirement to each of the subaccounts. The separate account, through its underlying fund portfolios and their portfolios, intends to comply with the diversification requirements of the Regulations. We have entered into agreements with each underlying fund portfolio company that require the portfolios to be operated in compliance with the Regulations.

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Owner Control. In some circumstances, owners of variable contracts who retain excessive control over the investment of the underlying separate account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. Although there is little guidance in this area and published guidance does not address certain aspects of the policies, we believe that the owner of a policy should not be treated as the owner of the underlying assets. We reserve the right to modify the policies to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the policies from being treated as the owners of the underlying separate account assets.

Distribution Requirements. The Code requires that nonqualified policies contain specific provisions for distribution of policy proceeds upon the death of any owner. In order to be treated as an annuity contract for federal income tax purposes, the Code requires that such policies provide that if any owner dies on or after the annuity commencement date and before the entire interest in the policy has been distributed, the remaining portion must be distributed at least as rapidly as under the method in effect on such owner’s death. If any owner dies before the annuity commencement date, the entire interest in the policy must generally be distributed within 5 years after such owner’s date of death or be used to provide payments to a designated beneficiary beginning within one year of such owner’s death and will be made for the life of the beneficiary or for a period not extending beyond the life expectancy of the beneficiary. However, if upon such owner’s death prior to the annuity commencement date, such owner’s surviving spouse becomes the sole new owner under the policy, then the policy may be continued with the surviving spouse as the new owner. Under the policy, the beneficiary is the person(s) designated by an owner/annuitant and the surviving joint owner is the beneficiary of an owner who is not the annuitant. If any owner is not a natural person, then for purposes of these distribution requirements, the primary annuitant shall be treated as an owner and any death or change of such primary annuitant shall be treated as the death of an owner. The nonqualified policies contain provisions intended to comply with these requirements of the Code. No regulations interpreting these requirements of the Code have yet been issued and thus no assurance can be given that the provisions contained in the policies satisfy all such Code requirements. The provisions contained in the policies will be reviewed and modified if necessary to assure that they comply with the Code requirements when clarified by regulation or otherwise.

The following discussion is based on the assumption that the policy qualifies as an annuity contract for federal income tax purposes.

Taxation of Annuities

In General. Code Section 72 governs taxation of annuities in general. We believe that an owner who is an individual will not be taxed on increases in the value of a policy until such amounts are surrendered or distributed. For this purpose, the assignment, pledge, or agreement to assign or pledge any portion of the policy value, and in the case of a qualified policy, any portion of an interest in the plan, generally will be treated as a distribution. The taxable portion of a distribution is taxable as ordinary income.

Non-Natural Persons. Pursuant to Section 72(u) of the Code, a nonqualified policy held by a taxpayer other than a natural person generally will not be treated as an annuity contract under the Code; accordingly, an owner who is not a natural person will recognize as ordinary income for a taxable year the excess, if any, of the policy value over the “investment in the contract”. There are some exceptions to this rule and a prospective purchaser of the policy that is not a natural person should discuss these with a competent tax adviser.

Withholding. The portion of any distribution under a policy that is includable in gross income will be subject to federal income tax withholding unless the recipient of such distribution elects not to have federal income tax withheld. Election

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forms will be provided at the time distributions are requested or made. For certain qualified policies, the withholding rate varies according to the type of distribution and the owner’s tax status. For qualified policies taxable, “eligible rollover distributions” from Section 401(a) plans, Section 403(a) annuities, Section 403(b) tax-sheltered annuities, and governmental 457 plans are subject to a mandatory federal income tax withholding of 20%. For this purpose, an eligible rollover distribution is any distribution to an employee (or an employee’s spouse or former spouse as beneficiary or alternate payee) from such a plan, other than specified distributions such as distributions required by the Code, distributions in a specified annuity form or hardship distributions. The 20% withholding does not apply, however, if the owner chooses a “direct rollover” from the plan to another tax-qualified plan or IRA. Different withholding requirements may apply in the case of non-United States persons.

Qualified Policies. The qualified policy is designed for use with several types of tax-qualified retirement plans. The tax rules applicable to participants and beneficiaries in tax-qualified retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits, distributions prior to age 59 ¹/2 (subject to certain exceptions), distributions that do not conform to specified commencement and minimum distribution rules, and in other specified circumstances. Some retirement plans are subject to distribution and other requirements that are not incorporated into the policies or our policy administration procedures. Owners, participants, and beneficiaries are responsible for determining that contributions, distributions, and other transactions with respect to the policies comply with applicable law.

For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner (or plan participant) (i) reaches age 70 ¹/2 or (ii) retires, and must be made in a specified form or manner. If a participant in a Section 401(a) plan is a “5 percent owner” (as defined in the Code), or in the case of an IRA (other than a Roth IRA), distributions generally must begin no later than April 1 of the calendar year in which the owner (or plan participant) reaches age 70 ¹/2. Each owner is responsible for requesting distributions under the policy that satisfy applicable tax rules. Pursuant to special legislation, required minimum distributions for the 2009 tax year generally are not required, and 2009 distributions that otherwise would be required minimum distributions may be eligible for rollover.

We may make available, as options under the policy, certain guaranteed lifetime withdrawal benefits and other optional benefits. The tax rules for qualified policies may limit the value of these optional benefits. Consult a qualified tax advisor before electing any of these benefits for a qualified policy.

We do not attempt to provide more than general information about use of the policy with the various types of retirement plans. Purchasers of policies for use with any retirement plan should consult their legal counsel and tax adviser regarding the suitability of the policy.

Traditional Individual Retirement Annuities. In order to qualify as a traditional individual retirement annuity under Section 408(b) of the Code, a policy must satisfy certain conditions: (i) the owner must be the annuitant; (ii) the policy generally is not transferable by the owner, e.g., the owner may not designate a new owner, designate a contingent owner or assign the policy as collateral security; (iii) subject to special rules, the total premium payments for any calendar year may not exceed the amount specified in the Code ($5,000 for 2009, $6,000 if age 50 or older), except in the case of a rollover amount or contribution under Section 402(c), 402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10), 408(d)(3) or 457(e)(16) of the Code; (iv) annuity payments or partial surrenders must begin no later than April 1 of the calendar year following the calendar year in which the annuitant attains age 70 ¹/2; (v) an annuity payment option with a period certain that will guarantee annuity payments beyond the life expectancy of the annuitant and the beneficiary may not be

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selected; (vi) certain payments of death benefits must be made in the event the annuitant dies prior to the distribution of the policy value; (vii) the entire interest of the owner is non-forfeitable; and (viii) the premiums must not be fixed. Policies intended to qualify as traditional individual retirement annuities under Section 408(b) of the Code contain such provisions. Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. Distributions prior to age 59 ¹/2 (unless certain exceptions apply) are subject to a 10% penalty tax.

The Internal Revenue Service has not reviewed the policy for qualification as an IRA and has not addressed in a ruling of general applicability whether the death benefit options and riders available with the policies comport with IRA qualification requirements.

Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section 408A of the Code, contains many of the same provisions as a traditional IRA. However, there are some differences. First, the contributions are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA may be subject to tax and other special rules may apply to the rollover or conversion and to distributions attributable thereto. The Roth IRA is available to individuals with earned income and whose modified adjusted gross income is under $120,000 for single filers, $176,000 for married filing jointly, and $10,000 for married filing separately. Subject to special rules, the amount per individual that may be contributed to all IRAs (Roth and traditional) is the deductible amount specified in the Code ($5,000 for 2009, $6,000 if age 50 or older). Secondly, the distributions are taxed differently. The Roth IRA offers tax-free distributions when made 5 tax years after the first contribution to any Roth IRA of the individual and made after attaining age 59 ¹/2, to pay for qualified first time homebuyer expenses (lifetime maximum of $10,000), or due to death or disability. All other distributions are subject to income tax when made from earnings and may be subject to a penalty tax unless an exception applies. Unlike the traditional IRA, there are no minimum required distributions during the owner’s lifetime; however, required distributions at death are generally the same as for traditional IRAs.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public school systems and certain tax exempt organizations to purchase policies for their employees are excludable from the gross income of the employee, subject to certain limitations. However, such payments may be subject to FICA (Social Security) taxes. The policy includes a death benefit that in some cases may exceed the greater of the premium payments or the policy value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in any tax-sheltered annuity under Section 403(b). Therefore, employers using the policy in connection with such plans should consult their tax adviser. Additionally, in accordance with the requirements of the Code, Section 403(b) annuities generally may not permit distribution of (i) elective contributions made in years beginning after December 31, 1988, and (ii) earnings on those contributions, and (iii) earnings on amounts attributed to elective contributions held as of the end of the last year beginning before January 1, 1989. Distributions of such amounts will be allowed only upon the death of the employee, on or after attainment of age 59 ¹/2, severance from employment, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship. These rules may prevent the payment of guaranteed withdrawals under a guaranteed lifetime withdrawal benefit prior to age 59 ¹/2.

For contracts issued after 2008, amounts attributable to nonelective contributions may be subject to distribution restrictions specified in the employer’s section 403(b) plan.

Pursuant to new tax regulations, we generally are required to confirm, with your 403(b) plan sponsor or otherwise, that surrenders you request from a 403(b) policy comply with applicable tax requirements before we process your request.

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Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of retirement plans for employees and self-employed individuals to establish qualified plans for themselves and their employees. Such retirement plans may permit the purchase of the policies to accumulate retirement savings. Adverse tax consequences to the plan, the participant or both may result if the policy is assigned or transferred to any individual as a means to provide benefit payments. The policy includes a death benefit that in some cases may exceed the greater of the premium payments or the policy value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in a pension or profit sharing plan. Therefore, employers using the policy in connection with such plans should consult their tax adviser.

Deferred Compensation Plans. Section 457 of the Code, while not actually providing for a qualified plan as that term is normally used, provides for certain deferred compensation plans with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities, and certain affiliates of such entities, and tax exempt organizations. The policies can be used with such plans. Under such plans a participant may specify the form of investment in which his or her participation will be made. For non-governmental Section 457 plans, all such investments, however, are owned by, and are subject to, the claims of the general creditors of the sponsoring employer. Depending on the terms of the particular plan, a non-government employer may be entitled to draw on deferred amounts for purposes unrelated to its Section 457 plan obligations. In general, all amounts received under a nongovernmental Section 457 plan are taxable and are subject to federal income tax withholding as wages.

Taxation of the Company

The Company at present is taxed as a life insurance company under part I of Subchapter L of the Code. The separate account is treated as part of the Company and, accordingly, will not be taxed separately as a “regulated investment company” under Subchapter M of the Code. We do not expect to incur any federal income tax liability with respect to investment income and net capital gains arising from the activities of the separate account retained as part of the reserves under the policy. Based on this expectation, it is anticipated that no charges will be made against the separate account for federal income taxes. If, in future years, any federal income taxes are incurred by us with respect to the separate account, we may make a charge to that account.

INVESTMENT EXPERIENCE

A “net investment factor” is used to determine the value of accumulation units and annuity units, and to determine annuity payment rates.

Accumulation Units

Allocations of a premium payment directed to a subaccount are credited in the form of accumulation units. Each subaccount has a distinct accumulation unit value. The number of units credited is determined by dividing the premium payment or amount transferred to the subaccount by the accumulation unit value of the subaccount as of the end of the valuation period during which the allocation is made. For each subaccount, the accumulation unit value for a given business day is based on the net asset value of a share of the corresponding portfolio of the underlying fund portfolios less any applicable charges or fees. The investment performance of the portfolio, expenses, and deductions of certain charges affect the value of an accumulation unit.

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Upon allocation to the selected subaccount, premium payments are converted into accumulation units of the subaccount. The number of accumulation units to be credited is determined by dividing the dollar amount allocated to each subaccount by the value of an accumulation unit for that subaccount as next determined after the premium payment is received at the administrative and service office or, in the case of the initial premium payment, when the enrollment form is completed, whichever is later. The value of an accumulation unit for each subaccount was arbitrarily established at $1 at the inception of each subaccount. Thereafter, the value of an accumulation unit is determined as of the close of trading on each day the New York Stock Exchange is open for regular trading.

An index (the “net investment factor”) which measures the investment performance of a subaccount during a valuation period, is used to determine the value of an accumulation unit for the next subsequent valuation period. The net investment factor may be greater or less than or equal to one; therefore, the value of an accumulation unit may increase, decrease, or remain the same from one valuation period to the next. You bear this investment risk. The net investment performance of a subaccount and deduction of certain charges affect the accumulation unit value.

The net investment factor for any subaccount for any valuation period is determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) is the net result of:

(1) the net asset value per share of the shares held in the subaccount determined at the end of the current valuation period, plus

(2) the per share amount of any dividend or capital gain distribution made with respect to the shares held in the subaccount if the ex-dividend date occurs during the current valuation period, plus or minus

(3) a per share credit or charge for any taxes determined by the Company to have resulted during the valuation period from the investment operations of the subaccount;

(b) is the net asset value per share of the shares held in the subaccount determined as of the end of the immediately preceding valuation period; and

(c) is an amount representing the separate account charge and any optional benefit fees, if applicable.

Illustration of Separate Account Accumulation Unit Value Calculations

Formula and Illustration for Determining the Net Investment Factor

Net Investment Factor =	(A + B - C) - E
	D

Where:

A =	The net asset value of an underlying fund portfolio share as of the end of the current valuation period.
	Assume	A = $11.57
B =	The per share amount of any dividend or capital gains distribution since the end of the immediately preceding valuation period.
	Assume	B = 0
C =	The per share charge or credit for any taxes reserved for at the end of the current valuation period.
	Assume	C = 0

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D =	The net asset value of an underlying fund portfolio share at the end of the immediately preceding valuation period.
	Assume	D = $11.40
E =	The daily deduction for the mortality and expense risk fee and the administrative charge, and any optional benefit fees. Assume E totals 1.80% on an annual basis; On a daily basis, this equals 0.000048878.

Then, the net investment factor =	(11.57 + 0 – 0) - 0.000048878 = Z = 1.014863403
	(11.40)

Formula and Illustration for Determining Accumulation Unit Value

Accumulation Unit Value = A * B

Where:

A =	The accumulation unit value for the immediately preceding valuation period.
		Assume = $X
B =	The net investment factor for the current valuation period.
		Assume = Y

Then, the accumulation unit value = $X * Y = $Z

Annuity Unit Value and Annuity Payment Rates

The amount of variable annuity payments will vary with annuity unit values. Annuity unit values rise if the net investment performance of the subaccount exceeds the assumed investment return of 5% annually. Conversely, annuity unit values fall if the net investment performance of the subaccount is less than the annual assumed investment return. The value of a variable annuity unit in each subaccount was established at $1 on the date operations began for that subaccount. The value of a variable annuity unit on any subsequent business day is equal to (a) multiplied by (b) multiplied by (c), where:

(a) is the variable annuity unit value for the subaccount on the immediately preceding business day;

(b) is the net investment factor for that subaccount for the valuation period; and

(c) is the investment result adjustment factor for the valuation period.

The investment result adjustment factor for the valuation period is the product of discount factors of .99986634 per day to recognize the 5% effective annual assumed investment return. The valuation period is the period from the close of the immediately preceding business day to the close of the current business day.

The net investment factor for the policy used to calculate the value of a variable annuity unit in each subaccount for the valuation period is determined by dividing (i) by (ii) and subtracting (iii) from the result, where:

(i) is the result of:

(1) the net asset value of a fund share held in that subaccount determined at the end of the current valuation period; plus

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(2) the per share amount of any dividend or capital gain distributions made by the fund for shares held in that subaccount if the ex-dividend date occurs during the valuation period; plus or minus

(3) a per share charge or credit for any taxes reserved for, which the Company determines to have resulted from the investment operations of the subaccount.

(ii) is the net asset value of a fund share held in that subaccount determined as of the end of the immediately preceding valuation period.

(iii) is a factor representing the mortality and expense risk fee and administrative charge. This factor is equal, on an annual basis, to 1.25% of the policy value held in that subaccount (For calculating Initial Payment Guarantee annuity payments, the factor is higher at a rate of 2.50%).

The dollar amount of subsequent variable annuity payments will depend upon changes in applicable annuity unit values.

The annuity payment rates generally vary according to the annuity option elected and the gender and adjusted age of the annuitant at the annuity commencement date. The policy also contains a table for determining the adjusted age of the annuitant.

Illustration of Calculations for Annuity Unit

Value and Variable Annuity Payments

Formula and Illustration for Determining Annuity Unit Value

Annuity Unit Value = A * B * C

Where:

A =	annuity unit value for the immediately preceding valuation period.
		Assume = $X
B =	Net investment factor for the valuation period for which the annuity unit value is being calculated.
		Assume = Y
C =	A factor to neutralize the annual assumed investment return of 5% built into the Annuity Tables used.
		Assume = Z

Then, the annuity unit value is:

$X * Y * Z = $Q

Formula and Illustration for Determining Amount of

First Monthly Variable Annuity Payment

First monthly variable annuity payment =	A * B
	$1,000

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Where:
A =	The adjusted policy value as of the annuity commencement date.
		Assume = $X
B =	The annuity purchase rate per $1,000 of adjusted policy value based upon the option selected, the sex and adjusted age of the annuitant according to the tables contained in the policy.
		Assume = $Y

Then, the first monthly variable annuity payment =	$X * $Y = $Z
	1,000

Formula and Illustration for Determining the Number of Annuity Units

Represented by Each Monthly Variable Annuity Payment

Number of annuity units =	A
	B

Where:
A =	The dollar amount of the first monthly variable annuity payment.
		Assume = $X
B =	The annuity unit value for the valuation date on which the first monthly payment is due.
		Assume = $Y

Then, the number of annuity units =	$X = Z
	$Y

HISTORICAL PERFORMANCE DATA

Money Market Yields

The Company may from time to time disclose the current annualized yield of the money market subaccount, which invests in the corresponding money market portfolio, for a 7-day period in a manner which does not take into consideration any realized or unrealized gains or losses on shares of the corresponding money market portfolio or on its portfolio securities. This current annualized yield is computed by determining the net change (exclusive of realized gains and losses on the sale of securities and unrealized appreciation and depreciation and income other than investment income) at the end of the 7-day period in the value of a hypothetical account having a balance of 1 unit of the money market subaccount at the beginning of the 7-day period, dividing such net change in account value by the value of the account at the beginning of the period to determine the base period return, and annualizing this quotient on a 365-day basis. The net change in account value reflects (i) net income from the portfolio attributable to the hypothetical account; and (ii) charges and deductions imposed under a policy that are attributable to the hypothetical account. The charges and deductions include the per unit charges for the hypothetical account for (i) the administrative charges and (ii) the mortality and expense risk fee. Current yield will be calculated according to the following formula:

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Current Yield = ((NCS * ES)/UV) * (365/7)

Where:
NCS	=	The net change in the value of the portfolio (exclusive of realized gains and losses on the sale of securities and unrealized appreciation and depreciation and income other than investment income) for the 7-day period attributable to a hypothetical account having a balance of 1 subaccount unit.
ES	=	Per unit expenses of the subaccount for the 7-day period.
UV	=	The unit value on the first day of the 7-day period.

Because of the charges and deductions imposed under a policy, the yield for the money market subaccount will be lower than the yield for the corresponding money market portfolio. The yield calculations do not reflect the effect of any premium taxes. The yield calculations also do not reflect surrender charges that may be applicable to a particular policy. Surrender charges range from 5% to 0% of the amount of premium payments surrendered based on the number of years since the premium payment was made. Surrender charges are based on the number of years since the date the premium payment was made, not the policy issue date.

The Company may also disclose the effective yield of the money market subaccount for the same 7-day period, determined on a compounded basis. The effective yield is calculated by compounding the base period return according to the following formula:

Effective Yield = (1 + ((NCS—ES)/UV))^365/7 - 1

Where:
NCS	=	The net change in the value of the portfolio (exclusive of realized gains and losses on the sale of securities and unrealized appreciation and depreciation and income other than investment income) for the 7-day period attributable to a hypothetical account having a balance of 1 subaccount unit.
ES	=	Per unit expenses of the subaccount for the 7-day period.
UV	=	The unit value on the first day of the 7-day period.

The yield on amounts held in the money market subaccount normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. The money market subaccount’s actual yield is affected by changes in interest rates on money market securities, average portfolio maturity of the corresponding money market portfolio, the types and quality of portfolio securities held by the corresponding money market portfolio and its operating expenses.

Total Returns

The Company may from time to time also advertise or disclose total returns for one or more of the subaccounts for various periods of time. One of the periods of time will include the period measured from the date the subaccount commenced operations. When a subaccount has been in operation for 1, 5 and 10 years, respectively, the total return for these periods will be provided. Total returns for other periods of time may from time to time also be disclosed. Total returns represent the average annual compounded rates of return that would equate an initial investment of $1,000 to the redemption value of that investment as of the last day of each of the periods. The ending date for each period for which total return quotations are provided will be for the most recent month end practicable, considering the type and media of the communication and will be stated in the communication.

21

Total returns will be calculated using subaccount unit values which the Company calculates on each business day based on the performance of the separate account’s underlying fund portfolio and the deductions for the mortality and expense risk fee and the administrative charges. Total return calculations will reflect the effect of surrender charges that may be applicable to a particular period. The total return will then be calculated according to the following formula:

P (1 + T)^N = ERV

Where:
T	=	The average annual total return net of subaccount recurring charges.
ERV	=	The ending redeemable value of the hypothetical account at the end of the period.
P	=	A hypothetical initial payment of $1,000.
N	=	The number of years in the period.

Other Performance Data

The Company may from time to time also disclose average annual total returns in a non-standard format in conjunction with the standard format described above. The non-standard format will be identical to the standard format except that the surrender charge percentage will be assumed to be 0%.

The Company may from time to time also disclose cumulative total returns in conjunction with the standard format described above. The cumulative returns will be calculated using the following formula except that the surrender charge percentage will be assumed to be 0%:

CTR = (ERV / P)-1

Where:
CTR	=	The cumulative total return net of subaccount recurring charges for the period.
ERV	=	The ending redeemable value of the hypothetical investment at the end of the period.
P	=	A hypothetical initial payment of $1,000.

All non-standard performance data will only be advertised if the standard performance data is also disclosed.

Adjusted Historical Performance Data

From time to time, sales literature or advertisements may quote average annual total returns for periods prior to the date a particular subaccount commenced operations. Such performance information for the subaccounts will be calculated based on the performance of the various portfolios and the assumption that the subaccounts were in existence for the same periods as those indicated for the portfolios, with the level of policy charges that are currently in effect.

PUBLISHED RATINGS

The Company may from time to time publish in advertisements, sales literature and reports to owners, the ratings and other information assigned to it by one or more independent rating organizations such as A.M. Best Company, Standard & Poor’s Insurance Ratings Services, Moody’s Investors Service and Fitch Financial Ratings. The purpose of the ratings is

22

to reflect the financial strength of the Company. The ratings should not be considered as bearing on the investment performance of assets held in the separate account or of the safety or riskiness of an investment in the separate account. Each year the A.M. Best Company reviews the financial status of thousands of insurers, culminating in the assignment of Best’s Ratings. These ratings reflect their current opinion of the relative financial strength and operating performance of an insurance company in comparison to the norms of the life/health insurance industry. In addition, these ratings may be referred to in advertisements or sales literature or in reports to owners. These ratings are opinions of an operating insurance company’s financial capacity to meet the obligations of its insurance policies in accordance with their terms.

STATE REGULATION OF TRANSAMERICA LIFE INSURANCE COMPANY

The Company is subject to the laws of Iowa governing insurance companies and to regulation by the Iowa Department of Insurance. An annual statement in a prescribed form is filed with the Department of Insurance each year covering the operation of the Company for the preceding year and its financial condition as of the end of such year. Regulation by the Department of Insurance includes periodic examination to determine the Company’s contract liabilities and reserves so that the Department may determine the items are correct. The Company’s books and accounts are subject to review by the Department of Insurance at all times, and a full examination of its operations is conducted periodically by the National Association of Insurance Commissioners. In addition, the Company is subject to regulation under the insurance laws of other jurisdictions in which it may operate.

ADMINISTRATION

The Company performs administrative services for the policies. These services include issuance of the policies, maintenance of records concerning the policies, and certain valuation services.

RECORDS AND REPORTS

All records and accounts relating to the separate account will be maintained by the Company. As presently required by the 1940 Act, as amended, and regulations promulgated thereunder, the Company will mail to all owners at their last known address of record, at least annually, reports containing such information as may be required under that Act or by any other applicable law or regulation. Owners will also receive confirmation of each financial transaction and any other reports required by law or regulation. However, for certain routine transactions (for example, regular monthly premiums deducted from your checking account, or regular annuity payments the Company sends to you) you may only receive quarterly confirmations.

DISTRIBUTION OF THE POLICIES

We have entered into a principal underwriting agreement with our affiliate, Transamerica Capital, Inc. (“TCI”), for the distribution and sale of the policies. We may reimburse TCI for certain expenses it incurs in order to pay for the distribution of the policies (e.g., commissions payable to selling firms selling the Policies, as described below.)

Effective May 1, 2007 TCI replaced our affiliate AFSG Securities Corporation (“AFSG”) as principal underwriter for the policies. TCI’s home office is located at 4600 S Syracuse St. Suite 1100 Denver, Colorado 80237-2719. TCI is an

23

indirect, wholly owned subsidiary of AEGON USA. TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934, and is a member of Financial Industry Regulatory Authority (“FINRA”). TCI is not a member of the Securities Investor Protection Corporation.

We currently offer the policies on a continuous basis. We anticipate continuing to offer the policies, but reserve the right to discontinue the offering. The policies are offered to the public through sales representatives of broker-dealers (“selling firms”) that have entered into selling agreements with us and with TCI. TCI compensates these selling firms for their services. Sales representatives with these selling firms are appointed as our insurance agents.

We and/or TCI or another affiliate may pay certain selling firms additional cash amounts for: (1) “preferred product” treatment of the policies in their marketing programs, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the policies; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other sales expenses of the selling firms. We and/or TCI may make bonus payments to certain selling firms based on aggregate sales or persistency standards. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.

VOTING RIGHTS

To the extent required by law, the Company will vote the underlying fund portfolios’ shares held by the separate account at regular and special shareholder meetings of the underlying fund portfolios in accordance with instructions received from persons having voting interests in the portfolios, although none of the underlying fund portfolios hold regular annual shareholder meetings. If, however, the 1940 Act or any regulation thereunder should be amended or if the present interpretation thereof should change, and as a result the Company determines that it is permitted to vote the underlying fund portfolios shares in its own right, it may elect to do so.

Before the annuity commencement date, you hold the voting interest in the selected portfolios. The number of votes that you have the right to instruct will be calculated separately for each subaccount. The number of votes that you have the right to instruct for a particular subaccount will be determined by dividing your policy value in the subaccount by the net asset value per share of the corresponding portfolio in which the subaccount invests. Fractional shares will be counted.

After the annuity commencement date, the person receiving annuity payments has the voting interest, and the number of votes decreases as annuity payments are made and as the reserves for the policy decrease. The person’s number of votes will be determined by dividing the reserve for the policy allocated to the applicable subaccount by the net asset value per share of the corresponding portfolio. Fractional shares will be counted.

The number of votes that you or the person receiving income payments has the right to instruct will be determined as of the date established by the underlying fund portfolio for determining shareholders eligible to vote at the meeting of the underlying fund portfolio. The Company will solicit voting instructions by sending you, or other persons entitled to vote, requests for instructions prior to that meeting in accordance with procedures established by the underlying fund portfolio. Portfolio shares as to which no timely instructions are received, and shares held by the Company in which you, or other persons entitled to vote have no beneficial interest, will be voted in proportion to the voting instructions that are received with respect to all policies participating in the same subaccount.

24

Each person having a voting interest in a subaccount will receive proxy material, reports, and other materials relating to the appropriate portfolio.

OTHER PRODUCTS

The Company makes other variable annuity policies available that may also be funded through the separate account. These variable annuity policies may have different features, such as different investment choices or charges.

CUSTODY OF ASSETS

The Company holds assets of each of the subaccounts. The assets of each of the subaccounts are segregated and held separate and apart from the assets of the other subaccounts and from the Company’s general account assets. The Company maintains records of all purchases and redemptions of shares of the underlying fund portfolios held by each of the subaccounts. Additional protection for the assets of the separate account is afforded by the Company’s fidelity bond, presently in the amount of $5,000,000, covering the acts of officers and employees of the Company.

LEGAL MATTERS

Sutherland Asbill & Brennan LLP, of Washington D.C. has provided legal advice to the Company regarding to certain matters under the federal securities laws that relate to the policies.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The financial statements of the Separate Account VA Y, at December 31, 2008 and for the periods disclosed in the financial statements, and the statutory-basis financial statements and schedules of Transamerica Life Insurance Company at December 31, 2008 and and 2007,, and for each of the three years in the period ended December 31, 2008, appearing herein, have been audited by Ernst & Young LLP, Suite 3000, 801 Grand Avenue, Des Moines, Iowa 50309, Independent Registered Public Accounting Firm, as set forth in their respective reports thereon appearing elsewhere herein, and are included in reliance upon their reports given on their authority as experts in accounting and auditing.

OTHER INFORMATION

A registration statement has been filed with the SEC, under the Securities Act of 1933 as amended, with respect to the policies discussed in this SAI. Not all of the information set forth in the registration statement and the amendments and exhibits thereto has been included in the prospectus or this SAI. Statements contained in the prospectus and this SAI concerning the content of the policies and other legal instruments are intended to be summaries. For a complete statement of the terms of these documents, reference should be made to the instruments filed with the SEC.

25

FINANCIAL STATEMENTS

The values of your interest in the separate account will be affected solely by the investment results of the selected subaccount(s). Financial statements of certain subaccounts of Separate Account VA Y, which are available for investment by Flexible Premium Variable Annuity—J policy owners, are contained herein. The statutory-basis financial statements and schedules of Transamerica Life Insurance Company, which are included in this SAI, should be considered only as bearing on the ability of the Company to meet its obligations under the policies. They should not be considered as bearing on the investment performance of the assets held in the separate account.

26

APPENDIX A

CONDENSED FINANCIAL INFORMATION

The accumulation unit values and the number of accumulation units outstanding for each subaccount from the date of inception are shown in the following tables.

	Year	2.00%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.793632	56,794
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.764313	238,838
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.715742	64,539
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.684342	0
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.917520	48,428
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$1.000000	$1.036128	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.732685	0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$1.000350	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$1.029863	0
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.713074	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.815125	0
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.719388	0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$1.000000	$1.012300	0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$1.000000	$0.663418	0
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$1.000000	$0.989628	0
	Year	1.80%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.795097	650,225
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.765724	756,110
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.717068	2,354,352

27

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.80%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.685608	435,380
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.919227	79,342
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.036413	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.734044	30,247
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	1.002197	191,272
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	1.031771	0
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.714013	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.816191	19,434
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.720336	144,651
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.012578	0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.664291	0
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.989903	0
	Year	1.55%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.689385	0
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.796946	86,721
Transamerica Asset Allocation—Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.668041	0
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.767498	923,736
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.718729	853,690
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.687197	134,506
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.731333	0
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.652035	0
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.647921	0

28

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.55%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.656511	0
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.632796	0
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.690972	0
Transamerica Jennison Growth VP– Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.700561	0
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.689795	0
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.755156	0
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.714003	0
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.662738	0
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.921360	0
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.692108	0
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.646152	0
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.715727	0
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008	$1.000000	$0.627499	0
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$1.000000	$1.036768	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.735747	0
Transamerica Convertible Securities VP – Service Class(1) Subaccount inception date July 31, 2006	2008	$1.000000	$0.686125	0
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.609356	0
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.664676	0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$1.004520	10,946
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.626922	0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$1.000000	$0.661155	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$1.034155	117,734
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.715188	0

29

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.55%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.817541	0
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.721522	0
Transamerica Van Kampen Active International Allocation VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.679315	0
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008	$1.000000	$0.640419	0
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.611926	0
PAM Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$1.034155	0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008	$1.000000	$0.530807	0
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008	$1.000000	$0.654555	0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$1.000000	$1.012924	0
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008	$1.000000	$0.650681	0
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008	$1.000000	$0.681360	0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$1.000000	$0.665388	0
Fidelity—VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008	$1.000000	$0.642238	0
Fidelity—VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008	$1.000000	$0.637459	0
Fidelity—VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008	$1.000000	$0.594860	0
Fidelity—VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008	$1.000000	$0.672421	0
Fidelity—VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008	$1.000000	$0.559987	0
Franklin Income Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008	$1.000000	$0.730445	0
Mutual Shares Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008	$1.000000	$0.683117	0
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008	$1.000000	$0.660350	0
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$1.000000	$0.990241	0
Janus Aspen—Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008	$1.000000	$0.636509	0

30

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.55%
Subaccount		Beginning AUV	Ending AUV	# Units
Janus Aspen—Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008	$1.000000	$0.615674	0
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.685619	0
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008	$1.000000	$0.808997	0
	Year	1.35%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.084339 $1.113901 $1.000000	$0.673481 $1.084339 $1.113901	0 0 0
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.101916 $1.052195 $1.000000	$0.854498 $1.101916 $1.052195	3,791,778 1,988,812 241,922
Transamerica Asset Allocation—Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.180266 $1.112463 $1.000000	$0.701538 $1.180266 $1.112463	495,461 439,166 193,693
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.142773 $1.075132 $1.000000	$0.832153 $1.142773 $1.075132	14,159,698 5,919,414 1,994,698
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.160868 $1.093933 $1.000000	$0.768272 $1.160868 $1.093933	21,788,798 11,938,616 4,265,808
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.164002 $1.087441 $1.000000	$0.731368 $1.164002 $1.087441	3,196,148 1,375,443 85,958
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.118447 $1.086394 $1.000000	$0.727603 $1.118447 $1.086394	85,000 88,656 0
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$1.150564 $1.099094 $1.000000	$0.668733 $1.150564 $1.099094	162,193 24,890 0
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$1.063410 $1.082063 $1.000000	$0.624428 $1.063410 $1.082063	16,870 63,126 0
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.007542 $1.092677 $1.000000	$0.599575 $1.007542 $1.092677	98,074 65,616 0
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.100744 $1.198465 $1.000000	$0.624497 $1.100744 $1.198465	54,081 5,921 0
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.152426 $1.119883 $1.000000	$0.710391 $1.152426 $1.119883	19,188 0 0
Transamerica Jennison Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.222800 $1.113786 $1.000000	$0.758759 $1.222800 $1.113786	32,243 0 0

31

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.35%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.116989 $1.123564 $1.000000	$0.699365 $1.116989 $1.123564	41,570 51,760 0
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.069864 $1.065972 $1.000000	$0.786775 $1.069864 $1.065972	98,904 39,615 0
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.193617 $1.111267 $1.000000	$0.759102 $1.193617 $1.111267	51,208 40,315 4,651
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.301503 $1.098089 $1.000000	$0.755945 $1.301503 $1.098089	41,337 10,088 4,696
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.102077 $1.026655 $1.000000	$1.053935 $1.102077 $1.026655	631,550 60,923 19,575
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.131377 $1.112705 $1.000000	$0.712226 $1.131377 $1.112705	172,160 38,822 4,619
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.222051 $1.130095 $1.000000	$0.693285 $1.222051 $1.130095	0 17,645 0
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.170750 $1.085938 $1.000000	$0.734596 $1.170750 $1.085938	69,788 15,872 4,735
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$1.265366 $1.115432 $1.000000	$0.701453 $1.265366 $1.115432	37,375 5,837 4,595
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$1.000000	$1.037055	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.187141 $1.061293 $1.000000	$0.789735 $1.187141 $1.061293	557,764 20,703 0
Transamerica Convertible Securities VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$1.248436 $1.069748 $1.000000	$0.776017 $1.248436 $1.069748	62,294 14,900 0
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.242400 $1.085153 $1.000000	$0.659774 $1.242400 $1.085153	30,647 5,897 0
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.305953 $1.078458 $1.000000	$0.759366 $1.305953 $1.078458	0 0 0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.048101 $1.013990 $1.000000	$1.056474 $1.048101 $1.013990	2,979,512 199,725 0
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.469051 $1.123761 $1.000000	$0.741027 $1.469051 $1.123761	13,377 0 0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$1.000000	$0.662384	37,430

32

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.35%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.071393 $1.026573 $1.000000	$1.135462 $1.071393 $1.026573	496,869 129,694 0
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.716139	2,963
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.818617	390,624
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$1.000000	$0.722483	415,614
Transamerica Van Kampen Active International Allocation VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.266856 $1.113915 $1.000000	$0.761851 $1.266856 $1.113915	86,078 59,615 0
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$1.195830 $1.112562 $1.000000	$0.681893 $1.195830 $1.112562	10,332 0 0
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.346857 $1.116782 $1.000000	$0.711744 $1.346857 $1.116782	0 0 0
PAM Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.071393 $1.026573 $1.000000	$1.135462 $1.071393 $1.026573	5,900 0 0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$1.116861 $1.116796 $1.000000	$0.529976 $1.116861 $1.116796	18,687 4,943 4,596
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$1.208702 $1.096459 $1.000000	$0.684202 $1.208702 $1.096459	0 0 0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$1.000000	$1.013201	0
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$1.170540 $1.131444 $1.000000	$0.684910 $1.170540 $1.131444	51,017 79,666 0
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$1.240823 $1.106972 $1.000000	$0.736731 $1.240823 $1.106972	10,134 0 0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$1.000000	$0.666271	463,387
Fidelity—VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$1.252152 $1.081945 $1.000000	$0.707993 $1.252152 $1.081945	250,922 270,463 4,729
Fidelity—VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$1.117653 $1.118591 $1.000000	$0.630602 $1.117653 $1.118591	21,193 17,547 0
Fidelity—VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$1.356056 $1.085161 $1.000000	$0.704967 $1.356056 $1.085161	0 79,398 0
Fidelity—VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$1.210842 $1.064060 $1.000000	$0.721487 $1.210842 $1.064060	159,587 75,481 4,798

33

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.35%
Subaccount		Beginning AUV	Ending AUV	# Units
Fidelity—VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$1.175836 $1.130305 $1.000000	$0.565127 $1.175836 $1.130305	40,031 36,555 0
Franklin Income Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$0.970715 $1.000000	$0.673706 $0.970715	326,273 169,537
Mutual Shares Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$0.964764 $1.000000	$0.598643 $0.964764	108,743 74,321
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$1.069427 $1.000000	$0.629081 $1.069427	70,726 28,153
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$1.000000	$0.990519	0
Janus Aspen—Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008 2007 2006	$1.356271 $1.129176 $1.000000	$0.751255 $1.356271 $1.129176	16,327 21,373 0
Janus Aspen—Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008 2007 2006	$1.285923 $1.191788 $1.000000	$0.700233 $1.285923 $1.191788	7,755 7,291 0
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.164901 $1.154723 $1.000000	$0.695106 $1.164901 $1.154723	148,786 125,839 4,434
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.106036 $1.078594 $1.000000	$0.847673 $1.106036 $1.078594	95,503 17,718 0
	Year	1.20%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.086609 $1.114576 $1.000000	$0.675898 $1.086609 $1.114576	16,626 18,474 3,589
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.104221 $1.052830 $1.000000	$0.857565 $1.104221 $1.052830	2,756,168 603,102 256,891
Transamerica Asset Allocation—Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.182747 $1.113142 $1.000000	$0.704053 $1.182747 $1.113142	149,322 260,843 0
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.145170 $1.075791 $1.000000	$0.835136 $1.145170 $1.075791	9,258,382 5,302,779 894,544
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.163294 $1.094596 $1.000000	$0.771028 $1.163294 $1.094596	25,017,265 18,889,456 4,207,596
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.166452 $1.088110 $1.000000	$0.733990 $1.166452 $1.088110	2,951,911 1,426,118 188,326
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.120814 $1.087057 $1.000000	$0.730219 $1.120814 $1.087057	39,512 28,645 4,451

34

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.20%
Subaccount		Beginning AUV	Ending AUV	# Units
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$1.152991 $1.099777 $1.000000	$0.671154 $1.152991 $1.099777	36,265 37,033 0
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$1.065641 $1.082723 $1.000000	$0.626671 $1.065641 $1.082723	0 0 0
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.009656 $1.093343 $1.000000	$0.601730 $1.009656 $1.093343	85,731 65,840 36,335
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.103065 $1.199203 $1.000000	$0.626747 $1.103065 $1.199203	39,638 50,882 51,737
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.154846 $1.120567 $1.000000	$0.712941 $1.154846 $1.120567	0 0 0
Transamerica Jennison Growth VP– Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.225374 $1.114466 $1.000000	$0.761482 $1.225374 $1.114466	0 0 0
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.119348 $1.124262 $1.000000	$0.701885 $1.119348 $1.124262	0 0 0
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.072119 $1.066626 $1.000000	$0.789611 $1.072119 $1.066626	42,358 63,417 35,954
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.196129 $1.111951 $1.000000	$0.761829 $1.196129 $1.111951	24,155 21,845 0
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.304235 $1.098756 $1.000000	$0.758664 $1.304235 $1.098756	32,064 20,204 2,708
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.104410 $1.027287 $1.000000	$1.057730 $1.104410 $1.027287	278,404 255,246 82,609
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.133753 $1.113383 $1.000000	$0.714781 $1.133753 $1.113383	66,078 67,921 6,184
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.224623 $1.130786 $1.000000	$0.695776 $1.224623 $1.130786	21,161 21,090 2,624
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$1.173216 $1.086597 $1.000000	$0.737243 $1.173216 $1.086597	18,872 15,242 1,821
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$1.268027 $1.116120 $1.000000	$0.703973 $1.268027 $1.116120	3,131 3,651 0
Transamerica Efficient Markets VP – Service Class Subaccount inception date November 10, 2008	2008	$1.000000	$1.037270	0

35

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.20%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.189629 1.061940 1.000000	$ $ $	0.792574 1.189629 1.061940	488,234 319,065 70,879
Transamerica Convertible Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.251049 1.070400 1.000000	$ $ $	0.778799 1.251049 1.070400	86,444 124,933 28,605
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.244995 1.085811 1.000000	$ $ $	0.662141 1.244995 1.085811	0 0 0
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.308702 1.079124 1.000000	$ $ $	0.762105 1.308702 1.079124	0 0 0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.050300 1.014612 1.000000	$ $ $	1.060265 1.050300 1.014612	703,382 256,586 236,754
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.472140 1.124452 1.000000	$ $ $	0.743699 1.472140 1.124452	0 0 0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$	1.000000	$	0.663319	10,910
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.073636 1.027198 1.000000	$ $ $	1.139520 1.073636 1.027198	139,638 11,784 1,950
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.716849	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.819431	542,681
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.723199	387,906
Transamerica Van Kampen Active International Allocation VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.269520 1.114600 1.000000	$ $ $	0.764598 1.269520 1.114600	11,735 1,628 0
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.198335 1.113233 1.000000	$ $ $	0.684342 1.198335 1.113233	10,649 0 0
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.349679 1.117456 1.000000	$ $ $	0.714290 1.349679 1.117456	8,959 10,744 0
PAM Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.073636 1.027198 1.000000	$ $ $	1.139520 1.073636 1.027198	0 0 0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.119214 1.117480 1.000000	$ $ $	0.531898 1.119214 1.117480	0 0 0
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.211239 1.097132 1.000000	$ $ $	0.686655 1.211239 1.097132	0 0 0
AllianceBernstein Balanced Wealth Strategy Portfolio – Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.013410	0

36

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.20%
Subaccount		Beginning AUV		Ending AUV		# Units
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.173006 1.132139 1.000000	$ $ $	0.687373 1.173006 1.132139	10,675 10,675 1,819
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.243442 1.107650 1.000000	$ $ $	0.739381 1.243442 1.107650	0 0 0
Fidelity—VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.666935	11,587
Fidelity—VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.254806 1.082615 1.000000	$ $ $	0.710549 1.254806 1.082615	87,110 76,395 6,197
Fidelity—VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.120010 1.119277 1.000000	$ $ $	0.632873 1.120010 1.119277	22,999 3,614 0
Fidelity—VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.358906 1.085817 1.000000	$ $ $	0.707494 1.358906 1.085817	17,936 17,936 0
Fidelity—VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.213386 1.064717 1.000000	$ $ $	0.724080 1.213386 1.064717	76,202 76,205 5,410
Fidelity—VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.178333 1.131010 1.000000	$ $ $	0.567175 1.178333 1.131010	6,416 800 0
Franklin Income Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.971675 1.000000	$ $	0.675372 0.971675	15,604 4,210
Mutual Shares Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.965715 1.000000	$ $	0.600119 0.965715	4,032 4,040
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	1.070485 1.000000	$ $	0.630642 1.070485	13,882 1,971
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.990720	0
Janus Aspen—Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.359125 1.129867 1.000000	$ $ $	0.753960 1.359125 1.129867	9,607 0 0
Janus Aspen—Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.288627 1.192519 1.000000	$ $ $	0.702756 1.288627 1.192519	9,944 9,944 1,699
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.167347 1.155422 1.000000	$ $ $	0.697603 1.167347 1.155422	0 0 0
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.108356 1.079249 1.000000	$ $ $	0.850714 1.108356 1.079249	0 0 0

37

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.15%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.087376 1.114805 1.000000	$ $ $	0.676714 1.087376 1.114805	4,683 4,690 4,999
Transamerica Asset Allocation—Conservative VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.105004 1.053046 1.000000	$ $ $	0.858596 1.105004 1.053046	9,999,675 3,368,969 304,534
Transamerica Asset Allocation—Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.183576 1.113366 1.000000	$ $ $	0.704887 1.183576 1.113366	2,879,575 2,333,772 527,838
Transamerica Asset Allocation—Moderate VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.145967 1.076007 1.000000	$ $ $	0.836138 1.145967 1.076007	39,160,987 18,468,162 1,484,793
Transamerica Asset Allocation—Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.164122 1.094828 1.000000	$ $ $	0.771951 1.164122 1.094828	94,223,608 53,349,004 9,973,902
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.167259 1.088325 1.000000	$ $ $	0.734869 1.167259 1.088325	9,512,686 4,065,930 384,150
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.121613 1.087288 1.000000	$ $ $	0.731114 1.121613 1.087288	232,196 112,761 0
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.153797 1.100002 1.000000	$ $ $	0.671950 1.153797 1.100002	313,267 184,569 1,974
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.066396 1.082943 1.000000	$ $ $	0.627430 1.066396 1.082943	7,448 61,070 0
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.010375 1.093570 1.000000	$ $ $	0.602464 1.010375 1.093570	228,721 35,558 4,641
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.103816 1.199440 1.000000	$ $ $	0.627488 1.103816 1.199440	62,445 66,981 8,422
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.155663 1.120800 1.000000	$ $ $	0.713807 1.155663 1.120800	19,656 6,103 0
Transamerica Jennison Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.226238 1.114697 1.000000	$ $ $	0.762402 1.226238 1.114697	131,903 5,970 0
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.120130 1.124490 1.000000	$ $ $	0.702727 1.120130 1.124490	15,171 7,815 1,254
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.072883 1.066851 1.000000	$ $ $	0.790565 1.072883 1.066851	135,316 124,340 0
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.196962 1.112169 1.000000	$ $ $	0.762735 1.196962 1.112169	226,454 75,716 3,559

38

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.15%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.305169 1.098984 1.000000	$ $ $	0.759590 1.305169 1.098984	77,660 69,193 24,080
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.105172 1.027497 1.000000	$ $ $	1.058979 1.105172 1.027497	999,622 242,610 49,173
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.134548 1.113610 1.000000	$ $ $	0.715644 1.134548 1.113610	231,201 226,145 93,016
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.225486 1.131015 1.000000	$ $ $	0.696617 1.225486 1.131015	48,525 32,880 28,040
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.174046 1.086825 1.000000	$ $ $	0.738127 1.174046 1.086825	29,246 24,764 7,453
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.268911 1.116342 1.000000	$ $ $	0.704814 1.268911 1.116342	82,437 72,161 41,508
Transamerica Efficient Markets VP - Service Class Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.037343	14,425
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.190480 1.062164 1.000000	$ $ $	0.793538 1.190480 1.062164	588,424 145,521 4,011
Transamerica Convertible Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.251943 1.070620 1.000000	$ $ $	0.779747 1.251943 1.070620	21,645 23,322 5,163
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.245882 1.086036 1.000000	$ $ $	0.662947 1.245882 1.086036	0 0 0
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.309615 1.079339 1.000000	$ $ $	0.763009 1.309615 1.079339	9,859 0 0
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.051030 1.014808 1.000000	$ $ $	1.061523 1.051030 1.014808	3,655,897 786,375 160,796
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.473172 1.124683 1.000000	$ $ $	0.744593 1.473172 1.124683	0 0 0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$	1.000000	$	0.663622	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.074391 1.027412 1.000000	$ $ $	1.140897 1.074391 1.027412	804,071 35,066 0
Transamerica Value Balanced VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.717081	33,641
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.819699	1,679,010
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.723436	3,678,196

39

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.15%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Van Kampen Active International Allocation VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.270411 1.114827 1.000000	$ $ $	0.765515 1.270411 1.114827	221,013 119,263 5,835
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.199182 1.113470 1.000000	$ $ $	0.685165 1.199182 1.113470	4,954 39,695 0
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.350632 1.117686 1.000000	$ $ $	0.715154 1.350632 1.117686	20,517 54,989 4,746
PAM Transamerica U.S. Government Securities VP — Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.074391 1.027412 1.000000	$ $ $	1.140897 1.074391 1.027412	101,931 0 0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.120001 1.117711 1.000000	$ $ $	0.532530 1.120001 1.117711	67,331 104,835 19,855
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.212101 1.097356 1.000000	$ $ $	0.687489 1.212101 1.097356	27,108 27,116 3,912
AllianceBernstein Balanced Wealth Strategy Portfolio - Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.013482	5,900
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.173823 1.132358 1.000000	$ $ $	0.688192 1.173823 1.132358	35,846 22,022 0
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.244325 1.107880 1.000000	$ $ $	0.740273 1.244325 1.107880	39,637 39,644 3,874
Fidelity – VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.667157	197,097
Fidelity - VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.255688 1.082835 1.000000	$ $ $	0.711414 1.255688 1.082835	246,571 205,404 50,219
Fidelity - VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.120789 1.119504 1.000000	$ $ $	0.633631 1.120789 1.119504	137,991 57,238 0
Fidelity – VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.359846 1.086041 1.000000	$ $ $	0.708345 1.359846 1.086041	0 0 4,739
Fidelity - VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.214238 1.064932 1.000000	$ $ $	0.724948 1.214238 1.064932	96,517 69,893 13,574
Fidelity – VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.179157 1.131240 1.000000	$ $ $	0.567846 1.179157 1.131240	18,338 15,749 1,053
Franklin Income Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.971991 1.000000	$ $	0.675928 0.971991	758,995 419,011
Mutual Shares Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.966036 1.000000	$ $	0.600622 0.966036	129,665 103,806
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	1.070845 1.000000	$ $	0.631171 1.070845	127,591 86,046

40

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.15%
Subaccount		Beginning AUV		Ending AUV		# Units
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.990788	24,360
Janus Aspen – Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.360067 1.130093 1.000000	$ $ $	0.754853 1.360067 1.130093	20,179 18,321 3,871
Janus Aspen – Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.289534 1.192760 1.000000	$ $ $	0.703600 1.289534 1.192760	7,853 7,387 0
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.168165 1.155662 1.000000	$ $ $	0.698444 1.168165 1.155662	24,730 24,755 9,408
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.109131 1.079472 1.000000	$ $ $	0.851734 1.109131 1.079472	204,109 139,892 21,149
	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica American Century Large Company Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.089672 1.115489 1.000000	$ $ $	0.679153 1.089672 1.115489	34,154 33,331 0
Transamerica Asset Allocation – Conservative VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.107334 1.053969 1.000000	$ $ $	0.861688 1.107334 1.053969	5,631,661 2,517,181 1,180,078
Transamerica Asset Allocation – Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.186073 1.114056 1.000000	$ $ $	0.707427 1.186073 1.114056	2,072,246 1,453,548 290,595
Transamerica Asset Allocation – Moderate VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.148406 1.076671 1.000000	$ $ $	0.839162 1.148406 1.076671	24,305,600 12,628,451 4,087,867
Transamerica Asset Allocation – Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.166573 1.095500 1.000000	$ $ $	0.774733 1.166573 1.095500	73,353,147 43,284,348 9,746,373
Transamerica International Moderate Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.169720 1.088991 1.000000	$ $ $	0.737518 1.169720 1.088991	10,500,872 7,133,361 1,119,065
Transamerica BlackRock Large Cap Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.123964 1.087948 1.000000	$ $ $	0.733737 1.123964 1.087948	25,221 115,905 0
Transamerica Capital Guardian Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.156228 1.100672 1.000000	$ $ $	0.674376 1.156228 1.100672	269,796 236,703 197,242
Transamerica Capital Guardian U.S. Equity VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.068634 1.083607 1.000000	$ $ $	0.629688 1.068634 1.083607	177,920 152,255 108,510
Transamerica Capital Guardian Value VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.012497 1.094238 1.000000	$ $ $	0.604624 1.012497 1.094238	243,457 171,550 112,062

41

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Clarion Global Real Estate Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.106146 1.200179 1.000000	$ $ $	0.629749 1.106146 1.200179	205,257 175,526 36,271
Transamerica JPMorgan Enhanced Index VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.158096 1.121489 1.000000	$ $ $	0.716377 1.158096 1.121489	16,374 16,261 0
Transamerica Jennison Growth VP– Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.228813 1.115379 1.000000	$ $ $	0.765142 1.228813 1.115379	0 0 0
Transamerica Legg Mason Partners All Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.122490 1.125176 1.000000	$ $ $	0.705260 1.122490 1.125176	5,260 2,911 1,967
Transamerica MFS High Yield VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.075132 1.067501 1.000000	$ $ $	0.793411 1.075132 1.067501	19,539 0 0
Transamerica MFS International Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.199480 1.112852 1.000000	$ $ $	0.765484 1.199480 1.112852	112,682 62,289 2,001
Transamerica Marsico Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.307903 1.099653 1.000000	$ $ $	0.762305 1.307903 1.099653	45,768 151,773 51,150
Transamerica PIMCO Total Return VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.107516 1.028119 1.000000	$ $ $	1.062809 1.107516 1.028119	1,175,987 75,995 17,358
Transamerica T. Rowe Price Equity Income VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.136946 1.114296 1.000000	$ $ $	0.718220 1.136946 1.114296	181,060 202,521 66,835
Transamerica T. Rowe Price Growth Stock VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.228046 1.131707 1.000000	$ $ $	0.699120 1.228046 1.131707	22,551 20,877 21,744
Transamerica T. Rowe Price Small Cap VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.176510 1.087448 1.000000	$ $ $	0.740781 1.176510 1.087448	46,998 71,681 39,048
Transamerica Templeton Global VP – Service Class(1) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.271592 1.117037 1.000000	$ $ $	0.707352 1.271592 1.117037	18,725 16,282 0
Transamerica Efficient Markets VP - Service Class Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.037554	0
Transamerica Balanced VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.192988 1.062815 1.000000	$ $ $	0.796399 1.192988 1.062815	1,628,344 436,089 46,365
Transamerica Convertible Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.254566 1.071274 1.000000	$ $ $	0.782542 1.254566 1.071274	103,577 95,812 37,419
Transamerica Equity VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.248500 1.086701 1.000000	$ $ $	0.665328 1.248500 1.086701	0 0 1,481

42

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Transamerica Growth Opportunities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.312376 1.080004 1.000000	$ $ $	0.765757 1.312376 1.080004	64,967 156,491 69,663
Transamerica Money Market VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.053248 1.015429 1.000000	$ $ $	1.065348 1.053248 1.015429	3,416,072 746,254 218,805
Transamerica Science & Technology VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.476282 1.125369 1.000000	$ $ $	0.747283 1.476282 1.125369	1,972 0 0
Transamerica Small/Mid Cap Value VP – Service Class Subaccount inception date January 22, 2008	2008	$	1.000000	$	0.664552	0
Transamerica U.S. Government Securities VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.076663 1.028045 1.000000	$ $ $	1.145005 1.076663 1.028045	253,708 8,292 0
Transamerica Value Balanced VP – Service Class Subaccount inception date July 31, 2006	2008	$	1.000000	$	0.717801	0
Transamerica Index 50 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.820520	1,788,126
Transamerica Index 75 VP – Service Class Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.724155	3,249,393
Transamerica Van Kampen Active International Allocation VP – Service	2008	$	1.273086	$	0.768272	52,297
Class	2007	$	1.115511	$	1.273086	37,533
Subaccount inception date July 31, 2006	2006	$	1.000000	$	1.115511	0
Transamerica Van Kampen Large Cap Core VP – Service Class(2) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.201710 1.114147 1.000000	$ $ $	0.687634 1.201710 1.114147	60,166 49,252 0
Transamerica Van Kampen Mid-Cap Growth VP – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.353486 1.118380 1.000000	$ $ $	0.717735 1.353486 1.118380	48,137 68,455 12,670
PAM Transamerica U.S. Government Securities VP — Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.076663 1.028045 1.000000	$ $ $	1.145005 1.076663 1.028045	3,624 0 0
AIM V.I. Basic Value Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.122355 1.118391 1.000000	$ $ $	0.534453 1.122355 1.118391	58,221 16,436 0
AIM V.I. Capital Appreciation Fund – Series II Shares Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.214651 1.098029 1.000000	$ $ $	0.689967 1.214651 1.098029	3,681 3,777 0
AllianceBernstein Balanced Wealth Strategy Portfolio - Class B Subaccount inception date November 10, 2008	2008	$	1.000000	$	1.013687	127,445
AllianceBernstein Growth and Income Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.176307 1.133057 1.000000	$ $ $	0.690681 1.176307 1.133057	105,060 105,060 105,060
AllianceBernstein Large Cap Growth Portfolio – Class B Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.246947 1.108560 1.000000	$ $ $	0.742942 1.246947 1.108560	151,021 104,935 104,935
Fidelity – VIP Balanced Portfolio – Service Class 2 Subaccount inception date May 1, 2008	2008	$	1.000000	$	0.667815	270,880

43

CONDENSED FINANCIAL INFORMATION — (Continued)

	Year	1.00%
Subaccount		Beginning AUV		Ending AUV		# Units
Fidelity – VIP Contrafund ® Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.258333 1.083504 1.000000	$ $ $	0.713966 1.258333 1.083504	107,425 92,843 26,138
Fidelity – VIP Equity-Income Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.123157 1.120193 1.000000	$ $ $	0.635921 1.123157 1.120193	28,080 9,452 2,840
Fidelity – VIP Growth Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.362724 1.086705 1.000000	$ $ $	0.710898 1.362724 1.086705	4,919 0 0
Fidelity – VIP Mid Cap Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.216793 1.065585 1.000000	$ $ $	0.727560 1.216793 1.065585	40,903 155,381 23,449
Fidelity – VIP Value Strategies Portfolio – Service Class 2 Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.181642 1.131933 1.000000	$ $ $	0.569896 1.181642 1.131933	10,507 10,120 2,818
Franklin Income Securities Fund - Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.972958 1.000000	$ $	0.677613 0.972958	123,982 2,381
Mutual Shares Securities Fund - Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	0.966988 1.000000	$ $	0.602110 0.966988	22,712 3,556
Templeton Foreign Securities Fund – Class 2 Subaccount inception date May 1, 2007	2008 2007	$ $	1.071902 1.000000	$ $	0.632734 1.071902	22,216 8,952
Franklin Templeton VIP Founding Funds Allocation Fund – Class 4 Subaccount inception date November 10, 2008	2008	$	1.000000	$	0.990993	89,239
Janus Aspen – Enterprise Portfolio – Service Shares(3) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.362941 1.130792 1.000000	$ $ $	0.757588 1.362941 1.130792	28,040 24,859 20,146
Janus Aspen – Worldwide Portfolio – Service Shares(4) Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.292250 1.193490 1.000000	$ $ $	0.706136 1.292250 1.193490	26,489 24,699 0
MFS New Discovery Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.170634 1.156373 1.000000	$ $ $	0.700970 1.170634 1.156373	23,693 3,584 0
MFS Total Return Series – Service Class Subaccount inception date July 31, 2006	2008 2007 2006	$ $ $	1.111468 1.080133 1.000000	$ $ $	0.854799 1.111468 1.080133	55,174 55,198 2,011

(1) Transamerica Capital Guardian Global VP merged into Transamerica Templeton Global VP.

(2) Transamerica Capital Guardian U.S. Equity VP merged into Transamerica Van Kampen Large Cap Core VP.

(3) formerly known as Janus Aspen—Mid Cap Growth Portfolio.

(4) formerly known as Janus Aspen—Worldwide Growth Portfolio.

The Transamerica BlackRock Tactical Allocation VP, the Transamerica BlackRock Global Allocation VP, and the Transamerica ProFund UltraBear VP had not commenced operations as of December 31, 2008 therefore, comparable data is not available.

44

FINANCIAL STATEMENTS AND SCHEDULES – STATUTORY

BASIS

Transamerica Life Insurance Company

Years Ended December 31, 2008, 2007, and 2006

Transamerica Life Insurance Company

Financial Statements and Schedules – Statutory Basis

Years Ended December 31, 2008, 2007, and 2006

Contents

Report of Independent Registered Public Accounting Firm	1
Audited Financial Statements
Balance Sheets – Statutory Basis	3
Statements of Operations – Statutory Basis	5
Statements of Changes in Capital and Surplus – Statutory Basis	7
Statements of Cash Flow – Statutory Basis	10
Notes to Financial Statements – Statutory Basis	12
Statutory-Basis Financial Statement Schedules
Summary of Investments – Other Than Investments in Related Parties	94
Supplementary Insurance Information	95
Reinsurance	96

Report of Independent Registered Public Accounting Firm

The Board of Directors

Transamerica Life Insurance Company

We have audited the accompanying statutory-basis balance sheets of Transamerica Life Insurance Company (the Company) as of December 31, 2008 and 2007, and the related statutory-basis statements of operations, changes in capital and surplus, and cash flow for each of the three years in the period ended December 31, 2008. Our audits also included the statutory-basis financial statement schedules required by Regulation S-X, Article 7. These financial statements and schedules are the responsibility of the Company’s 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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, the Company presents its financial statements in conformity with accounting practices prescribed or permitted by the Insurance Division, Department of Commerce, of the State of Iowa, which practices differ from U.S. generally accepted accounting principles. The variances between such practices and U.S. generally accepted accounting principles also are described in Note 1. The effects on the financial statements of these variances are not reasonably determinable but are presumed to be material.

In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with U.S. generally accepted accounting principles, the financial position of Transamerica Life Insurance Company at December 31, 2008 and 2007, or the results of its operations or its cash flow for each of the three years in the period ended December 31, 2008.

1

However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Transamerica Life Insurance Company at December 31, 2008 and 2007, and the results of its operations and its cash flow for each of the three years in the period ended December 31, 2008, in conformity with accounting practices prescribed or permitted by the Insurance Division, Department of Commerce, of the State of Iowa. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic statutory-basis financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 2 to the financial statements, Transamerica Life Insurance Company, with the permission of the Insurance Division, Department of Commerce, of the State of Iowa, changed its policy for deferred income taxes at December 31, 2008. As discussed in Note 3 to the financial statements, Transamerica Life Insurance Company, with the permission of the Insurance Division, Department of Commerce, of the State of Iowa, changed its policy related to its calculation of reserves related to synthetic guaranteed investment contracts at December 31, 2008. Also, as discussed in Note 3 to the financial statements, Transamerica Life Insurance Company changed its accounting for investments in certain low income housing tax credit properties at January 1, 2006.

/s/ Ernst & Young LLP

Des Moines, Iowa

April 22, 2009

2

Transamerica Life Insurance Company

Balance Sheets – Statutory Basis

(Dollars in Thousands, Except per Share Amounts)

	December 31
	2008		2007
			Restated
Admitted assets
Cash and invested assets:
Cash, cash equivalents and short-term investments	$	3,358,268	$	1,852,686
Bonds:
Affiliated entities		268,482		777,142
Unaffiliated		51,190,872		51,170,594
Preferred stocks:
Affiliated entities		8,901		11,354
Unaffiliated		1,817,213		2,018,837
Common stocks:
Affiliated entities (cost: 2008 - $747,489; 2007 - $515,985)		684,654		457,917
Unaffiliated (cost: 2008 - $347,384; 2007 - $334,889)		340,730		356,938
Mortgage loans on real estate		10,877,725		11,664,602
Real estate, at cost less accumulated depreciation
(2008 - $43,262; 2007 - $40,611)
Home office properties		85,820		77,469
Investment properties		36,496		39,925
Properties held for sale		31,125		29,774
Policy loans		732,588		690,855
Receivables for securities		39,662		58,011
Other invested asset receivable		191,348		—
Derivatives		164,217		—
Collateral balance		68,410		—
Other invested assets		3,110,823		4,234,117
Total cash and invested assets		73,007,334		73,440,221
Accrued investment income		722,363		1,156,569
Cash surrender value of life insurance policies		279,903		135,700
Premiums deferred and uncollected		167,584		292,178
Current federal income tax recoverable		352,420		—
Net deferred income tax asset		889,159		337,279
Reinsurance receivable		310,903		330,737
Receivable from parent, subsidiaries and affiliates		217,479		281,636
Accounts receivable		154,934		146,305
General agents pension fund		52,151		76,748
Reinsurance deposit receivable		128,745		120,582
Goodwill		60,765		69,719
Other assets		34,784		176,192
Separate account assets		27,404,629		36,041,715
Total admitted assets	$	103,783,153	$	112,605,581

3

	December 31
	2008			2007
				Restated
Liabilities and capital and surplus
Liabilities:
Aggregate reserves for policies and contracts:
Life	$	15,134,922		$	15,226,295
Annuity		23,412,004			26,856,767
Accident and health		3,187,935			3,051,972
Policy and contract claim reserves:
Life		283,453			353,801
Accident and health		200,884			176,443
Liability for deposit-type contracts		13,945,417			15,334,519
Other policyholders’ funds		20,405			25,835
Municipal reverse repurchase agreements		365,846			397,703
Remittances and items not allocated		524,661			408,246
Case level liability		13,761			20,561
Asset valuation reserve		1,273,354			1,528,475
Interest maintenance reserve		384,613			465,359
Funds held under reinsurance treaties		12,127,743			7,311,424
Reinsurance in unauthorized reinsurers		46,935			66,904
Commissions and expense allowances payable on reinsurance assumed		58,684			84,767
Federal and foreign income taxes payable (including $0 and $244,355 of realized capital gains (losses) at December 31, 2008 and 2007, respectively)		—			208,177
Payable to affiliates		244,864			340,990
Payable for securities		32,185			163,379
Securities lending liability		54,033			76,851
Transfers from separate accounts due or accrued (including $(512,661) and $(518,967) accrued for expense allowances recognized in reserves, net of reinsurance allowances at December 31, 2008 and 2007, respectively)		(537,656	)		(559,871	)
Amounts withheld or retained		155,233			168,201
Derivatives		—			214,737
Other liabilities		657,426			386,989
Separate account liabilities		27,357,976			35,955,202
Total liabilities		98,944,678			108,263,726
Capital and surplus:
Common stock, $10 per share par value, 1,000,000 shares authorized, 676,190 issued and outstanding		6,762			6,762
Preferred stock, Series A, $10 per share par value, 42,500 shares authorized and issued (total liquidation value - $58,000); Series B, $10 per share par value, 250,000 shares authorized, 174,345 shares issued and 117,005 shares outstanding as of December 31, 2008 and 2007 (total liquidation value - $1,743,450)		2,168			2,168
Treasury stock, Series A Preferred, $10 per share par value, 42,500 shares as of December 31, 2008 and 2007 and Series B Preferred, $10 per share par value, 57,340 shares as of December 31, 2008 and 2007		(631,400	)		(631,400	)
Aggregate write-ins for other than special surplus funds		380,358			—
Surplus notes		150,000			150,000
Paid-in surplus		3,186,591			2,693,895
Unassigned surplus		1,743,996			2,120,430
Total capital and surplus		4,838,475			4,341,855
Total liabilities and capital and surplus	$	103,783,153		$	112,605,581

See accompanying notes.

4

Transamerica Life Insurance Company

Statements of Operations – Statutory Basis

(Dollars in Thousands)

	Year Ended December 31
	2008			2007			2006
				Restated			Restated
Revenues:
Premiums and other considerations, net of reinsurance:
Life	$	2,111,407		$	1,972,579		$	1,936,610
Annuity		4,700,329			5,598,533			4,891,121
Accident and health		706,108			705,705			708,340
Net investment income		3,886,850			4,212,323			4,279,854
Amortization of interest maintenance reserve		29,314			42,059			52,579
Commissions and expense allowances on reinsurance ceded		(325,830	)		132,642			(67,782	)
Income from fees associated with investment management, administration and contract guarantees for separate accounts		399,445			439,852			392,498
Reserve adjustment on reinsurance ceded		10,159,202			1,261,103			732,781
Consideration on reinsurance transaction		16,542			889,492			955,428
Income from administrative service agreement with TFA		44,122			49,346			43,080
Other income		16,004			109,726			244,208
		21,743,493			15,413,360			14,168,717
Benefits and expenses:
Benefits paid or provided for:
Life benefits		1,028,541			1,204,980			1,128,241
Accident and health benefits		492,369			358,199			396,152
Annuity benefits		1,597,820			1,738,312			1,815,042
Surrender benefits		7,773,476			9,716,655			8,865,555
Other benefits		742,343			867,274			840,999
Increase (decrease) in aggregate reserves for policies and contracts:
Life		19,973			157,689			1,203,083
Annuity		(3,440,891	)		(4,436,268	)		(4,755,152	)
Accident and health		124,959			312,053			290,931
		8,338,590			9,918,894			9,784,851
Insurance expenses:
Commissions		1,445,841			1,344,822			1,275,149
General insurance expenses		683,966			676,791			598,918
Taxes, licenses and fees		147,880			132,380			114,928
Net transfers to separate accounts		529,435			1,582,484			2,282,890
Change in case level liability		(6,800	)		20,561			18,865
Modified coinsurance reinsurance premium paid		10,872,061			173,147			—
Consideration paid on reinsurance transaction		447,623			1,096,322			—
Other expenses		292,871			269,443			90,249
		14,412,877			5,295,950			4,380,999
Total benefits and expenses		22,751,467			15,214,844			14,165,850
Gain (loss) from operations before dividends to policyholders, federal income tax expense and net realized capital gains on investments	$	(1,007,974	)	$	198,516		$	2,867

5

Transamerica Life Insurance Company

Statements of Operations – Statutory Basis (continued)

(Dollars in Thousands)

	Year Ended December 31
	2008			2007			2006
				Restated			Restated
Dividends to policyholders	$	12,165		$	17,417		$	16,971
Gain (loss) from operations before federal income tax (benefit) expense and net realized capital gains on investments		(1,020,139	)		181,099			(14,104	)
Federal income tax (benefit) expense		(32,404	)		202,974			162,139
Loss from operations before net realized capital gains on investments		(987,735	)		(21,875	)		(176,243	)
Net realized capital gains on investments (net of related federal income taxes and amounts transferred to/from interest maintenance reserve)		366,221			313,799			149,387
Net income (loss)	$	(621,514	)	$	291,924		$	(26,856	)

See accompanying notes.

6

Transamerica Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis

(Dollars in Thousands)

	Common Stock			Preferred Stock			Treasury Stock			Aggregate Write-ins for Other than Special Surplus Funds		Surplus Notes			Paid-in Surplus			Unassigned Surplus			Total Capital and Surplus
Balance at January 1, 2006
As originally presented	$	3,170		$	1,302		$	—		$	—	$	575,000		$	1,437,996		$	400,577		$	2,418,045
Merger of Transamerica Occidental Life Insurance Company (TOLIC)		13,793			13,793			—			—		200,000			1,673,294			709,875			2,610,755
Merger adjustment - retire TOLIC stock		(13,793	)		(13,793	)		—			—		—			27,595			(9	)		—
Merger of Life Investors Insurance Company of America (LIICA)		1,686			1,250			—			—		150,000			363,009			52,109			568,054
Merger adjusment - retire LIICA stock		(1,686	)		(1,250	)		—			—		—			2,936			—			—
Merger adjustment - AVR reduction		—			—			—			—		—			—			7,997			7,997
Reverse TOLIC's ownership of Transamerica		(3,170	)		—			—			—		—			(675,248	)		—			(678,418	)
Nonadmit value of reciprocal ownership		—			—			—			—		—			—			(229,078	)		(229,078	)
Issuance of stock in connection with statutory merger		6,762			866			—			—		—			(7,628	)		—			—
Balance at January 1, 2006, as restated		6,762			2,168			—			—		925,000			2,821,954			941,471			4,697,355
Cumulative effect of change in accounting principle		—			—			—			—		—			—			(7,489	)		(7,489	)
Net loss		—			—			—			—		—			—			(26,856	)		(26,856	)
Change in net unrealized capital gains/losses, net of tax		—			—			—			—		—			—			262,343			262,343
Nonadmit value of reciprocal ownership		—			—			—			—		—			—			(257,732	)		(257,732	)
Change in net unrealized foreign exchange capital gains/losses, net of tax		—			—			—			—		—			—			(1,104	)		(1,104	)
Change in net deferred income tax asset		—			—			—			—		—			—			391,558			391,558
Change in other nonadmitted assets		—			—			—			—		—			—			(368,410	)		(368,410	)
Change in provision for reinsurance in unauthorized companies		—			—			—			—		—			—			7,468			7,468
Change in asset valuation reserve		—			—			—			—		—			—			(234,482	)		(234,482	)
Change in surplus in separate accounts		—			—			—			—		—			—			5,569			5,569
Reinsurance transactions		—			—			—			—		—			—			739,259			739,259
Repurchase of Series A preferred stock		—			—			(58,000	)		—		—			—			—			(58,000	)
Redemption of surplus notes		—			—			—			—		(775,000	)		—			—			(775,000	)
Correction of prior period error		—			—			—			—		—			—			20,480			20,480
Contributed surplus related to stock appreciation rights plan of indirect parent		—			—			—			—		—			2,444			—			2,444
Tax benefits on stock options exercised		—			—			—			—		—			9			—			9
Dividends to stockholders		—			—			—			—		—			—			(123,871	)		(123,871	)
Capital contribution		—			—			—			—		—			145,000			—			145,000
Balance at December 31, 2006, as restated	$	6,762		$	2,168		$	(58,000	)	$	—	$	150,000		$	2,969,407		$	1,348,204		$	4,418,541

7

Transamerica Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis (continued)

(Dollars in Thousands)

	Common Stock		Preferred Stock		Treasury Stock			Aggregate Write-ins for Other than Special Surplus Funds		Surplus Notes		Paid-in Surplus			Unassigned Surplus			Total Capital and Surplus
Balance at December 31, 2006, as restated	$	6,762	$	2,168	$	(58,000	)	$	—	$	150,000	$	2,969,407		$	1,348,204		$	4,418,541
Net income		—		—		—			—		—		—			291,924			291,924
Change in net unrealized capital gains/losses, net of tax		—		—		—			—		—		—			801,521			801,521
Nonadmit value of reciprocal ownership		—		—		—			—		—		—			(520,370	)		(520,370	)
Change in net unrealized foreign exchange capital gains/losses, net of tax		—		—		—			—		—		—			15,068			15,068
Change in net deferred income tax asset		—		—		—			—		—		—			12,077			12,077
Change in other nonadmitted assets		—		—		—			—		—		—			100,552			100,552
Change in provision for reinsurance in unauthorized companies		—		—		—			—		—		—			(32,606	)		(32,606	)
Change in reserve on account of change in valuation basis		—		—		—			—		—		—			(16,591	)		(16,591	)
Change in asset valuation reserve		—		—		—			—		—		—			(98,467	)		(98,467	)
Change in surplus in separate accounts		—		—		—			—		—		—			11,642			11,642
Reinsurance transactions		—		—		—			—		—		—			618,363			618,363
Repurchase of Series B preferred stock		—		—		(573,400	)		—		—		—			—			(573,400	)
Correction of prior period error		—		—		—			—		—		—			(29,287	)		(29,287	)
Return of capital related to stock appreciation rights plan of indirect parent		—		—		—			—		—		(5,535	)		—			(5,535	)
Tax benefits on stock options exercised		—		—		—			—		—		23			—			23
Dividends to stockholders		—		—		—			—		—		—			(381,600	)		(381,600	)
Return of capital		—		—		—			—		—		(270,000	)		—			(270,000	)
Balance at December 31, 2007, as restated	$	6,762	$	2,168	$	(631,400	)	$	—	$	150,000	$	2,693,895		$	2,120,430		$	4,341,855

8

Transamerica Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis (continued)

(Dollars in Thousands)

	Common Stock		Preferred Stock		Treasury Stock			Aggregate Write-ins for Other than Special Surplus Funds		Surplus Notes		Paid-in Surplus			Unassigned Surplus			Total Capital and Surplus
Balance at December 31, 2007	$	6,762	$	2,168	$	(631,400	)	$	—	$	150,000	$	2,693,895		$	2,120,430			4,341,855
Net loss		—		—		—			—		—		—			(621,514	)		(621,514	)
Change in net unrealized capital gains/losses, net of tax		—		—		—			—		—		—			(337,435	)		(337,435	)
Change in net unrealized foreign exchange capital gains/losses, net of tax		—		—		—			—		—		—			(20,767	)		(20,767	)
Change in net deferred income tax asset																(208,572	)		(208,572	)
Change in other nonadmitted assets		—		—		—			—		—		—			(85,791	)		(85,791	)
Change in provision for reinsurance in unauthorized companies		—		—		—			—		—		—			19,970			19,970
Change in reserve on account of change in valuation basis		—		—		—			—		—		—			35,039			35,039
Change in asset valuation reserve		—		—		—			—		—		—			255,121			255,121
Change in surplus in separate accounts		—		—		—			—		—		—			(40,108	)		(40,108	)
Reinsurance transactions		—		—		—			—		—		—			962,518			962,518
Increase in admitted deferred tax due to permitted practice		—		—		—			380,358		—		—			—			380,358
Correction of interest on taxes																(969	)		(969	)
Dividends to stockholders		—		—		—			—		—		—			(316,438	)		(316,438	)
Change in deferred premiums associated with reserve valuation change		—		—		—			—		—		—			(17,488	)		(17,488	)
Return of capital related to stock appreciation rights plan of indirect parent		—		—		—			—		—		(14,543	)		—			(14,543	)
Capital contribution		—		—		—			—		—		507,239			—			507,239
Balance at December 31, 2008	$	6,762	$	2,168	$	(631,400	)	$	380,358	$	150,000	$	3,186,591		$	1,743,996		$	4,838,475

See accompanying notes.

9

Transamerica Life Insurance Company

Statements of Cash Flow – Statutory Basis

(Dollars in Thousands)

	Year Ended December 31
	2008			2007			2006
				Restated			Restated
Operating activities
Premiums collected, net of reinsurance	$	7,620,017		$	8,360,208 $		7,540,267
Net investment income received		4,386,531			4,492,477		4,512,328
Miscellaneous income		914,930			2,747,579		3,092,400
Benefit and loss related payments		(11,345,116	)		(14,692,501	)	(14,452,625	)
Net transfers to separate accounts		(238,756	)		(1,843,501	)	(1,880,891	)
Commissions, expenses paid and aggregate write-ins for deductions		(3,225,359	)		(3,239,812	)	(2,284,817	)
Dividends paid to policyholders		(13,295	)		(17,465	)	(18,851	)
Federal and foreign income taxes paid		(398,325	)		(330,343	)	(107,274	)
Net cash used in operating activities		(2,299,373	)		(4,523,358	)	(3,599,463	)
Investing activities
Proceeds from investments sold, matured or repaid:
Bonds		19,888,476			34,578,561		33,387,358
Common stocks		131,682			726,484		978,862
Preferred stocks		439,153			932,541		608,569
Mortgage loans		1,146,455			1,896,250		2,423,007
Real estate and properties held for sale		49,453			5,581		31,551
Other invested assets		2,592,998			911,357		552,952
Receivable for securities		18,350			131,606		33,481
Miscellaneous proceeds		61,311			40,327		94,603
Total investment proceeds		24,327,878			39,222,707		38,110,383
Costs of investments acquired:
Bonds		(20,038,864	)		(29,668,399	)	(30,178,332	)
Common stocks		(440,692	)		(375,028	)	(1,353,249	)
Preferred stocks		(355,870	)		(339,964	)	(720,969	)
Mortgage loans		(398,019	)		(2,394,881	)	(2,264,712	)
Real estate and properties held for sale		(11,405	)		(7,152	)	(14,291	)
Other invested assets		(1,819,475	)		(1,223,973	)	(1,268,838	)
Payable for securities		(131,194	)		(115,668	)	(101,357	)
Miscellaneous applications		(278,394	)		(8,050	)	(284	)
Total cost of investments acquired		(23,473,913	)		(34,133,115	)	(35,902,032	)
Net (increase) decrease in policy loans		(41,733	)		30,836		(10,114	)
Net cost of investments acquired		(23,515,646	)		(34,102,279	)	(35,912,146	)
Net cash provided by investing activities		812,232			5,120,428		2,198,237

10

Transamerica Life Insurance Company

Statements of Cash Flow – Statutory Basis (continued)

(Dollars in Thousands)

	Year Ended December 31
	2008			2007			2006
				Restated			Restated
Financing and miscellaneous activities
Net borrowed funds received (returned)	$	—		$	(824,011	)	$	813,674
Net withdrawals on deposit-type contract funds and other liabilities without life or disability contingencies		(735,535	)		(149,112	)		(54,628	)
Funds held under reinsurance treaties with unauthorized reinsurers		4,819,583			1,117,443			3,404,366
Dividends paid to stockholders		(316,438	)		(381,600	)		(96,656	)
Repurchase of surplus notes		—			—			(775,000	)
Repurchase of preferred stock		—			(573,400	)		(58,000	)
Return of capital		—			(270,000	)		—
Capital distribution		507,239			—			145,000
Other cash used		(1,282,126	)		(66,449	)		(635,028	)
Net cash provided by (used in) financing and miscellaneous activities		2,992,723			(1,147,129	)		2,743,728
Net increase (decrease) in cash, cash equivalents and short-term investments		1,505,582			(550,059	)		1,342,502
Cash, cash equivalents and short-term investments:
Beginning of year		1,852,686			2,402,745			1,060,243
End of year	$	3,358,268		$	1,852,686		$	2,402,745
Supplemental disclosure of cash flow information for non-cash transactions:
Dividend paid in non-affiliated stock	$	—		$	—		$	27,215

See accompanying notes.

11

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

December 31, 2008

1. Organization and Summary of Significant Accounting Policies

Transamerica Life Insurance Company (the Company) is a stock life insurance company owned by Transamerica Corporation (74.01% of preferred shares), AEGON USA, LLC, formerly known as AEGON USA, Inc. (25.99% of preferred shares), and Transamerica International Holdings, Inc. (100% of common shares). Prior to the mergers, discussed below, the Company was owned by AEGON USA, LLC (100% of preferred shares) and Transamerica Occidental Life Insurance Company (100% of common shares). Transamerica Corporation (Transamerica), AEGON USA, LLC (AEGON), Transamerica International Holdings, Inc. (TIHI) and Transamerica Occidental Life Insurance Company (TOLIC) are indirect wholly-owned subsidiaries of AEGON N.V., a holding company organized under the laws of The Netherlands.

On October 1, 2008, the Company completed a merger with TOLIC, which was directly owned by TIHI (100% of common shares) and Transamerica (100% of preferred shares). On October 2, 2008, the Company completed a merger with Life Investors Insurance Company of America (LIICA), which was wholly owned by AEGON. The mergers were accounted for in accordance with Statement of Statutory Accounting Principles (SSAP) No. 68, Business Combinations and Goodwill, as statutory mergers. As such, financial statements for periods prior to the merger were combined and the recorded assets, liabilities and surplus of TOLIC and LIICA were carried forward to the merged company. As a result of the merger, TOLIC and LIICA’s common and preferred stock were deemed cancelled by operation of law and the outstanding common shares of the Company, on the date of the merger, were retired and considered authorized but unissued stock of the merged entity.

In exchange for its agreement to merge TOLIC into the Company, TIHI received common stock of the Company equal in value to the common stock of TOLIC deemed cancelled by the merger and Transamerica received Series B preferred stock of the Company equal in value to the Series B preferred stock of TOLIC deemed cancelled by the merger.

Specifically, TIHI received 676,190 shares of the Company’s common shares, and Transamerica received 86,590 shares of the Company’s Series B preferred shares. In exchange for its agreement to merge LIICA into the Company, AEGON received common stock of TIHI equal in value to the common stock of LIICA deemed cancelled by the merger. Specifically, AEGON received 18 shares of TIHI’s common shares.

12

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Summarized unaudited financial information for the Company, TOLIC and LIICA presented separately for periods prior to the merger is as follows:

	Nine Months Ended September 30 2008			Year Ended December 31 2007			Year Ended December 31 2006
	Unaudited
Revenue:
Company	$	6,974,936		$	9,883,193		$	9,106,419
TOLIC		3,418,805			3,562,107			3,991,889
LIICA		867,133			1,973,046			1,075,265
Merger elimination		(3,817	)		(4,986	)		(4,856	)
As restated	$	11,257,057		$	15,413,360		$	14,168,717
Net income (loss):
Company	$	158,642		$	270,778		$	332,398
TOLIC		328,929			(97,986	)		(461,337	)
LIICA		87,079			119,132			102,083
Merger elimination		183			—			—
As restated	$	574,833		$	291,924		$	(26,856	)
	September 30 2008			December 31 2007			December 31 2006
	Unaudited
Assets:
Company	$	68,617,798		$	73,509,105		$	73,929,535
TOLIC		29,867,249			31,011,958			30,344,061
LIICA		9,663,656			10,027,950			10,306,217
Merger elimination		(1,764,723	)		(1,943,432	)		(1,492,498	)
As restated	$	106,383,980		$	112,605,581		$	113,087,315
Liabilities:
Company	$	66,643,109		$	71,519,356		$	71,886,757
TOLIC		26,538,934			27,414,020			27,451,913
LIICA		9,202,479			9,605,476			9,672,325
Merger elimination		(106,449	)		(275,126	)		(342,221	)
As restated	$	102,278,073		$	108,263,726		$	108,668,774
Capital and surplus:
Company	$	1,974,690		$	1,989,749		$	2,042,778
TOLIC		3,328,315			3,597,938			2,892,148
LIICA		461,176			422,474			633,892
Merger elimination		(1,658,274	)		(1,668,306	)		(1,150,277	)
As restated	$	4,105,907		$	4,341,855		$	4,418,541

13

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Nature of Business

The Company sells individual non-participating whole life, endowment and term contracts, structured settlements, pension products and reinsurance, as well as a broad line of single fixed and flexible premium annuity products, guaranteed interest contracts and funding agreements. In addition, the Company offers group life, universal life, credit life, and individual and specialty health coverages. The Company is licensed in 49 states and the District of Columbia, Guam, Puerto Rico and US Virgin Islands. Sales of the Company’s products are primarily through a network of agents, brokers and financial institutions.

Basis of Presentation

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Insurance Division, Department of Commerce, of the State of Iowa, which practices differ from accounting principles generally accepted in the United States (GAAP). The more significant variances from GAAP are:

Investments: Investments in bonds and mandatory redeemable preferred stocks are reported at amortized cost or fair value based on their National Association of Insurance Commissioners (NAIC) rating; for GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in operations for those designated as trading and as a separate component of other comprehensive income for those designated as available-for-sale. Prior to 2008, fair value for statutory purposes was based on the price published by the Securities Valuation Office of the NAIC (SVO), if available, whereas fair value for GAAP was based on indexes, third party pricing services, brokers, external fund managers and internal models. In 2008, the NAIC adopted regulation allowing insurance companies to report the fair value determined by the SVO or determine the fair value by using a permitted valuation method. Therefore, effective December 31, 2008, fair value for statutory purposes was reported or determined using the following pricing sources: indexes, third party pricing services, brokers, external fund managers and internal models.

14

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

All single class and multi-class mortgage-backed/asset-backed securities (e.g., CMOs) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using either the retrospective or prospective methods. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to the undiscounted estimated future cash flows. Under GAAP, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g. CMO, CBO, CDO, CLO, MBS and ABS securities), other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to fair value. If high credit quality securities are adjusted, the retrospective method is used.

Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability. Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and risk of the host contract is accounted for separately from the host contract and valued and reported at fair value, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of capital and surplus rather than to income as required for fair value hedges.

Derivative instruments are also used in replication transactions. In these transactions, the derivative is valued in a manner consistent with the cash investment and replicated asset. For GAAP, the derivative is reported at fair value with changes in fair value reported in income.

Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted asset investment amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.

15

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Valuation allowances for mortgage loans are established, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.

The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.

Valuation Reserves: Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. That net deferral is reported as the “interest maintenance reserve” (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the income statement on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.

The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.

Subsidiaries: The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP.

Policy Acquisition Costs: The costs of acquiring and renewing business are expensed when incurred. Under GAAP, acquisition costs related to traditional life insurance and certain long duration accident and health insurance, to the extent recoverable from future policy revenues, would be deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves; for universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.

Separate Accounts with Guarantees: Some of the Company’s separate accounts provide policyholders with a guaranteed return. These separate accounts are included in the general account for GAAP due to the nature of the guaranteed return.

16

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Nonadmitted Assets: Certain assets designated as “nonadmitted”, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC Accounting Practices and Procedures Manual (NAIC SAP), are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet to the extent that those assets are not impaired.

Universal Life and Annuity Policies: Revenues for universal life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Premiums received and benefits incurred for annuity policies without mortality or morbidity risk and guaranteed interest in group annuity contracts are recorded directly to an appropriate policy reserve account, without recognizing premium income or benefits expense. Interest on these policies is reflected in other benefits. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability.

Benefit Reserves: Certain policy reserves are calculated based on statutorily required interest and mortality assumptions rather than on estimated expected experience or actual account balances as would be required under GAAP.

Reinsurance: Any reinsurance balance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances has been provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

17

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Deferred Income Taxes: Deferred income tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year, plus 2) the lesser of the remaining gross deferred income tax assets expected to be realized within one year of the balance sheet date or ten percent of capital and surplus excluding any net deferred income tax assets, electronic data processing equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred income tax assets that can be offset against existing gross deferred income tax liabilities. The remaining deferred income tax assets are nonadmitted. Deferred income taxes do not include amounts for state taxes. Under GAAP, state income taxes are included in the computation of deferred income taxes, a deferred income tax asset is recorded for the amount of gross deferred income tax assets expected to be realized in all future years, and a valuation allowance is established for deferred income tax assets not expected to be realizable. During 2008, the Company obtained permission from the state of Iowa to compute deferred income taxes using a permitted practice, which is discussed in detail in Note 2 – Prescribed and Permitted Statutory Accounting Practices.

Goodwill: Goodwill is admitted subject to an aggregate limitation of ten percent of the capital and surplus in the most recently filed annual statement excluding electronic data processing equipment, operating system software, net deferred income tax assets and net positive goodwill. Excess goodwill is nonadmitted. Goodwill is amortized over ten years. Under GAAP, goodwill is not amortized but is assessed for impairment on an annual basis, or more frequently if circumstances indicate that a possible impairment has occurred.

Policyholder Dividends: Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.

Surplus Notes: Surplus notes are reported as surplus rather than as liabilities as would be required under GAAP.

Statements of Cash Flow: Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.

Securities Lending Assets and Liabilities: If collateral is restricted and not available for the general use of the Company, an asset and related liability are not recorded on the balance sheet. However, if the collateral is not restricted and is available for general use, the Company is required to record the asset and related liability. Under GAAP, the asset and related liability must be recorded for collateral under the control of the Company, regardless of any restrictions on the collateral.

18

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

The effects of the foregoing variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material.

Other significant accounting practices are as follows:

Investments

Investments in bonds, except those to which the SVO has ascribed an NAIC designation of 6, are reported at amortized cost using the interest method.

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method including anticipated prepayments, except for those with an NAIC designation of 6, which are valued at the lower of amortized cost or fair value. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.

Investments in both affiliated and unaffiliated preferred stocks in good standing are reported at cost or amortized cost. Investments in preferred stocks not in good standing are reported at the lower of cost or fair value as determined by the SVO, and the related net unrealized capital gains (losses) are reported in unassigned surplus along with any adjustment for federal income taxes. Non-redeemable preferred stocks are reported at fair value or lower of cost or fair value as determined by the SVO, and the related net unrealized gains (losses) are reported in unassigned surplus with any adjustment for federal income taxes.

Beginning in 2006, hybrid securities, not classified as debt by the SVO, are reported as preferred stock. Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders. Reclassifications of securities from bonds to preferred stock have been made by the Company in the amount of $27,025, $20,524 and $1,909,038 as of December 31, 2008, 2007 and 2006, respectively, due to the SVO identification of such securities. Although the classification has changed, these hybrid securities continue to meet the definition of a bond, in accordance with SSAP No. 26, Bonds, excluding Loan-backed and Structured Securities and therefore, are reported at amortized cost based upon their NAIC rating.

Common stocks of unaffiliated companies, which includes shares of mutual funds, are reported at fair value as determined by the SVO, and the related net unrealized capital gains or losses are reported in unassigned surplus along with any adjustment for federal income taxes.

19

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Common stocks of affiliated insurance subsidiaries are reported based on underlying statutory equity plus the admitted portion of goodwill. Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity and the net change in the subsidiaries’ equity is included in the change in net unrealized capital gains or losses, reported in unassigned surplus along with any adjustment for federal income taxes.

The Company is restricted to trading Primus Guaranty, Ltd (Primus) and ACA Capital Holdings, Inc. (ACA), both common stock holdings, due to its ownership interest, which would require special securities filings prior to executing any purchase or sale transactions in regard to these securities. The carrying amount in Primus, which is carried at fair value, as of December 31, 2008 and 2007 was $6,364 and $39,134, respectively. The carrying amount in ACA, which is carried at fair value, as of December 31, 2008 and 2007 was $27 and $629, respectively.

Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost.

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines that the impairment is other than temporary, the mortgage loan is written down to realizable value and a realized loss is recognized.

Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate that the Company has the intent to sell is reported at the lower of depreciated cost or fair value, net of related obligations. Depreciation is computed principally by the straight-line method over the estimated useful lives of the properties.

Policy loans are reported at unpaid principal balances.

The Company has minority ownership interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee. The Company recognized impairment write-downs for its investments in joint ventures and limited partnerships of $42,829, $4,556 and $3,164 for the years ended December 31, 2008, 2007 and 2006, respectively. These write-downs are included in net realized capital gains (losses) within the statement of operations.

20

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company.

Other “admitted assets” are valued principally at cost, as required or permitted by Iowa Insurance Laws.

Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.

Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or on real estate where rent is in arrears for more than three months. Further, income is not accrued when collection is uncertain. At December 31, 2008 and 2007, the Company excluded investment income due and accrued of $182 and $1,347, respectively, with respect to such practices.

The carrying amounts of all investments are reviewed on an ongoing basis for deterioration. If this review indicates a decline in fair value that is other than temporary, the carrying amount of the investment is reduced to its fair value and a specific writedown is taken. Such reductions in carrying amount are recognized as realized losses on investments.

For dollar reverse repurchase agreements, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. Cash received as collateral will be invested as needed or used for general corporate purposes of the Company.

21

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Derivative Instruments

Interest rate swaps are the primary derivative financial instruments used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.

The Company may hold foreign denominated assets or liabilities and cross currency swaps are utilized to convert the asset or liability to a US denominated security. Cross currency swap agreements are contracts to exchange two principal amounts of two currencies at the prevailing exchange rate at inception of the contract. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually and the terms of the swap must meet the terms of the hedged instrument. For cross currency swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract and the foreign currency translation adjustment is recorded as unrealized gain/loss in unassigned surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.

The Company may issue foreign denominated assets or liabilities and use forward rate agreements to hedge foreign currency risk associated with these products. These forward agreements are marked to fair value based on the current forward rate on the financial statements, and cash payments and/or receipts are recognized as realized gain or losses.

22

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

The Company issues products providing the customer a return based on the S&P 500 and NASDAQ 1000 indices. The Company uses S&P 500 and NASDAQ 1000 futures and/or options to hedge the liability option risk associated with these products. Futures are marked to market on a daily basis and a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements. Options are marked to fair value in the balance sheet and fair value adjustments are recorded in unassigned surplus.

Capped floating rate commercial mortgage loans and interest rate caps that are designated as hedges and meet hedge accounting rules are carried at amortized cost in the financial statements. A gain or loss upon early termination would be reflected in the IMR similar to the underlying instrument.

For forecasted hedge transactions, the deferred gain (loss) is recognized in income as the purchased asset affects income. If the derivative is no longer effective at achieving the desired risk management objective or if the forecasted transaction is no longer probable, hedge accounting will cease and the forward-starting swap will be marked to fair value through unassigned surplus.

The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income for forward-starting interest rate swaps begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.

A replication transaction is a derivative transaction, generally a credit default swap, entered into in conjunction with a cash instrument that is used to reproduce the investment characteristics of an otherwise permissible investment. For replication transactions, generally a premium is received by the Company on a periodic basis and recognized in investment income as earned. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional of the contract will be made by the Company and recognized as a capital loss. The Company complies with the specific rules established in AVR for replication transactions.

23

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

The carrying value of derivative instruments is reflected in either the other invested assets or the other liabilities line within the balance sheets, depending upon the net balance of the derivatives as of the end of the reporting period. As of December 31, 2008, derivatives in the amount of $164,217 were recognized as an asset within the financial statements. As of December 31, 2007, derivatives in the amount of $214,737 were recognized as a liability within the financial statements.

Separate Accounts

Separate accounts held by the Company, primarily for individual policyholders as well as for group pension plans, do not have any minimum guarantees, and the investment risks associated with fair value changes are borne by the policyholder. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments.

Certain other separate accounts held by the Company provide a minimum guaranteed return of 3% of the average investment balance to policyholders. The assets consist of long-term bonds and short-term investments which are carried at amortized cost.

Assets held in trust for purchases of variable universal life and annuity contracts and the Company’s corresponding obligation to the contract owners are shown separately in the balance sheets. The assets in the separate accounts are valued at fair value. Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. The investment risks associated with market value changes of the separate accounts are borne entirely by the policyholders except in cases where minimum guarantees exist. The Company received variable contract premiums of $4,182,626, $5,690,724 and $4,923,547 in 2008, 2007 and 2006, respectively. In addition, the Company received $399,445, $439,852 and $392,498 in 2008, 2007 and 2006, respectively, related to fees associated with investment management, administration and contractual guarantees for separate accounts.

Aggregate Reserves for Policies and Contracts

Life, annuity and accident and health benefit reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law.

The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the month of death.

24

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

The aggregate policy reserves for life insurance policies are based principally upon the 1941, 1958, 1980 and 2001 Commissioners’ Standard Ordinary Mortality and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 6.00 percent and are computed principally on the Net Level Premium Valuation and the Commissioners’ Reserve Valuation Methods. Reserves for universal life policies are based on account balances adjusted for the Commissioners’ Reserve Valuation Method.

Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Generally, mean reserves are determined by computing the regular mean reserve for the plan at the true age and holding, in addition, one-half ( ¹/ 2) of the extra premium charge for the year. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioner’s Reserve Valuation Method for universal life policies and recognizing any substandard ratings.

Deferred annuity reserves are calculated according to the Commissioners’ Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest. Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 2.00 to 11.50 percent and mortality rates, where appropriate, from a variety of tables.

Annuity reserves also include guaranteed investment contracts (GICs) and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications and Definitions of Insurance or Managed Care Contracts In Force. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement options, on a change in fund basis, according to the Commissioners’ Annuity Reserve Valuation Method.

Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.

Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula. Tabular interest on funds not involving life contingencies has also been determined primarily by formula.

25

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

During 2008, the Company’s reserves decreased by $35,039 due to various changes in valuation basis. A decrease in reserves of $36,442 resulted from various valuation system upgrades or enhancements, the largest of which was the Prophet conversion. During 2008, the Company updated the valuation process which included conversion to the Prophet valuation system, subject to existing contractual mirror reserving requirements. Previously, reserves were determined by applying client reported data, with a one quarter of a year lag, against current in force volumes. The new method calculates the reserves directly (using Prophet) based on the current in force. The change in valuation process resulted in a decrease in reserves in the amount of $30,022, with a corresponding decrease in deferred premiums of $17,488. The change in reserves has been credited directly to unassigned surplus. A decrease in reserves of $23,967 represents a change in assumptions regarding the policyholder’s election to exercise the Supplementary Retirement Income Option rider attached to certain Universal Life policies. A decrease in reserves of $28,921 represents a change in valuation interest rates from those required under California insurance law to those allowed under Iowa insurance law due to the merger of TOLIC into TLIC. Also during 2008, the Company updated assumptions and made enhancements to valuation methodology related to its accident and health reserves. These changes resulted in a partially offsetting increase in accident and health reserves of $54,291.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the balance sheet date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.

Liability for Deposit-Type Contracts

Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include GICs, funding agreements and other annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the statement of operations.

The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50, Classifications and Definitions of Insurance or Managed Care Contracts Inforce.

26

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Municipal Reverse Repurchase Agreements

Municipal reverse repurchase agreements are investment contracts issued to municipalities that pay either a fixed or floating rate of interest on the guaranteed deposit balance. The floating interest rate is based on a market index. The related liabilities are equal to the policyholder deposit and accumulated interest on the contract.

The Company enters into municipal reverse repurchase agreements for which it requires a minimum of 95% of the fair value of the securities transferred to be maintained as collateral.

Premiums and Annuity Considerations

Revenues for policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received and are recognized over the premium paying periods of the related policies. Consideration received and benefits paid for annuity policies without mortality or morbidity risk are recorded using deposit accounting and recorded directly to an appropriate policy reserve account, without recognizing premium revenue.

Claims and Claim Adjustment Expense

Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. The balance in the liability for unpaid accident and health claim adjustment expenses as of December 31, 2008 and 2007 was $22,199 and $20,944, respectively.

The Company incurred $9,247 and paid $7,992 of claim adjustment expenses during 2008, of which $5,336 of the paid amount was attributable to insured or covered events of prior years.

Reinsurance

Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of inforce blocks of business are included in unassigned surplus and are amortized into income over the estimated life of the policies. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.

27

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

Stock Option Plan and Stock Appreciation Rights Plans

Prior to 2002 and in 2005 through 2008, AEGON N.V. sponsored a stock option plan for eligible employees of the Company. Pursuant to the plan, the option price at the date of grant is equal to the market value of the stock. Under statutory accounting principles, the Company does not record any expense related to this plan. However, the Company is allowed to record a deduction in the consolidated tax return filed by the Company and certain affiliates. The tax benefit of this deduction has been credited directly to unassigned surplus.

The Company’s employees participate in various stock appreciation rights (SAR) plans issued by the Company’s indirect parent. In accordance with SSAP No. 13, Stock Options and Stock Purchase Plans, the expense related to these plans for the Company’s employees has been charged to the Company, with an offsetting amount credited to paid-in surplus. The Company recorded a (benefit) expense of $(14,618), $(7,567) and $1,508 for the years ended December 31, 2008, 2007 and 2006, respectively. In addition, the Company recorded an adjustment to paid-in surplus for the income tax effect related to these plans over and above the amount reflected in the statement of operations in the amount of $75, $2,055 and $945, for years ended December 31, 2008, 2007 and 2006, respectively.

Recent Accounting Pronouncements

In November 2008, the NAIC issued SSAP No. 98, Treatment of Cash Flows When Quantifying Changes in Valuation and Impairments. This statement establishes statutory accounting principles for impairment analysis and subsequent valuation of loan-backed and structured securities. Prior to SSAP No. 98, loan-backed and structured securities were evaluated for impairment based upon undiscounted cash flows in accordance with SSAP No. 43, Loan-backed and Structured Securities. SSAP No. 98 requires the use of the present value of the anticipated future cash flows for this purpose. This will result in increased other-than-temporary impairments (OTTI) for certain loan-backed and structured settlement securities. The Company expects to adopt SSAP No. 98 for the period ending September 30, 2009. The adoption of this statement shall be accounted for prospectively, and therefore there was no impact to the Company’s financials at December 31, 2008. The impact to the Company’s financials upon adoption has not yet been determined.

28

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

1. Organization and Summary of Significant Accounting Policies (continued)

In September 2008, the NAIC issued SSAP No. 99, Accounting for Certain Securities Subsequent to an Other-Than-Temporary Impairment. This statement establishes the statutory accounting principles for the treatment of premium or discount applicable to certain securities subsequent to the recognition of an OTTI. Prior to SSAP No. 99, the Company’s investments in OTTI were reported in accordance with SSAP No. 26, Bonds, excluding Loan-backed and Structured Securities, SSAP No. 32, Investments in Preferred Stock and SSAP No. 43, Loan-backed and Structured Securities. The Company adopted SSAP No. 99 on January 1, 2009. The adoption of this statement shall be accounted for prospectively and therefore there was no impact to the Company’s financials at adoption.

Reclassifications

Certain reclassifications have been made to the 2007 and 2006 financial statements to conform to the 2008 presentation.

2. Prescribed and Permitted Statutory Accounting Practices

The Insurance Division, Department of Commerce, of the State of Iowa recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law.

The NAIC’s Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed or permitted practices by the State of Iowa. The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to reserve credits with respect to secondary guarantee reinsurance treaties. As prescribed by Iowa Administrative Code 191-17.3(2), the Commissioner found that the Company is entitled to take reserve credit for such a reinsurance contract in the amount equal to the portion of total reserves attributable to the secondary guarantee, whereas this type of reinsurance does not meet the specific requirements of SSAP No. 61, Life, Deposit-Type and Accident and Health Reinsurance and Appendix A-791 of the NAIC SAP.

The Company, with explicit permission from the State of Iowa Deputy Commissioner of Insurance, records the value of its wholly owned foreign life subsidiary, Transamerica Life (Bermuda), Ltd. (TLB), based upon audited statutory equity rather than audited U.S. GAAP equity adjusted to a statutory basis of accounting, utilizing adjustments as outlined in SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities, a replacement of SSAP No. 88, paragraph 9.

29

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

2. Prescribed and Permitted Statutory Accounting Practices (continued)

The Company has received written approval from the Iowa Insurance Division to determine the admitted amount of deferred income tax assets pursuant to Iowa Bulletin 09-01. Bulletin 09-01 increases the realization period for purposes of determining the admissibility of deferred tax assets in accordance with the requirements of SSAP No. 10 – Income Taxes, Paragraph 10(b)(i) from one year to three years from the balance sheet date and expands the limit on net deferred tax assets for Paragraph 10(b)(ii) from 10% of adjusted capital and surplus to 15%.

A reconciliation of the Company’s net income and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Iowa is shown below:

	2008			2007			2006
				Restated			Restated
Net income (loss), State of Iowa basis	$	(621,514	)	$	291,924		$	(26,856	)
State prescribed practice for secondary guarantee reinsurance		—			—			—
State permitted practice for valuation of foreign life subsidiary		—			—			—
Net income (loss), NAIC SAP	$	(621,514	)	$	291,924		$	(26,856	)
Statutory surplus, State of Iowa basis	$	4,838,475		$	4,341,855		$	4,418,541
State prescribed practice for secondary guarantee reinsurance		(2,349,638	)		(2,099,290	)		(1,239,657	)
State permitted practice for valuation of wholly-owned foreign life subsidiary		(124,668	)		(16,158	)		614
State permitted practice for deferred tax asset		(380,358	)		—			—
Statutory surplus, NAIC SAP	$	1,983,811		$	2,226,407		$	3,179,498

3. Accounting Changes and Correction of Errors

During 2008, the Company obtained approval from the Insurance Division, Department of Commerce, of the State of Iowa to calculate the reserves related to synthetic guaranteed investment contracts (synthetic GICs) utilizing a discount rate corresponding to the corporate bond AA credit curve, versus 105% of the Treasury spot-rate curve, which was utilized in previous years. The difference in the reserves held under the reserve methodology utilized at December 31, 2008 versus previous years’ methodology is a decrease in reserves of approximately $89,002.

30

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

3. Accounting Changes and Correction of Errors (continued)

Effective January 1, 2008, the Company modified the way it records interest on income taxes. Prior to January 1, 2008, interest on income taxes was included as a net amount (after federal tax benefit) within federal and foreign income taxes recoverable. Effective January 1, 2008, the gross amount of interest was included in taxes, licenses, and fees due and accrued, which is part of other liabilities, and the related deferred tax asset was included in net deferred income tax asset. The Company reported an increase in unassigned surplus of $969 related to the change in deferred income tax asset, with an offsetting decrease to unassigned surplus as a correction of interest on taxes on January 1, 2008, resulting in no impact to unassigned surplus.

Effective January 1, 2006, the Company adopted SSAP No. 93, Accounting for Low Income Housing Tax Credit Property Investments. This statement established statutory accounting principles for investments in federal and certain state sponsored LIHTC properties. SSAP No. 93 states that LIHTC investments shall be initially recorded at cost and amortized based on the proportion of tax benefits received in the current year to the total estimated tax benefits to be allocated to the investor. Prior to 2006, the Company’s investments in LIHTC investments were reported in accordance with SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies and SSAP No. 88, Investments in Subsidiary, Controlled and Affiliated Entities and carried at audited GAAP equity. The cumulative effect is the difference between the audited GAAP equity amount at December 31, 2005 and the amortized cost assuming the new accounting principles had been applied retroactively for prior periods. As a result of the change, the Company reported a cumulative effect of a change of accounting principle that reduced unassigned surplus by $7,489 at January 1, 2006.

During 2007, the Company discovered the cash surrender value used in the calculation of statutory reserves for a specific product did not reflect the three percent guarantee that is a part of the strategy option. As a result, the reserve balance was understated by $45,055 as of and for the year ended 2006. The 2007 financial statements reflect an increase in reserves on the balance sheet with an offset to unassigned surplus to correct this error.

During 2006, the Company discovered that the IMR incorrectly included interest-related realized gains and losses associated with specific assets supporting a block of business in which the policyholders were being credited the daily return on such investments. As a result, the IMR balance was overstated by $20,480 as of and for the year ended 2005. The 2006 financials reflect a reduction in the IMR balance with an offset to unassigned surplus to correct this error.

31

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash, Cash Equivalents and Short-term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair values.

Bonds and Preferred Stocks: Prior to 2008, fair values for bonds and preferred stocks were based on the price published by the SVO, if available. In 2008, the NAIC adopted regulation allowing insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. Therefore, effective December 31, 2008, fair value for statutory purposes was reported or determined using the following pricing sources: indexes, third party pricing services, brokers, external fund managers and internal models.

For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from independent pricing services, or, in the case of private placements, are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.

Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.

Policy Loans: The fair value of policy loans is assumed to equal their carrying amount.

Derivative Financial Instruments: The estimated fair values of interest rate caps and options are based upon the latest quoted market price at the balance sheet date. The estimated fair values of swaps, including interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The carrying amount of these items is included in the liability section of the balance sheet.

Credit Default Swaps: The estimated fair value of credit default swaps are based upon the pricing differential as of the balance sheet date for similar swap agreements.

Investment Contract Liabilities: Fair values for the Company’s liabilities under investment-type contracts, which include GICs and funding agreements, are estimated using discounted cash flow calculations, based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.

32

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments (continued)

Receivable From/Payable to Parents, Subsidiaries and Affiliates: The carrying value of receivable from/payable to affiliates approximates their fair value.

Surplus Notes: Fair values for surplus notes are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.

Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices. The fair value of separate account annuity liabilities approximate the market value of the separate account assets less a provision for the present value of future profits related to the underlying contracts.

Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

33

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments (continued)

The following sets forth a comparison of the fair values and carrying amounts of the Company’s financial instruments:

	December 31
	2008				2007
	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Admitted assets
Cash, cash equivalents and short-term investments, other than affiliates	$	1,428,385	$	1,428,385	$	517,386		$	517,386
Short-term notes receivable from affiliates		1,929,883		1,929,883		1,335,300			1,335,300
Bonds, other than affiliates		51,190,872		43,538,899		51,170,594			51,048,419
Preferred stocks, other than affiliates		1,817,213		1,044,049		2,018,837			1,900,171
Common stocks, other than affiliates		340,730		340,730		356,938			356,938
Mortgage loans on real estate, other than affiliates		10,795,426		10,101,872		11,627,501			11,699,880
Policy loans		732,588		732,588		690,855			690,855
Floors, caps, options, and swaptions		3,667		3,667		5,447			5,447
Interest rate and currency swaps and FDAs		160,550		1,274,394		(220,184	)		(296,852	)
Credit default swaps		—		466,244		—			530,531
Receivable from parent, subsidiaries and affiliates		217,479		217,479		281,636			281,636
Separate account assets		27,404,629		27,404,629		36,041,715			36,041,715
Liabilities
Investment contract liabilities		33,602,549		33,333,068		38,573,012			39,152,674
Deposit-type contracts		13,945,417		13,945,417		15,334,519			15,334,519
Payable to parent, subsidiaries and affiliates		244,864		244,864		340,990			340,990
Separate account annuity liabilities		18,325,613		18,508,526		27,010,094			27,010,476
Surplus notes		150,000		125,099		150,000			146,862

Included in the Company’s financial statements are certain investment-related financial instruments that are carried at fair value on a recurring basis. The Company also holds other financial instruments that are measured at fair value on a non-recurring basis; including impaired financial instruments, such as bonds and preferred stock that are carried at the lower of cost or market. Under Statutory Accounting practice, the Company calculates the fair value of affiliated common stock based on the equity method of accounting; as such, it is not included in the following fair value measurement disclosure.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

34

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments (continued)

Fair values are based on quoted market prices when available. When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing). In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input employed.

The Company’s financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

Level 1 -	Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date.
Level 2 -	Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: a)      Quoted prices for similar assets or liabilities in active markets b)      Quoted prices for identical or similar assets or liabilities in non-active markets c)      Inputs other than quoted market prices that are observable d)      Inputs that are derived principally from or corroborated by observable market data through correlation or other means
Level 3 -	Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

35

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments (continued)

Financial assets and liabilities measured at fair value on a recurring basis

The following table provides information as of December 31, 2008 about the Company’s financial assets and liabilities measured at fair value on a recurring basis.

		2008
		Level 1		Level 2		Level 3		Total
Assets:
Equity securities		$	—	$	45,179	$	295,552	$	340,731
Short-term investments	(a)		—		1,112,498		42,444		1,154,942
Derivative assets			—		219,750		—		219,750
Separate Account assets	(b)		27,404,629		—		—		27,404,629
Total assets		$	27,404,629	$	1,377,427	$	337,996	$	29,120,052
Liabilities:
Derivative liabilities		$	—	$	43,122	$	—	$	43,122
Total liabilities		$	—	$	43,122	$	—	$	43,122

^(a) Short-term investments are carried at amortized cost; which approximates fair value.

^(b) Separate Accounts assets are carried at the net asset value provided by the fund managers.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the changes in assets and liabilities classified in Level 3 for 2008.

	Equity Securities			Short-term Investments			Total
Balance at January 1, 2008	$	226,281		$	46,778		$	273,059
Change in realized gains/losses included in net income		(500	)		—			(500	)
Change in unrealized gains/losses included in surplus		(6,782	)		(284	)		(7,066	)
Net purchases (sales)		76,553			(4,050	)		72,503
Balance at December 31, 2008	$	295,552		$	42,444		$	337,996
Total gains/losses included in income attributable to instruments held at the reporting date	$	(500	)	$	—		$	(500	)

36

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

4. Fair Values of Financial Instruments (continued)

Assets measured at fair value on a non-recurring basis

During 2008, the Company reported the following financial instruments at fair value on a non-recurring basis.

Description	December 31, 2008		Level 1	Level 2		Level 3		Total Gains (Losses)
Fixed maturities	$	180,844	—	$	137,270	$	43,574	$	(207,538	)
Derivative liabilities		6,563	—		6,462		101		—

Level 2 - Financial Assets and Liabilities

Fair values of securities reported in this category are largely provided by independent pricing services, or are calculated by the Company using a matrix pricing model. Where independent pricing services provide fair values, the Company has obtained an understanding of the methods, models and inputs used in pricing, and have controls in place to validate that amounts provided represent current fair values.

Fixed maturities and equity securities that have been impaired, but are not being reported at an NAIC 6 rating are reported as non-recurring.

Derivative assets and liabilities may not always be measured at fair value due to hedge accounting assessment results. If derivatives meet hedge accounting requirements, they are carried on a basis consistent with the hedged item, generally amortized cost.

Level 3 - Financial Assets

The Company classifies certain broker quoted or impaired securities in Level 3. Fair values for the securities classified in Level 3 are at the lower of cost or market value.

In certain circumstances, the Company will obtain non-binding broker quotes from brokers to assist in the determination of fair value. If those quotes can be corroborated by other market observable data, the investment will be classified as Level 2. If not, the investments are classified as Level 3 due to the broker’s valuation process.

Investments, which have a designation of NAIC 6, are considered to be impaired. They are reported at the lower of cost or market, with gains/(losses) included in net income.

37

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments

Investments in common stocks of affiliated entities were as follows:

	December 31
	2008				2007
Affiliate	Cost		Carrying Amount		Cost		Carrying Amount
Wholly-owned subsidiaries:
LIICA Re II, Inc.	$	80,000	$	—	$	80,000	$	—
Life Investors Alliance LLC		13,250		—		13,250		—
Garnet Assurance Corp.		1		—		1		—
AEGON Financial Services Group		20,603		—		20,603		—
GEMINI Investments Inc.		63,623		87,699		63,623		83,826
NEF Investment Company		1,278		—		1,278		—
USA Administration Services		16,161		164		16,161		134
Transamerica Life (Bermuda), Ltd.		349,767		493,589		169,430		267,825
Transamerica Pacific Insurance Company, Ltd.		9,300		8,211		—		—
Asia Investments Holdings, Ltd.		2,114		—		1,164		—
		556,097		589,663		365,510		351,785
Minority-owned subsidiaries:
Transamerica Financial Life Insurance Company (12.6% of issued and outstanding shares)		172,938		75,564		141,438		95,326
Real Estate Alternatives Portfolio 3A Inc. (52.6% and 48.2% of issued and outstanding shares at December 31, 2008 and 2007, respectively)		18,454		19,427		9,037		10,806
	$	747,489	$	684,654	$	515,985	$	457,917

Additionally, the Company holds preferred stock of USA Administration Services Inc. with a carrying value of $1,739 at December 31, 2008 and 2007, respectively.

The Company owns 12.6% of the preferred shares of Transamerica Financial Life Insurance Company with a carrying value of $7,162 at December 31, 2008 and 2007, respectively. The cost of the preferred shares is $7,162.

The Company purchased 51.11% of the outstanding preferred shares of Malibu Loan Fund Ltd. during 2006. At December 31, 2008, these shares have no carrying value. At December 31, 2007, the carrying value of these shares was $2,453. The change in carrying value represents an unrealized loss which is recorded to unassigned surplus in the financial statements. The cost of the preferred shares is $2,453 at December 31, 2008 and 2007, respectively.

38

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The Company owns 100% of the membership interests for two affiliated limited liability companies, Transamerica Pyramid Properties LLC and Transamerica Realty Investment Properties LLC. At December 31, 2008 and 2007, the Company’s carrying value for these two affiliated entities was $175,242 and $181,377, respectively. The investment in these two entities is included in other invested assets in the accompanying balance sheets. Summarized combined balance sheet information for these two companies is as follows:

	December 31
	2008		2007
Real estate	$	186,227	$	188,403
Other assets		22,169		19,204
Total assets	$	208,396	$	207,607
	December 31
	2008		2007
Current liabilities	$	33,154	$	26,230
Total member’s interest		175,242		181,377
Total liabilities and member’s interest	$	208,396	$	207,607

The carrying amount and estimated fair value of investments in bonds and preferred stock were as follows:

	Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses 12 Months or More		Gross Unrealized Losses less Than 12 Months		Estimated Fair Value
December 31, 2008
Unaffiliated bonds:
United States Government and agencies	$	2,391,630	$	242,041	$	25,685	$	3,381	$	2,604,605
State, municipal and other government		1,439,155		41,470		40,490		68,353		1,371,782
Public utilities		3,335,878		65,880		100,061		149,669		3,152,028
Industrial and miscellaneous		27,891,681		503,490		1,714,964		1,380,777		25,299,430
Mortgage and other asset-backed securities		16,132,528		58,887		3,681,337		1,399,024		11,111,054
		51,190,872		911,768		5,562,537		3,001,204		43,538,899
Unaffiliated preferred stocks		1,817,213		2,874		511,919		264,119		1,044,049
	$	53,008,085	$	914,642	$	6,074,456	$	3,265,323	$	44,582,948

39

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

	Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses 12 Months or More		Gross Unrealized Losses less Than 12 Months		Estimated Fair Value
December 31, 2007
Unaffiliated bonds:
United States Government and agencies	$	1,864,525	$	55,507	$	19,440	$	970	$	1,899,622
State, municipal and other government		966,624		67,564		13,042		7,946		1,013,200
Public utilities		3,433,528		105,986		28,988		14,066		3,496,460
Industrial and miscellaneous		29,236,229		818,710		277,077		320,560		29,457,302
Mortgage and other asset-backed securities		15,669,688		98,252		136,997		449,108		15,181,835
		51,170,594		1,146,019		475,544		792,650		51,048,419
Unaffiliated preferred stocks		2,018,837		28,910		25,003		122,573		1,900,171
	$	53,189,431	$	1,174,929	$	500,547	$	915,223	$	52,948,590

The Company held bonds and preferred stock at December 31, 2008 and 2007 with a carrying value of $91,413 and $65,278, respectively, and amortized cost of $200,784 and $80,043, respectively, that have an NAIC rating of 6 and which are not considered to be other than temporarily impaired. These securities are carried at the lower of amortized cost or fair value, and any write-down to fair value has been recorded directly to unassigned surplus.

At December 31, 2008 and 2007, respectively, for securities that have been in a continuous loss position greater than or equal to twelve months, the Company held 2,063 and 1,534 securities with a carrying value of $20,369,486 and $11,808,338 and an unrealized loss of $6,074,456 and $500,547 with an average price of 70.2 and 95.8 (fair value/amortized cost). Of this portfolio, 87.1% and 95.1% were investment grade with associated unrealized losses of $5,052,946 and $436,911, respectively.

At December 31, 2008 and 2007, respectively, for securities in an unrealized loss position for less than twelve months, the Company held 2,146 and 1,686 securities with a carrying value of $21,045,200 and $18,164,681 and an unrealized loss of $3,265,323 and $915,223 with an average price of 84.5 and 95.0 (fair value/amortized cost). Of this portfolio, 91.2% and 90.9% were investment grade with associated unrealized losses of $2,755,389 and $772,250, respectively.

40

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The estimated fair value of bonds and preferred stocks with gross unrealized losses at December 31, 2008 and 2007 is as follows:

	Losses 12 Months or More		Losses Less Than 12 Months		Total
December 31, 2008
Unaffiliated bonds:
United States Government and agencies	$	472,534	$	456,921	$	929,455
State, municipal and other government		165,344		609,765		775,109
Public utilities		610,208		1,571,687		2,181,895
Industrial and miscellaneous		7,270,365		10,469,519		17,739,884
Mortgage and other asset-backed securities		5,190,868		4,271,338		9,462,206
		13,709,319		17,379,230		31,088,549
Unaffiliated preferred stocks		585,711		400,648		986,359
	$	14,295,030	$	17,779,878	$	32,074,908
	Losses 12 Months or More		Losses Less Than 12 Months		Total
December 31, 2007
Unaffiliated bonds:
United States Government and agencies	$	574,408	$	116,114	$	690,522
State, municipal and other government		111,908		150,842		262,750
Public utilities		765,794		607,477		1,373,271
Industrial and miscellaneous		6,328,971		8,009,027		14,337,998
Mortgage and other asset-backed securities		3,232,151		7,369,970		10,602,121
		11,013,232		16,253,430		27,266,662
Unaffiliated preferred stocks		294,559		996,028		1,290,587
	$	11,307,791	$	17,249,458	$	28,557,249

41

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The carrying amounts and estimated fair values of bonds at December 31, 2008, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Carrying Value		Estimated Fair Value
Due in one year or less	$	1,637,442	$	1,628,087
Due after one year through five years		12,940,834		11,955,849
Due after five years through ten years		9,652,840		8,584,458
Due after ten years		10,827,228		10,259,451
		35,058,344		32,427,845
Mortgage and other asset-backed securities		16,132,528		11,111,054
	$	51,190,872	$	43,538,899

The Company closely monitors below investment grade holdings and those investment grade issuers and industry sectors where the Company has concerns. Securities in unrealized loss positions that are considered other than temporary are written down to fair value. The Company considers relevant facts and circumstances in evaluating whether the impairment is other than temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; and (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount. Additionally, financial condition, near term prospects of the issuer, nationally recognized credit rating changes and cash flow trends and underlying levels of collateral, for asset-backed securities only, are monitored. The Company will record a charge to the statement of operations to the extent that these securities are subsequently determined to be other than temporarily impaired.

42

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008 the Company’s banking sector portfolio had a fair value of $3,051,259 and a carrying value of $4,015,366, resulting in a gross unrealized loss of $964,107. The overall exposure to the banking sub-sector in the Company’s portfolio is large, diverse, and consists of 90% investment grade assets. The unrealized losses in the banking sub-sector primarily reflect the size of the holdings, credit spread widening and the market’s concern over the adequacy of liquidity and capital in the banking sector given the deteriorating global economy. With some success, government initiatives were put into place during 2008 in an attempt to encourage lending, including the injection of capital into financial institutions through the US Treasury’s Capital Purchase Program and the establishment of the FDIC Temporary Liquidity Guarantee Program whereby the FDIC guarantees newly issued unsecured debt for participating institutions. However, financial institutions remain vulnerable to ongoing asset write downs, credit losses and weak earning prospects that are associated with a recessionary environment and this is adding pressure to subordinated and longer duration holdings. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

At December 31, 2008 the Company’s basic industry/capital goods sector portfolio had a fair value of $2,733,336 and a carrying value of $3,287,929, resulting in a gross unrealized loss of $554,593. The basic industry and capital goods industries encompass various sub-sectors ranging from aerospace defense to paper and forest products. Building materials continue to be impacted by the slowdown in the US housing market which has been further impacted by declines in consumer spending. Chemicals have been impacted by concerns of a slowing domestic economy, slower global demand, volatility in raw material costs and increasing competition from global competitors. Paper and forest products continue to be under pressure due to higher input costs, lower housing starts and lack of demand for paper related shipping and writing products. Additionally, lack of market liquidity and volatile credit markets have further impacted bond prices. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and recorded insignificant impairments as a result as of December 31, 2008.

43

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008 the Company’s communications sector portfolio had a fair value of $1,999,003 and a carrying value of $2,295,387, resulting in a gross unrealized loss of $296,384. The communications sector can be further divided into the media cable, media non-cable, wireless and wirelines sub-sectors. All media companies, but especially newspaper and directory companies, are suffering from a tepid advertising environment related to the weak economy. This has made it difficult for companies to offset declining revenues with sufficient cost cutting initiatives, leading to significantly lower profits. In addition, this space had been a focus for activist shareholders and private equity firms, forcing management to respond by increasing financial leverage, performing consolidations or divesting assets. The net effect of this was a weaker credit profile for many companies just as the market started to slow down. Many companies in the wirelines sector continue to focus on increasing shareholder returns. This has escalated event risk within the sector and caused concern that companies may increase financial leverage. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and recorded insignificant impairments as a result as of December 31, 2008.

At December 31, 2008 the Company’s consumer cyclical sector portfolio had a fair value of $1,568,583 and a carrying value of $1,921,600, resulting in a gross unrealized loss of $353,017. The more significant of these sub-sectors from an unrealized loss perspective are retail, automotive, and gaming.

Retail has been negatively impacted by a consumer pull-back in spending, particularly discretionary purchases, as increased unemployment, a weak housing market, credit market tightening and historically low consumer confidence weighed on the consumer. Margins have also been under increased pressure as many retailers have implemented aggressive promotion activity and increased discounts in an effort to drive store traffic, manage inventories and maintain market share.

The underlying fundamentals driving sales and earnings performance of the automotive industry continue to be pressured as a result of a secular shift away from more profitable sports utility vehicles (SUVs) and pickups towards more fuel-efficient cars and crossovers. In addition, the combination of weak consumer confidence, tighter credit standards and growing unemployment has negatively impacted auto sales.

Fundamentals in the gaming industry have weakened due to increased debt and related interest costs due to leveraged buyout activity and a material reduction in discretionary consumer spending. A deteriorating homebuilding environment and a material drop-off in consumer confidence, coupled with concerns over unemployment are resulting in declining demand. However, in some cases the industry is still increasing the supply of gaming products that were initiated prior to the economic downturn.

44

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

For all of the sub-sectors within the consumer cyclical sector portfolio, the Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

At December 31, 2008 the Company’s consumer non-cyclical sector portfolio had a fair value of $2,654,933 and a carrying value of $2,922,383, resulting in a gross unrealized loss of $267,450. The consumer non-cyclical industry encompasses various sub-sectors ranging from consumer products to supermarkets. The more significant of these sub-sectors from an unrealized loss perspective are food and beverages and consumer products. Food and beverages and consumer products fundamentals have modestly weakened due to higher input costs and the industries’ limited ability to pass along these higher costs to the customer. Also, the price gap between branded products and private label products became more compelling to the consumer in the fourth quarter.

Overall, the sector represents a large portion of the corporate debt market. As a result, the Company’s exposure is large and the gross dollar amount of unrealized losses is also large. The vast majority of the unrealized losses in the consumer non-cyclical sector relate to global macro economic conditions and credit spread widening. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and recorded insignificant impairments as a result as of December 31, 2008.

At December 31, 2008 the Company’s electric utility sector portfolio had a fair value of $2,113,318 and a carrying value of $2,338,162, resulting in a gross unrealized loss of $224,844. The electric utility sector is generally viewed as a defensive sector during weak economic environments. While defensive in nature, there are several issues which present challenges, including growing capital expenditures programs, the possibility of CO2 legislation, a renewed interest in expanding riskier unregulated generation projects, and increasingly uncertain state regulatory environments driven by rising energy prices and a slowing economy. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

45

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008 the company’s energy sector portfolio had a fair value of $1,716,185 and a carrying value of $1,996,357, resulting in a gross unrealized loss of $280,172. The energy sector includes independent oil and natural gas exploration and production companies, refiners, integrated energy companies active in both exploration/production and refining, and oil field service companies. For the independent exploration and production companies, underlying long-term fundamentals remain strong in the sector; however, there has been heightened near-term uncertainty given the dramatic decline in commodity prices. The industry has responded by reducing capital expenditures and share buyback programs as they focus on remaining free cash flow positive. Given the low market values currently, consolidation by the larger companies is likely in the sector.

The bonds of the underlying companies have seen price declines consistent with the overall market and concerns over the effect lower commodity prices will have on cash flow. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

At December 31, 2008 the Company’s insurance sector portfolio had a fair value of $971,707 and a carrying value of $1,260,761, resulting in a gross unrealized loss of $289,054. 79% of the securities in the unrealized loss position in the insurance sector are investment grade. These unrealized losses primarily reflect general spread widening on financial services companies (due to broad housing, mortgage market, equity market and economic issues, plus increased liquidity and capital markets concerns that were referenced in the above market backdrop section), compounded in some cases by the structure of the securities (subordination or other structural features and duration). While the sub-sector has some exposure to the US residential mortgage market, the issuers are highly diversified. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

At December 31, 2008 the Company’s natural gas sector portfolio had a fair value of $1,100,552 and a carrying value of $1,268,556, resulting in a gross unrealized loss of $168,004. The natural gas sector includes natural gas pipeline and distribution companies. The underlying fundamentals for pipelines are adversely affected by the decline in commodity prices, weak end user demand, and higher financing costs. Capital expenditures remained at elevated levels as the industry addresses the country’s infrastructure needs. As a result, pipelines will need continued access to the capital markets. The distributors remain well capitalized with increasing focus on reducing exposure to bad debts and weather related volatility. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be materially impaired as of December 31, 2008.

46

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008, the Company’s Real Estate Investment Portfolio (REIT) had a fair value of $620,143 and a carrying value of $862,023, resulting in a gross unrealized loss of $241,880. 94% of the securities in this portfolio in an unrealized loss position are investment grade. The unrealized losses in the REIT sub-sector are a result of general spread widening in the commercial mortgage-backed securities (CMBS) market and the REIT unsecured market. Despite real estate values falling and capitalization rates rising, REIT’s operating fundamentals continue to perform at levels sufficient to support their debt structure. However, further fundamental deterioration is expected as unemployment rises, consumer discretionary spending falls, and tenant bankruptcies increase. The majority of REITs have exhibited financial discipline and have focused on maintaining financial flexibility during the difficult financing environment. The Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the unrealized loss and does not consider those investments to be impaired as of December 31, 2008.

At December 31, 2008 the Company’s asset-backed securities (ABS) Credit Cards portfolio had a fair value of $931,734 and a carrying value of $1,433,625, resulting in a gross unrealized loss of $501,891. Over 98% of the ABS credit card bonds held by the Company are rated investment grade. The unrealized loss in the ABS credit card sector is primarily a function of decreased liquidity and increased credit spreads in the structured finance and financial institution market. While the credit card ABS portfolios with large sub-prime segments may be negatively impacted by the slowing domestic economy and housing market, there has been little rating migration of the bonds held by the Company. The Company’s entire credit card portfolio has been stress tested. Results of these stress tests indicate that while downgrades within the portfolio may occur, all of these securities are projecting payment in full. As the unrealized losses in the ABS Credit Card portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

At December 31, 2008, the Company’s ABS sub-prime mortgage portfolio had a fair value of $1,131,693 and a carrying value of $1,786,961, resulting in a gross unrealized loss of $655,268. ABS sub-prime mortgage securities are secured by pools of residential mortgage loans primarily those which are categorized as sub-prime.

47

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

Sub-prime mortgages are loans to homebuyers who have weak or impaired credit histories, are loans that are non-conforming or are loans that are second in priority. The Company does not sell or buy sub-prime mortgages directly. The Company’s exposure to sub-prime mortgages is through ABS. These securities are pools of mortgages that have been securitized and offered to investors as ABS, where the mortgages are collateral. Most of the underlying mortgages within the pool have FICO scores below 660 at issuance. Therefore, the ABS has been classified by the Company as a sub-prime mortgage position. Also included in the Company’s total sub-prime mortgage position are ABS with second lien mortgages as collateral. The second lien mortgages may not necessarily have sub-prime FICO scores; however, the Company has included these ABS in its sub-prime position as it’s the second priority in terms of repayment. The Company does not have any “direct” residential mortgages to sub-prime borrowers outside of the ABS structures.

All ABS-housing securities are monitored and reviewed on a monthly basis with detailed cash flow models using the current collateral pool and capital structure on each portfolio quarterly. Model output is generated under base and several stress-case scenarios. ABS-housing asset specialists utilize widely recognized industry modeling software to perform a loan-by-loan, bottom-up approach to modeling. The ABS-housing models incorporate external estimates on property valuations, borrower characteristics, propensity of a borrower to default or prepay and the overall security structure. Defaults were estimated by identifying the loans that are in various delinquency buckets and defaulting a certain percentage of them over the near-term and long-term. Recent payment history, a percentage of on-going delinquency rates and a constant prepayment rate are also incorporated into the model. Once the entire pool is modeled, the results are closely analyzed by the asset specialist to determine whether or not the Company’s particular tranche or holding is at risk for payment interruption. Holdings are impaired to projected cash flows where loss events have taken place (or are projected to take place on structured securities) that would affect future cash flows on the Company’s particular tranche.

Sub-prime holdings fair values have declined as the collateral pools have experienced higher than expected delinquencies and losses, further exacerbated by the impact of declining home values on borrowers using affordability products. Further impacting the unrealized losses is spread widening due to illiquidity as well as increased extension risk due to slower than expected prepayments. Despite the continued decline in the margin of safety on these securities during 2008, cash flow models indicate full recovery of principal and interest for each of the Company’s particular holdings in an unrealized loss position.

For ABS in an unrealized loss position, the Company considers them for impairment when there has been an adverse change in estimated cash flows from the cash flows previously projected at purchase, which is in accordance with SSAP 43, Loan-backed and Structured Securities. The Company recorded impairments of $9,023 in 2008. The Company did not record any impairments in 2007.

48

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The following table provides the actual cost, carrying amount and fair value by asset class of the Company’s sub-prime mortgage position at December 31, 2008:

	Actual Cost		Carrying Amount		Fair Value
Residential Mortgage Backed Securities	$	2,028,111	$	1,991,950	$	1,344,978

As the remaining unrealized losses in the ABS Housing portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

At December 31, 2008, the Company’s CMBS portfolio had a fair value of $3,696,568 and a carrying value of $5,170,915 resulting in a gross unrealized loss of $1,474,347. CMBS are securitizations of underlying pools of mortgages on commercial real estate. 99% of the securities in this portfolio in an unrealized loss position are investment grade. The underlying mortgages have varying risk characteristics and are pooled together and sold in different rated tranches. The Company’s CMBS includes conduit, large loan, single borrower, commercial real estate collateral debt obligations (CRE CDOs) and franchise loan receivable trusts.

All CMBS securities are monitored and modeled under base and several stress-case scenarios by asset specialists. For conduit securities, a widely recognized industry modeling software is used to perform a loan-by-loan, bottom-up approach. For non-conduit securities a CMBS asset specialist works closely with the Company’s real estate valuation group to determine underlying asset valuation and risk. Both methodologies incorporate external estimates on the property market, capital markets, property cash flows, and loan structure. Results are then closely analyzed by the asset specialist to determine whether or not a principal or interest loss is expected to occur. If cash flow models indicate a credit event will impact future cash flows, the security is impaired to undiscounted cash flows. As the unrealized losses in the CMBS portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be materially impaired as of December 31, 2008.

At December 31, 2008 the Company’s residential mortgage-backed securities (RMBS) sector portfolio had a fair value of $2,311,426 and a carrying value of $4,225,690 resulting in a gross unrealized loss of $1,914,264. RMBS are securitizations of underlying pools of non-commercial mortgages on real estate. The underlying residential mortgages have varying credit ratings and are pooled together and sold in tranches. The Company’s RMBS includes collateralized mortgage obligations (CMOs), government sponsored enterprise (GSE) guaranteed pass-throughs, whole loan pass-throughs, Alt-A MBS and negative amortization MBS.

49

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

RMBS securities are monitored and modeled under base and several stress-case scenarios by asset specialists using widely recognized industry modeling software to perform a loan-by-loan, bottom-up approach to modeling. 89% of the securities in the RMBS portfolio in an unrealized loss position were investment grade. RMBS models incorporate external loan-level analytics to identify the riskiest securities. The results from the models are then closely analyzed by the asset specialist to determine whether or not a principal or interest loss is expected to occur. If cash flow models indicate a credit event will impact future cash flows, the security is impaired to undiscounted cash flows. The combination of low floating-rate reset margins, slow prepayment speeds, severe illiquidity in the market for near-prime securities, and the unprecedented level of mortgage-related credit spread widening have pushed the overall market value as a percent of book on those RMBS bonds in an unrealized loss position to 55%. As the unrealized losses in the RMBS portfolio relate to holdings where the Company expects to receive full principal and interest, the Company does not consider the underlying investments to be impaired as of December 31, 2008.

Detail of net investment income (loss) is presented below:

	Year Ended December 31
	2008			2007			2006
Bonds	$	2,993,726		$	3,247,176		$	3,420,057
Preferred stocks		118,882			147,440			155,543
Common stocks		46,168			36,244			9,789
Mortgage loans on real estate		690,904			756,200			746,653
Real estate		21,328			22,332			21,360
Policy loans		46,017			46,850			46,736
Cash, cash equivalents and short-term investments		85,436			113,572			41,227
Derivatives		(9,236	)		2,244			(30,712	)
Other invested assets		28,504			32,569			46,353
Other		32,638			14,130			49,179
Gross investment income		4,054,367			4,418,757			4,506,185
Less investment expenses		(167,517	)		(206,434	)		(226,331	)
Net investment income	$	3,886,850		$	4,212,323		$	4,279,854

50

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

Proceeds from sales of bonds and preferred stock and related gross realized capital gains and losses were as follows:

	Year Ended December 31
	2008			2007			2006
Proceeds	$	18,754,495		$	33,516,007		$	34,592,243
Gross realized gains	$	362,022		$	570,114		$	369,889
Gross realized losses		(808,137	)		(344,712	)		(395,173	)
Net realized capital gains (losses)	$	(446,115	)	$	225,402		$	(25,284	)

Gross realized losses for the years ended December 31, 2008, 2007 and 2006 include $367,432, $70,724 and $46,517, respectively, which relate to losses recognized on other than temporary declines in the fair values of bonds and preferred stocks.

Net realized capital gains (losses) on investments are summarized below:

	Realized Year Ended December 31
	2008			2007			2006
Bonds	$	(324,506	)	$	205,396		$	(65,329	)
Preferred stocks		(120,940	)		32,322			40,045
Common stocks		(65,018	)		115,631			7,864
Mortgage loans on real estate		(7,074	)		1,697			(4,620	)
Real estate		17,781			96			11,659
Cash, cash equivalents and short-term investments		(13,767	)		(7,906	)		(5	)
Derivatives		54,650			(10,099	)		15,707
Other invested assets		654,443			284,195			181,211
		195,569			621,332			186,532
Federal income tax effect		119,219			(244,354	)		(72,407	)
Transfer to (from) interest maintenance reserve		51,433			(63,179	)		35,262
Net realized capital gains (losses) on investments	$	366,221		$	313,799		$	149,387

At December 31, 2008 and 2007, the Company had recorded investments in restructured securities of $13,157 and $2,248, respectively. The capital gains (losses) taken as a direct result of restructures in 2008, 2007 and 2006 were $1,905, $(713) and $9,001, respectively. The Company often has impaired a security prior to the restructure date. These impairments are not included in the calculation of restructure related losses and are accounted for as a realized loss, reducing the cost basis of the security involved.

51

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

Gross unrealized gains and gross unrealized losses on common stock of unaffiliated entities are as follows:

	December 31
	2008			2007
Unrealized gains	$	5,116		$	42,129
Unrealized losses		(11,770	)		(20,080	)
Net unrealized gains (losses)	$	(6,654	)	$	22,049

The changes in net unrealized capital gains and losses on investments were as follows:

	Change in Unrealized Year Ended December 31
	2008			2007			2006
Bonds	$	(226,573	)	$	66,449		$	39,588
Preferred stocks		(22,844	)		17,321			45,542
Common stocks		(28,695	)		(42,192	)		1,053
Affiliated Entities		(7,222	)		557,585			251,515
Derivatives		382,983			(36,994	)		(75,618	)
Other invested assets		(900,944	)		321,216			60,622
Change in unrealized capital gains/losses	$	(803,295	)	$	883,385		$	322,702

During 2008, the Company issued mortgage loans with interest rates ranging from 3.26% to 13.00% for commercial loans and 4.82% to 8.64% for agricultural loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate at origination was 98%. Mortgage loans with a carrying amount of $7,351 were non-income producing for the previous 180 days. Accrued interest of $346 and $3 related to these mortgage loans was excluded from investment income at December 31, 2008 and 2007, respectively. The Company has a mortgage or deed of trust on the property thereby creating a lien which gives it the right to take possession of the property (among other things) if the borrower fails to perform according to the terms of the loan documents. The Company requires all mortgaged properties to carry fire insurance equal to the value of the underlying property.

At December 31, 2008, the Company held $28,709 in impaired loans with related allowance and credit losses of $11,924. At December 31, 2007 the Company did not hold any impaired loans with a related allowance for credit losses. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2008 and 2007, respectively. The average recorded investment in impaired loans during 2008 was $9,788.

52

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on nonperforming loans generally is recognized on a cash basis. At December 31, 2008, the Company recognized $1,374 of interest income on impaired loans. Interest income of $1,570 was recognized on a cash basis for the year ended December 31, 2008. The Company did not recognize any interest income on impaired loans or any interest income on a cash basis for the years ended December 31, 2007 or 2006.

At December 31, 2008 and 2007, the Company held a mortgage loan loss reserve in the AVR of $361,121 and $277,265, respectively.

The Company’s mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:

Geographic Distribution					Property Type Distribution
	December 31					December 31
	2008		2007			2008		2007
South Atlantic	24	%	24	%	Office	31	%	31	%
Pacific	23		22		Apartment	20		19
Mountain	14		14		Retail	19		18
Middle Atlantic	14		13		Industrial	19		20
E. North Central	10		11		Other	6		7
W. North Central	5		5		Agricultural	5		5
W. South Central	4		5
E. South Central	4		4
New England	2		2

At December 31, 2008, 2007 and 2006, there were no investments in loans for which an impairment has been recognized in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2008, 2007 and 2006 related to such restructurings. There were no commitments to lend additional funds to debtors owing receivables at December 31, 2008, 2007 or 2006.

At December 31, 2008, the Company had ownership interests in 58 LIHTC properties. The remaining years of unexpired tax credits ranged from 1 to 12 and none of the properties were subject to regulatory review. The length of time remaining for holding periods ranged from 1 to 15 years. The amount of contingent equity commitments expected to be paid during the years 2009 to 2019 is $13,387. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.

53

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008, the Company recorded an impairment of $42,829 for its investment in Zero Beta Fund, LLC. The impairment was taken because there is an intent to sell some of the underlying investments of the fund before any anticipated recovery in value would occur.

For the year ended December 31, 2007, an impairment of $4,285 was recorded for MP Shoreline Associates, a LIHTC property. The impairment was determined by comparing the current book value to the fair value. The fair value was determined by discounting the anticipated future cash flows. Since the decline in fair value was determined to be other than temporary, the investment in partnership was written down to fair value.

The Company has an investment in Invenergy TN, LLC, a partnership which owns a 27 MW wind generating facility in Anderson County, Tennessee. This investment generates tax credits based on the amount of electricity produced from the wind turbines. Based on the project’s actual performance and a revised wind study, it was determined that the investment will not perform to the levels originally expected. For the year ending December 31, 2007, an impairment of $4,556, respectively, was recorded for the Invenergy TN, LLC partnership. The impairment was determined by comparing the current book value to the fair value as supplied by a third party. The fair value was determined by discounting future cash flows, expected future tax credits and income tax benefits of losses from the investment. Since the decline in fair value was determined to be other than temporary, the investment in the partnership was written down to the fair value amount. No impairment was recorded for the Invenergy TN, LLC partnership at December 31, 2008 or 2006.

The Company uses interest rate swaps to reduce market risk in interest rates and to alter interest rate exposures arising from mismatches between assets and liabilities. An interest rate swap is an arrangement whereby two parties (counterparties) enter into an agreement to exchange periodic interest payments. The dollar amount the counterparties pay each other is an agreed-upon period interest rate multiplied by an underlying notional amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. The Company also uses cross currency swaps to reduce market risk in foreign currencies and to alter exchange exposure arising from mismatches between assets and liabilities. A cash payment is often exchanged at the outset of the swap contract, representing the present value of cash flows of the instrument. A notional currency exchange occurs at the beginning and end of the contract. During the life of the swap, the counterparties exchange fixed or floating interest payments in its swapped currency. All swap transactions are entered into pursuant to master agreements providing for a single net payment to be made by one counterparty at each due date.

54

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

An interest rate floor provides for the receipt of payments in the event interest rates fall below the strike rates in the contract. The interest rate floor is designed to generate cash flows to offset the lower cash flows received on assets during low interest rate environments. The Company pays a single premium at the beginning of the contract. These interest rate floors are marked to fair value in the balance sheet and the fair value adjustment is recorded in capital and surplus.

The Company may invest in capped floating rate commercial mortgage loans and use interest rate caps to convert the commercial mortgage loan into a pure floating rate asset in order to meet its overall asset/liability strategy. Interest rate caps provide for the receipt of payments when interest rates rise above the strike rates in the contract. A single premium is paid by the Company at the beginning of the interest rate cap contracts.

The Company replicates investment grade corporate bonds by combining a AAA rated security, as a cash component, with a credit default swap which, in effect, converts the high quality asset into a lower rated investment grade asset. Using the swap market to replicate credit quality enables the Company to enhance the relative values while having the ability to execute larger transactions in a shortened time frame. A premium is received by the Company on a periodic basis and recognized in investment income. At December 31, 2008 and 2007, the Company had replicated assets with a fair value of $466,244 and $530,531 and credit default swaps with a fair value of $(21,375) and $(893), respectively. For the year ended December 31, 2008, the Company recognized $306 in capital losses related to replication transactions. For the years ended December 31, 2007 and 2006, the Company recognized no capital losses related to replication transactions.

The Company issues products providing the customer a return based on the S&P 500 and NASDAQ 1000 indices. The Company uses S&P 500 and NASDAQ 1000 index futures contracts and/or options to hedge the liability option risk associated with these products. Options are marked to fair value in the balance sheet and the fair value adjustment is recorded to unassigned surplus in the financial statements. There were no expenses recognized by the Company for the years ended December 31, 2008, 2007 or 2006 from option contracts.

55

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

The Company is exposed to credit related losses in the event of nonperformance by counterparties to financial instruments, but it does not expect any counterparty to fail to meet their obligations given their high credit ratings. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, the Company is required to post assets instead. At December 31, 2008, the fair value of all contracts, aggregated at a counterparty level, with a positive and a negative fair value amounted to $1,587,898 and $309,837, respectively.

The maximum term over which the Company is hedging its exposure to the variability of future cash flows for forecasted transactions is 23 years. The Company hedges the variability in future cash flows from expected future investment purchases due to changes in interest rates through the use of forward starting interest rate swaps. If the forecasted asset purchase does not occur or is no longer highly probable of occurring, valuation at cost ceases and the forward-starting swap would be valued at its current fair value with fair value adjustments recorded in unassigned surplus. At December 31, 2008 and 2007, none of the Company’s cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2008, the Company has accumulated deferred gains in the amount of $126,349 related to the termination of forecasted transactions. It is expected that these gains will be used as basis adjustments on future asset purchases expected to transpire throughout 2026.

Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges; consequently, when the value of the derivative changes, the value of a corresponding hedged asset or liability will move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.

56

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

At December 31, 2008 and 2007, the Company’s outstanding financial instruments with on and off balance sheet risks, shown in notional amounts, are summarized as follows:

	Notional Amount
	2008		2007
Interest rate and currency swaps:
Receive fixed - pay fixed	$	201,763	$	230,374
Receive fixed - pay floating		12,919,749		12,714,195
Receive floating - pay fixed		8,199,009		9,540,782
Receive floating - pay floating		2,716,370		3,452,857
Interest rate cap agreements		1,640,000		4,645,400
Interest rate floor agreements		62,400		60,800

The Company utilizes futures contracts to hedge against changes in market conditions. Initial margin deposits are made by cash deposits or segregation of specific securities as may be required by the exchange on which the transaction was conducted. Pursuant to the contracts, the Company agrees to receive from or pay to the broker, an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the Company as a variation margin receivable or payable on futures contracts. During the period the futures contracts are open, daily changes in the values of the contracts are recognized as realized gains (losses) since they are effectively settled daily through the variation account. The Company recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Company’s cost basis in the contract. The Company recognized net realized gains (losses) from futures contracts in the amount of $119,771, $(8,671) and $(3,707) for the years ended December 31, 2008, 2007 and 2006, respectively.

Open futures contracts at December 31, 2008 and 2007, were as follows:

Number of Contracts	Contract Type	Opening Market Value		Year-End Market Value
December 31, 2008
5271	S&P 500 March 2009 Futures	$	1,171,777	$	1,186,107
December 31, 2007
307	S&P 500 March 2008 Futures	$	113,582	$	113,375

57

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

5. Investments (continued)

For the years ended December 31, 2008 and 2007, the Company has recorded $264,343 and $22,903, respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. This has been recorded directly to unassigned surplus as an unrealized loss. The Company did not recognize any unrealized gains and losses during 2008 and 2007 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.

At December 31, 2008 and 2007, investments with an aggregate carrying value of $61,545 and $74,627, respectively, were on deposit with regulatory authorities or were restrictively held in bank custodial accounts for the benefit of such regulatory authorities, as required by statute.

6. Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.

Premiums earned reflect the following reinsurance assumed and ceded amounts:

	Year Ended December 31
	2008			2007			2006
Direct premiums	$	13,309,443		$	11,477,571		$	10,445,191
Reinsurance assumed - non affiliates		1,505,508			1,756,468			1,537,494
Reinsurance assumed - affiliates		305,925			238,686			78,499
Reinsurance ceded - non affiliates		(1,101,435	)		(1,114,954	)		(1,075,058	)
Reinsurance ceded - affiliates		(6,501,597	)		(4,080,954	)		(3,450,055	)
Net premiums earned	$	7,517,844		$	8,276,817		$	7,536,071

The Company received reinsurance recoveries in the amount of $2,166,604, $1,663,213 and $1,567,227 during 2008, 2007 and 2006, respectively. At December 31, 2008 and 2007, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $425,122 and $328,515, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2008 and 2007 of $29,483,844 and $20,150,258, respectively.

58

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

The net amount of the reduction in surplus at December 31, 2008, if all reinsurance agreements were cancelled, is $7,856.

At December 31, 2008, the amount of reinsurance credits, whether an asset or a reduction of liability, taken for new agreements or amendments was $2,708,917.

Effective December 31, 2008, the Company recaptured term life business previously ceded to Transamerica International Re (Ireland) Ltd. (TIRI), and Transamerica International Re (Bermuda) Ltd (TIRe) both affiliates. The Company received recapture consideration of $120,476, recorded net assets of $33,804, and recaptured reserves of $856,239 and $53,085 for life and claim reserves, with respect to the recapture from TIRI. The Company received recapture consideration of $25,563, recorded net assets of $5,088, and recaptured reserves of $167,004 and $4,821 for life and claim reserves, with respect to the recapture from TIRe. The Company incurred a statutory loss on the recapture from TIRI in the amount of $755,044 and a statutory loss on the recapture from TIRe in the amount of $141,174. As a result, a pre-tax loss of $896,218 was included in the statement of operations. During 2007 and 2006, the Company amortized $3,304 per year into earnings with a corresponding charge to unassigned surplus.

Subsequently, effective December 31, 2008, the Company ceded term life business to CGC Life Insurance Company (CGCL), an affiliate. The Company paid initial consideration of $146,039, released life and claim reserves of $1,023,243 and $57,906 respectively, and established other net liabilities of $38,892. The net pre-tax gain of $896,218 resulting from this transaction was credited directly to unassigned surplus.

The Company has entered into an indemnity reinsurance agreement effective December 31, 2008, with TIRe to cede on a 100% quota share basis the net liabilities associated with certain of the Company’s variable annuity products on a coinsurance and modified coinsurance basis. The Company ceded reserves on a coinsurance basis of $872,822 and ceded premium of a like amount, paid consideration of $223,608 and established a funds withheld liability of $1,096,431. The pre-tax loss of $223,608 ($145,345 on a net of tax basis) is included in the statement of operations. The Company ceded general account and separate account reserves on a modified coinsurance basis of $284,780 and $7,248,603, respectively. An initial reinsurance premium equal to the reserves ceded was recorded, resulting in no gain or loss on the modified coinsurance portion on this transaction.

59

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

Effective October 1, 2008 the Company recaptured various guaranteed minimum death benefit (GMDB) riders included in certain of its variable annuity contracts that were previously ceded to TIRe under a 2001 reinsurance agreement. The Company released a funds withheld liability of $40,133 associated with this business and received recapture consideration of $45,038. Reserves recaptured included $100,672 of GMDB reserves and $15,099 of claim reserves. The resulting pre-tax loss of $30,600 was included in the statement of operations. In addition, the unamortized pre-tax ceded gain held by the Company in unassigned surplus resulting from the original reinsurance transaction was released into income in the amount of $16,521 ($10,739 net of tax). Prior to this transaction, the Company had amortized $3,812 and $5,083 on a pre-tax basis ($2,478 and $3,304 on a net of tax basis) into earnings for 2008 and 2007, respectively, with a corresponding charge to unassigned surplus.

Effective December 31, 2008, the Company recaptured term life business previously ceded to TIRI on a funds withheld basis under a 2001 reinsurance agreement. The Company released the funds withheld liability of $38,603 and recorded net assets of $5,036, recaptured reserves of $288,498 and $7,065 for life and claim reserves, respectively. As a result, a pre-tax loss of $251,924 was included in the statement of operations. The gain that resulted from the initial ceding transaction to TIRI that had been credited directly to unassigned surplus was released into earning in the amount of $221. In 2007, the company amortized $28 into earnings.

Subsequently, effective December 31, 2008, the Company ceded term life business on a funds withheld basis to CGCL. Life and claim reserves of $288,498 and $7,065, respectively, were released and the Company established a funds withheld liability of $38,603 and established other net liabilities of $5,036. The net pre-tax gain of $251,924 resulting from this transaction was credited directly to unassigned surplus.

Also effective December 31, 2008, the Company ceded certain term life business to CGCL on a funds withheld basis. Life and claim reserves of $587,293 and $6,874, respectively were released and the Company established other reserves of $28,680. The net pre-tax gain of $565,487 resulting from this transaction was credited directly to unassigned surplus.

The Company entered into an assumption reinsurance agreement with Monumental Life Insurance Company (MLIC), an affiliate, effective September 30, 2008. The Company was the issuer of a series of corporate-owned life insurance policies issued to LIICA. The assumption reinsurance transaction resulted in the Company novating all liabilities arising under these policies to MLIC. The Company ceded reserves of $138,025 and paid consideration of $125,828. The Company recorded liability of $12,197 within the remittances line related to this transaction.

60

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

The Company entered into a stop loss reinsurance agreement with Transamerica Life International (Bermuda) Ltd. (TLIB), an affiliate, to cede an in force block of universal life business effective July 1, 2008. Reinsurance premiums paid of $70,728 were offset by a comparable amount of ceded reserves. Several other accounts were impacted by lesser amounts resulting in a pre-tax loss of $15. The net of tax loss of $10 was included in the statement of operations.

The Company entered into an assumption reinsurance agreement with Canadian Premier Life Insurance Company (CPLIC), an affiliate, effective July 1, 2008. This transaction resulted in CPLIC assuming all in force policies and certificates from the Canadian branch of the Company, along with all of the assets and liabilities related to these policies and all capital supporting this business. Subsequent to this assumption reinsurance transaction, the Company withdrew its license in Canada and therefore considered this transaction an economic transaction. The Company received a ceding commission of $11,460, which resulted in a pre-tax gain. During 2007, LIICA amended its 50% reinsurance treaty with CPLIC. LIICA received a ceding commission of $2,910 ($1,892 net of tax). This gain was credited directly to unassigned surplus at December 31, 2007.

Below is a summary of the net policyholder liabilities and assets transferred effective July 1, 2008:

Invested assets/cash transferred	$	(52,859	)
Ceded reserves		64,882
Due premiums		(2,920	)
Due comp liability		1,007
Retro accruals		1,350
Pre-tax net income impact	$	11,460

The Company entered into an indemnity reinsurance agreement with a nonaffiliated company effective May 1, 2008 in which the Company agreed to cede certain single premium deferred annuities on a coinsurance basis. The initial consideration paid was $446,522, the initial ceding allowance received was $18,263, and reserves ceded were $446,522, resulting in a pre-tax gain of $18,263. The net of tax gain of $11,871 was credited directly to unassigned surplus. The Company amortized $1,410 into earnings during 2008 with a corresponding charge to unassigned surplus.

61

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

The Company entered into a stop loss reinsurance agreement with TLIB to cede an in force block of universal life business effective January 1, 2008. Reinsurance premiums paid of $3,267,950 were offset by a comparable amount of ceded reserves. Several other accounts were impacted by lesser amounts resulting in a pre-tax loss of $603. The net of tax loss of $392 was included in the statement of operations.

Effective December 31, 2007, TIRe recaptured all inforce business that was previously retroceded to the Company and LIICA under the retrocession agreement effective January 1, 2003. The difference between the life and claim reserves released of $541 and $45, respectively, and consideration paid of $366 was included in the statement of operations.

The Company and LIICA entered into an agreement effective December 31, 2007 to recapture obligations and benefits related to certain universal life insurance contracts that were previously ceded to TIRe in 2003. The Company assumed assets of $23,737 associated with this business and paid recapture consideration of $1,558. Reserves recaptured included life reserves of $3,935 and claim reserves of $434. As a result, a pre-tax gain of $17,810 was included in the statement of operations. In addition, the unamortized pre-tax ceded gain held by the Company in unassigned surplus resulting from the original reinsurance transaction was released into income in the amount of $6,240 ($4,056 net of tax). Prior to this transaction, the Company had amortized $1,418 and $1,092 on a pre-tax basis ($921 and $710 on a net of tax basis) into earnings for 2007 and 2006, respectively, with a corresponding charge to unassigned surplus.

The Company and MLIC entered into an indemnity reinsurance agreement effective December 31, 2007, to automatically reinsure 100% of the risks attributable to secondary guarantee benefits on certain universal life policies that were issued by MLIC, with issue dates ranging from January 1, 2007 through December 31, 2007, and also covering policies issued between January 1, 2008 and December 31, 2008. As a result, the Company assumed reserves of $26,573.

Effective December 31, 2007, the Company entered into an indemnity reinsurance agreement with Pine Falls Re, Inc., an affiliate, to automatically reinsure 100% of the risks attributable to secondary guarantee benefits on certain universal life policies that were originally issued by the Company and assumed by the Company from various affiliated entities. Universal life secondary guarantee reserves ceded were $286,392, resulting in a pre-tax gain of $286,392 ($186,154, net of tax) that has been credited directly into unassigned surplus.

On October 1, 2007 the Company and LIICA recaptured various fixed deferred annuity plans that were ceded to MLIC under a July 1, 1990 agreement. The recapture premium received was $302,727 and the commission expense allowance paid was $3,770, for a net consideration received of $298,957. Reserves recaptured were $302,727. The resulting pre-tax loss of $3,770 was included in the statement of operations.

62

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

The Company entered into an indemnity reinsurance agreement with a nonaffiliated company effective July 1, 2007, in which the Company agreed to cede a closed block of fixed and variable deferred annuities on a coinsurance and modified coinsurance basis. The net of tax gain of $10,931 from this transaction was credited directly to unassigned surplus. During 2008 and 2007 the Company amortized $2,080 and $995, respectively, into earnings with a corresponding charge to unassigned surplus.

On April 1, 2007 LIICA entered into a recapture agreement with Veterans Life Insurance Company (VLIC), an affiliate of the Company, whereby VLIC recaptured all liabilities ceded to LIICA under an October 1, 2001 modified coinsurance agreement. The recapture consideration received was $76,086 and the reserves recaptured by VLIC were $173,147. LIICA paid a recapture premium of $173,147. The resulting pre-tax gain of $76,086 has been included in the statement of operations.

Effective December 31, 2007, LIICA recaptured all inforce universal life business that was previously reinsured to TIRI. LIICA paid a recapture fee of $4,004 and recovered miscellaneous assets of $1,985. Life and claims reserves were recaptured in the amount of $40,482 and $120, respectively. This transaction resulted in a net pre-tax loss of $42,621 which is included in the statement of operations.

Effective January 1, 2007, TOLIC recaptured the risks related to specified blocks of policies that were previously retroceded to TIRe. The recapture premium received was $9,677 and the commission expense allowance paid was $15,357 for a net consideration paid of $5,680. Reserves recaptured included $81,657 in life reserves and $457 in claim reserves resulting in a pre-tax loss of $87,794 which has been included in the statement of operations. TOLIC subsequently entered into an indemnity retrocession agreement with LIICA Re I, Inc., an affiliate, to retrocede specific blocks of policies assumed by TOLIC. Net consideration received by TOLIC was $16,006 and the life and claim reserves ceded were $81,657 and $457, respectively. This resulted in a pre-tax gain of $98,120 that was recorded directly to unassigned surplus on a net of tax basis. During 2007, TOLIC amortized $7,220 on a net of tax basis into earnings with a corresponding charge to unassigned surplus.

During 2007, TOLIC entered into an agreement with TIRe to retrocede certain life insurance policies issued by Seguros Argos, S.A. de C.V., effective January 1, 2007. The Company received consideration of $21,955, resulting in an initial transaction pre-tax gain of $21,955. The gain was recorded directly to unassigned surplus on a net of tax basis. During 2008 and 2007, the Company amortized $2,574 and $1,901, respectively, on a net of tax basis into earnings with a corresponding charge to unassigned surplus.

63

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

Effective October 1, 2007, TOLIC recaptured the risks related to specified blocks of policies that were previously retroceded to TIRe. The consideration received was $59,744 and life and claim reserves recaptured were $358,102 and $7,900, respectively. This resulted in a pre-tax loss on the statutory income statement of $306,258. TOLIC subsequently entered into an indemnity retrocession agreement with TIRI to retrocede specific blocks of policies assumed by TOLIC. The consideration that was given in the transaction was $59,744 and the life and claim reserves ceded were $358,102 and $7,900, respectively. This resulted in a pre-tax gain on a statutory basis of $306,258 that was recorded directly to unassigned surplus on a net of tax basis. During 2008, the Company amortized $2,431 into earnings with a corresponding charge to unassigned surplus. The Company did not record any amortization in 2007.

Effective January 1, 2006, the Company entered into a reinsurance transaction with TIRI to cede an inforce block of universal life business. The net of tax impact from the cession of inforce business was $13,585, which was credited directly to unassigned surplus. During 2008, 2007 and 2006, the Company amortized $1,019, $1,019 and $1,359 into earnings with a corresponding charge to unassigned surplus, respectively. The Company has a liability for funds held under reinsurance of $413,935 and $353,074 at December 31, 2008 and 2007, respectively.

TOLIC entered into an agreement effective December 30, 2006 to recapture a block of in force term life business that was ceded to Transamerica Pacific Insurance Company, Ltd. (TPIC), an affiliate. The consideration received was $37,614. Reserves recaptured included $223,404 of life reserves and $5,400 of claim reserves resulting in a pre-tax loss of $191,190, which has been included in the statement of operations.

TOLIC entered into an agreement effective December 30, 2006 to recapture a block of in force universal life business that was ceded to TPIC. The recapture consideration received was $635,128 for assets held related to the block; the recapture fee paid was $45,334 for a net consideration received of $589,794. Reserves recaptured included $678,272 of life reserves and $927 of claim reserves resulting in a pre-tax loss of $89,405, which has been included in the statement of operations.

TOLIC entered into an agreement effective December 31, 2006, to allow TIRI to recapture a retrocession agreement whereby TOLIC assumed mortality risks on a block of in force universal life business which subsequently allowed TOLIC to recapture the entire universal life contract ceded to TIRI. The recapture consideration paid was $1,245, and reserves recaptured were $4,562, for a net pre-tax gain of $3,317. Subsequent to the transaction, TOLIC entered into an agreement to recapture the universal life business ceded to TIRI effective December 31, 2006. The recapture consideration received was $361,986; a recapture fee of $11,400 was paid for a net consideration of $350,586. Reserves recaptured included $804,865 of life reserves and $1,152 of claim reserves, resulting in a pre-tax loss of $455,431, which is included in the statement of operations.

64

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

TLB acquired the direct liability to the policyholder through a court order from the Hong Kong Special Administrative Region Court, effective December 31, 2006, for most of the business issued from TOLIC’s branch in Hong Kong. TLB also acquired the direct liability to the policyholder through a court order from the High Court of the Republic of Singapore, effective December 31, 2006 for all business issued from TOLIC’s branch in Singapore. The novation of the contracts was approved by the Iowa Insurance Department and all policyholder liabilities were transferred to TLB. All balances assumed by TLB were reflected as direct adjustments to the balance sheet. As the transfer occurred between affiliated companies no gain or loss was recognized, and the difference between the assets transferred and the statutory liabilities assumed in the amount of $78,993 was recorded as goodwill and will be amortized into operations over the life of the business, not to exceed ten years.

Goodwill in the amount of $8,954 and $9,274 was amortized during 2008 and 2007, respectively, related to this transaction. TLB is valued on a U.S. statutory basis and includes a deferred gain liability of a similar amount to the goodwill reflected in the financials of the Company.

Subsequent to the novation of the Hong Kong and Singapore business to TLB, TOLIC entered into a reinsurance agreement to assume certain risks related to the inforce block from TLB effective December 31, 2006. The initial premium received was $261,418, reserves assumed included $328,985 of life reserves and $258 of claim reserves, resulting in a pre-tax loss of $67,825, which is included in the statement of operations.

Effective December 31, 2006, TOLIC entered into a reinsurance agreement with LIICA Re II, Inc., an affiliate of the Company, to cede term and universal life business. The initial premium paid was $120,000. Reserves ceded included $212,319 of term life reserves, $834,446 of universal life secondary guarantee reserves, $1,067 of claim reserves and $5,911 of miscellaneous policyholder assets, resulting in a pre-tax gain of $921,921 that was recorded directly to unassigned surplus on a net of tax basis. During 2008 and 2007, the Company amortized $74,716 and $1,321, respectively, on a net of tax basis into earnings with a corresponding charge to unassigned surplus.

Effective December 31, 2006, TOLIC recaptured a block of in force term life business that was ceded to TIRe. The recapture premium received was $86,705; the commission expense allowance paid was $43,730, for a net consideration received of $42,975. Reserves recaptured included $286,151 of life reserves and $16,892 of claim reserves, resulting in a pre-tax loss of $260,068, which has been included in the statement of operations.

65

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

Subsequent to the recapture, TOLIC entered into a reinsurance agreement with LIICA Re I, Inc., to retrocede term life business effective December 31, 2006. The initial premium paid was $77,479, offset by the commission expense received of $42,022, for a net consideration of $35,457. Reserves ceded included $256,795 of life reserves and $13,146 of claim reserves, resulting in a pre-tax gain of $234,484 that was recorded directly to unassigned surplus on a net of tax basis.

During 2003, the Company entered into an indemnity reinsurance agreement in which the Company agreed to cede the obligations and benefits related to certain fixed annuity contracts on a coinsurance and modified coinsurance basis. The Company received a ceding commission of $13,386 at the inception of the contract. In addition, the Company released the IMR liability of $19,855 related to the assets backing the ceded contracts because the future investment experience to be transferred to the assuming company will be without adjustment of the IMR that existed at the date of the initial transaction. The resulting gain from the ceding commission and the IMR release has been recorded directly to unassigned surplus on a net of tax basis. During 2007 and 2006, the Company amortized $1,538 and $2,632, respectively, into earnings with a corresponding charge to unassigned surplus. The surplus was fully amortized as of December 31, 2007.

During 2001, TOLIC novated certain traditional life insurance contracts to Transamerica Financial Life Insurance Company (TFLIC), an affiliate of the Company, via an assumption reinsurance transaction. Under the terms of this agreement, a significant portion of the future statutory-basis profits from the contracts assumed by TFLIC will be passed through to the Company as an experience rated refund. TOLIC recorded a deferred liability of $14,281 as a result of this transaction, which has an unamortized balance of $1,433 at December 31, 2008. The accretion of the deferred liability was $1,433 for 2008, 2007 and 2006.

During 2001, TOLIC entered into a reinsurance transaction with TIRe. Under the terms of this transaction, the Company ceded the obligation of future guaranteed minimum death benefits included in certain of its variable annuity contracts. The gain on the transaction of $28,967 was credited directly to unassigned surplus on a net of tax basis. The Company amortized $1,883 for each of the years ended December 31, 2008, 2007 and 2006 into earnings with a corresponding charge to unassigned surplus. At December 31, 2008, the Company holds collateral from this affiliate in the form of letters of credit of $433,417, covering this reinsurance agreement and others.

66

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

6. Reinsurance (continued)

The Company reports a reinsurance deposit receivable of $128,745 and $120,582 as of December 31, 2008 and 2007, respectively. In 1996, TOLIC entered into a reinsurance agreement with an unaffiliated company where, for a net consideration of $59,716, TOLIC ceded certain portions of future obligations under single premium annuity contracts originally written by the Company in 1993. Consistent with the requirements of SSAP No. 75, Reinsurance Deposit Accounting, the Company reports the net consideration paid as a deposit. The amount reported is the present value of the future payment streams discounted at the effective yield rate determined at inception.

During 2001, the Company entered into a reinsurance transaction with an unaffiliated company to cede certain annuity benefits on an inforce group of contracts. The gain from this transaction of $13,674 was credited directly to unassigned surplus. During 2008, 2007 and 2006, $954, $1,119 and $1,403, respectively, of the initial gain were amortized into earnings, with a corresponding charge to unassigned surplus.

Effective December 31, 2005, the Company entered into a reinsurance agreement with Stonebridge Reinsurance Company, an affiliate, to cede the term business and the secondary guarantee related to the universal life business. The consideration that was given in the transaction was $103,900, the commission expense allowance received was $67,400 and the reserves ceded were $832,400 ($508,200 term and $324,200 secondary guarantee). This resulted in a pre-tax gain on a statutory basis of $795,900 that was credited directly to unassigned surplus on a net of tax basis. During 2008 the Company amortized $24,045 into earnings with a corresponding charge to unassigned surplus.

During 2008 and 2007, the Company obtained letters of credit of $716,918 and $334,491, respectively, for the benefit of affiliated and nonaffiliated companies that have reinsured business to the Company where the ceding company’s state of domicile does not recognize the Company as an authorized reinsurer.

67

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

7. Income Taxes

The main components of deferred income tax amounts are as follows:

	December 31
	2008		2007
Deferred income tax assets:
Nonadmitted assets	$	53,237	$	51,597
Provision for contingent experience rated refund		7,771		7,743
Derivatives		37,184		87,560
Partnerships		97,270		110,638
Tax basis deferred acquisition costs		574,392		566,798
Reserves		339,341		483,663
Unrealized capital losses		209,648		71,343
§807(f) assets		13,711		18,916
Deferred intercompany losses		79,823		39,814
Investment in controlled foreign company		107,064		91,874
Credit carryforwards		17,100		32,123
Corporate provision		27,039		12,518
Compensation related accruals		36,443		34,263
Other		74,575		47,904
Total deferred income tax assets		1,674,598		1,656,754
Deferred income tax assets nonadmitted		334,539		649,898
Admitted deferred income tax assets		1,340,059		1,006,856
Deferred income tax liabilities:
Partnerships		132,036		372,952
Real estate		21,494		21,737
§807(f) liabilities		20,983		21,048
Separate account seed money		14,776		2,853
Unrealized capital gains		131,097		148,494
Deferred intercompany gains		103,805		42,553
PGAAP income/ reinsurance ceded		20,679		24,402
Other		6,030		35,538
Total deferred income tax liabilities		450,900		669,577
Net admitted deferred income tax asset	$	889,159	$	337,279

68

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

7. Income Taxes (continued)

The change in net deferred income taxes is comprised of the following:

	December 31
	2008		2007		Change
Total deferred income tax assets	$	1,674,598	$	1,656,754	$	17,844
Total deferred income tax liabilities		450,900		669,577		218,677
Net deferred income tax asset	$	1,223,698	$	987,177		236,521
Tax effect of unrealized gains (losses)						(445,093	)
Change in net deferred income tax					$	(208,572	)
	December 31
	2007		2006		Change
Total deferred income tax assets	$	1,656,754	$	1,483,760	$	172,994
Total deferred income tax liabilities		669,577		441,864		(227,713	)
Net deferred income tax asset	$	987,177	$	1,041,896		(54,719	)
Tax effect of unrealized gains (losses)						66,796
Change in net deferred income tax					$	12,077

69

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

7. Income Taxes (continued)

As discussed in Note 2—Prescribed and Permitted Statutory Accounting Practices, the Company, with permission from the State of Iowa Deputy Commissioner of Insurance, determines the admitted amount of deferred income tax assets pursuant to Iowa Bulletin 09-01. The following charts outline the effect of this permitted practice on the Company’s financial statements:

	3 years					1 year					Change
Gross DTAs at Enacted Tax Rate			$	1,674,598				$	1,674,598				$	—
Admitted Gross DTAs (paragraph 10 a.)	$	371,821				$	371,821				$	—
Admitted Gross DTAs (paragraph 10 b.)		517,338					136,980					380,358
Admitted Gross DTAs (paragraph 10 c.)		450,900					450,900					—
Total Admitted Gross DTAs		1,340,059		(1,340,059	)		959,701		(959,701	)		380,358		(380,358	)
Nonadmitted Gross DTAs				334,539					714,897					(380,358	)
Admitted DTA				1,340,059					959,701					380,358
Gross DTL				(450,900	)				(450,900	)				—
Net Admitted DTA			$	889,159				$	508,801				$	380,358
Total adjusted capital			$	5,855,303
Authorized control level				755,193

70

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

7. Income Taxes (continued)

Federal income tax expense (benefit) differs from the amount computed by applying the statutory federal income tax rate to gain (loss) from operations before federal income tax expense and net realized capital gains (losses) on investments for the following reasons:

	Year Ended December 31
	2008			2007			2006
Income tax expense (benefit) on operational gains and capital gains (losses) on investments computed at the federal statutory rate (35%)	$	(288,599	)	$	280,850		$	60,350
Controlled foreign corporation income - TA Life Bermuda		15,736			15,633			3,483
Deferred acquisition costs - tax basis		13,010			38,321			61,725
Dividends received deduction		(19,748	)		(22,001	)		(24,529	)
IMR amortization		(10,260	)		(14,721	)		(18,402	)
Investment income items		119,217			3,635			(23,822	)
Limited partnership book/tax difference		(247,383	)		(21,090	)		(18,732	)
Prior year under accrual		115,372			32,971			1,872
Reinsurance transactions		336,881			216,427			258,239
Tax credits		(64,996	)		(80,635	)		(65,665	)
Tax reserve valuation		(132,936	)		(5,021	)		(2,174	)
Non-deductible items		810			1,029			433
Depreciation		(1,479	)		1,673			(999	)
LOLI		(3,955	)		(3,806	)		(3,448	)
Other		16,707			4,063			6,215
Federal income tax (benefit) expense on operations and capital gains (losses) on investments		(151,623	)		447,328			234,546
Less tax (benefit) on capital gains (losses)		(119,219	)		244,354			72,407
Total federal income tax (benefit) expense	$	(32,404	)	$	202,974		$	162,139
The total statutory income taxes are computed as follows:
	Year Ended December 31
	2008			2007			2006
Federal income tax (benefit) expense on operations and capital gains (losses) on investments	$	(151,623	)	$	447,328		$	234,546
Change in net deferred income taxes		208,572			(12,077	)		(391,558	)
Total statutory income tax expense (benefit)	$	56,949		$	435,251		$	(157,012	)

71

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

7. Income Taxes (continued)

For federal income tax purposes, the Company joins in a consolidated income tax return filing with its parent and other affiliated companies. The method of allocation between the companies is subject to a written agreement. Under the terms of the agreement, allocations are based on separate return calculations. The Company is entitled to recoup federal income taxes paid in the event of future losses and credits to the extent the losses and credits reduce the greater of the Company’s separately computed tax liability or the consolidated group’s tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event of losses and credits reduce the greater of the Company’s separately computed tax liability or the consolidated group’s tax liability in any carryback or carryforward year when so applied. Intercompany tax balances are settled within 30 days of payment to or filing with the Internal Revenue Service. The Company has a credit carryforward at December 31, 2008 of $17,100, with no loss carryforward. At December 31, 2007 and 2006, the Company had no loss or credit carryforwards.

The Company did not incur income taxes during 2008 or 2006, which will be available for recoupment in the event of future net losses. The Company incurred income taxes in 2007 of $343,821, which will be available for recoupment in the event of future losses.

The amount of tax contingencies calculated for the Company as of December 31, 2008 and 2007 is not material to the Company’s financial position. Therefore, the total amount of tax contingencies that, if recognized, would affect the effective income tax rate is immaterial. The Company classifies interest and penalties related to income taxes as interest expense and penalty expense, respectively. The Company’s interest expense related to income taxes as of December 31, 2008 and 2007 was not material and the Company recorded no liability for penalties.

The Company’s federal income tax returns have been examined by the Internal Revenue Service and closing agreements have been executed through 2000. The examination for the years 2001 through 2004 have been completed and resulted in tax return adjustments that are currently being appealed. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions. An examination is currently underway for 2005 and 2006. The 2007 tax return has been filed but no examination has commenced.

8. Policy and Contract Attributes

Participating life insurance policies were issued by the Company which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted approximately 0.08% and 1% of ordinary life insurance in force at December 31, 2008 and 2007, respectively.

72

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

For the years ended December 31, 2008 and 2007, premiums for life participating policies were $18,433 and $21,950, respectively. The Company accounts for its policyholder dividends based on dividend scales and experience of the policies. The Company paid dividends in the amount of $12,166 and $17,417 to policyholders during 2008 and 2007, respectively, and did not allocate any additional income to such policyholders.

A portion of the Company’s policy reserves and other policyholders’ funds (including separate account liabilities) relates to liabilities established on a variety of the Company’s annuity and deposit fund products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on these products, by withdrawal characteristics, is summarized as follows:

	December 31 2008				December 31 2007
	Amount		Percent		Amount		Percent
Subject to discretionary withdrawal
With market value adjustment	$	2,427,891	4	%	$	5,650,637	7	%
At book value less surrender charge of 5% or more		9,063,978	13			5,426,946	7
At fair value		18,052,999	26			26,648,680	35
Total with adjustment or at market value		29,544,868	43			37,726,263	49
At book value without adjustment (with minimal or no charges or adjustments)		14,151,434	21			15,635,809	20
Not subject to discretionary withdrawal		24,373,769	36			23,344,387	31
Total annuity reserves and deposit fund liabilities - before reinsurance		68,070,071	100	%		76,706,459	100	%
Less reinsurance ceded		11,856,295				7,266,399
Net annuity reserves and deposit fund liabilities	$	56,213,776			$	69,440,060

Included in the liability for deposit-type contracts at December 31, 2008 and 2007 are $838,768 and $843,245, respectively, of funding agreements issued by an affiliate to special purpose entities in conjunction with non-recourse medium-term note programs. Under these programs, the proceeds from each note series issuance are used to purchase a funding agreement from an affiliated Company which secures that particular series of notes. The funding agreement is reinsured to the Company. In general, the payment terms of the note series match the payment terms of the funding agreement that secures that series. Claims for principal and interest for these funding agreements are afforded equal priority as other policyholders.

73

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

At December 31, 2008, the contractual maturities were as follows:

Year	Amount
2009	$	371,847
2010		55,181
2011		125,413
2012		53,708
2013		—
Thereafter		232,620

The Company’s liability for deposit-type contracts includes GIC’s and funding agreements assumed from MLIC. The liabilities assumed are $3,602,586 and $4,122,609 at December 31, 2008 and 2007, respectively.

Separate and variable accounts held by the Company relate to individual variable life insurance policies. The benefits provided on the policies are determined by the performance and/or market value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. The assets of these separate accounts are carried at fair value. The life insurance policies typically provide a guaranteed minimum death benefit.

Certain separate accounts held by the Company represent funds which are administered for pension plans. The assets consist primarily of fixed maturities and equity securities and are carried at fair value. The Company provides a minimum guaranteed return to policyholders of certain separate accounts. Certain other separate accounts do not have any minimum guarantees and the investment risks associated with fair value changes are borne entirely by the policyholder.

74

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

Information regarding the separate accounts of the Company as of and for the years ended December 31, 2008, 2007 and 2006 is as follows:

	Guaranteed Indexed		Nonindexed Guarantee Less Than or Equal to 4%		Nonindexed Guarantee Greater Than 4%		Nonguaranteed Separate Accounts		Total
Premiums, deposits and other considerations for the year ended December 31, 2008	$	—	$	63,549	$	36,534	$	4,145,459	$	4,245,542
Reserves for separate accounts as of December 31, 2008 with assets at:
Fair value	$	—	$	32,841	$	351,543	$	23,812,058	$	24,196,442
Amortized cost		—		548,144		—		—		548,144
Total as of December 31, 2008	$	—	$	580,985	$	351,543	$	23,812,058	$	24,744,586
Reserves for separate accounts by withdrawal characteristics as of December 31, 2008:
Subject to discretionary withdrawal:
With market value adjustment	$	—	$	61,733	$	—	$	—	$	61,733
At fair value		—		—		—		23,812,058		23,812,058
At book value without market value adjustment and with current surrender charge of less than 5%		—		486,411		—		—		486,411
Subtotal		—		548,144		—		23,812,058		24,360,202
Not subject to discretionary withdrawal		—		32,841		351,543		—		384,384
Total separate account liabilities at December 31, 2008	$	—	$	580,985	$	351,543	$	23,812,058	$	24,744,586

75

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

	Guaranteed Indexed		Nonindexed Guarantee Less Than or Equal to 4%		Nonindexed Guarantee Greater Than 4%		Nonguaranteed Separate Accounts		Total
Premiums, deposits and other considerations for the year ended December 31, 2007	$	—	$	15,567	$	574,226	$	5,685,724	$	6,275,517
Reserves for separate accounts as of December 31, 2007 with assets at:
Fair value	$	997	$	97,270	$	635,878	$	32,768,227	$	33,502,372
Amortized cost		—		521,653		—		—		521,653
Total as of December 31, 2007	$	997	$	618,923	$	635,878	$	32,768,227	$	34,024,025
Reserves for separate accounts by withdrawal characteristics as of December 31, 2007:
Subject to discretionary withdrawal:
With market value adjustment	$	—	$	41,480	$	—	$	—	$	41,480
At fair value		—		—		—		32,723,737		32,723,737
At book value without market value adjustment and with current surrender charge of less than 5%		—		480,173		—		—		480,173
Subtotal		—		521,653		—		32,723,737		33,245,390
Not subject to discretionary withdrawal		997		97,270		635,878		44,490		778,635
Total separate account liabilities at December 31, 2007	$	997	$	618,923	$	635,878	$	32,768,227	$	34,024,025

76

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

	Guaranteed Indexed		Nonindexed Guarantee Less Than or Equal to 4%		Nonindexed Guarantee Greater Than 4%		Nonguaranteed Separate Accounts		Total
Premiums, deposits and other considerations for the year ended December 31, 2006	$	4,878	$	10,348	$	160,623	$	4,923,548	$	5,099,397
Reserves for separate accounts as of December 31, 2006 with assets at:
Fair value	$	30,198	$	194,062	$	237,420	$	29,246,642	$	29,708,322
Amortized cost		—		493,802		—		—		493,802
Total as of December 31, 2006	$	30,198	$	687,864	$	237,420	$	29,246,642	$	30,202,124
Reserves for separate accounts by withdrawal characteristics as of December 31, 2006:
Subject to discretionary withdrawal:
With market value adjustment	$	—	$	37,244	$	—	$	—	$	37,244
At fair value		—		—		—		29,207,281		29,207,281
At book value without market value adjustment and with current surrender charge of less than 5%		—		456,558		—		—		456,558
Subtotal		—		493,802		—		29,207,281		29,701,083
Not subject to discretionary withdrawal		30,198		194,062		237,420		39,361		501,041
Total separate account liabilities at December 31, 2006	$	30,198	$	687,864	$	237,420	$	29,246,642	$	30,202,124

77

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

A reconciliation of the amounts transferred to and from the Company’s separate accounts is presented below:

	Year Ended December 31
	2008			2007			2006
Transfer as reported in the summary of operations of the separate accounts statement:
Transfers to separate accounts	$	4,199,455		$	5,691,829		$	4,924,496
Transfers from separate accounts		(3,658,761	)		(4,104,822	)		(2,647,443	)
Net transfers to separate accounts		540,694			1,587,007			2,277,053
Miscellaneous reconciling adjustments		(11,259	)		(4,523	)		5,837
Net transfers as reported in the statement of operations of the life, accident and health annual statement	$	529,435		$	1,582,484		$	2,282,890

A reclassification was made to the amounts previously reported to the Insurance Division, Department of Commerce, State of Iowa in the 2007 Annual Statement, to move $84,389 from net transfers to separate accounts to reserve adjustments on reinsurance ceded within the statement of operations, which also affected the reconciliation of net transfers to or from separate accounts as reflected in the notes to financials. This reclassification had no impact on net income.

At December 31, 2008 and 2007, the Company had variable and separate account annuities with minimum guaranteed benefits as follows:

Benefit and Type of Risk	Subjected Account Value		Amount of Reserve Held		Reinsurance Reserve Credit
December 31, 2008
Minimum guaranteed death benefit	$	16,439,840	$	2,330,543	$	1,745,559
Minimum guaranteed income benefit		4,834,470		914,995		891,198
Guaranteed premium accumulation fund		59,060		7,972		—
Minimum guaranteed withdrawal benefit		2,608,124		74,296		33,075
December 31, 2007
Minimum guaranteed death benefit	$	25,527,766	$	699,108	$	280,454
Minimum guaranteed income benefit		9,405,399		358,605		129,982
Guaranteed premium accumulation fund		53,508		8,212		–
Minimum guaranteed withdrawal benefit		3,483,468		36,448		(10,328	)

78

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

For Variable Annuities with Guaranteed Living Benefits (VAGLB), which includes minimum guaranteed income, minimum guaranteed withdrawal and guaranteed premium accumulation fund benefits, the Company complies with Actuarial Guideline 39. This guideline defines a two step process for the determination of VAGLB reserves. The first step is to establish a reserve equal to the accumulated VAGLB charges for the policies in question. The second step requires a standalone asset adequacy analysis to determine the sufficiency of these reserves. This step has been satisfied by projecting 30 years into the future along 1,000 stochastic variable return paths using a variety of assumptions as to VAGLB charges, lapse, withdrawal, annuitization and death. The results of this analysis are discounted back to the valuation date and compared to the accumulation of fees reserve to determine if an additional reserve needs to be established.

For Variable Annuities with Minimum Guaranteed Death Benefits (MGDB), the Company complies with Actuarial Guideline 34. This guideline requires that MGDBs be projected by assuming an immediate drop in the values of the assets supporting the variable annuity contract, followed by a subsequent recovery at a net assumed return until the maturity of the contract. The immediate drop percentages and gross assumed returns vary by asset class and are defined in the guideline. Mortality is based on the 1994 Variable Annuity MGDB Mortality Table, which is also defined in the guideline.

Reserves on the Company’s traditional life insurance products are computed using mean reserving methodologies. These methodologies result in the establishment of assets for the amount of the net valuation premiums that are anticipated to be received between the policy’s paid-through date to the policy’s next anniversary date. At December 31, 2008 and 2007, the gross premium and loading amounts related to these assets (which are reported as premiums deferred and uncollected), are as follows:

	Gross			Loading		Net
December 31, 2008
Life and annuity:
Ordinary first-year business	$	12,419		$	245	$	12,174
Ordinary renewal business		456,433			11,370		445,063
Group life direct business		16,298			2,786		13,512
Credit life business		(12,784	)		—		(12,784	)
Reinsurance ceded		(257,749	)		—		(257,749	)
		214,617			14,401		200,216
Accident and health		(32,632	)				(32,632	)
	$	181,985		$	14,401	$	167,584

79

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

8. Policy and Contract Attributes (continued)

	Gross			Loading		Net
December 31, 2007
Life and annuity:
Ordinary first-year business	$	20,302		$	914	$	19,388
Ordinary renewal business		502,264			14,452		487,812
Group life direct business		32,846			2,164		30,682
Credit life business		(4,231	)		—		(4,231	)
Reinsurance ceded		(201,648	)		—		(201,648	)
		349,533			17,530		332,003
Accident and health		(39,825	)		—		(39,825	)
	$	309,708		$	17,530	$	292,178

The Company anticipates investment income as a factor in the premium deficiency calculation, in accordance with SSAP No. 54, Individual and Group Accident and Health Contracts. At December 31, 2008 and 2007, the Company had insurance in force aggregating $393,200,350 and $339,597,764, respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the Insurance Division, Department of Commerce, of the State of Iowa. The Company established policy reserves of $688,913 and $834,812 to cover these deficiencies at December 31, 2008 and 2007, respectively.

For indeterminate premium products, a full schedule of current and anticipated premium rates is developed at the point of issue. Premium rate adjustments are considered when anticipated future experience foretells deviations from the original profit standards. The source of deviation (mortality, persistency, expense, etc.) is an important consideration in the re-rating decision as well as the potential effect of a rate change on the future experience of the existing block of business.

9. Capital and Surplus

The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its shareholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Company’s statutory surplus as of the preceding December 31, or (b) the Company’s statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2009, without the prior approval of insurance regulatory authorities, is $454,652.

80

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

9. Capital and Surplus (continued)

On December 31, 2008, the Company received a contribution of $9,300 from its parent company in the form of 1,000 shares of TPIC. Prior to the merger of LIICA into the Company, LIICA received a capital contribution from its parent, AEGON of $408,438 on June 2, 2008. On June 3, 2008, LIICA repurchased 504,033 of its Series A preferred shares for $392,000 from AEGON. Net impact to gross paid-in and contributed surplus for the Company was $16,438. The Company received a capital contribution of $481,500 from its parent company, TIHI, on December 30, 2008.

The Company paid a common stock dividend of $268,580 to its common stock shareholder, TIHI, on December 29, 2008.

The Company paid preferred stock dividends of $18,750 and $12,670 to its preferred stock shareholders, AEGON and Transamerica, respectively, on December 29, 2008. Prior to its merger with the Company, in conjunction with the redemption of its 504,033 shares of its Series A preferred stock, LIICA paid a dividend of $16,438 to its preferred stock shareholder, AEGON, on June 3, 2008.

On September 26, 2007 LIICA paid $400,000 to its parent company, AEGON. This payment consisted of a return of additional paid-in capital of $270,000, an ordinary common stock dividend of $94,400 and an extraordinary dividend of $35,600. No dividends were paid in 2006. LIICA received capital contributions of $145,000 from AEGON in 2006. LIICA did not receive any capital contributions from AEGON in 2007.

On December 19, 2007, TOLIC paid a $50,627 dividend to its preferred shareholder, Transamerica and a $149,373 dividend to its common shareholder as of that date, Transamerica Service Company. On December 13, 2006, TOLIC paid a $54,068 dividend to its preferred shareholder as of that date, Scottish Equitable Finance Limited.

81

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

9. Capital and Surplus (continued)

On December 26, 2006, the Company repurchased its 42,500 shares of non-voting Series A preferred shares for $58,000, which is reflected as treasury stock as of December 31, 2006. On December 19, 2007, the Company repurchased 57,340 shares of its Series B preferred shares for $573,400. The par value of each class of preferred stock is $10 per share and the liquidation value of Series A preferred shares is $1,365 per share and Series B preferred shares is $10 per share. The per share liquidation values shall be adjusted proportionally to reflect any resulting increase or decrease in the number of outstanding shares of preferred stock. Holders of the Series A preferred shares shall be entitled to receive dividends equal to the amount of income generated from a segregated pool of assets, including cash, cash equivalents, mortgages and debt securities and these dividends are cumulative in nature. Holders of the Series B preferred shares shall be entitled to receive dividends equal to the rate of six percent of the issue price of the Series B preferred shares. Holders of both series of preferred stock have no right to cause mandatory or optional redemption of the shares. As of December 31, 2007 and 2006, cumulative unpaid dividends relating to the preferred shares were $26,477 and $50,391, respectively.

The Company paid a preferred stock dividend of $51,600 to its Series B preferred stock shareholder, AEGON, on December 19, 2007. The Company paid a preferred stock dividend of $42,588 to its Series A and Series B preferred shareholder, AEGON, on December 26, 2006. On October 23, 2006, the Company paid a preferred stock dividend to AEGON through a transfer of a non-affiliated investment in common stock with a fair value of $27,215. The Company did not pay a common stock dividend to its parent company during 2007 or 2006.

On December 27, 2006, LIICA made an investment of $80,000 for the formation of LIICA Re II, a Vermont-domiciled pure captive subsidiary. LIICA also made a $172,000 capital contribution to LIICA Holdings, LLC on December 27, 2006 and received a return of capital on September 26, 2007 in the amount of $37,000 from LIICA Holdings, LLC.

Life and health insurance companies are subject to certain risk-based capital (RBC) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on the various risk factors related to it. At December 31, 2008, the Company meets the RBC requirements.

On September 30, 2002, LIICA received $150,000 from AEGON in exchange for surplus notes. These notes are due 20 years from the date of issuance at an interest rate of 6%, and are subordinate and junior in right of payment to all obligations and liabilities of the Company. In the event of liquidation of the Company, the holders of the issued and outstanding preferred stock shall be entitled to priority only with respect to accumulated but unpaid dividends before the holder of the surplus notes and full payment of the surplus notes shall be made before the holders of common stock become entitled to any distribution of the remaining assets of the Company. The Company received approval from the Insurance Division, Department of Commerce, of the State of Iowa prior to paying quarterly interest payments.

82

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

9. Capital and Surplus (continued)

On December 19, 2006, based on approval from the Insurance Division, Department of Commerce, of the State of Iowa, the Company redeemed the two surplus notes totaling $575,000 it held with AEGON and TOLIC redeemed the surplus note it held with Transamerica.

Additional information related to the outstanding surplus notes at December 31, 2008 and 2007 is as follows:

For Year Ending	Balance Outstanding		Interest Paid Current Year		Cumulative Interest Paid		Accrued Interest
2008	$	150,000	$	11,250	$	56,250	$	—
2007	$	150,000	$	9,000	$	45,000	$	2,250

10. Securities Lending

The Company participates in two agent-managed securities lending programs. Under the first program, the Company receives collateral equal to 102% of the fair market value of the loaned domestic securities, respectively, as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities, respectively. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair market value of the loaned security.

At December 31, 2008 and 2007, respectively, securities in the amount of $1,875,768 and $2,028,968 were on loan under securities lending agreements as a part of this program. At December 31, 2008, the collateral the Company received from securities lending activities was in the form of cash and on open terms. Also at December 31, 2008, cash collateral reinvested had a fair value of $1,904,642. At December 31, 2008, Separate Accounts have securities in the amount of $2,970 on loan under these security lending agreements.

83

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

10. Securities Lending (continued)

Under the second program, the Company receives collateral equal to 102% or 105% of the fair market value of the loaned securities as of the transaction date for domestic or international securities, respectively. The counterparty is mandated to deliver additional collateral if the fair value of the collateral is at any time less than 100% of the fair value of the loaned securities. This additional collateral, along with the collateral already held in connection with the lending transaction, must then be at least equal to 102% or 105% of the fair value of the loaned domestic or international securities, respectively. Except for the notional amount of $54,015 and $54,132 as of December 31, 2008 and 2007, respectively, the program requirements restrict the collateral from rehypothecation by any party involved in the transaction and has minimum limitations related to credit worthiness, duration and borrower levels. This program matured on January 13, 2009 and no future transactions are planned.

At December 31, 2008 and 2007, respectively, securities in the amount of $55,475 and $68,642 were on loan under securities lending agreements as part of this program. Liabilities are recorded with respect to the cash collateral received in connection with the securities on loan when it is available for the general use of the Company. Liabilities were recorded in the amount of $54,033 and $76,851 at December 31, 2008 and 2007, respectively. The fair value of the reinvested collateral was $58,790 as of December 31, 2008.

11. Retirement and Compensation Plans

The Company’s employees participate in a qualified defined benefit pension plan sponsored by AEGON. The Company has no legal obligation for the plan. The Company recognizes pension expense equal to its allocation from AEGON. The pension expense is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits as a percent of salaries. The benefits are based on years of service and the employee’s compensation during the highest five consecutive years of employment. Pension expense aggregated $16,434, $14,347 and $12,303 for the years ended December 31, 2008, 2007 and 2006, respectively. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974.

The Company’s employees also participate in a defined contribution plan sponsored by AEGON which is qualified under Section 401(k) of the Internal Revenue Service Code. Employees of the Company who customarily work at least 1,000 hours during each calendar year and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to twenty-five percent of their salary to the plan. The Company will match an amount up to three percent of the participant’s salary. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974. Expense related to this plan was $9,795, $8,791 and $7,867, for the years ended December 31, 2008, 2007 and 2006, respectively.

84

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

11. Retirement and Compensation Plans (continued)

AEGON sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The plans are noncontributory, and benefits are based on years of service and the employee’s compensation level. The plans are unfunded and nonqualified under the Internal Revenue Service Code. In addition, AEGON has established incentive deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for each of the years ended December 31, 2008, 2007 and 2006 was negligible. AEGON also sponsors an employee stock option plan/stock appreciation rights for individuals employed and a stock purchase plan for its producers, with the participating affiliated companies establishing their own eligibility criteria, producer contribution limits and company matching formula. These plans have been accrued or funded as deemed appropriate by management of AEGON and the Company.

In addition to pension benefits, the Company participates in plans sponsored by AEGON that provide postretirement medical, dental and life insurance benefits to employees meeting certain eligibility requirements. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans, calculated on the pay-as-you-go basis, are charged to affiliates in accordance with an intercompany cost sharing arrangement. The Company expensed $1,382, $1,204 and $886 related to these plans for the years ended December 31, 2008, 2007 and 2006, respectively.

12. Related Party Transactions

The Company shares certain offices, employees and general expenses with affiliated companies.

The Company is party to a common cost allocation service agreement between AEGON companies, in which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. The Company is also a party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, Inc. whereby the advisor serves as the administrator and advisor for the Company’s mortgage loan operations. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. The Company received $19,737 during 2008, and paid $18,688 and $51,535 in 2007 and 2006, respectively, for these services, which approximates their costs to the affiliates. During 2006, the Company executed an administration service agreement with Transamerica Fund Advisors, Inc. to provide administrative services to the AEGON/Transamerica Series Trust. The Company received $44,122, $49,346 and $43,080 for these services during 2008, 2007 and 2006, respectively.

85

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

12. Related Party Transactions (continued)

Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $74,156, $44,791 and $35,075 for the years ended December 31, 2008, 2007 and 2006, respectively.

At December 31, 2008, the Company reported a net amount of payables to affiliates of $27,385. At December 31, 2007, the Company reported a net amount of receivables from affiliates of $23,646. The December 31, 2007 balance excludes $83,300 of short-term intercompany notes payable. Terms of settlement require that these amounts be settled within 90 days. Receivables from and payables to affiliates bear interest at the thirty-day commercial paper rate.

At December 31, 2008, the Company had short-term notes receivable as follows. In accordance with SSAP No. 25, Accounting for and Disclosures about Transactions with Affiliates and Other Related Parties, these notes are reported as short-term investments.

Receivable from	Amount		Due By	Interest Rate
Garnet	$	58,583	January 16, 2009	1.74	%
Transamerica Corporation		293,800	August 21, 2009	2.44
AEGON		79,000	October 7, 2009	5.95
AEGON		166,000	October 8, 2009	5.95
AEGON		159,600	October 9, 2009	5.95
AEGON		69,800	October 15, 2009	5.95
AEGON		20,000	October 20, 2009	5.95
AEGON		91,000	October 21, 2009	5.95
AEGON		36,900	October 22, 2009	5.95
AEGON		19,500	October 23, 2009	5.95
AEGON		41,200	October 27, 2009	5.95
AEGON		55,100	October 28, 2009	5.95
AEGON		52,200	October 31, 2009	5.95
Transamerica Corporation		55,000	November 20, 2009	2.70
AEGON		89,800	December 15, 2009	1.74
AEGON		28,200	December 16, 2009	1.74
AEGON		38,800	December 17, 2009	1.74
AEGON		45,900	December 24, 2009	1.74
AEGON		63,300	December 26, 2009	1.74
AEGON		547,100	December 30, 2009	1.74

86

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

12. Related Party Transactions (continued)

At December 31, 2007, the Company had nine short-term notes receivable from the following companies: two notes from Transamerica in the amounts of $314,800 and $56,300 which were due on or before August 28, 2008 and November 28, 2008, respectively; three notes from TIRe in the amounts of $29,700, $8,900 and $100 which were due by December 10, 2008, December 10, 2008 and December 23, 2008, respectively; three notes from AEGON USA Inc., in the amounts of $595,600, $295,000 and $10,600 which were all due on or before December 27, 2008; and one note from MLIC in the amount of $24,300 which was due on or before December 27, 2008. These notes are reported as short-term investments. The Company had two short-term notes payable to MLIC for $26,300 and $47,100 outstanding at December 31, 2007. These notes were due by October 22, 2008 and October 23, 2008, respectively, and bear interest at 5.05%. The Company also had one short-term note payable to Stonebridge Life Insurance Company for $9,900 outstanding at December 31, 2007. This note was due by December 30, 2008 and bears interest at 4.75%. All of these notes described above were repaid prior to their due date.

At December 31, 2007, the Company had three notes payable to Commonwealth General Corporation of $10 each, bearing interest at 6% and due on December 31, 2030. All three notes were repaid during 2008.

During 2008, 2007 and 2006, the Company paid net interest of $3,221, $2,394 and $10,254, respectively, to affiliates.

During 1998, the Company issued life insurance policies to an affiliated company, covering the lives of certain employees of that affiliate. Aggregate reserves for policies and contracts related to these policies are $274,086 and $129,948 at December 31, 2008 and 2007, respectively.

13. Commitments and Contingencies

At December 31, 2008 and 2007, the Company has mortgage loan commitments of $149,216 and $366,957, respectively. The Company has contingent commitments for $768,083 and $1,076,309 as of December 31, 2008 and 2007, respectively, to provide additional funding for various joint ventures, partnerships, and limited liability companies, which includes LIHTC commitments of $13,387 and $41,780, respectively.

The Company has no private placement commitments outstanding at December 31, 2008. At December 31, 2007, the Company had private placement commitments outstanding of $148,318.

The Company had no securities being acquired (sold) on a “to be announced” (TBA) basis at December 31, 2008. At December 31, 2007, the net amount of securities being acquired (sold) on a TBA basis was $39,101.

87

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

13. Commitments and Contingencies (continued)

The Company pledged assets as collateral for derivative transactions in the amount of $753,973 and $168,432 at December 31, 2008 and 2007, respectively. In conjunction with derivative transactions, cash in the amount of $1,263,351 and $442,397 and securities in the amount of $577,838 and $42,493 were posted to the Company as of December 31, 2008 and 2007, respectively, which were not included in the financial statements of the Company.

The Company may pledge assets as collateral for transactions involving funding agreements. At December 31, 2008 and 2007, the Company has pledged invested assets with a carrying amount of $277,412 and $164,281, respectively, and fair value of $252,447 and $160,861, respectively, in conjunction with these transactions.

The Company had outstanding funding agreements totaling $5,453,131 and $3,531,439 at December 31, 2008 and 2007, respectively, to the Federal Home Loan Bank (FHLB), and the funds received are reported as deposit-type liabilities per SSAP 52, Deposit-Type Contracts. Total reserves are equal to the funding agreements balance. These funding agreements are used for investment spread management purposes and are subject to the same asset/liability management practices as other deposit-type business. All of the funding agreements issued to FHLB are classified in the general account as it is a general obligation of the Company. Collateral is required by FHLB to support repayment of the funding agreements. The amount of pledged collateral at December 31, 2008 and 2007 was $6,275,565 and $4,238,825, respectively. In addition, FHLB requires their common stock to be purchased. The Company owns $252,525 and $176,863 of FHLB common stock at December 31, 2008 and 2007, respectively. The FHLB has set funding capacity limits on the Company which are significantly higher than the current funding agreement level; however, the FHLB is under no obligation to extend additional capacity. Assets in the amount of $10,130,636 and $4,365,740 as of December 31, 2008 and 2007, respectively, were pledged as collateral in conjunction with funding agreements associated with the FHLB.

88

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

13. Commitments and Contingencies (continued)

The Company has issued synthetic GIC contracts to benefit plan sponsors on assets totaling $4,379,983 and $5,485,324 as of December 31, 2008 and 2007, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans. The plan sponsor retains ownership and control of the related plan assets. The Company provides book value benefit responsiveness in the event that qualified plan benefit requests exceed plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit payment needs and earns a market interest rate on these advances. The periodically adjusted contract-crediting rate is the means by which investment and benefit responsive experience is passed through to participants. In return for the book value benefit responsive guarantee, the Company receives a premium that varies based on such elements as benefit responsive exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines to ensure appropriate credit quality and cash flow. A contract reserve has been established for the possibility of unexpected benefit payments at below market interest rates of $44,753 and $550 at December 31, 2008 and 2007, respectively.

The Company has guaranteed that TFLIC, an affiliate, will maintain capital and surplus amounts in excess of the statutory minimum requirements of $3,000. At December 31, 2008, TFLIC had capital and surplus of $806,474. The Company has recorded no liability for this guarantee.

The Company has provided a guarantee for the performance of an affiliated noninsurance entity that was involved in guaranteed sales of investments in LIHTC partnerships. These partnerships are partially or majority owned by a noninsurance subsidiary of the Company for which a third party is the primary investor. The balance of the investor’s capital account covered by this transaction is $13,848 as of December 31, 2008. The nature of the obligation is to provide the investor with a minimum guaranteed annual and cumulative return on their contributed capital. The Company is not at risk for changes in tax law or the investor’s inability to fully utilize tax benefits. Accordingly, the Company believes the likelihood of having to make material payments under the guarantee is remote.

As of December 31, 2008, the Company had entered into a credit enhancement and a standby liquidity asset purchase agreement on a municipal variable rate demand note facility with commitment amounts of $7,220 for which it was paid a fee. This variable rate demand note facility was drawn upon in 2008 and the Company purchased municipal bonds that have a value of approximately $7,300 as of December 31, 2008. The Company believes that these bonds will be either re-marketed or redeemed in the future.

89

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

13. Commitments and Contingencies (continued)

At December 31, 2008 and 2007, the Company had entered into multiple agreements with commitment amounts of $123,075 and $665,013, respectively, for which it was paid a fee to provide credit enhancement and standby liquidity asset purchase agreements on municipal variable rate demand note facilities. A draw was made under one of these liquidity facilities in January 2008 for approximately $1,900, which will be repaid in full with interest. The Company believes the chance of additional draws under these agreements is minimal. Any advances that would be made under these agreements would be repaid with interest.

The Company serves as guarantor for an affiliate’s guaranties of the principal value of loans made to entities which invest in certain investment funds. There was no notional amount associated with these guarantees as of December 31, 2008. The investment funds’ assets are restricted based on established investment guidelines and are required, upon a decline in value below a formula based threshold, to either replace the assets with fixed income instruments or sell assets and pay down the loan in order to minimize the guarantor’s principal protection liability. There are no expected payments associated with these guarantees.

The Company has also provided a guarantee for the obligations of noninsurance affiliates who have accepted assignments of structured settlement payment obligations from other insurers and purchase structured settlement insurance policies from subsidiaries of the Company that match those obligations. There are no expected payments associated with this guarantee.

The Company is a party to legal proceedings involving a variety of issues incidental to its business including class actions. Lawsuits may be brought in nearly any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company’s legal proceedings are subject to many variables, and given its complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, it is management’s opinion that damages arising from such demands will not be material to the Company’s financial position.

90

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

13. Commitments and Contingencies (continued)

The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s balance sheet. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $28,404 and $14,657 at December 31, 2008 and 2007, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund expense was $1,720, $1,645 and $1,879, for the years ended December 31, 2008, 2007 and 2006, respectively.

14. Leases

The Company leases office buildings under various noncancelable operating lease agreements. At December 31, 2008, the future minimum aggregate rental commitments are as follows:

Year	Amount
2009	$	16,166
2010		14,581
2011		13,786
2012		11,980
2013		11,411
Thereafter		35,637

The Company, both on its own and through its holdings in Transamerica Realty Investment Properties, LLC, and Transamerica Pyramid Properties, LLC and REAP 4MR, LLC, owns buildings that are rented out to others. Future minimum lease payment receivables under noncancelable leasing arrangements as of December 31, 2008 are as follows:

Year	Amount
2009	$	42,233
2010		36,829
2011		31,021
2012		21,973
2013		18,779
Thereafter		17,890

91

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

During 2006, the Company sold $14,391 of agent balances without recourse to an affiliated company. Subsequent to July 1, 2006, agent debit balances were sold without recourse to ADB Corporation, LLC (ADB), an affiliated company. The Company did not realize a gain or loss as a result of the sale. As of July 1, 2006, the Company no longer sells agent debit balances and as a result retains such balances as nonadmitted receivables. Receivables in the amount of $40,517 and $45,398 were nonadmitted as of December 31, 2008 and 2007, respectively.

The Company has recorded liabilities of $365,846 and $397,703 for municipal reverse repurchase agreements as of December 31, 2008 and 2007, respectively. The reverse repurchase agreements are collateralized by securities with book values of $411,595 and $431,491 as of December 31, 2008 and 2007, respectively. These securities have maturity dates that range from 2009 to 2032 and have a weighted average interest rate of 6.15%.

At December 31, 2008 and 2007, the Company did not participate in dollar reverse repurchase agreements. The Company has no outstanding liability for borrowed money due to participation in dollar reverse repurchase agreements at December 31, 2008 or 2007.

In the course of the Company’s asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. The details by NAIC designation 3 or below of securities sold during 2008 and reacquired within 30 days of the sale date are:

	Number of Transactions	Book Value of Securities Sold		Cost of Securities Repurchased		Gain/ (Loss)
Bonds:
NAIC 3	1	$	25	$	22	$	(3	)
NAIC 5	1		570		573		10

92

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Thousands, Except per Share amounts)

16. Reconciliation to Statutory Statement

The following is a reconciliation of amounts previously reported to the Insurance Division, Department of Commerce, of the State of Iowa in the 2008 Annual Statement, to those reported in the accompanying statutory-basis financial statements:

	December 31, 2008
Balance Sheet:
Assets as reported in the Company’s Annual Statement	$	103,871,552
Reduce current federal income tax recoverable		(93,046	)
Increase admissible deferred income tax asset		4,647
Assets as reported in the accompanying audited statutory-basis balance sheet	$	103,783,153
Liabilities as reported in the Company’s Annual Statement	$	98,944,678
Adjust current federal income tax payable		—
Liabilities as reported in the accompanying audited statutory-basis balance sheet	$	98,944,678
Capital and surplus as reported in the Company’s Annual Statement	$	4,926,874
Reduce federal income tax benefit		(93,046	)
Increase admissible deferred income tax asset		4,647
Total capital and surplus as reported in the accompanying audited statutory-basis balance sheet	$	4,838,475
Statement of Operations:
Statutory net loss as reported in the Company’s Annual
Statement of Operations:	$	(528,468	)
Reduce federal income tax benefit		(93,046	)
Total statutory net income (loss) per financial statements	$	(621,514	)

The 2008 Annual Statement did not include the appropriate tax effect on the mark to market income on a derivative as of December 31, 2008. There were no reconciling items at December 31, 2007 for the year then ended.

93

Transamerica Life Insurance Company

Summary of Investments – Other Than

Investments in Related Parties

(Dollars in Thousands)

December 31, 2008

SCHEDULE I

Type of Investment	Cost (1)		Market Value		Amount at Which Shown in the Balance Sheet
Fixed maturities
Bonds:
United States government and government agencies and authorities	$	2,398,377	$	2,611,369	$	2,398,377
States, municipalities and political subdivisions		2,089,361		2,121,967		2,089,361
Foreign governments		820,993		749,141		820,993
Public utilities		3,335,878		3,152,028		3,335,878
All other corporate bonds		42,546,263		34,904,394		42,546,263
Preferred stocks		1,817,213		1,044,049		1,817,213
Total fixed maturities		53,008,085		44,582,948		53,008,085
Equity securities
Common stocks:
Public utilities		985		985		985
Banks, trust and insurance		252,756		252,874		252,874
Industrial, miscellaneous and all other		93,643		86,871		86,871
Total equity securities		347,384		340,730		340,730
Mortgage loans on real estate		10,795,426				10,795,426
Real estate		153,441				153,441
Policy loans		732,588				732,588
Other long-term investments		1,681,347				1,462,223
Cash, cash equivalents and short-term investments		1,428,385				1,428,385
Total investments	$	68,146,656			$	67,920,878

(1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

94

Transamerica Life Insurance Company

Supplementary Insurance Information

(Dollars in Thousands)

SCHEDULE III

	Future Policy Benefits and Expenses		Unearned Premiums		Policy and Contract Liabilities		Premium Revenue		Net Investment Income*		Benefits, Claims Losses and Settlement Expenses		Other Operating Expenses*
Year ended December 31, 2008
Individual life	$	14,091,409	$	—	$	235,047	$	1,945,161	$	1,004,966	$	1,663,810	$	4,643,168
Individual health		2,663,242		133,884		125,768		501,707		189,216		425,976		183,144
Group life and health		1,416,556		17,766		108,339		370,647		102,526		300,950		178,562
Annuity		23,412,004		—		15,183		4,700,329		2,590,142		5,947,854		9,408,003
	$	41,583,211	$	151,650	$	484,337	$	7,517,844	$	3,886,850	$	8,338,590	$	14,412,877
Year ended December 31, 2007
Individual life	$	14,160,258	$	—	$	291,960	$	1,784,003	$	974,451	$	1,713,938	$	3,010,914
Individual health		2,515,584		173,739		98,016		515,841		168,242		514,090		229,418
Group life and health		1,411,134		17,552		126,828		378,440		95,968		341,496		229,655
Annuity		26,856,767		—		13,440		5,598,533		2,973,662		7,349,370		1,825,963
	$	44,943,743	$	191,291	$	530,244	$	8,276,817	$	4,212,323	$	9,918,894	$	5,295,950
Year ended December 31, 2006
Individual life	$	14,023,333	$	—	$	258,262	$	1,753,704	$	926,193	$	2,662,506	$	3,132,589
Individual health		2,233,390		174,278		146,127		520,756		143,355		545,819		208,720
Group life and health		1,346,086		18,439		114,387		370,490		87,486		316,330		158,821
Annuity		31,243,597		—		11,137		4,891,121		3,122,820		6,260,196		880,869
	$	48,846,406	$	192,717	$	529,913	$	7,536,071	$	4,279,854	$	9,784,851	$	4,380,999

* Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied.

95

Transamerica Life Insurance Company

Reinsurance

(Dollars in Thousands)

SCHEDULE IV

	Gross Amount		Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net
Year ended December 31, 2008
Life insurance in force	$	443,518,542	$	837,623,161	$	634,967,537	$	240,862,918	264	%
Premiums:
Individual life		2,471,167		2,071,576		1,545,571		1,945,162	79	%
Individual health		573,587		205,331		133,450		501,706	27	%
Group life and health		422,904		83,809		31,552		370,647	9	%
Annuity		9,841,785		5,242,316		100,860		4,700,329	2	%
	$	13,309,443	$	7,603,032	$	1,811,433	$	7,517,844	24	%
Year ended December 31, 2007
Life insurance in force	$	462,923,158	$	743,762,690	$	569,426,330	$	288,586,798	197	%
Premiums:
Individual life	$	3,996,462	$	3,597,084	$	1,384,624	$	1,784,002	78	%
Individual health		592,260		215,035		138,616		515,841	27	%
Group life and health		456,124		142,726		65,043		378,441	17	%
Annuity		6,432,725		1,241,063		406,871		5,598,533	7	%
	$	11,477,571	$	5,195,908	$	1,995,154	$	8,276,817	24	%
Year ended December 31, 2006
Life insurance in force	$	464,208,866	$	654,906,658	$	472,895,448	$	282,197,656	168	%
Premiums:
Individual life	$	4,048,832	$	3,084,932	$	789,804	$	1,753,704	45	%
Individual health		593,920		188,276		115,112		520,756	22	%
Group life and health		466,422		150,289		54,357		370,490	15	%
Annuity		5,336,017		1,101,616		656,720		4,891,121	13	%
	$	10,445,191	$	4,525,113	$	1,615,993	$	7,536,071	21	%

96

FINANCIAL STATEMENTS

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Year Ended December 31, 2008

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Financial Statements

Year Ended December 31, 2008

Contents

Report of Independent Registered Public Accounting Firm	1
Financial Statements
Statements of Assets and Liabilities	2
Statements of Operations	14
Statements of Changes in Net Assets	29
Notes to Financial Statements	55

Report of Independent Registered Public Accounting Firm

The Board of Directors and Contract Owners

of Transamerica Axiom

Transamerica Life Insurance Company

We have audited the accompanying statements of assets and liabilities of certain subaccounts of Transamerica Life Insurance Company Separate Account VA Y (comprised of the Transamerica Asset Allocation-Conservative VP-Service Class, Transamerica Asset Allocation-Growth VP-Service Class, Transamerica Asset Allocation-Moderate VP-Service Class, Transamerica Asset Allocation-Moderate Growth VP-Service Class, Transamerica American Century Large Company Value VP-Service Class, Transamerica MFS International Equity VP-Service Class, Transamerica Capital Guardian Global VP-Service Class, Transamerica Capital Guardian U.S. Equity VP-Service Class, Transamerica Capital Guardian Value VP-Service Class, Transamerica Clarion Global Real Estate Securities VP-Service Class, Transamerica Science & Technology VP-Service Class, Transamerica Jennison Growth VP-Service Class, Transamerica JPMorgan Enhanced Index VP-Service Class, Transamerica Marsico Growth VP-Service Class, Transamerica BlackRock Large Cap Value VP-Service Class, Transamerica MFS High Yield VP-Service Class, Transamerica PIMCO Total Return VP-Service Class, Transamerica Legg Mason Partners All Cap VP-Service Class, Transamerica Templeton Global VP-Service Class, Transamerica Balanced VP-Service Class, Transamerica Convertible Securities VP-Service Class, Transamerica Equity VP-Service Class, Transamerica Growth Opportunities VP-Service Class, Transamerica Money Market VP-Service Class, Transamerica U.S. Government Securities VP-Service Class, Transamerica Value Balanced VP-Service Class, Transamerica T. Rowe Price Equity Income VP-Service Class, Transamerica T. Rowe Price Growth Stock VP-Service Class, Transamerica T. Rowe Price Small Cap VP-Service Class, Transamerica Van Kampen Active International Allocation VP-Service Class, Transamerica Van Kampen Large Cap Core VP-Service Class, Transamerica Van Kampen Mid-Cap Growth VP-Service Class, Transamerica Index 50 VP Service Class, Transamerica Index 75 VP Service Class, Transamerica Efficient Markets VP-Service Class, Transamerica U.S. Government Securities VP-Service Class-PAM, Transamerica International Moderate Growth VP-Service Class, Transamerica Small/Mid Cap Value VP-Service Class, AIM V.I. Basic Value Fund – Series II Shares, AIM V.I. Capital Appreciation Fund – Series II Shares, AllianceBernstein Growth and Income Portfolio – Class B, AllianceBernstein Large Cap Growth Portfolio – Class B, AllianceBernstein Balanced Wealth Strategy Portfolio-Class B, Janus Aspen-Mid Cap Growth Portfolio – Service Class, Janus Aspen-Worldwide Growth Portfolio – Service Class, MFS New Discovery Series – Service Class, MFS Total Return Series – Service Class, Fidelity-VIP Balanced Portfolio-Service Class 2, Fidelity-VIP Contrafund^® Portfolio – Service Class 2, Fidelity-VIP Equity-Income Portfolio – Service Class 2, Fidelity-VIP Growth Portfolio – Service Class 2, Fidelity-VIP Mid Cap Portfolio – Service Class 2, Fidelity-VIP Value Strategies Portfolio – Service Class 2, Franklin Income Securities Fund –Class 2, Mutual Shares Securities Fund –Class 2, Templeton Foreign Securities Fund – Class 2, and Franklin Templeton VIP Founding Funds Allocation-Class 2 subaccounts), at December 31, 2008, and the related statements of operations and changes in net assets for the periods indicated thereon. These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Separate Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008 by correspondence with the mutual funds’ transfer agents. 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 financial position of each of the respective subaccounts of Transamerica Life Insurance Company Separate Account VA Y, at December 31, 2008, and the results of their operations and changes in their net assets for the periods indicated thereon, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Des Moines, Iowa

March 25, 2009

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica Asset Allocation- Conservative VP- Service Class Subaccount		Transamerica Asset Allocation- Growth VP- Service Class Subaccount		Transamerica Asset Allocation- Moderate VP- Service Class Subaccount		Transamerica Asset Allocation- Moderate Growth VP-SC Subaccount		Transamerica American Century Large Company Value VP-SC Subaccount
Assets
Investment in securities:
Number of shares		2,387,530.341		605,593.596		8,933,861.229		20,759,250.673		5,671.146
Cost	$	24,312,565	$	7,226,553	$	101,742,124	$	260,407,088	$	65,085
Investments in mutual funds, Level 1 quoted prices at net asset value	$	19,673,250	$	3,948,470	$	74,151,048	$	167,942,338	$	37,600
Receivable for units sold		4		—		—		—		2
Total assets		19,673,254		3,948,470		74,151,048		167,942,338		37,602
Liabilities
Payable for units redeemed		—		16		111		495		—
	$	19,673,254	$	3,948,454	$	74,150,937	$	167,941,843	$	37,602
Net Assets:
Deferred annuity contracts terminable by owners	$	19,673,254	$	3,948,454	$	74,150,937	$	167,941,843	$	37,602
Total net assets	$	19,673,254	$	3,948,454	$	74,150,937	$	167,941,843	$	37,602
Accumulation units outstanding:
M&E - 1.00%		5,631,661		2,072,246		24,305,600		73,353,147		34,154
M&E - 1.15%		9,999,675		2,879,575		39,190,987		94,223,608		4,683
M&E - 1.20%		2,756,168		149,322		9,258,382		25,017,265		16,626
M&E - 1.35%		3,791,778		495,461		14,159,698		21,788,798		—
M&E - 1.55%		86,721		—		923,736		853,690		—
M&E - 1.80%		650,225		—		—		2,354,352		—
M&E - 2.00%		56,794		—		238,838		64,539		—
Accumulation unit value:
M&E - 1.00%	$	0.861688	$	0.707427	$	0.839162	$	0.774733	$	0.679153
M&E - 1.15%	$	0.858596	$	0.704887	$	0.836138	$	0.771951	$	0.676714
M&E - 1.20%	$	0.857565	$	0.704053	$	0.835136	$	0.771028	$	0.675898
M&E - 1.35%	$	0.854498	$	0.701538	$	0.832153	$	0.768272	$	0.673481
M&E - 1.55%	$	0.796946	$	0.668041	$	0.767498	$	0.718729	$	0.689385
M&E - 1.80%	$	0.795097	$	—	$	0.765724	$	0.717068	$	—
M&E - 2.00%	$	0.793632	$	—	$	0.764313	$	0.715742	$	—

2

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica MFS International Equity VP-Service Class Subaccount		Transamerica Capital Guardian Global VP- Service Class Subaccount		Transamerica Capital Guardian U.S. Equity VP- Service Class Subaccount		Transamerica Capital Guardian Value VP-Service Class Subaccount		Transamerica Clarion Global Real Estate Securities VP-SC Subaccount
Assets
Investment in securities:
Number of shares		64,279.676		110,811.944		27,015.195		41,532.205		27,860.317
Cost	$	478,864	$	912,741	$	257,691	$	665,704	$	470,253
Investments in mutual funds, Level 1 quoted prices at net asset value	$	316,256	$	525,249	$	127,242	$	395,387	$	227,062
Receivable for units sold		—		—		—		—		—
Total assets		316,256		525,249		127,242		395,387		227,062
Liabilities
Payable for units redeemed		2		2		1		2		1
	$	316,254	$	525,247	$	127,241	$	395,385	$	227,061
Net Assets:
Deferred annuity contracts terminable by owners	$	316,254	$	525,247	$	127,241	$	395,385	$	227,061
Total net assets	$	316,254	$	525,247	$	127,241	$	395,385	$	227,061
Accumulation units outstanding:
M&E - 1.00%		112,682		269,796		177,920		243,457		205,257
M&E - 1.15%		226,454		313,267		7,448		228,721		62,445
M&E - 1.20%		24,155		36,265		—		85,731		39,638
M&E - 1.35%		51,208		162,193		16,870		98,073		54,081
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.765484	$	0.674376	$	0.629688	$	0.604624	$	0.629749
M&E - 1.15%	$	0.762735	$	0.671950	$	0.627430	$	0.602464	$	0.627488
M&E - 1.20%	$	0.761829	$	0.671154	$	0.626671	$	0.601730	$	0.626747
M&E - 1.35%	$	0.759102	$	0.668733	$	0.624428	$	0.599575	$	0.624497
M&E - 1.55%	$	0.714003	$	0.652035	$	0.647921	$	0.656511	$	0.632796
M&E - 1.80%	$	—	$	—	$	—	$	—	$	—
M&E - 2.00%	$	—	$	—	$	—	$	—	$	—

3

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica Science & Technology VP- Service Class Subaccount		Transamerica Jennison Growth VP-Service Class Subaccount		Transamerica JPMorgan Enhanced Index VP-Service Class Subaccount		Transamerica Marsico Growth VP-Service Class Subaccount		Transamerica BlackRock Large Cap Value VP- Service Class Subaccount
Assets
Investment in securities:
Number of shares		4,430.628		25,309.136		4,821.146		20,445.031		25,064.346
Cost	$	13,119	$	133,189	$	71,570	$	234,471	$	443,738
Investments in mutual funds, Level 1 quoted prices at net asset value	$	11,387	$	125,027	$	39,389	$	149,453	$	278,966
Receivable for units sold		—		1		3		—		—
Total assets		11,387		125,028		39,392		149,453		278,966
Liabilities
Payable for units redeemed		—		—		—		—		1
	$	11,387	$	125,028	$	39,392	$	149,453	$	278,965
Net Assets:
Deferred annuity contracts terminable by owners	$	11,387	$	125,028	$	39,392	$	149,453	$	278,965
Total net assets	$	11,387	$	125,028	$	39,392	$	149,453	$	278,965
Accumulation units outstanding:
M&E - 1.00%		1,972		—		16,374		45,768		25,221
M&E - 1.15%		—		131,903		19,656		77,660		232,196
M&E - 1.20%		—		—		—		32,064		39,512
M&E - 1.35%		13,377		32,243		19,188		41,337		85,000
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.747283	$	0.765142	$	0.716377	$	0.762305	$	0.733737
M&E - 1.15%	$	0.744593	$	0.762402	$	0.713807	$	0.759590	$	0.731114
M&E - 1.20%	$	0.743699	$	0.761482	$	0.712941	$	0.758664	$	0.730219
M&E - 1.35%	$	0.741027	$	0.758759	$	0.710391	$	0.755945	$	0.727603
M&E - 1.55%	$	0.626922	$	0.700561	$	0.690972	$	0.662738	$	0.731333
M&E - 1.80%	$	—	$	—	$	—	$	—	$	—
M&E - 2.00%	$	—	$	—	$	—	$	—	$	—

4

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica MFS High Yield VP-Service Class Subaccount		Transamerica PIMCO Total Return VP- Service Class Subaccount		Transamerica Legg Mason Partners All Cap VP-Service Class Subaccount		Transamerica Templeton Global VP-Service Class Subaccount		Transamerica Balanced VP- Service Class Subaccount
Assets
Investment in securities:
Number of shares		39,349.971		317,624.790		5,862.193		7,264.424		313,733.998
Cost	$	343,003	$	3,462,773	$	57,215	$	156,405	$	3,484,362
Investments in mutual funds, Level 1 quoted prices at net asset value	$	233,739	$	3,385,880	$	43,439	$	99,813	$	2,613,404
Receivable for units sold		—		4		5		—		—
Total assets		233,739		3,385,884		43,444		99,813		2,613,404
Liabilities
Payable for units redeemed		—		—		—		44		4
	$	233,739	$	3,385,884	$	43,444	$	99,769	$	2,613,400
Net Assets:
Deferred annuity contracts terminable by owners	$	233,739	$	3,385,884	$	43,444	$	99,769	$	2,613,400
Total net assets	$	233,739	$	3,385,884	$	43,444	$	99,769	$	2,613,400
Accumulation units outstanding:
M&E - 1.00%		19,539		1,175,987		5,260		18,725		1,628,344
M&E - 1.15%		135,316		999,622		15,171		82,437		588,424
M&E - 1.20%		42,358		278,404		—		3,131		488,234
M&E - 1.35%		98,904		631,550		41,570		37,375		557,764
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		79,342		—		—		30,247
M&E - 2.00%		—		48,428		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.793411	$	1.062809	$	0.705260	$	0.707352	$	0.796399
M&E - 1.15%	$	0.790565	$	1.058979	$	0.702727	$	0.704814	$	0.793538
M&E - 1.20%	$	0.789611	$	1.057730	$	0.701885	$	0.703973	$	0.792574
M&E - 1.35%	$	0.786775	$	1.053935	$	0.699365	$	0.701453	$	0.789735
M&E - 1.55%	$	0.755156	$	0.921360	$	0.689795	$	0.627499	$	0.735747
M&E - 1.80%	$	—	$	0.919227	$	—	$	—	$	0.734044
M&E - 2.00%	$	—	$	0.917520	$	—	$	—	$	0.732685

5

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica Convertible Securities VP- Service Class Subaccount		Transamerica Equity VP- Service Class Subaccount		Transamerica Growth Opportunities VP- Service Class Subaccount		Transamerica Money Market VP-Service Class Subaccount		Transamerica U.S. Government Securities VP- Service Class Subaccount
Assets
Investment in securities:
Number of shares		34,562.387		1,366.210		7,494.987		11,616,310.550		159,636.075
Cost	$	377,866	$	25,111	$	102,083	$	11,616,311	$	1,984,999
Investments in mutual funds, Level 1 quoted prices at net asset value	$	213,596	$	20,220	$	57,262	$	11,616,311	$	2,052,920
Receivable for units sold		—		—		9		48		—
Total assets		213,596		20,220		57,271		11,616,359		2,052,920
Liabilities
Payable for units redeemed		1		—		—		—		10
	$	213,595	$	20,220	$	57,271	$	11,616,359	$	2,052,910
Net Assets:
Deferred annuity contracts terminable by owners	$	213,595	$	20,220	$	57,271	$	11,616,359	$	2,052,910
Total net assets	$	213,595	$	20,220	$	57,271	$	11,616,359	$	2,052,910
Accumulation units outstanding:
M&E - 1.00%		103,577		—		64,967		3,416,072		253,708
M&E - 1.15%		21,645		—		9,859		3,655,897		804,071
M&E - 1.20%		86,444		—		—		703,382		139,638
M&E - 1.35%		62,294		30,647		—		2,979,512		496,869
M&E - 1.55%		—		—		—		10,946		117,734
M&E - 1.80%		—		—		—		191,272		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.782542	$	0.665328	$	0.765757	$	1.065348	$	1.145005
M&E - 1.15%	$	0.779747	$	0.662947	$	0.763009	$	1.061523	$	1.140897
M&E - 1.20%	$	0.778799	$	0.662141	$	0.762105	$	1.060265	$	1.139520
M&E - 1.35%	$	0.776017	$	0.659774	$	0.759366	$	1.056474	$	1.135462
M&E - 1.55%	$	0.686125	$	0.609356	$	0.664676	$	1.004520	$	1.034155
M&E - 1.80%	$	—	$	—	$	—	$	1.002197	$	1.031771
M&E - 2.00%	$	—	$	—	$	—	$	1.000350	$	1.029863

6

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica Value Balanced VP- Service Class Subaccount		Transamerica T. Rowe Price Equity Income VP- Service Class Subaccount		Transamerica T. Rowe Price Growth Stock VP- Service Class Subaccount		Transamerica T. Rowe Price Small Cap VP- Service Class Subaccount		Transamerica Van Kampen Active Int’l Allocation VP-SC Subaccount
Assets
Investment in securities:
Number of shares		2,948.870		55,530.901		4,689.104		23,425.491		32,634.495
Cost	$	27,024	$	908,659	$	109,592	$	215,126	$	471,015
Investments in mutual funds, Level 1 quoted prices at net asset value	$	26,245	$	465,349	$	64,288	$	121,578	$	283,920
Receivable for units sold		—		—		5		3		—
Total assets		26,245		465,349		64,293		121,581		283,920
Liabilities
Payable for units redeemed		—		1		—		—		2
	$	26,245	$	465,348	$	64,293	$	121,581	$	283,918
Net Assets:
Deferred annuity contracts terminable by owners	$	26,245	$	465,348	$	64,293	$	121,581	$	283,918
Total net assets	$	26,245	$	465,348	$	64,293	$	121,581	$	283,918
Accumulation units outstanding:
M&E - 1.00%		—		181,060		22,551		46,998		52,297
M&E - 1.15%		33,641		231,201		48,525		29,246		221,013
M&E - 1.20%		—		66,078		21,161		18,872		11,735
M&E - 1.35%		2,963		172,160		—		69,788		86,078
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.717801	$	0.718220	$	0.699120	$	0.740781	$	0.768272
M&E - 1.15%	$	0.717081	$	0.715644	$	0.696617	$	0.738127	$	0.765515
M&E - 1.20%	$	0.716849	$	0.714781	$	0.695776	$	0.737243	$	0.764598
M&E - 1.35%	$	0.716139	$	0.712226	$	0.693285	$	0.734596	$	0.761851
M&E - 1.55%	$	0.715188	$	0.692108	$	0.646152	$	0.715727	$	0.679315
M&E - 1.80%	$	0.714013	$	—	$	—	$	—	$	—
M&E - 2.00%	$	0.713074	$	—	$	—	$	—	$	—

7

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica Van Kampen Large Cap Core VP-Service Class Subaccount		Transamerica Van Kampen Mid-Cap Growth VP- Service Class Subaccount		Transamerica Index 50 VP Service Class Subaccount		Transamerica Index 75 VP Service Class Subaccount		Transamerica Efficient Markets VP-Service Class Subaccount
Assets
Investment in securities:
Number of shares		6,374.731		4,138.047		449,203.430		781,756.440		1,440.220
Cost	$	110,955	$	104,756	$	3,856,637	$	5,973,037	$	14,345
Investments in mutual funds, Level 1 quoted prices at net asset value	$	59,094	$	55,615	$	3,710,420	$	5,699,004	$	14,964
Receivable for units sold		5		8		—		5		—
Total assets		59,099		55,623		3,710,420		5,699,009		14,964
Liabilities
Payable for units redeemed		—		—		2		—		—
	$	59,099	$	55,623	$	3,710,418	$	5,699,009	$	14,964
Net Assets:
Deferred annuity contracts terminable by owners	$	59,099	$	55,623	$	3,710,418	$	5,699,009	$	14,964
Total net assets	$	59,099	$	55,623	$	3,710,418	$	5,699,009	$	14,964
Accumulation units outstanding:
M&E - 1.00%		60,166		48,137		1,788,126		3,249,393		—
M&E - 1.15%		4,954		20,517		1,679,010		3,678,196		14,425
M&E - 1.20%		10,649		8,959		542,681		387,906		—
M&E - 1.35%		10,332		—		390,624		415,614		—
M&E - 1.55%		—		—		105,951		—		—
M&E - 1.80%		—		—		19,434		144,651		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.687634	$	0.717735	$	0.820520	$	0.724155	$	1.037554
M&E - 1.15%	$	0.685165	$	0.715154	$	0.819699	$	0.723436	$	1.037343
M&E - 1.20%	$	0.684342	$	0.714290	$	0.819431	$	0.723199	$	1.037270
M&E - 1.35%	$	0.681893	$	0.711744	$	0.818617	$	0.722483	$	1.037055
M&E - 1.55%	$	0.640419	$	0.611926	$	0.817541	$	0.721522	$	1.036768
M&E - 1.80%	$	—	$	—	$	0.816191	$	0.720336	$	1.036413
M&E - 2.00%	$	—	$	—	$	0.815125	$	0.719388	$	1.036128

8

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Transamerica U.S. Government Securities VP- Service Class- PAM Subaccount		Transamerica International Moderate Growth VP-Service Class Subaccount		Transamerica Small/Mid Cap Value VP- Service Class Subaccount		AIM V.I. Basic Value Fund-Series II Shares Subaccount		AIM V.I. Capital Appreciation Fund- Series II Shares Subaccount
Assets
Investment in securities:
Number of shares		9,886.611		2,938,682.282		2,787.688		18,888.492		1,274.825
Cost	$	121,675	$	29,452,394	$	35,008	$	182,582	$	32,490
Investments in mutual funds, Level 1 quoted prices at net asset value	$	127,142	$	19,630,398	$	32,031	$	76,876	$	21,175
Receivable for units sold		—		—		—		—		2
Total assets		127,142		19,630,398		32,031		76,876		21,177
Liabilities
Payable for units redeemed		1		73		1		1		—
	$	127,141	$	19,630,325	$	32,030	$	76,875	$	21,177
Net Assets:
Deferred annuity contracts terminable by owners	$	127,141	$	19,630,325	$	32,030	$	76,875	$	21,177
Total net assets	$	127,141	$	19,630,325	$	32,030	$	76,875	$	21,177
Accumulation units outstanding:
M&E - 1.00%		3,624		10,500,872		—		58,221		3,681
M&E - 1.15%		101,931		9,512,686		—		67,331		27,108
M&E - 1.20%		—		2,951,911		10,910		—		—
M&E - 1.35%		5,900		3,196,148		37,430		18,687		—
M&E - 1.55%		—		134,506		—		—		—
M&E - 1.80%		—		435,380		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	1.145005	$	0.737518	$	0.664552	$	0.534453	$	0.689967
M&E - 1.15%	$	1.140897	$	0.734869	$	0.663622	$	0.532530	$	0.687489
M&E - 1.20%	$	1.139520	$	0.733990	$	0.663319	$	0.531898	$	0.686655
M&E - 1.35%	$	1.135462	$	0.731368	$	0.662384	$	0.529976	$	0.684202
M&E - 1.55%	$	1.034155	$	0.687197	$	0.661155	$	0.530807	$	0.654555
M&E - 1.80%	$	—	$	0.685608	$	—	$	—	$	—
M&E - 2.00%	$	—	$	0.684342	$	—	$	—	$	—

9

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	AllianceBernstein Growth and Income Portfolio- Class B Subaccount		AllianceBernstein Large Cap Growth Portfolio- Class B Subaccount		AllianceBernstein Balanced Wealth Strategy Portfolio- Class B Subaccount		Janus Aspen–Mid Cap Growth Portfolio-Service Class Subaccount		Janus Aspen–Worldwide Growth Portfolio- Service Class Subaccount
Assets
Investment in securities:
Number of shares		10,756.561		8,264.475		15,754.018		2,704.403		1,918.500
Cost	$	248,465	$	214,934	$	126,711	$	94,206	$	65,072
Investments in mutual funds, Level 1 quoted prices at net asset value	$	139,513	$	149,008	$	135,957	$	55,981	$	36,643
Receivable for units sold		—		—		—		4		5
Total assets		139,513		149,008		135,957		55,985		36,648
Liabilities
Payable for units redeemed		1		—		788		—		—
	$	139,512	$	149,008	$	135,169	$	55,985	$	36,648
Net Assets:
Deferred annuity contracts terminable by owners	$	139,512	$	149,008	$	135,169	$	55,985	$	36,648
Total net assets	$	139,512	$	149,008	$	135,169	$	55,985	$	36,648
Accumulation units outstanding:
M&E - 1.00%		105,060		151,021		127,445		28,040		26,489
M&E - 1.15%		35,846		39,637		5,900		20,179		7,853
M&E - 1.20%		10,675		—		—		9,607		9,944
M&E - 1.35%		51,017		10,134		—		16,327		7,755
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.690681	$	0.742942	$	1.013687	$	0.757588	$	0.706136
M&E - 1.15%	$	0.688192	$	0.740273	$	1.013482	$	0.754853	$	0.703600
M&E - 1.20%	$	0.687373	$	0.739381	$	1.013410	$	0.753960	$	0.702756
M&E - 1.35%	$	0.684910	$	0.736731	$	1.013201	$	0.751255	$	0.700233
M&E - 1.55%	$	0.650681	$	0.681360	$	1.012924	$	0.636509	$	0.615674
M&E - 1.80%	$	—	$	—	$	1.012578	$	—	$	—
M&E - 2.00%	$	—	$	—	$	1.012300	$	—	$	—

10

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	MFS New Discovery Series- Service Class Subaccount		MFS Total Return Series- Service Class Subaccount		Fidelity - VIP Balanced Portfolio-Service Class 2 Subaccount		Fidelity–VIP Contrafund® Portfolio-Service Class 2 Subaccount		Fidelity–VIP Equity-Income Portfolio-Service Class 2 Subaccount
Assets
Investment in securities:
Number of shares		17,140.549		19,813.526		64,498.668		32,474.268		10,246.476
Cost	$	249,208	$	400,688	$	768,080	$	922,030	$	224,677
Investments in mutual funds, Level 1 quoted prices at net asset value	$	137,296	$	301,958	$	628,862	$	491,660	$	133,204
Receivable for units sold		6		7		—		—		8
Total assets		137,302		301,965		628,862		491,660		133,212
Liabilities
Payable for units redeemed		—		—		1		1		—
	$	137,302	$	301,965	$	628,861	$	491,659	$	133,212
Net Assets:
Deferred annuity contracts terminable by owners	$	137,302	$	301,965	$	628,861	$	491,659	$	133,212
Total net assets	$	137,302	$	301,965	$	628,861	$	491,659	$	133,212
Accumulation units outstanding:
M&E - 1.00%		23,693		55,174		270,880		107,425		28,080
M&E - 1.15%		24,730		204,109		197,097		246,571		137,991
M&E - 1.20%		—		—		11,587		87,110		22,999
M&E - 1.35%		148,786		95,503		463,387		250,922		21,193
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.700970	$	0.854799	$	0.667815	$	0.713966	$	0.635921
M&E - 1.15%	$	0.698444	$	0.851734	$	0.667157	$	0.711414	$	0.633631
M&E - 1.20%	$	0.697603	$	0.850714	$	0.666935	$	0.710549	$	0.632873
M&E - 1.35%	$	0.695106	$	0.847673	$	0.666271	$	0.707993	$	0.630602
M&E - 1.55%	$	0.685619	$	0.808997	$	0.665388	$	0.642238	$	0.637459
M&E - 1.80%	$	—	$	—	$	0.664291	$	—	$	—
M&E - 2.00%	$	—	$	—	$	0.663418	$	—	$	—

11

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Fidelity–VIP Growth Portfolio- Service Class 2 Subaccount		Fidelity–VIP Mid Cap Portfolio- Service Class 2 Subaccount		Fidelity–VIP Value Strategies Portfolio- Service Class 2 Subaccount		Franklin Income Securities Fund - Class 2 Subaccount		Mutual Shares Securities Fund - Class 2 Subaccount
Assets
Investment in securities:
Number of shares		694.176		14,903.256		8,599.968		72,962.379		13,503.461
Cost	$	27,905	$	449,916	$	105,560	$	1,108,442	$	254,465
Investments in mutual funds, Level 1 quoted prices at net asset value	$	16,181	$	270,047	$	42,656	$	827,393	$	159,071
Receivable for units sold		5		—		7		—		1
Total assets		16,186		270,047		42,663		827,393		159,072
Liabilities
Payable for units redeemed		—		2		—		4		—
	$	16,186	$	270,045	$	42,663	$	827,389	$	159,072
Net Assets:
Deferred annuity contracts terminable by owners	$	16,186	$	270,045	$	42,663	$	827,389	$	159,072
Total net assets	$	16,186	$	270,045	$	42,663	$	827,389	$	159,072
Accumulation units outstanding:
M&E - 1.00%		4,919		40,903		10,507		123,982		22,712
M&E - 1.15%		—		96,517		18,338		758,995		129,665
M&E - 1.20%		17,936		76,202		6,416		15,604		4,032
M&E - 1.35%		—		159,587		40,031		326,273		108,743
M&E - 1.55%		—		—		—		—		—
M&E - 1.80%		—		—		—		—		—
M&E - 2.00%		—		—		—		—		—
Accumulation unit value:
M&E - 1.00%	$	0.710898	$	0.727560	$	0.569896	$	0.677613	$	0.602110
M&E - 1.15%	$	0.708345	$	0.724948	$	0.567846	$	0.675928	$	0.600622
M&E - 1.20%	$	0.707494	$	0.724080	$	0.567175	$	0.675372	$	0.600119
M&E - 1.35%	$	0.704967	$	0.721487	$	0.565127	$	0.673706	$	0.598643
M&E - 1.55%	$	0.594860	$	0.672421	$	0.559987	$	0.730445	$	0.683117
M&E - 1.80%	$	—	$	—	$	—	$	—	$	—
M&E - 2.00%	$	—	$	—	$	—	$	—	$	—

12

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Assets and Liabilities

December 31, 2008

	Templeton Foreign Securities Fund - Class 2 Subaccount		Franklin Templeton VIP Founding Funds Allocation- Class 2 Subaccount
Assets
Investment in securities:
Number of shares		13,739.368		20,030.532
Cost	$	223,462	$	110,723
Investments in mutual funds, Level 1 quoted prices at net asset value	$	147,836	$	112,572
Receivable for units sold		—		—
Total assets		147,836		112,572
Liabilities
Payable for units redeemed		—		1
	$	147,836	$	112,571
Net Assets:
Deferred annuity contracts terminable by owners	$	147,836	$	112,571
Total net assets	$	147,836	$	112,571
Accumulation units outstanding:
M&E - 1.00%		22,216		89,239
M&E - 1.15%		127,591		24,360
M&E - 1.20%		13,882		—
M&E - 1.35%		70,726		—
M&E - 1.55%		—		—
M&E - 1.80%		—		—
M&E - 2.00%		—		—
Accumulation unit value:
M&E - 1.00%	$	0.632734	$	0.990993
M&E - 1.15%	$	0.631171	$	0.990788
M&E - 1.20%	$	0.630642	$	0.990720
M&E - 1.35%	$	0.629081	$	0.990519
M&E - 1.55%	$	0.660350	$	0.990241
M&E - 1.80%	$	—	$	0.989903
M&E - 2.00%	$	—	$	0.989628

13

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Year Ended December 31, 2008, Except as Noted

	Transamerica Asset Allocation- Conservative VP- Service Class Subaccount			Transamerica Asset Allocation- Growth VP- Service Class Subaccount			Transamerica Asset Allocation- Moderate VP- Service Class Subaccount			Transamerica Asset Allocation- Moderate Growth VP-SC Subaccount
Net investment income (loss)
Income:
Dividends	$	445,289		$	141,535		$	2,192,579		$	5,394,765
Expenses:
Administrative, mortality and expense risk charge		161,157			56,120			709,114			1,888,030
Net investment income (loss)		284,132			85,415			1,483,465			3,506,735
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		853,976			977,745			6,427,609			20,718,349
Proceeds from sales		1,972,262			747,278			1,380,688			5,611,710
Cost of investments sold		2,177,197			1,113,378			1,405,777			7,130,657
Net realized capital gains (losses) on investments		649,041			611,645			6,402,520			19,199,402
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(96,394	)		(17,413	)		190,579			768,923
End of period		(4,639,315	)		(3,278,083	)		(27,591,076	)		(92,464,750	)
Net change in unrealized appreciation/depreciation of investments		(4,542,921	)		(3,260,670	)		(27,781,655	)		(93,233,673	)
Net realized and unrealized capital gains (losses) on investments		(3,893,880	)		(2,649,025	)		(21,379,135	)		(74,034,271	)
Increase (decrease) in net assets from operations	$	(3,609,748	)	$	(2,563,610	)	$	(19,895,670	)	$	(70,527,536	)

See accompanying notes.

14

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica American Century Large Company Value VP-SC Subaccount			Transamerica MFS International Equity VP- Service Class Subaccount			Transamerica Capital Guardian Global VP- Service Class Subaccount			Transamerica Capital Guardian U.S. Equity VP- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	1,028		$	16,235		$	9,428		$	5,113
Expenses:
Administrative, mortality and expense risk charge		545			3,302			5,855			2,540
Net investment income (loss)		483			12,933			3,573			2,573
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		1,632			25,871			94,964			46,441
Proceeds from sales		2,246			32,695			119,961			107,550
Cost of investments sold		2,893			64,079			137,342			177,278
Net realized capital gains (losses) on investments		985			(5,513	)		77,583			(23,287	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(2,876	)		(28,495	)		(20,631	)		(34,768	)
End of period		(27,485	)		(162,608	)		(387,492	)		(130,449	)
Net change in unrealized appreciation/depreciation of investments		(24,609	)		(134,113	)		(366,861	)		(95,681	)
Net realized and unrealized capital gains (losses) on investments		(23,624	)		(139,626	)		(289,278	)		(118,968	)
Increase (decrease) in net assets from operations	$	(23,141	)	$	(126,693	)	$	(285,705	)	$	(116,395	)

See accompanying notes.

15

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica Capital Guardian Value VP-Service Class Subaccount			Transamerica Clarion Global Real Estate Securities VP- SC Subaccount			Transamerica Science & Technology VP- Service Class Subaccount			Transamerica Jennison Growth VP- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	25,539		$	17,339		$	—		$	—
Expenses:
Administrative, mortality and expense risk charge		4,254			3,290			35			386
Net investment income (loss)		21,285			14,049			(35	)		(386	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		29,014			67,421			123			1,180
Proceeds from sales		77,635			102,392			136			14,061
Cost of investments sold		92,983			184,295			158			17,380
Net realized capital gains (losses) on investments		13,666			(14,482	)		101			(2,139	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(51,942	)		(75,803	)		—			(161	)
End of period		(270,317	)		(243,191	)		(1,732	)		(8,162	)
Net change in unrealized appreciation/depreciation of investments		(218,375	)		(167,388	)		(1,732	)		(8,001	)
Net realized and unrealized capital gains (losses) on investments		(204,709	)		(181,870	)		(1,631	)		(10,140	)
Increase (decrease) in net assets from operations	$	(183,424	)	$	(167,821	)	$	(1,666	)	$	(10,526	)

See accompanying notes.

16

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica JPMorgan Enhanced Index VP- Service Class Subaccount			Transamerica Marsico Growth VP- Service Class Subaccount			Transamerica BlackRock Large Cap Value VP- Service Class Subaccount			Transamerica MFS High Yield VP- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	3,272		$	1,760		$	2,430		$	25,398
Expenses:
Administrative, mortality and expense risk charge		605			3,020			4,222			3,213
Net investment income (loss)		2,667			(1,260	)		(1,792	)		22,185
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		9,350			8,851			46,140			2,319
Proceeds from sales		5,003			120,957			168,974			43,218
Cost of investments sold		10,029			141,232			230,161			54,580
Net realized capital gains (losses) on investments		4,324			(11,424	)		(15,047	)		(9,043	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(757	)		31,847			(38,725	)		(20,066	)
End of period		(32,181	)		(85,018	)		(164,772	)		(109,264	)
Net change in unrealized appreciation/depreciation of investments		(31,424	)		(116,865	)		(126,047	)		(89,198	)
Net realized and unrealized capital gains (losses) on investments		(27,100	)		(128,289	)		(141,094	)		(98,241	)
Increase (decrease) in net assets from operations	$	(24,433	)	$	(129,549	)	$	(142,886	)	$	(76,056	)

See accompanying notes.

17

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica PIMCO Total Return VP- Service Class Subaccount			Transamerica Legg Mason Partners All Cap VP-Service Class Subaccount			Transamerica Templeton Global VP- Service Class Subaccount			Transamerica Balanced VP- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	94,277		$	1,842		$	2,053		$	42,604
Expenses:
Administrative, mortality and expense risk charge		19,680			1,161			1,369			22,426
Net investment income (loss)		74,597			681			684			20,178
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		726			15,326			—			203,987
Proceeds from sales		156,624			56,852			13,526			552,747
Cost of investments sold		151,050			108,879			14,361			834,318
Net realized capital gains (losses) on investments		6,300			(36,701	)		(835	)		(77,584	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		33,237			(5,614	)		11,180			51,202
End of period		(76,893	)		(13,776	)		(56,592	)		(870,958	)
Net change in unrealized appreciation/depreciation of investments		(110,130	)		(8,162	)		(67,772	)		(922,160	)
Net realized and unrealized capital gains (losses) on investments		(103,830	)		(44,863	)		(68,607	)		(999,744	)
Increase (decrease) in net assets from operations	$	(29,233	)	$	(44,182	)	$	(67,923	)	$	(979,566	)

See accompanying notes.

18

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica Convertible Securities VP- Service Class Subaccount			Transamerica Equity VP- Service Class Subaccount			Transamerica Growth Opportunities VP-Service Class Subaccount			Transamerica Money Market VP-Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	21,338		$	—		$	6,072		$	102,432
Expenses:
Administrative, mortality and expense risk charge		4,289			134			1,583			61,829
Net investment income (loss)		17,049			(134	)		4,489			40,603
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		65,448			367			46,416			(63	)
Proceeds from sales		140,167			150			101,578			4,579,970
Cost of investments sold		204,865			193			160,136			4,579,970
Net realized capital gains (losses) on investments		750			324			(12,142	)		(63	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		6,258			512			11,757			—
End of period		(164,270	)		(4,891	)		(44,821	)		—
Net change in unrealized appreciation/depreciation of investments		(170,528	)		(5,403	)		(56,578	)		—
Net realized and unrealized capital gains (losses) on investments		(169,778	)		(5,079	)		(68,720	)		(63	)
Increase (decrease) in net assets from operations	$	(152,729	)	$	(5,213	)	$	(64,231	)	$	40,540

See accompanying notes.

19

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica U.S. Government Securities VP- Service Class Subaccount		Transamerica Value Balanced VP-Service Class Subaccount(1)			Transamerica T. Rowe Price Equity Income VP-Service Class Subaccount			Transamerica T. Rowe Price Growth Stock VP-Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	25,472	$	4,465		$	21,462		$	482
Expenses:
Administrative, mortality and expense risk charge		10,890		434			7,109			1,083
Net investment income (loss)		14,582		4,031			14,353			(601	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		—		8,287			190,624			6,159
Proceeds from sales		445,033		72,783			106,739			18,081
Cost of investments sold		440,327		114,956			180,194			25,073
Net realized capital gains (losses) on investments		4,706		(33,886	)		117,169			(833	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		1,373		—			(41,511	)		2,637
End of period		67,921		(779	)		(443,310	)		(45,304	)
Net change in unrealized appreciation/depreciation of investments		66,548		(779	)		(401,799	)		(47,941	)
Net realized and unrealized capital gains (losses) on investments		71,254		(34,665	)		(284,630	)		(48,774	)
Increase (decrease) in net assets from operations	$	85,836	$	(30,634	)	$	(270,277	)	$	(49,375	)

See accompanying notes.

20

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica T. Rowe Price Small Cap VP- Service Class Subaccount			Transamerica Van Kampen Active Int'l Allocation VP- SC Subaccount			Transamerica Van Kampen Large Cap Core VP- Service Class Subaccount			Transamerica Van Kampen Mid-Cap Growth VP- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	2,818		$	18,202		$	3,980		$	2,744
Expenses:
Administrative, mortality and expense risk charge		2,082			4,080			1,081			1,481
Net investment income (loss)		736			14,122			2,899			1,263
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		41,396			42,514			15,006			—
Proceeds from sales		57,865			57,163			24,093			66,362
Cost of investments sold		85,084			84,448			55,088			89,632
Net realized capital gains (losses) on investments		14,177			15,229			(15,989	)		(23,270	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(6,673	)		(483	)		(7,107	)		10,779
End of period		(93,548	)		(187,095	)		(51,861	)		(49,141	)
Net change in unrealized appreciation/depreciation of investments		(86,875	)		(186,612	)		(44,754	)		(59,920	)
Net realized and unrealized capital gains (losses) on investments		(72,698	)		(171,383	)		(60,743	)		(83,190	)
Increase (decrease) in net assets from operations	$	(71,962	)	$	(157,261	)	$	(57,844	)	$	(81,927	)

See accompanying notes.

21

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica Index 50 VP Service Class Subaccount (1)			Transamerica Index 75 VP Service Class Subaccount (1)			Transamerica Efficient Markets VP- Service Class Subaccount (1)			Transamerica U.S. Government Securities VP- Service Class- PAM Subaccount
Net investment income (loss)
Income:
Dividends	$	—		$	—		$	—		$	116
Expenses:
Administrative, mortality and expense risk charge		11,503			12,154			9			225
Net investment income (loss)		(11,503	)		(12,154	)		(9	)		(109	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		—			—			—			—
Proceeds from sales		102,337			60,098			2,033			5,089
Cost of investments sold		131,181			80,375			2,109			5,113
Net realized capital gains (losses) on investments		(28,844	)		(20,277	)		(76	)		(24	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		—			—			—			—
End of period		(146,217	)		(274,033	)		619			5,467
Net change in unrealized appreciation/depreciation of investments		(146,217	)		(274,033	)		619			5,467
Net realized and unrealized capital gains (losses) on investments		(175,061	)		(294,310	)		543			5,443
Increase (decrease) in net assets from operations	$	(186,564	)	$	(306,464	)	$	534		$	5,334

See accompanying notes.

22

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Transamerica International Moderate Growth VP- Service Class Subaccount			Transamerica Small/Mid Cap Value VP- Service Class Subaccount (1)			AIM V.I. Basic Value Fund- Series II Shares Subaccount			AIM V.I. Capital Appreciation Fund-Series II Shares Subaccount
Net investment income (loss)
Income:
Dividends	$	490,373		$	14		$	633		$	—
Expenses:
Administrative, mortality and expense risk charge		218,703			88			1,370			442
Net investment income (loss)		271,670			(74	)		(737	)		(442	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		758,057			88			24,635			—
Proceeds from sales		1,776,085			597			38,663			18,887
Cost of investments sold		2,067,943			665			45,962			22,387
Net realized capital gains (losses) on investments		466,199			20			17,336			(3,500	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		294,028			—			(11,052	)		2,800
End of period		(9,821,996	)		(2,977	)		(105,706	)		(11,315	)
Net change in unrealized appreciation/depreciation of investments		(10,116,024	)		(2,977	)		(94,654	)		(14,115	)
Net realized and unrealized capital gains (losses) on investments		(9,649,825	)		(2,957	)		(77,318	)		(17,615	)
Increase (decrease) in net assets from operations	$	(9,378,155	)	$	(3,031	)	$	(78,055	)	$	(18,057	)

See accompanying notes.

23

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	AllianceBernstein Growth and Income Portfolio- Class B Subaccount			AllianceBernstein Large Cap Growth Portfolio- Class B Subaccount			AllianceBernstein Balanced Wealth Strategy Portfolio- Class B Subaccount (1)			Janus Aspen–Mid Cap Growth Portfolio- Service Class Subaccount
Net investment income (loss)
Income:
Dividends	$	3,862		$	—		$	—		$	64
Expenses:
Administrative, mortality and expense risk charge		2,358			1,856			106			1,051
Net investment income (loss)		1,504			(1,856	)		(106	)		(987	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		39,851			—			—			5,882
Proceeds from sales		103,072			2,162			1,571			23,713
Cost of investments sold		137,766			2,452			1,586			32,060
Net realized capital gains (losses) on investments		5,157			(290	)		(15	)		(2,465	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		1,093			20,697			—			9,212
End of period		(108,952	)		(65,926	)		9,246			(38,225	)
Net change in unrealized appreciation/depreciation of investments		(110,045	)		(86,623	)		9,246			(47,437	)
Net realized and unrealized capital gains (losses) on investments		(104,888	)		(86,913	)		9,231			(49,902	)
Increase (decrease) in net assets from operations	$	(103,384	)	$	(88,769	)	$	9,125		$	(50,889	)

See accompanying notes.

24

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Janus Aspen–Worldwide Growth Portfolio- Service Class Subaccount			MFS New Discovery Series-Service Class Subaccount			MFS Total Return Series- Service Class Subaccount			Fidelity - VIP Balanced Portfolio- Service Class 2 Subaccount (1)
Net investment income (loss)
Income:
Dividends	$	542		$	—		$	8,256		$	12,752
Expenses:
Administrative, mortality and expense risk charge		576			2,145			3,403			2,307
Net investment income (loss)		(34	)		(2,145	)		4,853			10,445
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		—			35,164			18,003			—
Proceeds from sales		2,251			11,846			13,307			28,169
Cost of investments sold		2,481			20,503			15,961			35,544
Net realized capital gains (losses) on investments		(230	)		26,507			15,349			(7,375	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		1,447			(11,521	)		(2,654	)		—
End of period		(28,429	)		(111,912	)		(98,730	)		(139,218	)
Net change in unrealized appreciation/depreciation of investments		(29,876	)		(100,391	)		(96,076	)		(139,218	)
Net realized and unrealized capital gains (losses) on investments		(30,106	)		(73,884	)		(80,727	)		(146,593	)
Increase (decrease) in net assets from operations	$	(30,140	)	$	(76,029	)	$	(75,874	)	$	(136,148	)

See accompanying notes.

25

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Fidelity–VIP Contrafund® Portfolio- Service Class 2 Subaccount			Fidelity–VIP Equity-Income Portfolio- Service Class 2 Subaccount			Fidelity–VIP Growth Portfolio- Service Class 2 Subaccount			Fidelity–VIP Mid Cap Portfolio- Service Class 2 Subaccount
Net investment income (loss)
Income:
Dividends	$	5,667		$	4,502		$	224		$	983
Expenses:
Administrative, mortality and expense risk charge		8,600			1,675			748			4,946
Net investment income (loss)		(2,933	)		2,827			(524	)		(3,963	)
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		20,674			117			—			70,572
Proceeds from sales		185,327			2,637			105,118			143,112
Cost of investments sold		304,018			4,102			109,758			202,879
Net realized capital gains (losses) on investments		(98,017	)		(1,348	)		(4,640	)		10,805
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(146,700	)		(11,588	)		14,533			11,952
End of period		(430,370	)		(91,473	)		(11,724	)		(179,869	)
Net change in unrealized appreciation/depreciation of investments		(283,670	)		(79,885	)		(26,257	)		(191,821	)
Net realized and unrealized capital gains (losses) on investments		(381,687	)		(81,233	)		(30,897	)		(181,016	)
Increase (decrease) in net assets from operations	$	(384,620	)	$	(78,406	)	$	(31,421	)	$	(184,979	)

See accompanying notes.

26

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Fidelity–VIP Value Strategies Portfolio- Service Class 2 Subaccount			Franklin Income Securities Fund Class 2 Subaccount			Mutual Shares Securities Fund Class 2 Subaccount			Templeton Foreign Securities Fund Class 2 Subaccount
Net investment income (loss)
Income:
Dividends	$	384		$	40,688		$	6,766		$	4,270
Expenses:
Administrative, mortality and expense risk charge		831			9,110			2,650			2,119
Net investment income (loss)		(447	)		31,578			4,116			2,151
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		14,400			17,037			9,624			17,474
Proceeds from sales		1,176			313,877			70,393			65,082
Cost of investments sold		1,797			372,271			88,822			95,207
Net realized capital gains (losses) on investments		13,779			(41,357	)		(8,805	)		(12,651	)
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		(5,533	)		(5,754	)		(4,294	)		3,842
End of period		(62,904	)		(281,049	)		(95,394	)		(75,626	)
Net change in unrealized appreciation/depreciation of investments		(57,371	)		(275,295	)		(91,100	)		(79,468	)
Net realized and unrealized capital gains (losses) on investments		(43,592	)		(316,652	)		(99,905	)		(92,119	)
Increase (decrease) in net assets from operations	$	(44,039	)	$	(285,074	)	$	(95,789	)	$	(89,968	)

See accompanying notes.

27

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Operations

Years Ended December 31, 2008 Except as Noted

	Franklin Templeton VIP Founding Funds Allocation- Class 2 Subaccount (1)
Net investment income (loss)
Income:
Dividends	$	527
Expenses:
Administrative, mortality and expense risk charge		58
Net investment income (loss)		469
Net realized and unrealized capital gains (losses) on investments
Net realized capital gains (losses) on investments:
Realized gain distributions		510
Proceeds from sales		1,548
Cost of investments sold		1,577
Net realized capital gains (losses) on investments		481
Net change in unrealized appreciation/depreciation of investments:
Beginning of period		—
End of period		1,849
Net change in unrealized appreciation/depreciation of investments		1,849
Net realized and unrealized capital gains (losses) on investments		2,330
Increase (decrease) in net assets from operations	$	2,799

See accompanying notes.

28

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Asset Allocation- Conservative VP-Service Class Subaccount						Transamerica Asset Allocation- Growth VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	284,132		$	122,099		$	85,415		$	40,563
Net realized capital gains (losses) on investments		649,041			246,464			611,645			156,560
Net change in unrealized appreciation/depreciation of investments		(4,542,921	)		(131,493	)		(3,260,670	)		(56,679	)
Increase (decrease) in net assets from operations		(3,609,748	)		237,070			(2,563,610	)		140,444
Contract transactions
Net contract purchase payments		9,791,188			6,296,694			1,087,663			3,438,691
Transfer payments from (to) other subaccounts or general account		5,461,276			820,691			400,385			757,873
Contract terminations, withdrawals, and other deductions		(1,292,421	)		(68,775	)		(282,483	)		(147,749	)
Contract maintenance charges		(44,588	)		(7,276	)		(6,556	)		(3,096	)
Increase (decrease) in net assets from contract transactions		13,915,455			7,041,334			1,199,009			4,045,719
Net increase (decrease) in net assets		10,305,707			7,278,404			(1,364,601	)		4,186,163
Net assets:
Beginning of the period		9,367,547			2,089,143			5,313,055			1,126,892
End of the period	$	19,673,254		$	9,367,547		$	3,948,454		$	5,313,055

See accompanying notes.

29

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Asset Allocation- Moderate VP-Service Class Subaccount						Transamerica Asset Allocation- Moderate Growth VP-SC Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	1,483,465		$	633,131		$	3,506,735		$	1,282,440
Net realized capital gains (losses) on investments		6,402,520			963,364			19,199,402			2,477,872
Net change in unrealized appreciation/depreciation of investments		(27,781,655	)		3,313			(93,233,673	)		(377,272	)
Increase (decrease) in net assets from operations		(19,895,670	)		1,599,808			(70,527,536	)		3,383,040
Contract transactions
Net contract purchase payments		39,031,548			35,638,469			90,408,113			106,474,963
Transfer payments from (to) other subaccounts or general account		9,824,004			3,580,283			7,701,399			10,022,099
Contract terminations, withdrawals, and other deductions		(3,063,519	)		(1,372,321	)		(7,250,674	)		(2,151,902	)
Contract maintenance charges		(249,050	)		(48,457	)		(821,708	)		(164,936	)
Increase (decrease) in net assets from contract transactions		45,542,983			37,797,974			90,037,130			114,180,224
Net increase (decrease) in net assets		25,647,313			39,397,782			19,509,594			117,563,264
Net assets:
Beginning of the period		48,503,624			9,105,842			148,432,249			30,868,985
End of the period	$	74,150,937		$	48,503,624		$	167,941,843		$	148,432,249

See accompanying notes.

30

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica American Century Large Company Value VP-SC Subaccount						Transamerica MFS International Equity VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	483		$	(400	)	$	12,933		$	149
Net realized capital gains (losses) on investments		985			886			(5,513	)		30,614
Net change in unrealized appreciation/depreciation of investments		(24,609	)		(3,218	)		(134,113	)		(28,964	)
Increase (decrease) in net assets from operations		(23,141	)		(2,732	)		(126,693	)		1,799
Contract transactions
Net contract purchase payments		100			52,327			82,710			164,016
Transfer payments from (to) other subaccounts or general account		847			3,878			123,990			62,438
Contract terminations, withdrawals, and other deductions		(1,685	)		(1,545	)		(2,949	)		—
Contract maintenance charges		(13	)		(7	)		(399	)		(12	)
Increase (decrease) in net assets from contract transactions		(751	)		54,653			203,352			226,442
Net increase (decrease) in net assets		(23,892	)		51,921			76,659			228,241
Net assets:
Beginning of the period		61,494			9,573			239,595			11,354
End of the period	$	37,602		$	61,494		$	316,254		$	239,595

See accompanying notes.

31

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Capital Guardian Global VP-Service Class Subaccount						Transamerica Capital Guardian U.S. Equity VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	3,573		$	(1,193	)	$	2,573		$	(964	)
Net realized capital gains (losses) on investments		77,583			43,595			(23,287	)		21,531
Net change in unrealized appreciation/depreciation of investments		(366,861	)		(27,505	)		(95,681	)		(35,580	)
Increase (decrease) in net assets from operations		(285,705	)		14,897			(116,395	)		(15,013	)
Contract transactions
Net contract purchase payments		167,388			315,573			22,134			193,738
Transfer payments from (to) other subaccounts or general account		107,627			8,758			(67,755	)		(388	)
Contract terminations, withdrawals, and other deductions		(21,946	)		(504	)		(5,356	)		(953	)
Contract maintenance charges		(93	)		(18	)		(344	)		(9	)
Increase (decrease) in net assets from contract transactions		252,976			323,809			(51,321	)		192,388
Net increase (decrease) in net assets		(32,729	)		338,706			(167,716	)		177,375
Net assets:
Beginning of the period		557,976			219,270			294,957			117,582
End of the period	$	525,247		$	557,976		$	127,241		$	294,957

See accompanying notes.

32

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Capital Guardian Value VP-Service Class Subaccount						Transamerica Clarion Global Real Estate Securities VP-SC Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	21,285		$	29		$	14,049		$	22,234
Net realized capital gains (losses) on investments		13,666			23,819			(14,482	)		21,579
Net change in unrealized appreciation/depreciation of investments		(218,375	)		(57,058	)		(167,388	)		(86,946	)
Increase (decrease) in net assets from operations		(183,424	)		(33,210	)		(167,821	)		(43,133	)
Contract transactions
Net contract purchase payments		129,126			180,969			80,295			103,530
Transfer payments from (to) other subaccounts or general account		109,466			27,183			24,461			160,710
Contract terminations, withdrawals, and other deductions		(1,708	)		—			(40,364	)		(5,923	)
Contract maintenance charges		(282	)		(159	)		(247	)		(124	)
Increase (decrease) in net assets from contract transactions		236,602			207,993			64,145			258,193
Net increase (decrease) in net assets		53,178			174,783			(103,676	)		215,060
Net assets:
Beginning of the period		342,207			167,424			330,737			115,677
End of the period	$	395,385		$	342,207		$	227,061		$	330,737

See accompanying notes.

33

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Science & Technology VP-Service Class Subaccount					Transamerica Jennison Growth VP-Service Class Subaccount
	2008			2007		2008			2007
Operations
Net investment income (loss)	$	(35	)	$	—	$	(386	)	$	(18	)
Net realized capital gains (losses) on investments		101			—		(2,139	)		—
Net change in unrealized appreciation/depreciation of investments		(1,732	)		—		(8,001	)		(161	)
Increase (decrease) in net assets from operations		(1,666	)		—		(10,526	)		(179	)
Contract transactions
Net contract purchase payments		2,677			—		36,182			7,500
Transfer payments from (to) other subaccounts or general account		10,477			—		95,106			(1	)
Contract terminations, withdrawals, and other deductions		(101	)		—		(3,029	)		—
Contract maintenance charges		—			—		(25	)		—
Increase (decrease) in net assets from contract transactions		13,053			—		128,234			7,499
Net increase (decrease) in net assets		11,387			—		117,708			7,320
Net assets:
Beginning of the period		—			—		7,320			—
End of the period	$	11,387		$	—	$	125,028		$	7,320

See accompanying notes.

34

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica JPMorgan Enhanced Index VP-Service Class Subaccount						Transamerica Marsico Growth VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	2,667		$	(4	)	$	(1,260	)	$	(2,018	)
Net realized capital gains (losses) on investments		4,324			445			(11,424	)		7,889
Net change in unrealized appreciation/depreciation of investments		(31,424	)		(757	)		(116,865	)		29,470
Increase (decrease) in net assets from operations		(24,433	)		(316	)		(129,549	)		35,341
Contract transactions
Net contract purchase payments		42,114			26,202			51,406			121,751
Transfer payments from (to) other subaccounts or general account		(4,041	)		(1	)		(100,530	)		83,269
Contract terminations, withdrawals, and other deductions		(102	)		—			(101	)		(2,897	)
Contract maintenance charges		(31	)		—			(65	)		(15	)
Increase (decrease) in net assets from contract transactions		37,940			26,201			(49,290	)		202,108
Net increase (decrease) in net assets		13,507			25,885			(178,839	)		237,449
Net assets:
Beginning of the period		25,885			—			328,292			90,843
End of the period	$	39,392		$	25,885		$	149,453		$	328,292

See accompanying notes.

35

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica BlackRock Large Cap Value VP-Service Class Subaccount						Transamerica MFS High Yield VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	(1,792	)	$	(304	)	$	22,185		$	17,176
Net realized capital gains (losses) on investments		(15,047	)		31,154			(9,043	)		980
Net change in unrealized appreciation/depreciation of investments		(126,047	)		(38,815	)		(89,198	)		(21,275	)
Increase (decrease) in net assets from operations		(142,886	)		(7,965	)		(76,056	)		(3,119	)
Contract transactions
Net contract purchase payments		121,629			181,886			41,005			217,954
Transfer payments from (to) other subaccounts or general account		(49,611	)		214,017			50,015			(8,334	)
Contract terminations, withdrawals, and other deductions		(37,359	)		(4,767	)		(24,827	)		(1,067	)
Contract maintenance charges		(817	)		—			(173	)		(8	)
Increase (decrease) in net assets from contract transactions		33,842			391,136			66,020			208,545
Net increase (decrease) in net assets		(109,044	)		383,171			(10,036	)		205,426
Net assets:
Beginning of the period		388,009			4,838			243,775			38,349
End of the period	$	278,965		$	388,009		$	233,739		$	243,775

See accompanying notes.

36

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica PIMCO Total Return VP-Service Class Subaccount						Transamerica Legg Mason Partners All Cap VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	74,597		$	7,392		$	681		$	92
Net realized capital gains (losses) on investments		6,300			1,200			(36,701	)		2,597
Net change in unrealized appreciation/depreciation of investments		(110,130	)		31,370			(8,162	)		(5,750	)
Increase (decrease) in net assets from operations		(29,233	)		39,962			(44,182	)		(3,061	)
Contract transactions
Net contract purchase payments		1,842,785			375,838			3,277			40,165
Transfer payments from (to) other subaccounts or general account		998,304			124,448			14,831			29,124
Contract terminations, withdrawals, and other deductions		(126,705	)		(12,142	)		(101	)		—
Contract maintenance charges		(597	)		(107	)		(219	)		(13	)
Increase (decrease) in net assets from contract transactions		2,713,787			488,037			17,788			69,276
Net increase (decrease) in net assets		2,684,554			527,999			(26,394	)		66,215
Net assets:
Beginning of the period		701,330			173,331			69,838			3,623
End of the period	$	3,385,884		$	701,330		$	43,444		$	69,838

See accompanying notes.

37

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Templeton Global VP-Service Class Subaccount						Transamerica Balanced VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	684		$	470		$	20,178		$	948
Net realized capital gains (losses) on investments		(835	)		1,977			(77,584	)		21,719
Net change in unrealized appreciation/depreciation of investments		(67,772	)		10,071			(922,160	)		51,187
Increase (decrease) in net assets from operations		(67,923	)		12,518			(979,566	)		73,854
Contract transactions
Net contract purchase payments		27,458			39,799			1,422,100			996,801
Transfer payments from (to) other subaccounts or general account		23,277			26,062			1,130,522			(62,201	)
Contract terminations, withdrawals, and other deductions		(7,298	)		(5,545	)		(48,288	)		(38,308	)
Contract maintenance charges		(29	)		(12	)		(9,003	)		(1,317	)
Increase (decrease) in net assets from contract transactions		43,408			60,304			2,495,331			894,975
Net increase (decrease) in net assets		(24,515	)		72,822			1,515,765			968,829
Net assets:
Beginning of the period		124,284			51,462			1,097,635			128,806
End of the period	$	99,769		$	124,284		$	2,613,400		$	1,097,635

See accompanying notes.

38

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Convertible Securities VP-Service Class Subaccount						Transamerica Equity VP- Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	17,049		$	2,562		$	(134	)	$	(66	)
Net realized capital gains (losses) on investments		750			30,130			324			292
Net change in unrealized appreciation/depreciation of investments		(170,528	)		5,591			(5,403	)		503
Increase (decrease) in net assets from operations		(152,729	)		38,283			(5,213	)		729
Contract transactions
Net contract purchase payments		138,989			132,682			3,624			7,096
Transfer payments from (to) other subaccounts or general account		(68,592	)		80,964			14,498			(2,107	)
Contract terminations, withdrawals, and other deductions		(28,312	)		(3,854	)		—			—
Contract maintenance charges		(61	)		(8	)		(16	)		—
Increase (decrease) in net assets from contract transactions		42,024			209,784			18,106			4,989
Net increase (decrease) in net assets		(110,705	)		248,067			12,893			5,718
Net assets:
Beginning of the period		324,300			76,233			7,327			1,609
End of the period	$	213,595		$	324,300		$	20,220		$	7,327

See accompanying notes.

39

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Growth Opportunities VP-Service Class Subaccount						Transamerica Money Market VP- Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	4,489		$	(1,305	)	$	40,603		$	44,543
Net realized capital gains (losses) on investments		(12,142	)		12,036			(63	)		—
Net change in unrealized appreciation/depreciation of investments		(56,578	)		11,102			—			—
Increase (decrease) in net assets from operations		(64,231	)		21,833			40,540			44,543
Contract transactions
Net contract purchase payments		16,113			53,130			8,922,898			4,193,543
Transfer payments from (to) other subaccounts or general account		(99,862	)		55,176			1,679,119			(2,566,886	)
Contract terminations, withdrawals, and other deductions		(103	)		—			(1,105,999	)		(204,497	)
Contract maintenance charges		(21	)		—			(11,516	)		(957	)
Increase (decrease) in net assets from contract transactions		(83,873	)		108,306			9,484,502			1,421,203
Net increase (decrease) in net assets		(148,104	)		130,139			9,525,042			1,465,746
Net assets:
Beginning of the period		205,375			75,236			2,091,317			625,571
End of the period	$	57,271		$	205,375		$	11,616,359		$	2,091,317

See accompanying notes.

40

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica U.S. Government Securities VP-Service Class Subaccount						Transamerica Value Balanced VP-Service Class Subaccount
	2008			2007			2008(1)
Operations
Net investment income (loss)	$	14,582		$	6,647		$	4,031
Net realized capital gains (losses) on investments		4,706			517			(33,886	)
Net change in unrealized appreciation/depreciation of investments		66,548			1,390			(779	)
Increase (decrease) in net assets from operations		85,836			8,554			(30,634	)
Contract transactions
Net contract purchase payments		965,682			632,772			126,310
Transfer payments from (to) other subaccounts or general account		808,976			(445,121	)		(68,674	)
Contract terminations, withdrawals, and other deductions		(5,560	)		—			(757	)
Contract maintenance charges		(232	)		—			—
Increase (decrease) in net assets from contract transactions		1,768,866			187,651			56,879
Net increase (decrease) in net assets		1,854,702			196,205			26,245
Net assets:
Beginning of the period		198,208			2,003			—
End of the period	$	2,052,910		$	198,208		$	26,245

See accompanying notes.

41

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica T. Rowe Price Equity Income VP-Service Class Subaccount						Transamerica T. Rowe Price Growth Stock VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	14,353		$	4,355		$	(601	)	$	(923	)
Net realized capital gains (losses) on investments		117,169			42,293			(833	)		6,949
Net change in unrealized appreciation/depreciation of investments		(401,799	)		(50,233	)		(47,941	)		(335	)
Increase (decrease) in net assets from operations		(270,277	)		(3,585	)		(49,375	)		5,691
Contract transactions
Net contract purchase payments		127,263			308,855			100			40,179
Transfer payments from (to) other subaccounts or general account		9,089			123,730			3,408			12,553
Contract terminations, withdrawals, and other deductions		(7,865	)		(11,255	)		(3,162	)		(4,390	)
Contract maintenance charges		(619	)		(71	)		—			—
Increase (decrease) in net assets from contract transactions		127,868			421,259			346			48,342
Net increase (decrease) in net assets		(142,409	)		417,674			(49,029	)		54,033
Net assets:
Beginning of the period		607,757			190,083			113,322			59,289
End of the period	$	465,348		$	607,757		$	64,293		$	113,322

See accompanying notes.

42

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica T. Rowe Price Small Cap VP-Service Class Subaccount						Transamerica Van Kampen Active Int’l Allocation VP-SC Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	736		$	(1,252	)	$	14,122		$	4,304
Net realized capital gains (losses) on investments		14,177			14,824			15,229			1,761
Net change in unrealized appreciation/depreciation of investments		(86,875	)		(7,994	)		(186,612	)		(828	)
Increase (decrease) in net assets from operations		(71,962	)		5,578			(157,261	)		5,237
Contract transactions
Net contract purchase payments		85,889			80,881			76,871			271,297
Transfer payments from (to) other subaccounts or general account		(37,175	)		8,711			87,752			(1,593	)
Contract terminations, withdrawals, and other deductions		(4,995	)		(2,982	)		(101	)		(4,561	)
Contract maintenance charges		(49	)		—			(228	)		—
Increase (decrease) in net assets from contract transactions		43,670			86,610			164,294			265,143
Net increase (decrease) in net assets		(28,292	)		92,188			7,033			270,380
Net assets:
Beginning of the period		149,873			57,685			276,885			6,505
End of the period	$	121,581		$	149,873		$	283,918		$	276,885

See accompanying notes.

43

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Van Kampen Large Cap Core VP-Service Class Subaccount						Transamerica Van Kampen Mid- Cap Growth VP-Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	2,899		$	(9	)	$	1,263		$	(934	)
Net realized capital gains (losses) on investments		(15,989	)		3,665			(23,270	)		697
Net change in unrealized appreciation/depreciation of investments		(44,754	)		(7,107	)		(59,920	)		10,094
Increase (decrease) in net assets from operations		(57,844	)		(3,451	)		(81,927	)		9,857
Contract transactions
Net contract purchase payments		32,883			110,843			14,447			127,021
Transfer payments from (to) other subaccounts or general account		(19,175	)		(1	)		(52,593	)		27,419
Contract terminations, withdrawals, and other deductions		(3,420	)		(602	)		(5,544	)		(2,326	)
Contract maintenance charges		(134	)		—			(184	)		(22	)
Increase (decrease) in net assets from contract transactions		10,154			110,240			(43,874	)		152,092
Net increase (decrease) in net assets		(47,690	)		106,789			(125,801	)		161,949
Net assets:
Beginning of the period		106,789			—			181,424			19,475
End of the period	$	59,099		$	106,789		$	55,623		$	181,424

See accompanying notes.

44

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica Index 50 VP Service Class Subaccount			Transamerica Index 75 VP Service Class Subaccount			Transamerica Efficient Markets VP- Service Class Subaccount			Transamerica U.S. Government Securities VP- Service Class-PAM Subaccount
	2008(1)			2008(1)			2008(1)			2008			2007
Operations
Net investment income (loss)	$	(11,503	)	$	(12,154	)	$	(9	)	$	(109	)	$	—
Net realized capital gains (losses) on investments		(28,844	)		(20,277	)		(76	)		(24	)		—
Net change in unrealized appreciation/depreciation of investments		(146,217	)		(274,033	)		619			5,467			—
Increase (decrease) in net assets from operations		(186,564	)		(306,464	)		534			5,334			—
Contract transactions
Net contract purchase payments		2,200,550			3,706,882			15,053			—			—
Transfer payments from (to) other subaccounts or general account		1,737,173			2,312,451			23			121,907			—
Contract terminations, withdrawals, and other deductions		(40,723	)		(13,860	)		(646	)		(100	)		—
Contract maintenance charges		(18	)		—			—			—			—
Increase (decrease) in net assets from contract transactions		3,896,982			6,005,473			14,430			121,807			—
Net increase (decrease) in net assets		3,710,418			5,699,009			14,964			127,141			—
Net assets:
Beginning of the period		—			—			—			—			—
End of the period	$	3,710,418		$	5,699,009		$	14,964		$	127,141		$	—

See accompanying notes.

45

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Transamerica International Moderate Growth VP-Service Class Subaccount						Transamerica Small/Mid Cap Value VP- Service Class Subaccount			AIM V.I. Basic Value Fund-Series II Shares Subaccount
	2008			2007			2008 (1)			2008			2007
Operations
Net investment income (loss)	$	271,670		$	28,861		$	(74	)	$	(737	)	$	(477	)
Net realized capital gains (losses) on investments		466,199			92,927			20			17,336			8,276
Net change in unrealized appreciation/ depreciation of investments		(10,116,024	)		232,095			(2,977	)		(94,654	)		(11,293	)
Increase (decrease) in net assets from operations		(9,378,155	)		353,883			(3,031	)		(78,055	)		(3,494	)
Contract transactions
Net contract purchase payments		11,221,536			11,367,819			500			49,285			96,539
Transfer payments from (to) other subaccounts or general account		2,237,470			2,828,401			35,076			(35,589	)		21,061
Contract terminations, withdrawals, and other deductions		(701,448	)		(119,858	)		(515	)		(102	)		—
Contract maintenance charges		(103,623	)		(10,825	)		—			(48	)		(47	)
Increase (decrease) in net assets from contract transactions		12,653,935			14,065,537			35,061			13,546			117,553
Net increase (decrease) in net assets		3,275,780			14,419,420			32,030			(64,509	)		114,059
Net assets:
Beginning of the period		16,354,545			1,935,125			—			141,384			27,325
End of the period	$	19,630,325		$	16,354,545		$	32,030		$	76,875		$	141,384

See accompanying notes.

46

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	AIM V.I. Capital Appreciation Fund-Series II Shares Subaccount						AllianceBernstein Growth and Income Portfolio-Class B Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	(442	)	$	(325	)	$	1,504		$	(472	)
Net realized capital gains (losses) on investments		(3,500	)		56			5,157			6,964
Net change in unrealized appreciation/ depreciation of investments		(14,115	)		2,666			(110,045	)		(3,106	)
Increase (decrease) in net assets from operations		(18,057	)		2,397			(103,384	)		3,386
Contract transactions
Net contract purchase payments		20,220			29,901			52,656			106,229
Transfer payments from (to) other subaccounts or general account		(18,329	)		871			(20,938	)		30,324
Contract terminations, withdrawals, and other deductions		(101	)		—			(43,922	)		(5,829	)
Contract maintenance charges		(11	)		(7	)		(108	)		—
Increase (decrease) in net assets from contract transactions		1,779			30,765			(12,312	)		130,724
Net increase (decrease) in net assets		(16,278	)		33,162			(115,696	)		134,110
Net assets:
Beginning of the period		37,455			4,293			255,208			121,098
End of the period	$	21,177		$	37,455		$	139,512		$	255,208

See accompanying notes.

47

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	AllianceBernstein Large Cap Growth Portfolio-Class B Subaccount						AllianceBernstein Balanced Wealth Strategy Portfolio- Class B Subaccount			Janus Aspen–Mid Cap Growth Portfolio-Service Class Subaccount
	2008			2007			2008(1)			2008			2007
Operations
Net investment income (loss)	$	(1,856	)	$	(1,567	)	$	(106	)	$	(987	)	$	(244	)
Net realized capital gains (losses) on investments		(290	)		204			(15	)		(2,465	)		144
Net change in unrealized appreciation/ depreciation of investments		(86,623	)		19,124			9,246			(47,437	)		9,384
Increase (decrease) in net assets from operations		(88,769	)		17,761			9,125			(50,889	)		9,284
Contract transactions
Net contract purchase payments		49,285			40,939			75,700			37,811			49,154
Transfer payments from (to) other subaccounts or general account		8,422			866			51,832			(18,590	)		2,199
Contract terminations, withdrawals, and other deductions		(100	)		—			(1,488	)		(103	)		—
Contract maintenance charges		(8	)		(7	)		—			(30	)		(7	)
Increase (decrease) in net assets from contract transactions		57,599			41,798			126,044			19,088			51,346
Net increase (decrease) in net assets		(31,170	)		59,559			135,169			(31,801	)		60,630
Net assets:
Beginning of the period		180,178			120,619			—			87,786			27,156
End of the period	$	149,008		$	180,178		$	135,169		$	55,985		$	87,786

See accompanying notes.

48

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Janus Aspen–Worldwide Growth Portfolio-Service Class Subaccount						MFS New Discovery Series- Service Class Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	(34	)	$	(205	)	$	(2,145	)	$	(1,006	)
Net realized capital gains (losses) on investments		(230	)		420			26,507			2,042
Net change in unrealized appreciation/ depreciation of investments		(29,876	)		1,452			(100,391	)		(11,978	)
Increase (decrease) in net assets from operations		(30,140	)		1,667			(76,029	)		(10,942	)
Contract transactions
Net contract purchase payments		2,677			53,484			20,220			160,398
Transfer payments from (to) other subaccounts or general account		598			6,456			13,731			14,279
Contract terminations, withdrawals, and other deductions		(104	)		—			(103	)		—
Contract maintenance charges		(16	)		—			(220	)		(24	)
Increase (decrease) in net assets from contract transactions		3,155			59,940			33,628			174,653
Net increase (decrease) in net assets		(26,985	)		61,607			(42,401	)		163,711
Net assets:
Beginning of the period		63,633			2,026			179,703			15,992
End of the period	$	36,648		$	63,633		$	137,302		$	179,703

See accompanying notes.

49

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	MFS Total Return Series- Service Class Subaccount						Fidelity - VIP Balanced Portfolio- Service Class 2 Subaccount
	2008			2007			2008(1)
Operations
Net investment income (loss)	$	4,853		$	15		$	10,445
Net realized capital gains (losses) on investments		15,349			1,930			(7,375	)
Net change in unrealized appreciation/ depreciation of investments		(96,076	)		(3,352	)		(139,218	)
Increase (decrease) in net assets from operations		(75,874	)		(1,407	)		(136,148	)
Contract transactions
Net contract purchase payments		60,987			171,307			721,511
Transfer payments from (to) other subaccounts or general account		90,777			41,427			48,544
Contract terminations, withdrawals, and other deductions		(9,572	)		(200	)		(5,046	)
Contract maintenance charges		(459	)		(23	)		—
Increase (decrease) in net assets from contract transactions		141,733			212,511			765,009
Net increase (decrease) in net assets		65,859			211,104			628,861
Net assets:
Beginning of the period		236,106			25,002			—
End of the period	$	301,965		$	236,106		$	628,861

See accompanying notes.

50

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Fidelity VIP Contrafund® Portfolio-Service Class 2 Subaccount						Fidelity–VIP Equity-Income Portfolio-Service Class 2 Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	(2,933	)	$	1,201		$	2,827		$	1,357
Net realized capital gains (losses) on investments		(98,017	)		188,909			(1,348	)		8,203
Net change in unrealized appreciation/ depreciation of investments		(283,670	)		(141,575	)		(79,885	)		(11,446	)
Increase (decrease) in net assets from operations		(384,620	)		48,535			(78,406	)		(1,886	)
Contract transactions
Net contract purchase payments		92,727			578,962			21,609			55,850
Transfer payments from (to) other subaccounts or general account		39,031			93,710			92,892			43,948
Contract terminations, withdrawals, and other deductions		(64,169	)		(6,393	)		(990	)		(2,657	)
Contract maintenance charges		(582	)		(68	)		(321	)		(8	)
Increase (decrease) in net assets from contract transactions		67,007			666,211			113,190			97,133
Net increase (decrease) in net assets		(317,613	)		714,746			34,784			95,247
Net assets:
Beginning of the period		809,272			94,526			98,428			3,181
End of the period	$	491,659		$	809,272		$	133,212		$	98,428

See accompanying notes.

51

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Fidelity–VIP Growth Portfolio-Service Class 2 Subaccount						Fidelity–VIP Mid Cap Portfolio- Service Class 2 Subaccount
	2008			2007			2008			2007
Operations
Net investment income (loss)	$	(524	)	$	(720	)	$	(3,963	)	$	(1,590	)
Net realized capital gains (losses) on investments		(4,640	)		1,252			10,805			20,405
Net change in unrealized appreciation/ depreciation of investments		(26,257	)		14,489			(191,821	)		11,890
Increase (decrease) in net assets from operations		(31,421	)		15,021			(184,979	)		30,705
Contract transactions
Net contract purchase payments		6,348			123,893			58,290			173,694
Transfer payments from (to) other subaccounts or general account		(39,129	)		(5,616	)		(50,255	)		214,476
Contract terminations, withdrawals, and other deductions		(51,652	)		(6,405	)		(10,517	)		(11,358	)
Contract maintenance charges		—			—			(289	)		(29	)
Increase (decrease) in net assets from contract transactions		(84,433	)		111,872			(2,771	)		376,783
Net increase (decrease) in net assets		(115,854	)		126,893			(187,750	)		407,488
Net assets:
Beginning of the period		132,040			5,147			457,795			50,307
End of the period	$	16,186		$	132,040		$	270,045		$	457,795

See accompanying notes.

52

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Fidelity–VIP Value Strategies Portfolio-Service Class 2 Subaccount						Franklin Income Securities Fund - Class 2 Subaccount
	2008			2007			2008			2007 (1)
Operations
Net investment income (loss)	$	(447	)	$	(321	)	$	31,578		$	(1,083	)
Net realized capital gains (losses) on investments		13,779			1,567			(41,357	)		(363	)
Net change in unrealized appreciation/ depreciation of investments		(57,371	)		(5,682	)		(275,295	)		(5,754	)
Increase (decrease) in net assets from operations		(44,039	)		(4,436	)		(285,074	)		(7,200	)
Contract transactions
Net contract purchase payments		5,771			56,389			403,767			371,902
Transfer payments from (to) other subaccounts or general account		6,805			18,128			212,119			221,321
Contract terminations, withdrawals, and other deductions		(103	)		—			(79,589	)		(7,769	)
Contract maintenance charges		(225	)		(8	)		(2,088	)		—
Increase (decrease) in net assets from contract transactions		12,248			74,509			534,209			585,454
Net increase (decrease) in net assets		(31,791	)		70,073			249,135			578,254
Net assets:
Beginning of the period		74,454			4,381			578,254			—
End of the period	$	42,663		$	74,454		$	827,389		$	578,254

See accompanying notes.

53

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Statements of Changes in Net Assets

For Years Ended December 31, 2008 and 2007, Except as Noted

	Mutual Shares Securities Fund - Class 2 Subaccount						Templeton Foreign Securities Fund - Class 2 Subaccount						Franklin Templeton VIP Founding Funds Allocation- Class 2 Subaccount
	2008			2007 (1)			2008			2007 (1)			2008 (1)
Operations
Net investment income (loss)	$	4,116		$	(729	)	$	2,151		$	(136	)	$	469
Net realized capital gains (losses) on investments		(8,805	)		(11	)		(12,651	)		948			481
Net change in unrealized appreciation/ depreciation of investments		(91,100	)		(4,294	)		(79,468	)		3,842			1,849
Increase (decrease) in net assets from operations		(95,789	)		(5,034	)		(89,968	)		4,654			2,799
Contract transactions
Net contract purchase payments		99,775			166,944			67,189			71,196			50,865
Transfer payments from (to) other subaccounts or general account		(826	)		20,664			38,139			58,509			60,412
Contract terminations, withdrawals, and other deductions		(23,075	)		(3,251	)		(1,009	)		(404	)		(1,505	)
Contract maintenance charges		(336	)		—			(470	)		—			—
Increase (decrease) in net assets from contract transactions		75,538			184,357			103,849			129,301			109,772
Net increase (decrease) in net assets		(20,251	)		179,323			13,881			133,955			112,571
Net assets:
Beginning of the period		179,323			—			133,955			—			—
End of the period	$	159,072		$	179,323		$	147,836		$	133,955		$	112,571

See accompanying notes.

54

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

1. Organization and Summary of Significant Accounting Policies

Organization

The Transamerica Life Insurance Company Separate Account VA Y (the Mutual Fund Account) is a segregated investment account of Transamerica Life Insurance Company (Transamerica Life), an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.

The Mutual Fund Account is registered with the Securities and Exchange Commission as a Unit Investment Trust pursuant to provisions of the Investment Company Act of 1940. The Mutual Fund Account consists of multiple investment subaccounts (each a Series Fund and collectively the Series Funds). Activity in these specified investment subaccounts is available to contract owners of the Transamerica Axiom Variable Annuity, issued by Transamerica Life. Each Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended. The Transamerica U.S. Government Securities-Portfolio Asset Manager-Service Class ("PAM") was included in the Fund portfolio solely to facilitate a contract owner purchase option. If this option is elected, assets are automatically allocated from the contract owner's other subaccounts into "PAM" when the policy value has dropped relative to the guaranteed amount.

Subaccount Investment by Fund:

AEGON/Transamerica Series Fund, Inc.-Service Class:

Transamerica Asset Allocation-Conservative VP-Service Class

Transamerica Asset Allocation-Growth VP-Service Class

Transamerica Asset Allocation-Moderate VP-Service Class

Transamerica Asset Allocation-Moderate Growth VP-SC

Transamerica American Century Large Company Value VP-SC

Transamerica MFS International Equity VP-Service Class

Transamerica Capital Guardian Global VP-Service Class

Transamerica Capital Guardian U.S. Equity VP-Service Class

Transamerica Capital Guardian Value VP-Service Class

Transamerica Clarion Global Real Estate Securities VP-SC

Transamerica Science & Technology VP-Service Class

Transamerica Balanced VP-Service Class

Transamerica Jennison Growth VP-Service Class

Transamerica JPMorgan Enhanced Index VP-Service Class

Transamerica Marsico Growth VP-Service Class

Transamerica MFS High Yield VP-Service Class

Transamerica BlackRock Large Cap Value VP-Service Class

Transamerica PIMCO Total Return VP-Service Class

Transamerica Legg Mason Partners All Cap VP-Service Class

55

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

1. Organization and Summary of Significant Accounting Policies (continued)

Subaccount Investment by Fund: (continued)

Transamerica Templeton Global VP-Service Class

Transamerica Convertible Securities VP-Service Class

Transamerica Equity VP-Service Class

Transamerica Growth Opportunities VP-Service Class

Transamerica U.S. Government Securities VP-Service Class

Transamerica Money Market VP-Service Class

Transamerica T. Rowe Price Equity Income VP-Service Class

Transamerica T. Rowe Price Growth Stock VP-Service Class

Transamerica T. Rowe Price Small Cap VP-Service Class

Transamerica Van Kampen Active Int’l Allocation VP-SC

Transamerica Van Kampen Large Cap Core VP-Service Class

Transamerica Van Kampen Mid-Cap Growth VP-Service Class

Transamerica U.S. Government Securities VP-Service Class-PAM

Transamerica International Moderate Growth VP-Service Class

Transamerica Small/Mid Cap Value VP-Service Class

Transamerica Value Balanced VP-Service Class

Transamerica Index 50 VP Service Class

Transamerica Index 75 VP Service Class

Transamerica Efficient Markets VP- Service Class

AIM Variable Insurance Funds–Series II:

AIM V.I. Basic Value Fund-Series II Shares

AIM V.I. Capital Appreciation Fund-Series II Shares

AllianceBernstein Variable Products Series Fund, Inc.–Class B:

AllianceBernstein Growth and Income Portfolio-Class B

AllianceBernstein Large Cap Growth Portfolio-Class B

AllianceBernstein Balanced Wealth Strategy Portfolio- Class B

Janus Aspen Series–Service Shares:

Janus Aspen–Mid Cap Growth Portfolio-Service Class

Janus Aspen–Worldwide Growth Portfolio-Service Class

MFS^® Variable Insurance TrustSM–Service Class:

MFS New Discovery Series-Service Class

MFS Total Return Series-Service Class

Variable Insurance Products Fund–Service Class 2:

Fidelity–VIP Contrafund® Portfolio-Service Class 2

Fidelity–VIP Equity-Income Portfolio-Service Class 2

Fidelity–VIP Growth Portfolio-Service Class 2

Fidelity–VIP Mid Cap Portfolio-Service Class 2

Fidelity–VIP Value Strategies Portfolio-Service Class 2

Fidelity - VIP Balanced Portfolio-Service Class 2

56

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

1. Organization and Summary of Significant Accounting Policies (continued)

Franklin Templeton Variable Insurance Products Trust - Class 2

Franklin Income Securities Fund - Class 2

Mutual Shares Securities Fund - Class 2

Templeton Foreign Securities Fund - Class 2

Franklin Templeton VIP Founding Funds Allocation - Class 2

The following name changes were made effective during the fiscal year ended December 31, 2008:

Portfolio	Formerly
Transamerica Asset Allocation-Conservative VP-Service Class	Asset Allocation-Conservative Portfolio-Service Class
Transamerica Asset Allocation-Growth VP-Service Class	Asset Allocation-Growth Portfolio-Service Class
Transamerica Asset Allocation-Moderate VP-Service Class	Asset Allocation-Moderate Portfolio-Service Class
Transamerica Asset Allocation-Moderate Growth VP-SC	Asset Allocation-Moderate Growth Portfolio-Service Class
Transamerica American Century Large Company Value VP-SC	American Century Large Company Value-Service Class
Transamerica MFS International Equity VP-Service Class	MFS International Equity-Service Class
Transamerica Capital Guardian Global VP-Service Class	Capital Guardian Global-Service Class
Transamerica Capital Guardian U.S. Equity VP-Service Class	Capital Guardian U.S. Equity-Service Class
Transamerica Capital Guardian Value VP-Service Class	Capital Guardian Value-Service Class
Transamerica Clarion Global Real Estate Securities VP-SC	Clarion Global Real Estate Securities-Service Class
Transamerica Science & Technology VP-Service Class	Transamerica Science & Technology-Service Class
Transamerica Balanced VP-Service Class	Transamerica Balanced-Service Class
Transamerica Jennison Growth VP-Service Class	Jennison Growth-Service Class
Transamerica JPMorgan Enhanced Index VP-Service Class	JPMorgan Enhanced Index-Service Class
Transamerica Marsico Growth VP-Service Class	Marsico Growth-Service Class
Transamerica MFS High Yield VP-Service Class	MFS High Yield-Service Class
Transamerica BlackRock Large Cap Value VP-Service Class	BlackRock Large Cap Value-Service Class
Transamerica PIMCO Total Return VP-Service Class	PIMCO Total Return-Service Class
Transamerica Legg Mason Partners All Cap VP-Service Class	Legg Mason Partners All Cap-Service Class
Transamerica Templeton Global VP-Service Class	Templeton Transamerica Global-Service Class
Transamerica Convertible Securities VP-Service Class	Transamerica Convertible Securities-Service Class
Transamerica Equity VP-Service Class	Transamerica Equity-Service Class
Transamerica Growth Opportunities VP-Service Class	Transamerica Growth Opportunities-Service Class
Transamerica U.S. Government Securities VP-Service Class	Transamerica U.S. Government Securities-Service Class
Transamerica Money Market VP-Service Class	Transamerica Money Market-Service Class
Transamerica T. Rowe Price Equity Income VP-Service Class	T. Rowe Price Equity Income-Service Class
Transamerica T. Rowe Price Growth Stock VP-Service Class	T. Rowe Price Growth Stock-Service Class
Transamerica T. Rowe Price Small Cap VP-Service Class	T. Rowe Price Small Cap-Service Class
Transamerica Van Kampen Active Int’l Allocation VP-SC	Van Kampen Active International Allocation-Service Class
Transamerica Van Kampen Large Cap Core VP-Service Class	Van Kampen Large Cap Core-Service Class
Transamerica Van Kampen Mid-Cap Growth VP-Service Class	Van Kampen Mid-Cap Growth-Service Class
Transamerica U.S. Government Securities VP-Service Class-PAM	Transamerica U.S. Government Securities-Service Class-PAM
Transamerica International Moderate Growth VP-Service Class	International Moderate Growth Fund-Service Class

57

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

1. Organization and Summary of Significant Accounting Policies (continued)

Each period reported reflects a twelve month period, except those noted below:

Subaccount	Inception Date
Transamerica Small/Mid Cap Value VP-Service Class	January 21, 2008
Transamerica Value Balanced VP-Service Class	May 1, 2008
Transamerica Index 50 VP Service Class	May 1, 2008
Transamerica Index 75 VP Service Class	May 1, 2008
Fidelity - VIP Balanced Portfolio-Service Class 2	May 1, 2008
Transamerica Efficient Markets VP- Service Class	November 10, 2008
AllianceBernstein Balanced Wealth Strategy Portfolio- Class B	November 10, 2008
Franklin Templeton VIP Founding Funds Allocation- Class 2	November 10, 2008
Franklin Income Securities Fund - Class 2	May 1, 2007
Mutual Shares Securities Fund - Class 2	May 1, 2007
Templeton Foreign Securities Fund - Class 2	May 1, 2007

The period ended December 31, 2006 represents the period from July 31, 2006 (Inception Date) through December 31, 2006.

In addtion to M&E, the following funds are assessed a daily charge for fund facilitation fee:

Subaccount	Additional Fund Facilitation Fee Assessed
AllianceBernstein Balance Wealth Strategy	0.20	%
Founding Funds Allocation	0.15	%

Investments

Net purchase payments received by the Mutual Fund Account are invested in the portfolios of the Series Funds, as selected by the contract owner. Investments are stated at the closing net asset values per share on December 31, 2008.

Realized capital gains and losses from the sales of shares in the Series Funds are determined on the first-in, first-out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Unrealized gains or losses from investments in the mutual funds are included in the Statements of Operations.

Dividend Income

Dividends received from the Series Funds investments are reinvested to purchase additional mutual fund shares.

Accounting Policy

Effective January 1, 2008 the Mutual Fund adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. The adoption did not have a material impact on the Mutual Fund's Financial Statements. See Note 8 to the Financial Statements for additional disclosure.

58

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

2. Investments

The aggregate cost of purchases and proceeds from sales of investments for the period ended December 31, 2008 were as follows:

	Purchases		Sales
AEGON/Transamerica Series Fund, Inc.-Service Class:
Transamerica Asset Allocation-Conservative VP-Service Class	$	17,025,819	$	1,972,262
Transamerica Asset Allocation-Growth VP-Service Class		3,009,488		747,278
Transamerica Asset Allocation-Moderate VP-Service Class		54,834,880		1,380,688
Transamerica Asset Allocation-Moderate Growth VP-SC		119,875,023		5,611,710
Transamerica American Century Large Company Value VP-SC		3,609		2,246
Transamerica Capital Guardian Global VP-Service Class		471,480		119,961
Transamerica MFS International Equity VP-Service Class		274,854		32,695
Transamerica Capital Guardian U.S. Equity VP-Service Class		105,244		107,550
Transamerica Capital Guardian Value VP-Service Class		364,546		77,635
Transamerica Clarion Global Real Estate Securities VP-SC		248,015		102,392
Transamerica Science & Technology VP-Service Class		13,277		136
Transamerica Jennison Growth VP-Service Class		143,087		14,061
Transamerica JPMorgan Enhanced Index VP-Service Class		54,957		5,003
Transamerica Marsico Growth VP-Service Class		79,258		120,957
Transamerica BlackRock Large Cap Value VP-Service Class		247,165		168,974
Transamerica MFS High Yield VP-Service Class		133,742		43,218
Transamerica PIMCO Total Return VP-Service Class		2,945,723		156,624
Transamerica Legg Mason Partners All Cap VP-Service Class		90,643		56,852
Transamerica Templeton Global VP-Service Class		57,662		13,526
Transamerica Balanced VP-Service Class		3,272,247		552,747
Transamerica Convertible Securities VP-Service Class		264,689		140,167
Transamerica Equity VP-Service Class		18,488		150
Transamerica Growth Opportunities VP-Service Class		68,603		101,578
Transamerica Money Market VP-Service Class		14,104,972		4,579,970
Transamerica U.S. Government Securities VP-Service Class		2,228,486		445,033
Transamerica T. Rowe Price Equity Income VP-Service Class		439,589		106,739
Transamerica T. Rowe Price Growth Stock VP-Service Class		23,976		18,081
Transamerica T. Rowe Price Small Cap VP-Service Class		143,661		57,865
Transamerica Van Kampen Active Int’l Allocation VP-SC		278,097		57,163
Transamerica Van Kampen Large Cap Core VP-Service Class		52,146		24,093
Transamerica Van Kampen Mid-Cap Growth VP-Service Class		23,744		66,362
Transamerica U.S. Government Securities VP-Service Class-PAM		126,788		5,089
Transamerica International Moderate Growth VP-Service Class		15,459,798		1,776,085
Transamerica Small/Mid Cap Value VP-Service Class		35,673		597
Transamerica Value Balanced VP-Service Class		141,980		72,783
Transamerica Index 50 VP Service Class		3,987,818		102,337
Transamerica Index 75 VP Service Class		6,053,412		60,098
Transamerica Efficient Markets VP- Service Class		16,454		2,033

59

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

2. Investments (continued)

	Purchases		Sales
AIM Variable Insurance Funds–Series II:
AIM V.I. Basic Value Fund-Series II Shares	$	76,107	$	38,663
AIM V.I. Capital Appreciation Fund-Series II Shares		20,220		18,887
AllianceBernstein Variable Products Series Fund, Inc.–Class B:
AllianceBernstein Growth and Income Portfolio-Class B		132,114		103,072
AllianceBernstein Large Cap Growth Portfolio-Class B		57,899		2,162
AllianceBernstein Balanced Wealth Strategy Portfolio- Class B		128,297		1,571
Janus Aspen Series–Service Shares:
Janus Aspen–Mid Cap Growth Portfolio-Service Class		47,686		23,713
Janus Aspen–Worldwide Growth Portfolio-Service Class		5,367		2,251
MFS® Variable Insurance TrustSM–Service Class:
MFS New Discovery Series-Service Class		78,489		11,846
MFS Total Return Series-Service Class		177,888		13,307
Variable Insurance Products Fund–Service Class 2:
Fidelity–VIP Contrafund® Portfolio-Service Class 2		270,074		185,327
Fidelity–VIP Equity-Income Portfolio-Service Class 2		118,764		2,637
Fidelity–VIP Growth Portfolio-Service Class 2		20,155		105,118
Fidelity–VIP Mid Cap Portfolio-Service Class 2		206,951		143,112
Fidelity–VIP Value Strategies Portfolio-Service Class 2		27,371		1,176
Fidelity - VIP Balanced Portfolio-Service Class 2		803,624		28,169
Franklin Templeton Variable Insurance Products Trust - Class 2
Franklin Income Securities Fund - Class 2		896,704		313,877
Mutual Shares Securities Fund - Class 2		159,670		70,393
Templeton Foreign Securities Fund - Class 2		188,557		65,082
Franklin Templeton VIP Founding Funds Allocation - Class 2		112,300		1,548

60

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding

A summary of changes in accumulation units outstanding follows:

	Transamerica Asset Allocation- Conservative VP- Service Class Subaccount		Transamerica Asset Allocation- Growth VP- Service Class Subaccount	Transamerica Asset Allocation- Moderate VP- Service Class Subaccount	Transamerica Asset Allocation- Moderate Growth VP-SC Subaccount
Units outstanding at January 1, 2007	1,983,425		1,012,126	8,461,902	28,193,679
Units purchased	5,301,820		2,481,794	29,854,102	86,550,235
Units redeemed and transferred	1,192,820		993,409	4,002,803	12,717,510
Units outstanding at December 31, 2007	8,478,065		4,487,329	42,318,807	127,461,424
Units purchased	8,688,866		1,058,651	34,400,687	87,147,203
Units redeemed and transferred	5,806,092		50,624	12,113,857	3,046,772
Units outstanding at December 31, 2008	22,973,023		5,596,604	88,833,351	217,655,399
	Transamerica American Century Large Company Value VP-SC Subaccount		Transamerica MFS International Equity VP- Service Class Subaccount	Transamerica Capital Guardian Global VP-Service Class Subaccount	Transamerica Capital Guardian U.S. Equity VP- Service Class Subaccount
Units outstanding at January 1, 2007	8,588		10,211	199,216	108,510
Units purchased	45,810		104,605	275,313	168,811
Units redeemed and transferred	2,097		85,350	8,667	(871	)
Units outstanding at December 31, 2007	56,495		200,166	483,196	276,450
Units purchased	101		73,409	161,381	29,029
Units redeemed and transferred	(1,134	)	140,924	136,943	(103,241	)
Units outstanding at December 31, 2008	55,462		414,499	781,520	202,238

61

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Transamerica Capital Guardian Value VP-Service Class Subaccount		Transamerica Clarion Global Real Estate Securities VP-SC Subaccount		Transamerica Science & Technology VP-Service Class Subaccount		Transamerica Jennison Growth VP-Service Class Subaccount
Units outstanding at January 1, 2007	153,038		96,430		—		—
Units purchased	161,418		75,128		—		5,970
Units redeemed and transferred	24,107		127,753		—		—
Units outstanding at December 31, 2007	338,563		299,311		—		5,970
Units purchased	144,377		90,439		15,450		35,115
Units redeemed and transferred	173,043		(28,328	)	(101	)	123,062
Units outstanding at December 31, 2008	655,983		361,422		15,349		164,147
	Transamerica JPMorgan Enhanced Index VP-Service Class Subaccount		Transamerica Marsico Growth VP-Service Class Subaccount		Transamerica BlackRock Large Cap Value VP-Service Class Subaccount		Transamerica MFS High Yield VP-Service Class Subaccount
Units outstanding at January 1, 2007	—		82,634		4,451		35,954
Units purchased	22,364		100,855		157,141		200,057
Units redeemed and transferred	—		67,768		184,374		(8,639	)
Units outstanding at December 31, 2007	22,364		251,257		345,966		227,372
Units purchased	38,945		50,007		140,198		51,718
Units redeemed and transferred	(6,091	)	(104,436	)	(104,236	)	17,027
Units outstanding at December 31, 2008	55,218		196,828		381,928		296,117

62

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Transamerica PIMCO Total Return VP-Service Class Subaccount		Transamerica Legg Mason Partners All Cap VP-Service Class Subaccount		Transamerica Templeton Global VP-Service Class Subaccount		Transamerica Balanced VP-Service Class Subaccount
Units outstanding at January 1, 2007	168,715		3,221		46,103		121,255
Units purchased	354,869		33,681		31,858		853,143
Units redeemed and transferred	111,191		25,584		19,970		(53,020	)
Units outstanding at December 31, 2007	634,775		62,486		97,931		921,378
Units purchased	1,691,290		3,043		25,907		1,453,823
Units redeemed and transferred	887,267		(3,528	)	17,830		917,812
Units outstanding at December 31, 2008	3,213,332		62,001		141,668		3,293,013
	Transamerica Convertible Securities VP-Service Class Subaccount		Transamerica Equity VP-Service Class Subaccount		Transamerica Growth Opportunities VP-Service Class Subaccount		Transamerica Money Market VP-Service Class Subaccount
Units outstanding at January 1, 2007	71,187		1,481		69,663		616,355
Units purchased	118,081		5,897		33,694		3,592,587
Units redeemed and transferred	69,700		(1,481	)	53,134		(2,220,003	)
Units outstanding at December 31, 2007	258,968		5,897		156,491		1,988,939
Units purchased	118,868		24,866		12,950		7,785,031
Units redeemed and transferred	(103,876	)	(116	)	(94,615	)	1,183,111
Units outstanding at December 31, 2008	273,960		30,647		74,826		10,957,081

63

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Transamerica U.S. Government Securities VP-Service Class Subaccount		Transamerica Value Balanced VP-Service Class Subaccount(1)		Transamerica T. Rowe Price Equity Income VP-Service Class Subaccount		Transamerica T. Rowe Price Growth Stock VP-Service Class Subaccount
Units outstanding at January 1, 2007	1,950				170,654		52,408
Units purchased	616,940				213,555		32,987
Units redeemed and transferred	(434,054	)			151,201		7,096
Units outstanding at December 31, 2007	184,836		—		535,410		92,491
Units purchased	746,264		121,449		138,683		101
Units redeemed and transferred	880,920		(84,845	)	(23,593	)	(355	)
Units outstanding at December 31, 2008	1,812,020		36,604		650,500		92,237
	Transamerica T. Rowe Price Small Cap VP-Service Class Subaccount		Transamerica Van Kampen Active Int’l Allocation VP-SC Subaccount		Transamerica Van Kampen Large Cap Core VP-Service Class Subaccount		Transamerica Van Kampen Mid-Cap Growth VP-Service Class Subaccount
Units outstanding at January 1, 2007	53,057		5,835		—		17,416
Units purchased	67,057		216,740		89,457		86,015
Units redeemed and transferred	7,446		(4,537	)	(510	)	30,757
Units outstanding at December 31, 2007	127,560		218,038		88,947		134,188
Units purchased	81,106		107,918		31,996		11,533
Units redeemed and transferred	(43,763	)	45,167		(34,842	)	(68,107	)
Units outstanding at December 31, 2008	164,903		371,123		86,101		77,614

64

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Transamerica Index 50 VP Service Class Subaccount(1)	Transamerica Index 75 VP Service Class Subaccount(1)	Transamerica U.S. Government Securities VP-Service Class-PAM Subaccount		Transamerica International Moderate Growth VP-Service Class Subaccount
Units outstanding at January 1, 2007			—		1,777,499
Units purchased			107,275		44,663
Units redeemed and transferred			(107,275	)	12,178,690
Units outstanding at December 31, 2007	—	—	—		14,000,852
Units purchased	2,388,386	4,428,168	1		11,024,907
Units redeemed and transferred	2,137,440	3,447,593	111,454		1,705,744
Units outstanding at December 31, 2008	4,525,826	7,875,761	111,455		26,731,503
	Transamerica Small/Mid Cap Value VP-Service Class Subaccount(1)	Transamerica Efficient Markets VP-Service Class Subaccount(1)	AIM V.I. Basic Value Fund-Series II Shares Subaccount		AIM V.I. Capital Appreciation Fund-Series II Shares Subaccount
Units outstanding at January 1, 2007			24,451		3,912
Units purchased			89,720		35,002
Units redeemed and transferred			12,043		(8,021	)
Units outstanding at December 31, 2007	—	—	126,214		30,893
Units purchased	35,442	707	53,379		19,684
Units redeemed and transferred	12,899	13,718	(35,354	)	(19,788	)
Units outstanding at December 31, 2008	48,341	14,425	144,239		30,789

65

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	AllianceBernstein Growth and Income Portfolio-Class B Subaccount		AllianceBernstein Large Cap Growth Portfolio-Class B Subaccount		AllianceBernstein Balanced Wealth Strategy Portfolio-Class B Subaccount(1)	Janus Aspen–Mid Cap Growth Portfolio-Service Class Subaccount
Units outstanding at January 1, 2007	106,879		108,809			24,017
Units purchased	37,003		42,063			128,704
Units redeemed and transferred	73,541		(6,293	)		(88,168	)
Units outstanding at December 31, 2007	217,423		144,579		—	64,553
Units purchased	49,949		48,142		82,538	32,156
Units redeemed and transferred	(64,774	)	8,071		50,807	(22,555	)
Units outstanding at December 31, 2008	202,598		200,792		133,345	74,154
	Janus Aspen–Worldwide Growth Portfolio-Service Class Subaccount		MFS New Discovery Series-Service Class Subaccount		MFS Total Return Series-Service Class Subaccount	Fidelity - VIP Balanced Portfolio-Service Class 2 Subaccount(1)
Units outstanding at January 1, 2007	1,699		13,842		23,160
Units purchased	123,980		413,268		44,376
Units redeemed and transferred	(76,358	)	(272,932	)	145,271
Units outstanding at December 31, 2007	49,321		154,178		212,807	—
Units purchased	2,214		53,439		65,708	797,189
Units redeemed and transferred	506		(10,408	)	76,271	145,762
Units outstanding at December 31, 2008	52,041		197,209		354,786	942,951

66

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Fidelity–VIP Contrafund® Portfolio-Service Class 2 Subaccount		Fidelity–VIP Equity-Income Portfolio-Service Class 2 Subaccount		Fidelity–VIP Growth Portfolio-Service Class 2 Subaccount		Fidelity–VIP Mid Cap Portfolio-Service Class 2 Subaccount
Units outstanding at January 1, 2007	87,283		2,840		4,739		47,231
Units purchased	84,305		107,275		44,663		—
Units redeemed and transferred	473,517		(22,264	)	47,931		329,729
Units outstanding at December 31, 2007	645,105		87,851		97,333		376,960
Units purchased	111,250		20,518		5,020		83,600
Units redeemed and transferred	(64,327	)	101,894		(79,498	)	(87,351	)
Units outstanding at December 31, 2008	692,028		210,263		22,855		373,209
	Fidelity–VIP Value Strategies Portfolio-Service Class 2 Subaccount		Franklin Income Securities Fund - Class 2 Subaccount(1)		Mutual Shares Securities Fund - Class 2 Subaccount(1)		Templeton Foreign Securities Fund - Class 2 Subaccount(1)
Units outstanding at January 1, 2007	3,871		—		—		—
Units purchased	9,375,214		—		9,375,214		107,275
Units redeemed and transferred	(9,315,861	)	595,139		(9,189,491	)	17,846
Units outstanding at December 31, 2007	63,224		595,139		185,723		125,121
Units purchased	5,719		503,902		113,450		105,896
Units redeemed and transferred	6,349		125,813		(34,022	)	3,398
Units outstanding at December 31, 2008	75,292		1,224,854		265,151		234,415

67

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008, Except as Noted

3. Accumulation Units Outstanding (continued)

	Franklin Templeton VIP Founding Funds Allocation-Class 2 Subaccount(1)
Units outstanding at January 1, 2007
Units purchased
Units redeemed and transferred
Units outstanding at December 31, 2007	—
Units purchased	707
Units redeemed and transferred	112,892
Units outstanding at December 31, 2008	113,599

68

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights

The Mutual Fund Account presents the following disclosures required by the AICPA Audit and Accounting Guide for Investment Companies.

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio	Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest	Total Return*** Corresponding to Lowest to Highest Expense Ratio
Transamerica Asset Allocation-Conservative VP-Service Class
	12/31/2008		22,973,023	$0.79 to $0.86	$	19,673,254	3.17	%	1.00% to 2.00%	(22.18)% to (20.64)%
	12/31/2007		8,478,065	1.10 to 1.11		9,367,547	3.39		1.00 to 2.00	5.09 to 4.73
	12/31/2006	(1)	1,983,425	1.05 to 1.05		2,089,143	0.52		1.00 to 2.00	5.37 to 5.22
Transamerica Asset Allocation-Growth VP-Service Class
	12/31/2008		5,596,604	0.67 to 0.71		3,948,454	2.78		1.00 to 1.55	(40.36) to (33.20)
	12/31/2007		4,487,329	1.18 to 1.19		5,313,055	2.42		1.00 to 1.55	6.46 to 6.09
	12/31/2006	(1)	1,012,126	1.11 to 1.11		1,126,892	0.06		1.00 to 1.55	11.41 to 11.25
Transamerica Asset Allocation-Moderate VP-Service Class
	12/31/2008		88,833,351	0.76 to 0.84		74,150,937	3.52		1.00 to 2.00	(26.93) to (23.57)
	12/31/2007		42,318,807	1.14 to 1.15		48,503,624	3.33		1.00 to 2.00	6.66 to 6.29
	12/31/2006	(1)	8,461,902	1.08 to 1.08		9,105,842	0.63		1.00 to 2.00	7.67 to 7.51
Transamerica Asset Allocation-Moderate Growth VP-SC
	12/31/2008		217,655,399	0.72 to 0.77		167,941,843	3.19		1.00 to 2.00	(33.59) to (28.43)
	12/31/2007		127,461,424	1.16 to 1.17		148,432,249	2.61		1.00 to 2.00	6.49 to 6.12
	12/31/2006	(1)	28,193,679	1.09 to 1.10		30,868,985	0.27		1.00 to 2.00	9.55 to 9.39
Transamerica American Century Large Company Value VP-SC
	12/31/2008		55,462	0.67 to 0.69		37,602	2.00		1.00 to 1.55	(37.67) to (31.06)
	12/31/2007		56,495	1.08 to 1.09		61,494	0.31		1.00 to 1.55	(2.31) to (2.65)
	12/31/2006	(1)	8,588	1.11 to 1.12		9,573	0.00		1.00 to 1.55	11.55 to 11.39
Transamerica MFS International Equity VP-Service Class
	12/31/2008		414,499	0.71 to 0.77		316,254	5.55		1.00 to 1.55	(36.18) to (28.60)
	12/31/2007		200,166	1.19 to 1.20		239,595	1.26		1.00 to 1.55	7.78 to 7.41
	12/31/2006	(1)	10,211	1.11 to 1.11		11,354	0.00		1.00 to 1.55	11.29 to 11.13
Transamerica Capital Guardian Global VP-Service Class
	12/31/2008		781,520	0.65 to 0.67		525,247	1.79		1.00 to 1.55	(41.67) to (34.80)
	12/31/2007		483,196	1.15 to 1.16		557,976	0.77		1.00 to 1.55	5.05 to 4.68
	12/31/2006	(1)	199,216	1.10 to 1.10		219,270	0.00		1.00 to 1.55	10.07 to 9.91
Transamerica Capital Guardian U.S. Equity VP-Service Class
	12/31/2008		202,238	0.62 to 0.65		127,241	2.18		1.00 to 1.55	(41.08) to (35.21)
	12/31/2007		276,450	1.06 to 1.07		294,957	0.58		1.00 to 1.55	(1.38) to (1.72)
	12/31/2006	(1)	108,510	1.08 to 1.08		117,582	0.00		1.00 to 1.55	8.36 to 8.21

69

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio					Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest		Total Return*** Corresponding to Lowest to Highest Expense Ratio
Transamerica Capital Guardian Value VP-Service Class
	12/31/2008		655,983	$	0.60	to	$	0.66	$	395,385	6.66	%	1.00% to 1.55	%	(40.28	)%	to	(34.35	)%
	12/31/2007		338,563		1.01	to		1.01		342,207	1.11		1.00 to 1.55		(7.47	)	to	(7.79	)
	12/31/2006	(1)	153,038		1.09	to		1.09		167,424	0.00		1.00 to 1.55		9.42		to	9.27
Transamerica Clarion Global Real Estate Securities VP-SC
	12/31/2008		361,422		0.62	to		0.63		227,061	5.65		1.00 to 1.55		(43.07	)	to	(36.72	)
	12/31/2007		299,311		1.10	to		1.11		330,737	8.25		1.00 to 1.55		(7.83	)	to	(8.15	)
	12/31/2006	(1)	96,430		1.20	to		1.20		115,677	0.00		1.00 to 1.55		20.02		to	19.85
Transamerica Science & Technology VP-Service Class
	12/31/2008		15,349		0.63	to		0.75		11,387	0.00		1.00 to 1.55		(49.38	)	to	(37.31	)
	12/31/2007		—		1.47	to		1.48		—	0.00		1.00 to 1.55		31.18		to	30.73
	12/31/2006	(1)	—		1.12	to		1.13		—	0.00		1.00 to 1.55		12.54		to	12.38
Transamerica Jennison Growth VP-Service Class
	12/31/2008		164,147		0.70	to		0.77		125,028	0.00		1.00 to 1.55		(37.73	)	to	(29.94	)
	12/31/2007		5,970		1.22	to		1.23		7,320	0.00		1.00 to 1.55		10.17		to	9.79
	12/31/2006	(1)	—		1.11	to		1.12		—	0.00		1.00 to 1.55		11.54		to	11.38
Transamerica JPMorgan Enhanced Index VP-Service Class
	12/31/2008		55,218		0.69	to		0.72		39,392	6.41		1.00 to 1.55		(38.14	)	to	(30.90	)
	12/31/2007		22,364		1.15	to		1.16		25,885	1.01		1.00 to 1.55		3.26		to	2.91
	12/31/2006	(1)	—		1.12	to		1.12		—	0.00		1.00 to 1.55		12.15		to	11.99
Transamerica Marsico Growth VP-Service Class
	12/31/2008		196,828		0.66	to		0.76		149,453	0.64		1.00 to 1.55		(41.72	)	to	(33.73	)
	12/31/2007		251,257		1.30	to		1.31		328,292	0.00		1.00 to 1.55		18.94		to	18.52
	12/31/2006	(1)	82,634		1.10	to		1.10		90,843	0.00		1.00 to 1.55		9.97		to	9.81
Transamerica BlackRock Large Cap Value VP-Service Class
	12/31/2008		381,928		0.73	to		0.73		278,965	0.67		1.00 to 1.55		(34.72	)	to	(26.87	)
	12/31/2007		345,966		1.12	to		1.12		388,009	1.01		1.00 to 1.55		3.31		to	2.95
	12/31/2006	(1)	4,451		1.09	to		1.09		4,838	0.00		1.00 to 1.55		8.79		to	8.64
Transamerica MFS High Yield VP-Service Class
	12/31/2008		296,117		0.76	to		0.79		233,739	9.61		1.00 to 1.55		(26.20	)	to	(24.48	)
	12/31/2007		227,372		1.07	to		1.08		243,775	11.22		1.00 to 1.55		0.71		to	0.37
	12/31/2006	(1)	35,954		1.07	to		1.07		38,349	0.00		1.00 to 1.55		6.75		to	6.60
Transamerica PIMCO Total Return VP-Service Class
	12/31/2008		3,213,332		0.92	to		1.06		3,385,884	5.60		1.00 to 2.00		(4.04	)	to	(8.25	)
	12/31/2007		634,775		1.10	to		1.11		701,330	2.76		1.00 to 2.00		7.72		to	7.35
	12/31/2006	(1)	168,715		1.03	to		1.03		173,331	0.00		1.00 to 2.00		2.81		to	2.67

70

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio					Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest		Total Return*** Corresponding to Lowest to Highest Expense Ratio
Transamerica Legg Mason Partners All Cap VP-Service Class
	12/31/2008		62,001	$	0.69	to	$	0.71	$	43,444	2.09	%	1.00% to 1.55	%	(37.17	)%	to	(31.02	)%
	12/31/2007		62,486		1.12	to		1.12		69,838	1.51		1.00 to 1.55		(0.24	)	to	(0.59	)
	12/31/2006	(1)	3,221		1.12	to		1.13		3,623	0.00		1.00 to 1.55		12.52		to	12.36
Transamerica Templeton Global VP-Service Class
	12/31/2008		141,668		0.63	to		0.71		99,769	1.72		1.00 to 1.55		(44.37	)	to	(37.25	)
	12/31/2007		97,931		1.27	to		1.27		124,284	1.62		1.00 to 1.55		13.84		to	13.44
	12/31/2006	(1)	46,103		1.12	to		1.12		51,462	0.00		1.00 to 1.55		11.70		to	11.54
Transamerica Balanced VP-Service Class
	12/31/2008		3,293,013		0.73	to		0.80		2,613,400	2.12		1.00 to 2.00		(33.24	)	to	(26.73	)
	12/31/2007		921,378		1.19	to		1.19		1,097,635	1.25		1.00 to 2.00		12.25		to	11.86
	12/31/2006	(1)	121,255		1.06	to		1.06		128,806	0.00		1.00 to 2.00		6.28		to	6.13
Transamerica Convertible Securities VP-Service Class
	12/31/2008		273,960		0.69	to		0.78		213,595	5.87		1.00 to 1.55		(37.62	)	to	(31.39	)
	12/31/2007		258,968		1.25	to		1.25		324,300	2.26		1.00 to 1.55		17.11		to	16.70
	12/31/2006	(1)	71,187		1.07	to		1.07		76,233	0.00		1.00 to 1.55		7.13		to	6.97
Transamerica Equity VP-Service Class
	12/31/2008		30,647		0.61	to		0.67		20,220	0.00		1.00 to 1.55		(46.71	)	to	(39.06	)
	12/31/2007		5,897		1.24	to		1.25		7,327	0.00		1.00 to 1.55		14.89		to	14.49
	12/31/2006	(1)	1,481		1.09	to		1.09		1,609	0.00		1.00 to 1.55		8.67		to	8.52
Transamerica Growth Opportunities VP-Service Class
	12/31/2008		74,826		0.66	to		0.77		57,271	3.94		1.00 to 1.55		(41.65	)	to	(33.53	)
	12/31/2007		156,491		1.31	to		1.31		205,375	0.00		1.00 to 1.55		21.52		to	21.09
	12/31/2006	(1)	69,663		1.08	to		1.08		75,236	0.00		1.00 to 1.55		8.00		to	7.85
Transamerica Money Market VP-Service Class
	12/31/2008		10,957,081		1.00	to		1.07		11,616,359	1.85		1.00 to 2.00		1.15		to	0.03
	12/31/2007		1,988,939		1.05	to		1.05		2,091,317	4.48		1.00 to 2.00		3.72		to	3.36
	12/31/2006	(1)	616,355		1.01	to		1.02		625,571	2.23		1.00 to 2.00		1.54		to	1.40
Transamerica U.S. Government Securities VP-Service Class
	12/31/2008		1,812,020		1.03	to		1.15		2,052,910	2.76		1.00 to 2.00		6.35		to	2.99
	12/31/2007		184,836		1.07	to		1.08		198,208	7.74		1.00 to 2.00		4.73		to	4.37
	12/31/2006	(1)	1,950		1.03	to		1.03		2,003	0.00		1.00 to 2.00		2.80		to	2.66
Transamerica Value Balanced VP-Service Class
	12/31/2008	(1)	36,604		0.71	to		0.72		26,245	8.43		1.00 to 2.00		(28.22	)	to	(28.69	)

71

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio					Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest		Total Return*** Corresponding to Lowest to Highest Expense Ratio
Transamerica T. Rowe Price Equity Income VP-Service Class
	12/31/2008		650,500	$	0.69	to	$	0.72	$	465,348	3.44	%	1.00% to 1.55	%	(36.83	)%	to	(30.79	)%
	12/31/2007		535,410		1.13	to		1.14		607,757	2.25		1.00 to 1.55		2.03		to	1.68
	12/31/2006	(1)	170,654		1.11	to		1.11		190,083	0.00		1.00 to 1.55		11.43		to	11.27
Transamerica T. Rowe Price Growth Stock VP-Service Class
	12/31/2008		92,237		0.65	to		0.70		64,293	0.51		1.00 to 1.55		(43.07	)	to	(35.38	)
	12/31/2007		92,491		1.22	to		1.23		113,322	0.12		1.00 to 1.55		8.51		to	8.14
	12/31/2006	(1)	52,408		1.13	to		1.13		59,289	0.00		1.00 to 1.55		13.17		to	13.01
Transamerica T. Rowe Price Small Cap VP-Service Class
	12/31/2008		164,903		0.72	to		0.74		121,581	1.57		1.00 to 1.55		(37.04	)	to	(28.43	)
	12/31/2007		127,560		1.17	to		1.18		149,873	0.00		1.00 to 1.55		8.19		to	7.81
	12/31/2006	(1)	53,057		1.09	to		1.09		57,685	0.00		1.00 to 1.55		8.75		to	8.59
Transamerica Van Kampen Active Int’l Allocation VP-SC
	12/31/2008		371,123		0.68	to		0.77		283,918	5.15		1.00 to 1.55		(39.65	)	to	(32.07	)
	12/31/2007		218,038		1.27	to		1.27		276,885	4.39		1.00 to 1.55		14.13		to	13.73
	12/31/2006	(1)	5,835		1.11	to		1.12		6,505	0.00		1.00 to 1.55		11.55		to	11.39
Transamerica Van Kampen Large Cap Core VP-Service Class
	12/31/2008		86,101		0.64	to		0.69		59,099	3.96		1.00 to 1.55		(42.78	)	to	(35.96	)
	12/31/2007		88,947		1.20	to		1.20		106,789	0.95		1.00 to 1.55		7.86		to	7.48
	12/31/2006	(1)	—		1.11	to		1.11		—	0.00		1.00 to 1.55		11.41		to	11.26
Transamerica Van Kampen Mid-Cap Growth VP-Service Class
	12/31/2008		77,614		0.61	to		0.72		55,623	1.99		1.00 to 1.55		(46.97	)	to	(38.81	)
	12/31/2007		134,188		1.35	to		1.35		181,424	0.00		1.00 to 1.55		21.02		to	20.60
	12/31/2006	(1)	17,416		1.12	to		1.12		19,475	0.00		1.00 to 1.55		11.84		to	11.68
Transamerica Index 50 VP Service Class
	12/31/2008	(1)	4,525,826		0.82	to		0.82		3,710,418	0.00		1.00 to 2.00		(17.95	)	to	(18.49	)
Transamerica Index 75 VP Service Class
	12/31/2008	(1)	7,875,761		0.72	to		0.72		5,699,009	0.00		1.00 to 2.00		(27.58	)	to	(28.06	)
Transamerica Efficient Markets VP- Service Class
	12/31/2008	(1)	14,425		1.04	to		1.04		14,964	0.00		1.00 to 2.00		3.76		to	3.61
Transamerica U.S. Government Securities VP-Service Class-PAM
	12/31/2008		111,455		1.03	to		1.15		127,141	0.53		1.00 to 1.55		6.35		to	3.42
	12/31/2007		—		1.07	to		1.08		—	0.00		1.00 to 1.55		4.73		to	4.37
	12/31/2006	(1)	—		1.03	to		1.03		—	0.00		1.00 to 1.55		2.80		to	2.66
Transamerica International Moderate Growth VP-Service Class
	12/31/2008		26,731,503		0.68	to		0.74		19,630,325	2.47		1.00 to 2.00		(36.95	)	to	(31.57	)
	12/31/2007		14,000,852		1.16	to		1.17		16,354,545	1.42		1.00 to 2.00		7.41		to	7.04
	12/31/2006	(1)	1,777,499		1.09	to		1.09		1,935,125	0.00		1.00 to 2.00		8.90		to	8.74

72

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio					Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest		Total Return*** Corresponding to Lowest to Highest Expense Ratio
Transamerica Small/Mid Cap Value VP-Service Class
	12/31/2008	(1)	48,341	$	0.66	to	$	0.66	$	32,030	0.15	%	1.00% to 1.55	%	(33.54	)%	to	(33.88	)%
AIM V.I. Basic Value Fund-Series II Shares
	12/31/2008		144,239		0.53	to		0.53		76,875	0.51		1.00 to 1.55		(52.38	)	to	(46.92	)
	12/31/2007		126,214		1.12	to		1.12		141,384	0.56		1.00 to 1.55		0.35		to	0.01
	12/31/2006	(1)	24,451		1.12	to		1.12		27,325	0.24		1.00 to 1.55		11.84		to	11.68
AIM V.I. Capital Appreciation Fund-Series II Shares
	12/31/2008		30,789		0.65	to		0.69		21,177	0.00		1.00 to 1.55		(43.20	)	to	(34.54	)
	12/31/2007		30,893		1.21	to		1.21		37,455	0.00		1.00 to 1.55		10.62		to	10.24
	12/31/2006	(1)	3,912		1.10	to		1.10		4,293	0.00		1.00 to 1.55		9.80		to	9.65
AllianceBernstein Growth and Income Portfolio-Class B
	12/31/2008		202,598		0.65	to		0.69		139,512	1.84		1.00 to 1.55		(41.28	)	to	(34.93	)
	12/31/2007		217,423		1.17	to		1.18		255,208	0.86		1.00 to 1.55		3.82		to	3.46
	12/31/2006	(1)	106,879		1.13	to		1.13		121,098	0.00		1.00 to 1.55		13.31		to	13.14
AllianceBernstein Large Cap Growth Portfolio-Class B
	12/31/2008		200,792		0.68	to		0.74		149,008	0.00		1.00 to 1.55		(40.42	)	to	(31.86	)
	12/31/2007		144,579		1.24	to		1.25		180,178	0.00		1.00 to 1.55		12.48		to	12.09
	12/31/2006	(1)	108,809		1.11	to		1.11		120,619	0.00		1.00 to 1.55		10.86		to	10.70
AllianceBernstein Balanced Wealth Strategy Portfolio- Class B
	12/31/2008	(1)	133,345		1.01	to		1.01		135,169	0.00		1.20 to 2.00		1.37		to	1.23
Janus Aspen–Mid Cap Growth Portfolio-Service Class
	12/31/2008		74,154		0.64	to		0.76		55,985	0.07		1.00 to 1.55		(44.42	)	to	(36.35	)
	12/31/2007		64,553		1.36	to		1.36		87,786	0.66		1.00 to 1.55		20.53		to	20.11
	12/31/2006	(1)	24,017		1.13	to		1.13		27,156	0.00		1.00 to 1.55		13.08		to	12.92
Janus Aspen–Worldwide Growth Portfolio-Service Class
	12/31/2008		52,041		0.62	to		0.71		36,648	1.03		1.00 to 1.55		(45.36	)	to	(38.43	)
	12/31/2007		49,321		1.29	to		1.29		63,633	0.66		1.00 to 1.55		8.27		to	7.90
	12/31/2006	(1)	1,699		1.19	to		1.19		2,026	1.36		1.00 to 1.55		19.35		to	19.18
MFS New Discovery Series-Service Class
	12/31/2008		197,209		0.69	to		0.70		137,302	0.00		1.00 to 1.55		(40.12	)	to	(31.44	)
	12/31/2007		154,178		1.16	to		1.17		179,703	0.00		1.00 to 1.55		1.23		to	0.88
	12/31/2006	(1)	13,842		1.15	to		1.16		15,992	0.00		1.00 to 1.55		15.64		to	15.47
MFS Total Return Series-Service Class
	12/31/2008		354,786		0.81	to		0.85		301,965	2.82		1.00 to 1.55		(23.09	)	to	(19.10	)
	12/31/2007		212,807		1.11	to		1.11		236,106	1.11		1.00 to 1.55		2.90		to	2.54
	12/31/2006	(1)	23,160		1.08	to		1.08		25,002	0.00		1.00 to 1.55		8.01		to	7.86

73

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

Subaccount	Year Ended		Units	Unit Fair Value Corresponding to Lowest to Highest Expense Ratio					Net Assets		Investment Income Ratio*		Expense Ratio** Lowest to Highest		Total Return*** Corresponding to Lowest to Highest Expense Ratio
Fidelity–VIP Balanced Portfolio-Service Class 2
	12/31/2008	(1)	942,951	$	0.66	to	$	0.67	$	628,861	3.80	%	1.00% to 2.00	%	(33.22	)%	to	(33.46	)%
Fidelity–VIP Contrafund® Portfolio-Service Class 2
	12/31/2008		692,028		0.64	to		0.71		491,659	0.79		1.00 to 1.55		(43.26	)	to	(35.78	)
	12/31/2007		645,105		1.25	to		1.26		809,272	1.46		1.00 to 1.55		16.14		to	15.73
	12/31/2006	(1)	87,283		1.08	to		1.08		94,526	1.95		1.00 to 1.55		8.35		to	8.19
Fidelity–VIP Equity-Income Portfolio-Service Class 2
	12/31/2008		210,263		0.63	to		0.64		133,212	3.11		1.00 to 1.55		(43.38	)	to	(36.25	)
	12/31/2007		87,851		1.12	to		1.12		98,428	6.30		1.00 to 1.55		0.26		to	(0.08	)
	12/31/2006	(1)	2,840		1.12	to		1.12		3,181	2.17		1.00 to 1.55		12.02		to	11.86
Fidelity–VIP Growth Portfolio-Service Class 2
	12/31/2008		22,855		0.59	to		0.71		16,186	0.37		1.00 to 1.55		(47.83	)	to	(40.51	)
	12/31/2007		97,333		1.36	to		1.36		132,040	0.08		1.00 to 1.55		25.40		to	24.96
	12/31/2006	(1)	4,739		1.09	to		1.09		5,147	0.00		1.00 to 1.55		8.67		to	8.52
Fidelity–VIP Mid Cap Portfolio-Service Class 2
	12/31/2008		373,209		0.67	to		0.73		270,045	0.23		1.00 to 1.55		(40.21	)	to	(32.76	)
	12/31/2007		376,960		1.21	to		1.22		457,795	0.56		1.00 to 1.55		14.19		to	13.79
	12/31/2006	(1)	47,231		1.06	to		1.07		50,307	0.00		1.00 to 1.55		6.56		to	6.41
Fidelity–VIP Value Strategies Portfolio-Service Class 2
	12/31/2008		75,292		0.56	to		0.57		42,663	0.57		1.00 to 1.55		(51.77	)	to	(44.00	)
	12/31/2007		63,224		1.18	to		1.18		74,454	0.53		1.00 to 1.55		4.39		to	4.03
	12/31/2006	(1)	3,871		1.13	to		1.13		4,381	0.00		1.00 to 1.55		13.19		to	13.03
Franklin Income Securities Fund–Class 2
	12/31/2008		1,224,854		0.67	to		0.73		827,389	5.29		1.00 to 1.55		(30.36	)	to	(26.96	)
	12/31/2007	(1)	595,139		0.97	to		0.97		578,254	0.50		1.00 to 1.55		(2.70	)	to	(2.93	)
Mutual Shares Securities Fund–Class 2
	12/31/2008		265,151		0.60	to		0.68		159,072	3.11		1.00 to 1.55		(37.73	)	to	(31.69	)
	12/31/2007	(1)	185,723		0.96	to		0.97		179,323	0.04		1.00 to 1.55		(3.30	)	to	(3.52	)
Templeton Foreign Securities Fund–Class 2
	12/31/2008		234,415		0.63	to		0.66		147,836	2.37		1.00 to 1.55		(40.97	)	to	(33.97	)
	12/31/2007	(1)	125,121		1.07	to		1.07		133,955	0.68		1.00 to 1.55		7.19		to	6.94
Franklin Templeton VIP Founding Funds Allocation–Class 2
	12/31/2008	(1)	113,599		0.99	to		0.99		112,571	1.36		1.00 to 2.00		(0.90	)	to	(0.98	)

74

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

4. Financial Highlights (continued)

* These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying Series Fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying Series Fund in which the subaccounts invest.

** These ratios represent the annualized contract expenses of the Mutual Fund Account, consisting primarily of mortality and expense charges. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying Series Fund are excluded. These charges range from .25% to .75% of the average contract owner's account value depending on the options selected. Refer to the product's prospectus for specific details. Expense ratios for periods of less than one year have been annualized.

*** These amounts represent the total return for the period indicated, including changes in the value of the underlying Series Fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total returns reflect a full twelve month period except for those subaccounts indicated as being a partial year in the Organization and Summary of Significant Accounting Policies footnote and new expense ratios as follows:

Expense Ratio	Inception Date
1.00%	July 31, 2006
1.15%	July 31, 2006
1.20%	July 31, 2006
1.35%	July 31, 2006
2.00%	January 22, 2008
1.80%	January 22, 2008
2.00%	January 22, 2008

75

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

5. Administrative, Mortality, and Expense Risk Charge

Administrative charges include an annual charge of the lesser of 2.00% of the policy value or $35 per contract which will commence on the first policy anniversary of each contract owner’s account. Charges for administrative fees to the variable annuity contracts are an expense of the Mutual Fund Account. Transamerica Life also deducts a daily charge equal to an annual rate of .15% of the contract owner’s account for administrative expenses.

Transamerica Life deducts a daily charge equal to an annual rate of 0.85%, 1.00%, 1.05%, 1.20%, 1.40%, 1.65% or 1.85% of the value of the contract owner's account (depending on the death benefit selected) as a charge for assuming certain mortality and expense risks.

6. Income Taxes

Operations of the Mutual Fund Account form a part of Transamerica Life, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code of 1986, as amended (the Code). The operations of the Mutual Fund Account are accounted for separately from other operations of Transamerica Life for purposes of federal income taxation. The Mutual Fund Account is not separately taxable as a regulated investment company under Subchapter M of the Code and is not otherwise taxable as an entity separate from Transamerica Life. Under existing federal income tax laws, the income of the Mutual Fund Account is not taxable to Transamerica Life, as long as earnings are credited under the variable annuity accounts.

7. Dividend Distributions

Dividends are not declared by the Mutual Fund Account, since the increase in the value of the underlying investment in the Series Funds is reflected daily in the accumulation unit price used to calculate the equity value within the Mutual Fund Account. Consequently, a dividend distribution by the underlying Series Funds does not change either the accumulation unit price or equity values within the Mutual Fund Account.

76

Transamerica Life Insurance Company

Separate Account VA Y - Transamerica Axiom

Notes to Financial Statements

December 31, 2008

8. Fair Value Measurements and Fair Value Hierarchy

SFAS No. 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the nature of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.

The Company has categorized its financial instruments into a three level hierarchy which is based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded at fair value on the Statement of Assets and Liabilities are categorized as follows:

Level 1. Unadjusted quoted prices for identical assets or liabilities in an active market.

Level 2. Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

a) Quoted prices for similar assets or liabilities in active markets

b) Quoted prices for identical or similar assets or liabilities in non-active markets

c) Inputs other than quoted market prices that are observable

d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

Level 3. Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

All investments in Mutual Funds included in the Statement of Assets and Liabilities are stated at fair value and are based upon daily unadjusted quoted prices, therefore are considered Level 1.

77

PART C      OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements are included in Part B of this Registration Statement.

(b) Exhibits:

(1)	(a)	Resolution of the Board of Directors of Transamerica Life Insurance Company authorizing establishment of the Separate Account. Note 20.
	(2)	Not Applicable.
(3)	(a)	Principal Underwriting Agreement by and between Transamerica Life Insurance Company, on its own behalf and on the behalf of the Separate Account, and AFSG Securities Corporation. Note 1.
	(a)(1)	Amendment No. 7 to Principal Underwriting Agreement. Note 20.
	(a)(2)	Amendment No. 8 and Novation to Amended and Restated Principal Underwriting Agreement. Note 22.
	(a)(3)	Amendment No. 10 to Amended and Restated Principal Underwriting Agreement. Note 27.
	(b)	Form of Broker/Dealer Supervision and Sales Agreement by and between AFSG Securities Corporation and the Broker/Dealer. Note 2.
(3)	(b)(1)	Form of Life Insurance Company Product Sales Agreement (TCI). Note 24.
(4)	(a)	Form of Policy. Note 3.
	(b)	Form of Death Benefit Rider (Return of Premium). Note 4.
	(c)	Form of Death Benefit Rider (Annual Step-Up). Note 20.
	(d)	Form of Policy Rider (Initial Payment Guarantee). Note 5.
	(e)	Form of Policy Rider (Additional Death Distribution). Note 5.
	(f)	Form of Policy Rider (Additional Death Distribution +). Note 6.
	(g)	Form of Policy Rider (GPS). Note 7.
	(h)	Form of Policy Rider (5 For Life). Note 8.
	(i)	Form of Policy Rider (5 For Life with Growth without Death Benefit). Note 9.
	(j)	Form of Policy Rider (5 For Life with Growth with Death Benefit). Note 9.
	(k)	Form of Policy Rider (Income Select for Life). Note 21.
	(l)	Form of Policy Rider (Access Rider). Note 21.
	(m)	Form of Death Benefit Rider (Double Enhanced). Note 23.
	(n)	Form of Policy Rider (Retirement Income Choice). Note 23.
	(o)	Form of Endorsement (Fund Facilitation Fee). Note 26.
	(p)	Form of Policy Rider (Retirement Income Choice-Double Withdrawal Base Benefit). Note 26.
	(q)	Form of Policy Rider (Retirement Income Choice 1.2). Note 29.
(5)	(a)	Form of Application. Note 21.
	(b)	Form of Application. Note 29.
(6)	(a)	Articles of Incorporation of Transamerica Life Insurance Company. Note 10.
	(b)	ByLaws of Transamerica Life Insurance Company. Note 10.
(7)		Reinsurance Agreements. Note 11.
(7)	(a)	Reinsurance agreement between Transamerica Life Insurance & Annuity Company and Swiss RE Life & Health America Inc. dated January 2, 1998. Note 29.
(7)	(b)	Reinsurance agreement between Transamerica Occidental Life Insurance Company and North American Reassurance Company dated July 1, 1994. Note 29.
(7)	(c)	Reinsurance Agreement No. FUV-1 between Transamerica Life Insurance Company and Union Hamilton Reinsurance Limited dated April 1, 2001. Note 29.
(7)	(c)1	Reinsurance agreement Amendment No. 1 to agreement FUV-1 between Transamerica Life Insurance Company and Union Hamilton Reinsurance Limited dated April 1, 2001. Note 29.
(7)	(d)	Reinsurance Agreement No. FUV-011 between Transamerica Life Insurance Company and Scottish Annuity & Life International Insurance Company (Bermuda) Limited initial dated April 1, 2001, Amended and Restated – May 1, 2007. Note 29.
(7)	(e)	Reinsurance Agreement between Transamerica Life Insurance Company and Transamerica International RE (Bermuda) LTD dated December 31, 2008. Note 29.
(7)	(f)	Reinsurance Agreement between American United Life Insurance Company and Transamerica Life Insurance Company dated July 1, 2007. Note 29.

(8)	(a)	Participation Agreement among WRL Series Fund, Inc., Western Reserve Life Assurance Co. of Ohio, and PFL Life Insurance Company. Note 12.
(8)	(a)(1)	Amendment No. 16 to Participation Agreement among WRL Series Fund, Inc., PFL Life Insurance Company, AUSA Life Insurance Company, Inc., Peoples Benefit Life Insurance Company and Transamerica Occidental Life Insurance Company. Note 10.
(8)	(a)(2)	Amendment No. 17 to Participation Agreement among WRL Series Fund, Inc., PFL Life Insurance Company, AUSA Life Insurance Company, Inc., Peoples Benefit Life Insurance Company and Transamerica Occidental Life Insurance Company. Note 5.
(8)	(a)(3)	Amendment No. 28 to Participation Agreement among AEGON/Transamerica Series Fund, Inc., Transamerica Life Insurance Company, Transamerica Financial Life Insurance Company, Peoples Benefit Life Insurance Company, Transamerica Occidental Life Insurance Company and Transamerica Life Insurance and Annuity Company. Note 3.
(8)	(a)(4)	Amendment No. 31 to Participation Agreement among AEGON/Transamerica Series Fund, Inc., Transamerica Life Insurance Company, Transamerica Financial Life Insurance Company, Peoples Benefit Life Insurance Company, Transamerica Occidental Life Insurance Company and Transamerica Life Insurance and Annuity Company. Note 11.
(8)	(a)(5)	Amendment No. 32 to Participation Agreement (AEGON/Transamerica). Note 6.
(8)	(a)(6)	Amendment No. 33 to Participation Agreement (AEGON/Transamerica). Note 13.
(8)	(a)(7)	Amendment No. 34 to Participation Agreement (ATST). Note 21
(8)	(a)(8)	Amendment No. 36 to Participation Agreement (TST). Note 25.
(8)	(a)(9)	Amendment No. 38 to Participation Agreement (TST). Note 27.
(8)	(a)(10)	Amendment No. 40 to Participation Agreement (TST). Note 29.
(8)	(b)	Participation Agreement by and among AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., PFL Life Insurance Company and AFSG Securities Corporation. Note 14.
(8)	(b)(1)	Amendment No. 14 to Participation Agreement (AIM). Note 21
(8)	(c)	Participation Agreement by and among Alliance Variable Products Series Fund, Inc., PFL Life Insurance Company and AFSG Securities Corporation. Note 14.
(8)	(c)(1)	Amendment No. 1 to Participation Agreement by and among Alliance Variable Products Series Fund, Inc., PFL Life Insurance Company, AFSG Securities Corporation. Note 15.
(8)	(c)(2)	Amendment No. 6 to Participation Agreement (ALLIANCEBERNSTEIN). Note 21
	(c)(3)	Amendment to Participation Agreement (Alliance Bernstein). Note 27.
(8)	(d)	Participation Agreement by and between Janus Aspen Series and PFL Life Insurance Company. Note 14.
(8)	(d)(1)	Amendment No. 2 to Participation Agreement by and between Janus Aspen Series and PFL Life Insurance Company. Note 16.
(8)	(d)(2)	Amendment No. 9 to Participation Agreement (JANUS). Note 21
(8)	(e)	Amended and Restated Participation Agreement among MFS Variable Insurance Trust, Transamerica Life Insurance Company and Massachusetts Financial Services Company. Note 17.
(8)	(e)(1)	Addendum to Participation Agreement (MFS). Note 21
(8)	(f)	Amended and Restated Participation Agreement among Variable Insurance Products Funds, Fidelity Distributors Corporation, and Transamerica Life Insurance Company. Note 20.
(8)	(f)(1)	Amendment No. 1 to Participation Agreement (FIDELITY). Note 21
(8)	(g)	Amended and Restated Participation Agreement among Franklin/Templeton Distributors, Inc. and Transamerica Life Insurance Company. Note 29.
(8)	(h)	Amendment No. 3 to Participation Agreement (Franklin Templeton) Note 27.
(9)	(a)	Opinion and consent of Counsel. Note 29.
	(b)	Consent of Counsel. Note 29.
(10)	(a)	Consent of Independent Registered Public Accounting Firm. Note 29.
	(b)	Opinion and Consent of Actuary. Note 21.
(11)		Not applicable.
(12)		Not applicable.

(13)	Performance Data Calculations. Note 21.
(14)	Powers of Attorney. Craig D. Vermie, Arthur C. Schneider, Eric J. Martin,	Brenda K. Clancy, M. Craig Fowler, Mark Mullin, Kenneth Kilbane. Note 28.

Note 1.	Incorporated herein by reference to Initial Filing to Form N-4 Registration Statement (File No. 333-98891) on August 29, 2002.
Note 2.	Incorporated herein by reference to Initial Filing to Form N-4 Registration Statement (File No. 333-87792) filed on May 8, 2002.
Note 3.	Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-109580) filed on December 30, 2003.
Note 4.	Incorporated herein by reference to Initial Filing to form N-4 Registration Statement (File No. 333-110049) on October 29, 2003.
Note 5.	Incorporated herein by reference to Post-Effective Amendment No. 25 to form N-4 Registration Statement (File No. 33-33085) on April 27, 2001.
Note 6.	Incorporated herein by reference to Post-Effective Amendment No. 5 to form N-4 Registration Statement (File No. 333-109580) filed on April 27, 2005.
Note 7.	Incorporated herein by reference to Initial Filing to form N-4 Registration Statement (File No. 333-109913) on October 23, 2003.
Note 8.	Incorporated herein by reference to Pre-Effective Amendment No. 1 to form N-4 Registration Statement (File No. 333-116562) on July 26, 2004.
Note 9.	Incorporated herein by reference to Post-Effective Amendment No. 39 to form N-4 Registration Statement (File No. 033-33085) filed on December 12, 2005.
Note 10.	Incorporated herein by reference to Initial Filing to form N-4 Registration Statement (File No. 333-62738) on June 11, 2001.
Note 11.	Incorporated herein by reference to Post-Effective Amendment No. 2 to form N-4 Registration Statement (File No. 333-109580) on January 7, 2005.
Note 12.	Incorporated herein by reference to Post-Effective Amendment No. 1 to form N-4 Registration Statement (File No. 333-26209) on April 29, 1998.
Note 13.	Incorporated herein by reference to Pre-Effective Amendment No. 1 to form N-4 Registration Statement (File No. 333-125817) dated August 29, 2005.
Note 14.	Incorporated herein by reference to Post-Effective Amendment No. 3 to form N-4 Registration Statement (File No. 333-26209) dated April 28, 2000.
Note 15.	Incorporated herein by reference to Post-Effective Amendment No. 11 to form N-4 Registration Statement (File No. 333-7509) on January 18, 2002.
Note 16.	Incorporated herein by reference to Post-Effective Amendment No. 22 to form N-4 Registration Statement (File No. 33-33085) on October 3, 2000.

Note 17.	Incorporated herein by reference to Post-Effective Amendment No. 1 to form N-4 Registration Statement (File No. 333-87792) April 30, 2003.
Note 18.	Incorporated herein by reference to Initial Filing to form N-4 Registration Statement (File No. 333-109580) filed on October 9, 2003.
Note 19.	Incorporated herein by reference to Initial Filing to form N-4 Registration Statement (File No. 333-116562) filed on June 17, 2004.
Note 20.	Filed with Initial Filing to form N-4 Registration Statement (File No. 333 - 131987) filed on February 22, 2006.
Note 21.	Filed with Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-131987) filed on July 19, 2006.
Note 22.	Filed with Post-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-131987) filed on April 30, 2007.
Note 23.	Filed with Post-Effective Amendment No. 2 to this Form N-4 Registration Statement (File No. 333-131987) filed on September 21, 2007.
Note 24.	Incorporated herein by reference to Post-Effective Amendment No. 6 to Form N-4 Registration Statement (File No. 333-125817 filed on February 15, 2008).
Note 25.	Filed with Post-Effective Amendment No. 4 to this Form N-4 Registration Statement (File No. 333-131987) filed on April 29, 2008.
Note 26.	Filed with Post-Effective Amendment No. 5 to this Form N-4 Registration Statement (File No. 333-131987) filed on August 14, 2008.
Note 27.	Filed with Post-Effective Amendment No. 7 to this Form N-4 Registration Statement (File No. 333-131987) filed on November 6, 2008.
Note 28.	Incorporated herein by reference to Initial Filing to Form N-4 Registration Statement (File No. 333-156259) filed on December 18, 2008.
Note 29.	Filed herewith.

Item 25. Directors and Officers of the Depositor (Transamerica Life Insurance Company)

Name and Business Address	Principal Positions and Offices with Depositor
Craig D. Vermie 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Director, Senior Vice President, Secretary and General Counsel
Arthur C. Schneider 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Director, Senior Vice President and Chief Tax Officer
Eric J. Martin 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Vice President and Corporate Controller
Brenda K. Clancy 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Director and President
M. Craig Fowler 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Vice President and Treasurer
Mark W. Mullin 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Director and Chief Executive Officer
Kenneth Kilbane 4333 Edgewood Road, N.E. Cedar Rapids, Iowa 52499-0001	Director and Chairman of the Board

Item 26. Persons Controlled by or under Common Control with the Depositor or Registrant

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Academy Alliance Holdings Inc.	Canada	100% Creditor Resources, Inc.	Holding company
Academy Alliance Insurance Inc.	Canada	100% Creditor Resources, Inc.	Insurance
ADMS Insurance Broker (HK) Limited	Hong Kong	100% AEGON Direct Marketing Services Hong Kong Limited	Brokerage company
AEGON Alliances, Inc.	Virginia	100% Commonwealth General Corporation	Insurance company marketing support
AEGON Asset Management Services, Inc.	Delaware	100% AUSA Holding Co.	Registered investment advisor
AEGON Assignment Corporation	Illinois	100% AEGON Financial Services Group, Inc.	Administrator of structured settlements
AEGON Assignment Corporation of Kentucky	Kentucky	100% AEGON Financial Services Group, Inc.	Administrator of structured settlements
AEGON Canada Inc.	Canada	100% Transamerica International Holdings, Inc.	Holding company
AEGON Capital Management, Inc.	Canada	100% AEGON Canada Inc.	Portfolio management company/investment advisor
AEGON Derivatives N.V.	Netherlands	100% AEGON N.V.	Holding company
AEGON Direct Marketing Services, Inc.	Maryland	Monumental Life Insurance Company owns 103,324 shares; Commonwealth General Corporation owns 37,161 shares	Marketing company
AEGON Direct Marketing Services International, Inc.	Maryland	100% Monumental General Insurance Group, Inc.	Marketing arm for sale of mass marketed insurance coverage
AEGON Direct Marketing Services Australia Pty Ltd.	Australia	100% Transamerica Direct Marketing Asia Pacific Pty Ltd.	Marketing/operations company
AEGON Direct Marketing Services e Corretora de Seguros Ltda.	Brazil	749,000 quota shares owned by AEGON DMS Holding B.V.; 1 quota share owned by AEGON International B.V.	Brokerage company
AEGON Direct Marketing Services Europe Ltd.	United Kingdom	100% Cornerstone International Holdings, Ltd.	Marketing
AEGON Direct Marketing Services Hong Kong Limited	China	100% AEGON DMS Holding B.V.	Provide consulting services ancillary to the marketing of insurance products overseas.
AEGON Direct Marketing Services Japan K.K.	Japan	100% AEGON DMS Holding B.V.	Marketing company
AEGON Direct Marketing Services Korea Co., Ltd.	Korea	100% AEGON DMS Holding B.V.	Provide consulting services ancillary to the marketing of insurance products overseas.
AEGON Direct Marketing Services Mexico, S.A. de C.V.	Mexico	100% AEGON DMS Holding B.V.	Provide management advisory and technical consultancy services.
AEGON Direct Marketing Services Mexico Servicios, S.A. de C.V.	Mexico	100% AEGON DMS Holding B.V.	Provide marketing, trading, telemarketing and advertising services in favor of any third party, particularly in favor of insurance and reinsurance companies.
AEGON Direct Marketing Services, Inc.	Taiwan	100% AEGON DMS Holding B.V.	Authorized business: Enterprise management consultancy, credit investigation services, to engage in business not prohibited or restricted under any law of R.O.C., except business requiring special permission of government
AEGON Direct Marketing Services (Thailand) Ltd.	Thailand	93% Transamerica International Direct Marketing Consultants, LLC; remaining 7% held by various AEGON employees	Marketing of insurance products in Thailand
AEGON DMS Holding B.V.	Netherlands	100% AEGON International B.V.	Holding company

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
AEGON Financial Services Group, Inc.	Minnesota	100% Transamerica Life Insurance Company	Marketing
AEGON Fund Management, Inc.	Canada	100% AEGON Canada Inc.	Mutual fund manager
AEGON Funding Company, LLC.	Delaware	100% AEGON USA, LLC	Issue debt securities-net proceeds used to make loans to affiliates
AEGON Institutional Markets, Inc.	Delaware	100% Commonwealth General Corporation	Provider of investment, marketing and administrative services to insurance companies
AEGON International B.V.	Netherlands	100% AEGON N.V.	Holding company
AEGON Life Insurance Agency	Taiwan	100% AEGON Direct Marketing Services, Inc. (Taiwan Domiciled)	Life insurance
AEGON Managed Enhanced Cash, LLC	Delaware	Members: Transamerica Life Insurance Company (71.11%) ; Monumental Life Insurance Company (28.89%)	Investment vehicle for securities lending cash collateral
AEGON Management Company	Indiana	100% AEGON U.S. Holding Corporation	Holding company
AEGON N.V.	Netherlands	22.95% of Vereniging AEGON Netherlands Membership Association	Holding company
AEGON Nederland N.V.	Netherlands	100% AEGON N.V.	Holding company
AEGON Nevak Holding B.V.	Netherlands	100% AEGON N.V.	Holding company
AEGON Structured Settlements, Inc.	Kentucky	100% Commonwealth General Corporation	Administers structured settlements of plaintiff’s physical injury claims against property and casualty insurance companies
AEGON U.S. Holding Corporation	Delaware	100% Transamerica Corporation	Holding company
AEGON USA Investment Management, LLC	Iowa	100% AEGON USA, LLC.	Investment advisor
AEGON USA Real Estate Services, Inc.	Delaware	100% AEGON USA Realty Advisors, Inc.	Real estate and mortgage holding company
AEGON USA Realty Advisors, Inc.	Iowa	100% AUSA Holding Company	Administrative and investment services
AEGON USA Travel and Conference Services LLC	Iowa	100% Money Services, Inc.	Travel and conference services
AEGON USA, LLC	Iowa	100% AEGON U.S. Holding Corporation	Holding company
AFSG Securities Corporation	Pennsylvania	100% Commonwealth General Corporation	Inactive
ALH Properties Eight LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Eleven LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Fifteen LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Five LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Four LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Nine LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Seven LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Seventeen LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Sixteen LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Ten LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Twelve LLC	Delaware	100% FGH USA LLC	Real estate
ALH Properties Two LLC	Delaware	100% FGH USA LLC	Real estate
American Bond Services LLC	Iowa	100% Transamerica Life Insurance Company (sole member)	Limited liability company
Ampac, Inc.	Texas	100% Commonwealth General Corporation	Managing general agent
ARC Reinsurance Corporation	Hawaii	100% Transamerica Corporation	Property & Casualty Insurance

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
ARV Pacific Villas, A California Limited Partnership	California	General Partners - Transamerica Affordable Housing, Inc. (0.5%); Non-Affiliate of AEGON, Jamboree Housing Corp. (0.5%). Limited Partner: Transamerica Life Insurance Company (99%)	Property
Asia Business Consulting Company	China	100% Asia Investments Holdings, Limited
Asia Investments Holdings, Limited	Hong Kong	99% Transamerica Life Insurance Company	Holding company
AUSA Holding Company	Maryland	100% AEGON USA, LLC	Holding company
AUSACAN LP	Canada	General Partner - AUSA Holding Co. (1%); Limited Partner - AEGON USA, LLC (99%)	Inter-company lending and general business
Bay Area Community Investments I, LLC	California	70%Transamerica Life Insurance Company; 30% Monumental Life Insurance Company	Investments in low income housing tax credit properties
Bay State Community Investments I, LLC	Delaware	100% Monumental Life Insurance Company	Investments in low income housing tax credit properties
Bay State Community Investments II, LLC	Delaware	100% Monumental Life Insurance Company	Investments in low income housing tax credit properties
Beijing Dafu Insurance Agency Co. Ltd.	Peoples Republic of China	10% owned by WFG China Holdings, Inc.; 90% owned by private individual (non-AEGON associated)	Insurance Agency
Canadian Premier Holdings Ltd.	Canada	100% AEGON DMS Holding B.V.	Holding company
Canadian Premier Life Insurance Company	Canada	100% Canadian Premier Holdings Ltd.	Insurance company
Capital General Development Corporation	Delaware	2.64 shares of common stock owned by AEGON USA, LLC 18.79 shares of common stock owned by Commonwealth General Corporation	Holding company
CBC Insurance Revenue Securitization, LLC	Delaware	100% Clark Consulting, Inc.	Special purpose
CGC Life Insurance Company	Iowa	100% Commonwealth General Corporation	Insurance Company
Clark/Bardes (Bermuda) Ltd.	Bermuda	100% Clark, Inc.	Insurance agency
Clark, Inc.	Delaware	100% AUSA Holding Company	Holding company
Clark Consulting, Inc.	Delaware	100% Clark, Inc.	Financial consulting firm
Clark Investment Strategies, inc.	Delaware	100% Clark Consulting, Inc.	Registered investment advisor
Clark Securities, Inc.	California	100% Clark Consulting, Inc.	Broker-Dealer
Commonwealth General Corporation	Delaware	100% AEGON U.S. Holding Corporation	Holding company
Consumer Membership Services Canada Inc.	Canada	100% Canadian Premier Holdings Ltd.	Marketing of credit card protection membership services in Canada
Cornerstone International Holdings Ltd.	UK	100% AEGON DMS Holding B.V.	Holding company
CRC Creditor Resources Canadian Dealer Network Inc.	Canada	100% Creditor Resources, Inc.	Insurance agency
CRG Insurance Agency, Inc.	California	100% Clark Consulting, Inc.	Insurance agency
Creditor Resources, Inc.	Michigan	100% AUSA Holding Co.	Credit insurance
CRI Canada Inc.	Canada	100% Creditor Resources, Inc.	Holding company
CRI Credit Group Services Inc.	Canada	100% Creditor Resources, Inc.	Holding company
CRI Solutions Inc.	Maryland	100% Creditor Resources, Inc.	Sales of reinsurance and credit insurance
CRI Systems, Inc.	Maryland	100% Creditor Resources, Inc.	Technology
Diversified Actuarial Services, Inc.	Massachusetts	100% Diversified Investment Advisors, Inc.	Employee benefit and actuarial consulting

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Diversified Investment Advisors, Inc.	Delaware	100% AUSA Holding Company	Registered investment advisor
Diversified Investors Securities Corp.	Delaware	100% Diversified Investment Advisors, Inc.	Broker-Dealer
Edgewood IP, LLC	Iowa	100% Transamerica Life Insurance Company	Limited liability company
FGH Eastern Region LLC	Delaware	100% FGH USA LLC	Real estate
FGH Realty Credit LLC	Delaware	100% FGH Eastern Region LLC	Real estate
FGH USA LLC	Delaware	100% RCC North America LLC	Real estate
FGP 90 West Street LLC	Delaware	100% FGH USA LLC	Real estate
FGP Burkewood, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP Bush Terminal, Inc.	Delaware	100% FGH Realty Credit LLC	Real estate
FGP Franklin LLC.	Delaware	100% FGH USA LLC	Real estate
FGP Herald Center, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP Heritage Square, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP Islandia, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP Merrick, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP West 32nd Street, Inc.	Delaware	100% FGH USA LLC	Real estate
FGP West Mezzanine LLC	Delaware	100% FGH USA LLC	Real estate
FGP West Street LLC	Delaware	100% FGP West Mezzanine LLC	Real estate
FGP West Street Two LLC	Delaware	100% FGH USA LLC	Real estate
Fifth FGP LLC	Delaware	100% FGH USA LLC	Real estate
Financial Planning Services, Inc.	District of Columbia	100% Commonwealth General Corporation	Special-purpose subsidiary
Financial Resources Insurance Agency of Texas	Texas	100% owned by Transamerica Financial Advisors, Inc.	Retail sale of securities products
First FGP LLC	Delaware	100% FGH USA LLC	Real estate
Flashdance, LLC	New York	100% Transamerica Life Insurance Company	Broadway production
Fourth & Market Funding, LLC	Delaware	Commonwealth General Corporation owns 0% participating percentage, but is Managing Member. Ownership: 99% Monumental Life Insurance Company and 1% Garnet Assurance Corporation II	Investments
Fourth FGP LLC	Delaware	100% FGH USA LLC	Real estate
Garnet Assurance Corporation	Kentucky	100%Transamerica Life Insurance Company	Investments
Garnet Assurance Corporation II	Iowa	100% Commonwealth General Corporation	Business investments
Garnet Community Investments, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments I, LLC	Delaware	100%Transamerica Life Insurance Company	Securities
Garnet Community Investments II, LLC	Delaware	100% Monumental Life Insurance Company	Securities
Garnet Community Investments III, LLC	Delaware	100%Transamerica Life Insurance Company	Business investments
Garnet Community Investments IV, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments V, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments VI, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments VII, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments VIII, LLC	Delaware	100% Monumental Life Insurance Company	Investments

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Garnet Community Investments IX, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments X, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments XI, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet Community Investments XII, LLC	Delaware	100% Monumental Life Insurance Company	Investments
Garnet LIHTC Fund I, LLC	Delaware	Members: Garnet Community Investments I, LLC (0.01%); Goldenrod Asset Management, Inc.—a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund II, LLC	Delaware	Members: Garnet Community Investments II, LLC (0.01%); Metropolitan Life Insurance Company, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund III, LLC	Delaware	Members: Garnet Community Investments III, LLC (0.01%); Jefferson-Pilot Life Insurance Company, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund IV, LLC	Delaware	Members: Garnet Community Investments IV, LLC (0.01%); Goldenrod Asset Management, Inc., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund V, LLC	Delaware	Members: Garnet Community Investments V, LLC (0.01%); Lease Plan North America, Inc., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund VI, LLC	Delaware	Members: Garnet Community Investments VI, LLC (0.01%); Pydna Corporation, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund VII, LLC	Delaware	Members: Garnet Community Investments VII, LLC (0.01%); Washington Mutual Bank, a non-AEGON affiliate(99.99%)	Investments
Garnet LIHTC Fund VIII, LLC	Delaware	Members: Garnet Community Investments VIII, LLC (0.01%); Washington Mutual Bank, a non-AEGON affiliate(99.99%)	Investments
Garnet LIHTC Fund IX, LLC	Delaware	Members: Garnet Community Investments IX, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund X, LLC	Delaware	Members: Garnet Community Investments X, LLC (0.01%); Goldenrod Asset Management, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XI, LLC	Delaware	Members: Garnet Community Investments XI, LLC (0.01%); NorLease, Inc., a non-AEGON affiliate (99.99%)	Investments

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Garnet LIHTC Fund XII, LLC	Delaware	Garnet Community Investments XII, LLC (.01%); and the following non-AEGON affiliates: Bank of America, N.A.( 73.39%); Washington Mutual Bank (13.30%); NorLease, Inc. (13.30%)	Investments
Garnet LIHTC Fund XII-A, LLC	Delaware	Garnet Community Investments XII, LLC (.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XII-B, LLC	Delaware	Garnet Community Investments XII, LLC (.01%); Washington Mutual Bank, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XII-C, LLC	Delaware	Garnet Community Investments XII, LLC (.01%); NorLease, Inc., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XIII, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); Washington Mutual Bank, a non-AEGON affiliate (68.10%); Norlease, Inc., a non-AEGON affiliate (31.89%)	Investments
Garnet LIHTC Fund XIII-A, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); Washington Mutual Bank, a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XIII-B, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); Norlease, Inc., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XIV, LLC	Delaware	0.01% Garnet Community Investments, LLC; 49.995% Wells Fargo Bank, N.A.; and 49.995% Goldenrod Asset Management, Inc.	Investments
Garnet LIHTC Fund XV, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)	Investments
Garnet LIHTC Fund XVI, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); FNBC Leasing Corporation, a non-AEGON entity (99.99%)	Investments
Garnet LIHTC Fund XVII, LLC	Delaware	Members: Garnet Community Investments, LLC (0.01%); Security Life of Denver, a non-affiliate of AEGON (20.979%), ING USA Annuity and Life Insurance company, a non-affiliate of AEGON (12.999%), and ReliaStar Life Insurance Company, a non-affiliate of AEGON (66.012%).	Investments
Garnet LIHTC Fund XVIII, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XIX, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XX, LLC	Delaware	100% Garnet Community Investments, LLC	Investments

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Garnet LIHTC Fund XXI, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXII, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXIII, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXIV, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXV, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXVI, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Garnet LIHTC Fund XXVII, LLC	Delaware	100% Garnet Community Investments, LLC	Investments
Gemini Investment, Inc.	Delaware	100% Transamerica Life Insurance Company	Investment subsidiary
Global Preferred Re Limited	Bermuda	100% AEGON USA, LLC	Reinsurance
Innergy Lending, LLC	Delaware	50% World Financial Group, Inc.; 50% ComUnity Lending, Inc.(non-AEGON entity)	Lending
InterSecurities, Inc.	Delaware	100% AUSA Holding Co.	Broker-Dealer
Investors Warranty of America, Inc.	Iowa	100% AUSA Holding Co.	Leases business equipment
Iowa Fidelity Life Insurance Co.	Arizona	Ordinary common stock is allowed 60% of total cumulative vote - AEGON USA, LLC. Participating common stock (100% owned by non-AEGON shareholders) is allowed 40% of total cumulative vote.	Insurance
JMH Operating Company, Inc.	Mississippi	100% Monumental Life Insurance Company	Real estate holdings
Legacy General Insurance Company	Canada	100% Canadian Premier Holdings Ltd.	Insurance company
Life Investors Alliance, LLC	Delaware	100% Transamerica Life Insurance Company	Purchase, own, and hold the equity interest of other entities
Life Investors Financial Group, Inc.	Iowa	100% AUSA Holding Company	Special-purpose subsidiary
LIICA Holdings, LLC	Delaware	Sole Member: Transamerica Life Insurance Company	To form and capitalize LIICA Re I, Inc.
LIICA Re I, Inc.	Vermont	100% LIICA Holdings, LLC	Captive insurance company
LIICA Re II, Inc.	Vermont	100%Transamerica Life Insurance Company	Captive insurance company
Massachusetts Fidelity Trust Company	Iowa	100% AUSA Holding Co.	Trust company
Merrill Lynch Life Insurance Company	Arkansas	100% AEGON USA, LLC	Insurance company
ML Life Insurance Company of New York	New York	100% AEGON USA, LLC	Insurance company
Money Services, Inc.	Delaware	100% AUSA Holding Co.	Provides financial counseling for employees and agents of affiliated companies
Monumental General Administrators, Inc.	Maryland	100% Monumental General Insurance Group, Inc.	Provides management services to unaffiliated third party administrator
Monumental General Insurance Group, Inc.	Maryland	100% AUSA Holding Co.	Holding company
Monumental Life Insurance Company	Iowa	99.72% Capital General Development Corporation; .28% Commonwealth General Corporation	Insurance Company
nVISION Financial, Inc.	Iowa	100% AUSA Holding Company	Special-purpose subsidiary
National Association Management and Consultant Services, Inc.	Maryland	100% Monumental General Administrators, Inc.	Provides actuarial consulting services
NEF Investment Company	California	100% Transamerica Life Insurance Company	Real estate development

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
New Markets Community Investment Fund, LLC	Iowa	50% AEGON Institutional Markets, Inc.; 50% AEGON USA Realty Advisors, Inc.	Community development entity
Oncor Insurance Services, LLC	Iowa	Sole Member - Life Investors Financial Group, Inc.	Direct sales of term life insurance
Penco, Inc.	Ohio	100% AUSA Holding Company	Record keeping
Pensaprima, Inc.	Iowa	100% AEGON USA Realty Advisors, Inc.	Investments
Peoples Benefit Services, Inc.	Pennsylvania	100% Stonebridge Life Insurance Company	Special-purpose subsidiary
Pine Falls Re, Inc.	Vermont	100% Stonebridge Life Insurance Company	Captive insurance company
Primus Guaranty, Ltd.	Bermuda	Partners are: Transamerica Life Insurance Company (13.1%) and non-affiliates of AEGON: XL Capital, Ltd. (34.7%); CalPERS/PCO Corporate Partners Fund, LLC (13.0%); Radian Group (11.1%). The remaining 28.1% of stock is publicly owned.	Provides protection from default risk of investment grade corporate and sovereign issues of financial obligations.
Prisma Holdings, Inc. I	Delaware	100% AUSA Holding Company	Holding company
Prisma Holdings, Inc. II	Delaware	100% AUSA Holding Company	Holding company
Pyramid Insurance Company, Ltd.	Hawaii	100% Transamerica Corporation	Property & Casualty Insurance
Quantitative Data Solutions, LLC	Delaware	100% Transamerica Life Insurance Company	Special purpose corporation
RCC North America LLC	Delaware	100% AEGON USA, LLC	Real estate
Real Estate Alternatives Portfolio 1 LLC	Delaware	Members: Transamerica Life Insurance Company (90.959%); Monumental Life Insurance Company (6.301%); Transamerica Financial Life Insurance Company (2.74%). Manager: AEGON USA Realty Advisors, Inc.	Real estate alternatives investment
Real Estate Alternatives Portfolio 2 LLC	Delaware	Members are: Transamerica Life Insurance Company (90.25%); Transamerica Financial Life Insurance Company (7.5%); Stonebridge Life Insurance Company (2.25%). Manager: AEGON USA Realty Advisors, Inc.	Real estate alternatives investment
Real Estate Alternatives Portfolio 3 LLC	Delaware	Members are: Transamerica Life Insurance Company (73.4%); Monumental Life Insurance Company (25.6%); Stonebridge Life Insurance Company (1%). Manager: AEGON USA Realty Advisors, Inc.	Real estate alternatives investment
Real Estate Alternatives Portfolio 3A, Inc.	Delaware	Members: Monumental Life Insurance Company (41.4%); Transamerica Financial Life Insurance Company (9.4%); Transamerica Life Insurance Company (48.2%); Stonebridge Life Insurance Company (1%)	Real estate alternatives investment
Real Estate Alternatives Portfolio 4 HR, LLC	Delaware	Members are: Transamerica Life Insurance Company (64%); Monumental Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.	Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Real Estate Alternatives Portfolio 4 MR, LLC	Delaware	Members are: Transamerica Life Insurance Company (64%); Monumental Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.	Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment
Real Estate Alternatives Portfolio 5 NR, LLC	Delaware	Members are: Transamerica Life Insurance Company (75.000%); Monumental Life Insurance Company (20.000%); Western Reserve Life Assurance Co. of Ohio (3.333%); Stonebridge Life Insurance Company (1.667%). Manager: AEGON USA Realty Advisors, Inc.	Real estate investments
Real Estate Alternatives Portfolio 5 RE, LLC	Delaware	Members are: Transamerica Life Insurance Company (75.000%); Monumental Life Insurance Company (20.000%); Western Reserve Life Assurance Co. of Ohio (3.333%); Stonebridge Life Insurance Company (1.667%). Manager: AEGON USA Realty Advisors, Inc.	Real estate investments
Realty Information Systems, Inc.	Iowa	100% AEGON USA Realty Advisors, Inc.	Information Systems for real estate investment management
Retirement Project Oakmont	CA	General Partner: Transamerica Oakmont Retirement Associates, a CA limited partnership; Transamerica Life Insurance Company (limited partner); and Oakmont Gardens, a CA limited partnership (non-AEGON entity limited partner). General Partner of Transamerica Oakmont Retirement Associates is Transamerica Oakmont Corporation. 100 units of limited partnership interests widely held by individual investors.	Senior living apartment complex
River Ridge Insurance Company	Vermont	100% AEGON Management Company	Captive insurance company
Second FGP LLC	Delaware	100% FGH USA LLC	Real estate
Selient Inc.	Canada	100% Canadian Premier Holdings Ltd.	Application service provider providing loan origination platforms to Canadian credit unions.
Separate Account Fund C	CA	100% Transamerica Life Insurance Company	Mutual Fund
Seventh FGP LLC	Delaware	100% FGH USA LLC	Real estate
Short Hills Management Company	New Jersey	100% AEGON U.S. Holding Corporation	Holding company
Southwest Equity Life Insurance Company	Arizona	Voting common stock is allocated 75% of total cumulative vote - AEGON USA, LLC. Participating Common stock (100% owned by non-AEGON shareholders) is allocated 25% of total cumulative vote.	Insurance
Stonebridge Benefit Services, Inc.	Delaware	100% Commonwealth General Corporation	Health discount plan
Stonebridge Casualty Insurance Company	Ohio	100% AEGON USA, LLC	Insurance company

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Stonebridge Group, Inc.	Delaware	100% Commonwealth General Corporation	General purpose corporation
Stonebridge International Insurance Ltd.	UK	100% Cornerstone International Holdings Ltd.	General insurance company
Stonebridge Life Insurance Company	Vermont	100% Commonwealth General Corporation	Insurance company
Stonebridge Reinsurance Company	Vermont	100% Stonebridge Life Insurance Company	Captive insurance company
TA Air XI, Corp.	Delaware	100% TCFC Air Holdings, Inc.	Special purpose corporation
TAH-MCD IV, LLC	Iowa	100% Transamerica Affordable Housing, Inc.	Serve as the general partner for McDonald Corporate Tax Credit Fund IV Limited Partnership
TBK Insurance Agency of Ohio, Inc.	Ohio	100% owned by Transamerica Financial Advisors, Inc.;	Variable insurance contract sales in state of Ohio
TCF Asset Management Corporation	Colorado	100% TCFC Asset Holdings, Inc.	A depository for foreclosed real and personal property
TCFC Air Holdings, Inc.	Delaware	100% Transamerica Commercial Finance Corporation, I	Holding company
TCFC Asset Holdings, Inc.	Delaware	100% Transamerica Commercial Finance Corporation, I	Holding company
TCFC Employment, Inc.	Delaware	100% Transamerica Commercial Finance Corporation, I	Used for payroll for employees at Transamerica Finance Corporation
The AEGON Trust Advisory Board: Patrick J. Baird, Joseph B.M. Streppel, Alexander R. Wynaendts, and Craig D. Vermie	Delaware	AEGON International B.V.	Voting Trust
The RCC Group, Inc.	Delaware	100% FGH USA LLC	Real estate
TIHI Mexico, S. de R.L. de C.V.	Mexico	95% Transamerica International Holdings, Inc.; 5% Transamerica Life Insurance Company	To render and receive all kind of administrative, accountant, mercantile and financial counsel and assistance to and from any other Mexican or foreign corporation, whether or not this company is a shareholder of them
Transamerica Accounts Holding Corporation	Delaware	100% TCFC Asset Holdings, Inc.	Holding company
Transamerica Affinity Services, Inc.	Maryland	100% AEGON Direct Marketing Services, Inc.	Marketing company
Transamerica Affordable Housing, Inc.	California	100% Transamerica Realty Services, LLC	General partner LHTC Partnership
Transamerica Annuity Service Corporation	New Mexico	100% Transamerica International Holdings, Inc.	Performs services required for structured settlements
Transamerica Asset Management, Inc.	Florida	Western Reserve Life Assurance Co. of Ohio owns 77%; AUSA Holding Co. owns 23%.	Fund advisor
Transamerica Aviation LLC	Delaware	100% TCFC Air Holdings, Inc.	Special purpose corporation
Transamerica Capital, Inc.	California	100% AUSA Holding Co.	Broker/Dealer
Transamerica Commercial Finance Corporation, I	Delaware	100% Transamerica Finance Corporation	Holding company
Transamerica Consultora Y Servicios Limitada	Chile	95% Transamerica Life Insurance Company; 5% Transamerica International Holdings, Inc.	Special purpose limited liability corporation
Transamerica Consumer Finance Holding Company	Delaware	100% TCFC Asset Holdings, Inc.	Consumer finance holding company
Transamerica Corporation	Delaware	100% The AEGON Trust	Major interest in insurance and finance
Transamerica Corporation (Oregon)	Oregon	100% Transamerica Corporation	Holding company
Transamerica Direct Marketing Asia Pacific Pty Ltd.	Australia	100% AEGON DMS Holding B.V.	Holding company

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Transamerica Direct Marketing Consultants, LLC	Maryland	51% Hugh J. McAdorey; 49% AEGON Direct Marketing Services, Inc.	Provide consulting services ancillary to the marketing of insurance products overseas.
Transamerica Distribution Finance - Overseas, Inc.	Delaware	100% TCFC Asset Holdings, Inc.	Commercial Finance
Transamerica Finance Corporation	Delaware	100% Transamerica Corporation	Commercial & Consumer Lending & equipment leasing
Transamerica Financial Advisors, Inc.	Delaware	100% Transamerica International Holdings, Inc.	Broker/dealer
Transamerica Financial Life Insurance Company	New York	87.40% AEGON USA, LLC; 12.60% Transamerica Life Insurance Company	Insurance
Transamerica Financial Resources Insurance Agency of Alabama, Inc.	Alabama	100% Transamerica Financial Advisors, Inc.	Insurance agent & broker
Transamerica Fund Services, Inc.	Florida	Western Reserve Life Assurance Co. of Ohio owns 44%; AUSA Holding Company owns 56%	Mutual fund
Transamerica Funding LP	U.K.	99% Transamerica Leasing Holdings, Inc.; 1% Transamerica Commercial Finance Corporation, I	Intermodal leasing
Transamerica Holding B.V.	Netherlands	100% AEGON International B.V.	Holding company
Transamerica Home Loan	California	100% Transamerica Finance Corporation	Consumer mortgages
Transamerica Insurance Marketing Asia Pacific Pty Ltd.	Australia	100% Transamerica Direct Marketing Asia Pacific Pty Ltd.	Insurance intermediary
Transamerica International Direct Marketing Consultants, LLC	Maryland	51% Hugh J. McAdorey; 49% AEGON Direct Marketing Services, Inc.	Provide consulting services ancillary to the marketing of insurance products overseas.
Transamerica International Holdings, Inc.	Delaware	100% AEGON USA, LLC	Holding company
Transamerica International RE (Bermuda) Ltd.	Bermuda	100% AEGON USA, LLC	Reinsurance
Transamerica Investment Management, LLC	Delaware	81.75% Transamerica Investment Services, Inc. as Original Member; 18.25% owned by Professional Members (employees of Transamerica Investment Services, Inc.)	Investment advisor
Transamerica Investment Services, Inc. (“TISI”)	Delaware	100% Transamerica Corporation	Holding company
Transamerica Investors, Inc.	Maryland	100% Transamerica Asset Management, Inc.	Open-end mutual fund
Transamerica Leasing Holdings, Inc.	Delaware	100% Transamerica Finance Corporation	Holding company
Transamerica Life (Bermuda) Ltd.	Bermuda	100% Transamerica Life Insurance Company	Long-term life insurer in Bermuda— will primarily write fixed universal life and term insurance
Transamerica Life Canada	Canada	AEGON Canada Inc. owns 9,600,000 shares of common stock; AEGON International B.V. owns 3,568,941 shares of common stock and 184,000 shares of Series IV Preferred stock.	Life insurance company
Transamerica Life Insurance Company	Iowa	676,190 shares Common Stock owned by Transamerica International Holdings, Inc.; 86,590 shares of Preferred Stock owned by Transamerica Corporation; 30,415 shares of Preferred Stock owned by AEGON USA, LLC	Insurance

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Transamerica Life Solutions, LLC	Delaware	Investors Warranty of America, Inc. - sole member	Provision of marketing, training, educational, and support services to life insurance professionals relating to the secondary market for life insurance, primarily through its affiliation with LexNet, LP, a life settlements marketplace.
Transamerica Minerals Company	California	100% Transamerica Realty Services, LLC	Owner and lessor of oil and gas properties
Transamerica Oakmont Corporation	California	100% Transamerica International Holdings, Inc.	General partner retirement properties
Transamerica Oakmont Retirement Associates	California	General Partner is Transamerica Oakmont Corporation. 100 units of limited partnership interests widely held by individual investors.	Senior living apartments
Transamerica Pacific Insurance Company, Ltd.	Hawaii	100% Transamerica Life Insurance Company	Life insurance
Transamerica Pyramid Properties LLC	Iowa	100% Transamerica Life Insurance Company	Realty limited liability company
Transamerica Re Consultoria em Seguros e Servicos Ltda	Brazil	95% Transamerica Life Insurance Company; 5% Transamerica International Holdings, Inc.	Insurance and reinsurance consulting
Transamerica Realty Investment Properties LLC	Delaware	100% Transamerica Life Insurance Company	Realty limited liability company
Transamerica Realty Services, LLC	Delaware	100% AEGON USA Realty Advisors, Inc.	Real estate investments
Transamerica Retirement Management, Inc.	Minnesota	100% AEGON Financial Services Group, Inc.	Life Insurance and underwriting services
Transamerica Securities Sales Corporation	Maryland	100% Transamerica International Holdings, Inc.	Broker/Dealer
Transamerica Small Business Capital, Inc.	Delaware	100% TCFC Asset Holdings, Inc.	Holding company
Transamerica Trailer Leasing AG	Switzerland	100% Transamerica Leasing Holdings, Inc.	Leasing
Transamerica Trailer Leasing Sp. Z.O.O.	Poland	100% Transamerica Leasing Holdings, Inc.	Leasing
Transamerica Vendor Financial Services Corporation	Delaware	100% TCFC Asset Holdings, Inc.	Provides commercial leasing
Unicom Administrative Services, Inc.	Pennsylvania	100% Commonwealth General Corporation	Provider of administrative services
United Financial Services, Inc.	Maryland	100% AEGON USA, LLC	General agency
Universal Benefits Corporation	Iowa	100% AUSA Holding Co.	Third party administrator
USA Administration Services, Inc.	Kansas	100% Transamerica Life Insurance Company	Third party administrator
Valley Forge Associates, Inc.	Pennsylvania	100% Commonwealth General Corporation	Furniture & equipment lessor
Western Reserve Life Assurance Co. of Ohio	Ohio	100% AEGON USA, LLC	Insurance
Westport Strategies, LLC	Delaware	AUSA Holding Company - sole Member	Provide administrative and support services, including but not limited to plan consulting, design and administration in connection with retail insurance brokerage business as carried on by producers related to corporate-owned or trust-owned life insurance policies
WFG China Holdings, Inc.	Delaware	100% World Financial Group, Inc.	Hold interest in Insurance Agency located in Peoples Republic of China
WFG Insurance Agency of Puerto Rico, Inc.	Puerto Rico	100% World Financial Group Insurance Agency, Inc.	Insurance agency

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
WFG Properties Holdings, LLC	Georgia	100% World Financial Group, Inc.	Marketing
WFG Property & Casualty Insurance Agency of California, Inc.	California	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance agency
WFG Property & Casualty Insurance Agency of Nevada, Inc.	Nevada	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance agency
WFG Property & Casualty Insurance Agency, Inc.	Georgia	100% World Financial Group Insurance Agency, Inc.	Insurance agency
WFG Reinsurance Limited	Bermuda	100% World Financial Group, Inc.	Reinsurance
WFG Securities of Canada, Inc.	Canada	100% World Financial Group Holding Company of Canada, Inc.	Mutual fund dealer
World Financial Group Holding Company of Canada Inc.	Canada	100% Transamerica International Holdings, Inc.	Holding company
World Financial Group Insurance Agency of Canada Inc.	Ontario	50% World Financial Group Holding Co. of Canada Inc.; 50% World Financial Group Subholding Co. of Canada Inc.	Insurance agency
World Financial Group Insurance Agency of Hawaii, Inc.	Hawaii	100% World Financial Group Insurance Agency, Inc.	Insurance agency
World Financial Group Insurance Agency of Massachusetts, Inc.	Massachusetts	100% World Financial Group Insurance Agency, Inc.	Insurance agency
World Financial Group Insurance Agency of Wyoming, Inc.	Wyoming	100% World Financial Group Insurance Agency, Inc.	Insurance agency
World Financial Group Insurance Agency, Inc.	California	100% Western Reserve Life Assurance Co. of Ohio	Insurance agency
World Financial Group Subholding Company of Canada Inc.	Canada	100% World Financial Group Holding Company of Canada, Inc.	Holding company
World Financial Group, Inc.	Delaware	100% AEGON Asset Management Services, Inc.	Marketing
World Group Securities, Inc.	Delaware	100% AEGON Asset Management Services, Inc.	Broker-dealer
Zahorik Company, Inc.	California	100% AUSA Holding Co.	Inactive
Zero Beta Fund, LLC	Delaware	Members are: Transamerica Life Insurance Company (74.0181%); Monumental Life Insurance Company (23.6720%); Transamerica Financial Life Insurance Company (2.3097%). Manager: AEGON USA Investment Management LLC	Aggregating vehicle formed to hold various fund investments.

Item 27. Number of Contract Owners

As of March 31, 2009, there were 4,905 Contract owners.

Item 28. Indemnification

The Iowa Code (Sections 490.850 et. seq.) provides for permissive indemnification in certain situations, mandatory indemnification in other situations, and prohibits indemnification in certain situations. The Code also specifies producers for determining when indemnification payments can be made.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Depositor pursuant to the foregoing provisions, or otherwise, the Depositor has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Depositor of expenses incurred or paid by a director, officer or controlling person in connection with the securities being registered), the Depositor will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 29. Principal Underwriters

(a) Transamerica Capital, Inc. serves as the principal underwriter for:

Transamerica Capital, Inc. serves as the principal underwriter for the Retirement Builder Variable Annuity Account, Separate Account VA A, Separate Account VA B, Separate Account VA C, Separate Account VA D, Separate Account VA E, Separate Account VA F, Separate Account VA I, Separate Account VA J, Separate Account VA K, Separate Account VA L, Separate Account VA P, Separate Account VA Q, Separate Account VA R, Separate Account VA S, Separate Account VA W, Separate Account VA X, Separate Account VA Y; Separate Account VA Z, Separate Account VA EE, Separate Account VA-1, Separate Account VA-2L, Separate Account VA-5, Separate Account VA-6, Separate Account VA-7, Separate Account VA-8, Separate Account Fund B, Separate Account Fund C, Transamerica Corporate Separate Account Sixteen, Separate Account VL A, Separate Account VUL-3 and Separate Account VUL A. These accounts are separate accounts of Transamerica Life Insurance Company.

Transamerica Capital, Inc. serves as principal underwriter for Separate Account VA BNY, Separate Account VA GNY, Separate Account VA HNY, Separate Account VA QNY, Separate Account VA WNY, Separate Account VA YNY, TFLIC Separate Account VNY, Separate Account VA-2LNY, TFLIC Separate Account C, Separate Account VA-5NLNY, Separate Account VA-6NY, TFLIC Series Annuity Account and TFLIC Series Life Account. These accounts are separate accounts of Transamerica Financial Life Insurance Company.

Transamerica Capital, Inc. serves as principal underwriter for Separate Account VA U, Separate Account VA V, Separate Account VA AA, WRL Series Life Account, WRL Series Life Account G, WRL Series Life Corporate Account, WRL Series Annuity Account and WRL Series Annuity Account B. These accounts are separate accounts of Western Reserve Life Assurance Co. of Ohio.

Transamerica Capital, Inc. also serves as principal underwriter for Separate Account VA BB, Separate Account VA CC, Separate Account VA WM, and Separate Account VL E. This account is a separate account of Monumental Life Insurance Company.

Transamerica Capital, Inc. also serves as principal underwriter for Merrill Lynch Life Variable Annuity Separate Account, Merrill Lynch Life Variable Annuity Separate Account A, Merrill Lynch Life Variable Annuity Separate Account B, Merrill Lynch Life Variable Annuity Separate Account C, Merrill Lynch Life Variable Annuity Separate Account D, Merrill Lynch Variable Life Separate Account, and Merrill Lynch Life Variable Life Separate Account II. These accounts are separate accounts of Merrill Lynch Life Insurance Company.

Transamerica Capital, Inc. also serves as principal underwriter for ML of New York Variable Annuity Separate Account, ML of New York Variable Annuity Separate Account A, ML of New York Variable Annuity Separate Account B, ML of New York Variable Annuity Separate Account C, ML of New York Variable Annuity Separate Account D, ML of New York Variable Life Separate Account, and ML of New York Variable Life Separate Account II. These accounts are separate accounts of ML Life Insurance Company of New York.

Transamerica Capital, Inc. also serves as principal underwriter for Transamerica Series Trust, Transamerica Funds and Transamerica Investors, Inc.

(b) Directors and Officers of Transamerica Capital, Inc.:

Name	Principal Business Address	Position and Offices with Underwriter
John T. Mallett	(1)	Director
Mark W. Mullin	(6)	Director
Lon J. Olejniczak	(1)	Chief Executive Officer and Director
Michael W. Brandsma	(2)	Director, President and Chief Financial Officer
Blake S. Bostwick	(2)	Chief Operations Officer
David R. Paulsen	(2)	Executive Vice President
Michael G. Petko	(2)	Executive Vice President
Anne M. Spaes	(3)	Executive Vice President and Chief Marketing Officer
Courtney John	(2)	Chief Compliance Officer and Vice President
Frank A. Camp	(1)	Secretary
Amy J. Boyle	(4)	Assistant Vice President
John W. Fischer	(4)	Assistant Vice President
Clifton W. Flenniken, III	(5)	Assistant Vice President
Dennis P. Gallagher	(4)	Assistant Vice President
Wesley J. Hodgson	(2)	Assistant Vice President
Karen D. Heburn	(4)	Vice President
Kyle A. Keelan	(4)	Assistant Vice President
Christy Post-Rissin	(4)	Assistant Vice President
Brenda L. Smith	(4)	Assistant Vice President
Darin D. Smith	(1)	Assistant Vice President
Arthur D. Woods	(4)	Assistant Vice President
Tamara D. Barkdoll	(2)	Assistant Secretary
Erin K. Burke	(1)	Assistant Secretary
Amy Angle	(3)	Assistant Secretary
Elizabeth Belanger	(6)	Assistant Vice President

(1) 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001

(2) 4600 S Syracuse St, Suite 1100, Denver, CO 80237-2719

(3) 400 West Market Street, Louisville, KY 40202

(4) 570 Carillon Parkway, St. Petersburg, FL 33716

(5) 1111 North Charles Street, Baltimore, MD 21201

(6) 4 Manhattanville Rd, Purchase, NY 10577

(c) Compensation to Principal Underwriter:

Name of Principal Underwriter	Net Underwriting Discounts and Commissions(1)	Compensation on Redemption	Brokerage Commissions	Compensation
Transamerica Capital, Inc.	$12,745,096	0	0	0

⁽¹⁾ Fiscal Year 2008

Item 30. Location of Accounts and Records

The records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by Manager Regulatory Filing Unit, Transamerica Life Insurance Company at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001.

Item 31. Management Services.

All management Contracts are discussed in Part A or Part B.

Item 32. Undertakings

(a) Registrant undertakes that it will file a post-effective amendment to this registration statement as frequently as necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as Premiums under the Contract may be accepted.

(b) Registrant undertakes that it will include either (i) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information or (ii) a space in the Policy application that an applicant can check to request a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request to Transamerica Life Insurance Company at the address or phone number listed in the Prospectus.

(d) Transamerica Life Insurance Company hereby represents that the fees and charges deducted under the contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Transamerica Life Insurance Company.

SECTION 403(B) REPRESENTATIONS

Transamerica Life Insurance Company represents that it is relying on a no-action letter dated November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88), regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in connection with redeemability restrictions on Section 403(b) Policies, and that paragraphs numbered (1) through (4) of that letter will be complied with.

TEXAS ORP REPRESENTATION

The Registrant intends to offer policies to participants in the Texas Option Retirement Program. In connection with that offering, the Registrant is relying on Rule 6c-7 under the Investment Company Act of 1940 and is complying with, or shall comply with, paragraphs (a) – (d) of that Rule.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant hereby certifies that this Amendment to the Registration Statement meets the requirements for effectiveness pursuant to paragraph (b) of Securities Act Rule 485 and has caused this Registration Statement to be signed on its behalf, in the City of Cedar Rapids and State of Iowa, on this 29th day of April, 2009.

SEPARATE ACCOUNT VA Y

TRANSAMERICA LIFE INSURANCE COMPANY

Depositor

*

Brenda K. Clancy

President

As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signatures	Title	Date
* Craig D. Vermie	Director, Senior Vice President, Secretary, and General Counsel	________, 2009
* Arthur C. Schneider	Director, Chief Tax Officer, and Senior Vice President	________, 2009
* Brenda K. Clancy	Director and President	________, 2009
* Eric J. Martin	Vice President and Corporate Controller	________, 2009
* M. Craig Fowler	Vice President and Treasurer	________, 2009
* Mark W. Mullin	Chief Executive Officer and, Director	________, 2009
* Kenneth Kilbane	Chairman of the Board and, Director	________, 2009
/s/ Darin D. Smith *By: Darin D. Smith	Vice President, Assistant Secretary, and General Counsel	April 29, 2009

* By: Darin D. Smith - Attorney-in-Fact pursuant to Powers of Attorney filed previously and herewith.

Registration No. 333-131987

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

EXHIBITS

TO

FORM N-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FOR

FLEXIBLE PREMIUM VARIABLE ANNUITY - J

EXHIBIT INDEX

Exhibit No.	Description of Exhibit	Page No.*
4(q)	Form of Policy Rider – Retirement Income Choice 1.2
5(b)	Form of Application
7(a)	Reinsurance Agreement between Transamerica Life Insurance & Annuity Company and Swiss RE Life & Health America Inc.
7(b)	Reinsurance Agreement between Transamerica Occidental Life Insurance Company and North American Reassurance Company
7(c)	Reinsurance Agreement No. FUV-1 between Transamerica Life Insurance Company and Union Hamilton Reinsurance Limited
7(c)(1)	Reinsurance Agreement Amendment No. 1 to agreement FUV-1 between Transamerica Life Insurance Company and Union Hamilton Reinsurance Limited
7(d)	Reinsurance Agreement No. FUV-011 between Transamerica Life Insurance Company and Scottish Annuity & Life International Insurance Company (Bermuda) Limited
7(e)	Reinsurance Agreement between Transamerica Life Insurance Company and Transamerica International RE (Bermuda) LTD
7(f)	Reinsurance Agreement between American United Life Insurance Company and Transamerica Life Insurance Company
8(a)(10)	Amendment No. 40 to Participation Agreement (TST).
(8)(g)	Amended and Restated Participation Agreement Franklin/Templeton Distributors, Inc. Transamerica Life Insurance Company.
9(a)	Opinion and Consent of Counsel
9(b)	Consent of Counsel
10(a)	Consent of Independent Registered Public Accounting Firm

* Page numbers included only in manually executed original.